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Investors bought a quarter of US homes sold last year

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Re: Investors bought a quarter of US homes sold last year

#61

Post by BeetleB »

gbasin wrote: post #13

The CoreLogic data shows that what it calls “mega” investors, with a thousand or more homes, bought 3% of houses last year and in 2022, compared with about 1% in previous years, with the bulk of investor purchases made by smaller groups.

1000 is too high a threshold. I wonder what it would look like if you dropped to 50 or 100.

I hang out in RE circles. Anecdotally it seems that probably most of these are bought by people who have just 1-20 properties - regular folks who have regular jobs but are looking for ways to supplement their income and hopefully quit their jobs. Owning merely 5 extra homes is not enough to replace income, and in some markets owning even 20 is not enough.

But without a good study that breaks it down, I have no idea if my anecdotal experience is reflective of the nationwide trend.

Re: Investors bought a quarter of US homes sold last year

#62

Post by davidw »

slg wrote: post #40
sillystuff wrote: post #12

In 2012 I was looking at investing in REITs. One REIT's pitch was that they owned such a large percentage of the rental housing in Tampa Florida, that even though vacancy rates were high, and rents were going down throughout the nation and other areas in the state of Florida, they were able to keep rents high in Tampa. Disgusted, I realized the harm that REITs and private equity are doing to housing markets, and want…

We have spent decades telling American families that homeownership is the safest investment. We then spent decades enacting policies to ensure this is true. Do we think investors were going to just sit that out and ignore a safe and government protected investment? Of course the more attractive we make home ownership as an investment, the more investors will flock to the market. We need policies specifically benefiti…

This article, speaking to your point, is pretty convincing in terms of the data:

https://www.vox.com/platform/amp/22524829/wall-street-housin...

> The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that are harder to combat. Housing undersupply is the result of decades of locals opposing new home building. It’s not something that can be blamed on Wall Street greed and the nefarious tinkering of a private equity firm. And that’s a much harder truth to stomach.

I'm involved with a local YIMBY group, and what I see over and over again is my neighbors stopping homes from being built. No wonder investors think it's a great place to put some money - other people do the dirty work for them!

Re: Investors bought a quarter of US homes sold last year

#63

Post by inetknght »

_fat_santa wrote: post #38
didgetmaster wrote: post #5

What constitutes an 'Investor' in this article? If I see a distressed home for sale in my neighborhood and decide to buy it, fix it up, and rent it out; this article seems to put me in the same category as institutional investors who come in and buy or build entire communities of homes.

Seems everyone that bought a home for anything other than living in it. In the article they even mention: > The CoreLogic data shows that what it calls “mega” investors, with a thousand or more homes, bought 3% of houses last year and in 2022, compared with about 1% in previous years, with the bulk of investor purchases made by smaller groups. So most of the percentage increase is done by mom-and-pop investors rather…

> There's a massive gap between someone being able to afford $1200 in rent and being able to afford a home with all of the added costs.

Having recently bought a home, I think there isn't so much of a gap and in many cases the gap is inverted: it's cheaper to buy than to rent.

Re: Investors bought a quarter of US homes sold last year

#65

Post by BeetleB »

acchow wrote: post #4
sebhook wrote: post #2

It would be interesting to see the "investors" segmented by assets under management (AUM). I'm sure some "investors" are mom and pop rental situations while other institutions, such as BlackRock, are purchasing single-family homes at scale. I'll also be curious to see what happens when remodels need to happen. Many trade labor markets are hyper localized and difficult to scale across a property portfolio, this is whe…

Aren't most mom-and-pop investors getting real estate exposure via their Blackrock holdings?

I believe GP is referring to "regular folks with jobs" who buy houses on the side to supplement their income (as opposed to investing in funds).

Re: Investors bought a quarter of US homes sold last year

#66

Post by pwinnski »

boringg wrote: post #56
ethanbond wrote: post #42

Earlier quoted context omitted.

There are ways to disincentivize toxic forms of investment (especially speculation) without banning it. A high land value tax, for example, would simultaneously increase investment and decrease speculation.

I don't see how a high land value tax increase investment & decrease speculation? If your talking about flipping homes that's one thing but REIT ownership isn't home flipping for the most part...

A very high real estate tax with huge discounts for a single primary homestead makes investment less profitable.

Re: Investors bought a quarter of US homes sold last year

#67

Post by boringg »

brianwawok wrote: post #48
yardstick wrote: post #35

Earlier quoted context omitted.

Imagine if housing was cheap enough that paying the mortgage was around the same as what it now costs to rent. There definitely needs to be some rentals, but I believe that there needs to be controls over how many and the rental price.

In much of the US (read, in the Midwest where I am right now).. mortage monthly payment is indeed cheaper, sometimes a lot. And this is after taxes / repair issues. Renting is very much a poverty trap where the poor with bad credit get poorer and worse credit.

Depends on where you live - this "renting is a poverty trap" only applies to certain places and depends on home values constantly increasing. If home values crash where you live then you spent years putting money towards a worthless asset.

Re: Investors bought a quarter of US homes sold last year

#69

Post by aprdm »

JamesBarney wrote: post #24
sillystuff wrote: post #12

In 2012 I was looking at investing in REITs. One REIT's pitch was that they owned such a large percentage of the rental housing in Tampa Florida, that even though vacancy rates were high, and rents were going down throughout the nation and other areas in the state of Florida, they were able to keep rents high in Tampa. Disgusted, I realized the harm that REITs and private equity are doing to housing markets, and want…

We just need to remember that banning housing investment means banning rentals which is problematic for people who don't have good credit and a down payment.

The concept of credit score isn't something that has always existed in humanity. It's something that we can go on without, even more so given the ridiculous profitability of banks

Re: Investors bought a quarter of US homes sold last year

#70

Post by HideousKojima »

yardstick wrote: post #35
JamesBarney wrote: post #24

Earlier quoted context omitted.

We just need to remember that banning housing investment means banning rentals which is problematic for people who don't have good credit and a down payment.

Imagine if housing was cheap enough that paying the mortgage was around the same as what it now costs to rent. There definitely needs to be some rentals, but I believe that there needs to be controls over how many and the rental price.

When I bought my home 4 years ago my mortgage was ~10% more per month than the apartment I was renting. Looking at the apartment complex's website, it looks like the same apartment is now about 60% more per month than my mortgage.
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