Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

US will ban Wall Street investors from buying single-family homes

reuters.com

Post reply on HN
Print view View original

911–920 of 1001 posts

Re: US will ban Wall Street investors from buying single-family homes

#911

Post by john-h-k »

ksec wrote: post #889

This is largely a good move. There are plenty of whales, once those 5% disappeared, price should slowly come down. ( The Hong Kong Housing market is the one worth studying ) Next would be increase supply, and may be if needed, additional tax for individuals owning more than one home or when they buy 2nd home. Largely making housing as an asset not attractive for certain group of investment. Housing continues to be th…

> There are plenty of whales, once those 5% disappeared, price should slowly come down

But by how much? ~3-4% of housing has to be sold, some amount of it will still be bought for renting (as many people still want to rent). Surely this can’t have a very big effect on house price

Re: US will ban Wall Street investors from buying single-family homes

#912

Post by xnx »

bombcar wrote: post #907
xnx wrote: post #878

Earlier quoted context omitted.

> homeowners will get muscled out by large builder concerns > homeowners are being pushed out and their homes What does this mean?

Usually it means that supply gets bought up and converted (and leaves the supply, often). The desire is that a row of single family homes (say a block has 10) get slowly redeveloped into a row of brownstones or similar density - but they're still single family and owned by the residents, but now you have 20 in the same space, or 30. You can triple the density and not really change anything else. But what ends up happ…

Right, but how do homeowners get "muscled" or "pushed" out? Is it by the homeowners agreeing to sell their homes for a price they found acceptable?

Re: US will ban Wall Street investors from buying single-family homes

#913

Post by 15155 »

notepad0x90 wrote: post #904
15155 wrote: post #867

Earlier quoted context omitted.

> they make no money from cash buys because of that economic perversion. This is completely false. This might be surprising to learn, but for normal car dealerships (not buy-here, pay-here or used car dealerships) a huge amount of their compensation rides on receiving holdback payments from manufacturers, as well as per-unit bonuses that often have cliffs. Cash buyers paying invoice price are welcomed (if they aren't…

What I heard is that they make no profit. I'm sure they'll make revenue, but if they simply sold all cars at the cash price, they will be losing money, especially dealerships. But if you're certain they do make profit, not just revenue, then you sound like you know more about the industry than myself, so I'll concede that point.

The dealership customarily earns 2-3%+ in quarterly holdback payments from the manufacturer. They sell you a $100k car at invoice, later that quarter they're getting a $3000 payment - this is pure profit, the deal was long-since done and they didn't take a loss at time of sale.

Dealerships are also earning miscellaneous per-car bonuses which are also profit, which go up based on overall volume: if they sell 50 cars, they get $200/car, if they sell 100 units this might jump to $500/car - just a random example.

If a car is in high-demand or really uncommon (in reality, not sales-speak, and a customer has no other options), they can afford to not sell a car at invoice - but this is an exceptional circumstance.

Re: US will ban Wall Street investors from buying single-family homes

#914

Post by bombcar »

parineum wrote: post #721
Someone1234 wrote: post #421

Earlier quoted context omitted.

The problem with "increase supply" is that existing property owners rarely want that. In almost all cities land has run out, so the only way to actually increase supply is to increase density. That means fewer single-family-homes, and more townhomes, multi-family, condos, and apartments. The "American Dream" is a single-family-home, surrounded by other single-family homes, but even with urban sprawl we simply run int…

> In almost all cities land has run out That's incredibly untrue. There are numerous cities, even in CA and NY, that have plenty of room for new single family homes. The response to that is usually some variant of "eww, gross".

More importantly, there's huge tracts of land that could be new cities.

In the past, we had that incidentally or almost "accidentally" as new industries would create or vastly expand existing towns, and development would occur around them.

Now most "work" is more fluid, and doesn't build company towns, instead you get endless suburbs expanding off an existing city, even when they're technically their "own legal framework".

Even after we moved off the "factory town" type new cities, the suburb development wasn't a major issue because each new exurb usually involved a new highway direct to the city center - but new highways have been rare mainly because all the "reasonable" ones have been built now.

You could either create demand for cities somehow (look at Las Vegas, built out of nowhere) or you could use high-speed commuter rail to empty areas to give room for a seed to grow.

Re: US will ban Wall Street investors from buying single-family homes

#916

Post by h14h »

ksec wrote: post #889

This is largely a good move. There are plenty of whales, once those 5% disappeared, price should slowly come down. ( The Hong Kong Housing market is the one worth studying ) Next would be increase supply, and may be if needed, additional tax for individuals owning more than one home or when they buy 2nd home. Largely making housing as an asset not attractive for certain group of investment. Housing continues to be th…

Given how inexorably tied the US economy is to SFH prices, a drop may do more harm than good.

Many families have the majority of their wealth tied up in their home, and another significant portion of it (knowingly or not) in the SFH MBS market via their retirement investments. If prices fall quickly enough to impact the MBS market, a large number of households could suddenly see big dips their two biggest sources of wealth.

A gradual drop may be fine, but the financialization of housing at the national is a big mess. Sadly it makes the market dynamics of giving people places to live way more complex than it should be.

Re: US will ban Wall Street investors from buying single-family homes

#917

Post by bombcar »

gregw134 wrote: post #528
rgmerk wrote: post #165

It will make very little difference in the end. Australia's land tax system makes it effectively impossible for large corporations to own large chunks of residential property, but our real estate is amongst the world's most expensive and landlords are still awful - it's just that the landlords are hundreds of thousands of dentists and, yes, software engineers rather than corporate entities. If you want housing to be…

It's a good start. Would be nice to add a gradually increasing tax on multiple home purchases, e.g. buying a third home has a 5% tax, 4th 15% tax, fifth 25%, and if you want a sixth home you have to build it yourself. Would prevent regular people from buying up dozens of homes to rent.

Changing the excessively huge (and probably financially needed) capital gains deduction for selling a home and buying a new one to only work if you literally buy new construction - would probably spur something.

Existing stock would be depressed in value as the pool of buyers would be smaller, but they'd be more likely to be first time buyers anyway (no capital gains to deal with) and demand for new would increase.

But you could end up with insane inversions where existing stock was pulled down to build new to take advantage of the gains exclusion.

Re: US will ban Wall Street investors from buying single-family homes

#918

Post by mimd »

It's not going to solve the housing issue and is mostly for press (and it's not even getting into ulterior motives), but it might help with preventing a longer term issue of large investors becoming a major issue. Additionally, I wonder about the choice in properties as properties aren't fungible.

Re: US will ban Wall Street investors from buying single-family homes

#919

Post by bombcar »

SamDc73 wrote: post #788
rgmerk wrote: post #165

It will make very little difference in the end. Australia's land tax system makes it effectively impossible for large corporations to own large chunks of residential property, but our real estate is amongst the world's most expensive and landlords are still awful - it's just that the landlords are hundreds of thousands of dentists and, yes, software engineers rather than corporate entities. If you want housing to be…

As long as houses are treated as an investment, there will be all kind of incentives to make them go up in value. China did "over" solve it by building loads of houses, so everyone's house value just crippled down like crazy. If buying a house delivers 5–10× the ROI of the S&P 500, that’s not “smart investing” then there is a huge problem to be addressed ... (preferably by building more)

5–10× the ROI of the S&P 500 - which is really only true because we allow massive leverage on real estate that we'd not on stocks themselves.

And leverage brings all the problems associated with it; if you own your house outright and it goes down %10 you're out 10%; if you only have 10% equity and the same happens you're down 100%. The gains, of course, work similarly which is why for so long it's been a heads I win, tails I win.

Re: US will ban Wall Street investors from buying single-family homes

#920

Post by majani »

kelnos wrote: post #701
Someone1234 wrote: post #421

Earlier quoted context omitted.

The problem with "increase supply" is that existing property owners rarely want that. In almost all cities land has run out, so the only way to actually increase supply is to increase density. That means fewer single-family-homes, and more townhomes, multi-family, condos, and apartments. The "American Dream" is a single-family-home, surrounded by other single-family homes, but even with urban sprawl we simply run int…

> The problem with "increase supply" is that existing property owners rarely want that. Yup. I'm a weirdo who owns his home but wants a shit-ton more housing built in his city, even if it means my home value goes down. I do know some like-minded folks here, but I would be very surprised if we weren't in the minority. And it makes sense. We're taught (in the US) to treat our primary residence as an investment, and for…

Increasing supply would see your property value rise astronomically. Suddenly there would be developers wanting to build a 30 storey building in place of your single family unit. The ROI on that 30 storey would be high enough for them to give you multiple millions of dollars for your land. What would decrease is the beauty of the neighborhood, but people can be taught to appreciate the beauty of highrise buildings
Post reply on HN