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If you sell a house these days, the buyer might be a pension fund

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Re: If you sell a house these days, the buyer might be a pension fund

#921

Post by kelp »

beiller wrote: post #848
treeman79 wrote: post #778

Earlier quoted context omitted.

Prices are set by supply and demand. Realtors don’t control that. Build 1-10 million 400 sq-ft studio apartments will solve the housing price problem. Existing inventory can cover families.

Supply and demand. I think of demand as people looking to live in homes, not investors. If that was the case, demand should have dropped off a cliff after covid when they closed the borders. Our countries have negative birth rates. Immigration is the only source of new people. So you must have come to the conclusion at this point that the demand is purely investment driven via speculation. Now see a problem with just…

People moving around inside of a country is also a source of demand.

The price of condos in San Francisco dropped 10% with COVID-19. The prices in the Tahoe area are up about 20 - 30% over the past 12 months.

The demand moved to single family homes, because people wanted a yard, when they were locked down at home, with few things open.

Now that California and San Francisco is opening back up, the real estate demand is coming back, as are the prices. Yes, speculation and investment is part of the story. But also a lot of people made a lot of money in the stock merket over the past 12 months, and are looking to upgrade their housing.

Re: If you sell a house these days, the buyer might be a pension fund

#922

Post by ivalm »

dcolkitt wrote: post #806
ivalm wrote: post #730

Earlier quoted context omitted.

Because there are external costs. The “consenting adults” narrative is false. Not enough parking means people living there will use street parking in nearby areas affecting the residents of those communities. This happens all the time.

This problem only exists because street parking is heavily subsidized at below market rates. In urban cores, street parking is often 90% cheaper than garage parking.

True, but again, if there exist people who currently rely on street parking and your solution is to raise prices so that new residents could compete for street parking then this still affects old residents. Gentrification is an externality too.

I am not saying we should stop doing everything that has externalities -- clearly we can't do that. It's just important to know that these transactions are not "between consenting adults" that dont affect others. Just because an owner of some land, some developers, and some perspective tenants agree on something doesn't mean it wont negatively affect a bunch of other people. And ignoring a bunch of other people entirely is not the correct choice.

Re: If you sell a house these days, the buyer might be a pension fund

#923

Post by zamfi »

mixmastamyk wrote: post #736
zamfi wrote: post #721

Earlier quoted context omitted.

> they know your neighbors will do the dirty work of artificially constraining the housing supply, which makes it a good investment ...until your neighbors are all renters, at which point the tide turns?

A lot of renters are nimbys as well, due to misconceptions, or other factors such as rent-control affecting their outlook.

Err…no one wants their neighborhood to suddenly have a bunch of new unknown people in it, right? You don’t have to be a nimby to be concerned about who you live next to. It’s not a “misconception” in that sense, especially if moving is impossible because of rent control, as you mention.

Perhaps we need better protections around dealing with insufferable neighbors and other neighborhood changes’ negative impacts, and people will object less?

Re: If you sell a house these days, the buyer might be a pension fund

#924

Post by nthtoss »

beiller wrote: post #842
markdown wrote: post #779

Earlier quoted context omitted.

> I read recently that Japan and new Zealand scrapped various regulations and this led to stabilization / lower of property prices. I don't know about Japan, but that can't possibly be right about NZ. Nobody in our generation will ever be able to afford a home in Auckland. Land Value Tax sorely needed.

Same in Canada. I am in the top 3% of wage earners in the entire country and can not "afford" to buy. Average price is > 1 million. At > 1 million, a 20% down payment is required in cash. That would basically take my well balanced portfolio into pure real estate holdings not to mention a massive tax hit to sell 200k+ of my portfolio. I used quotes in afford because I could afford it, but I feel it would be a huge mis…

Similar story here. We modified our expectations and bought a smaller home AND kept the well balanced portfolio. So far so good.

Re: If you sell a house these days, the buyer might be a pension fund

#925

Post by babyshake »

eric-hu wrote: post #910
babyshake wrote: post #847

Earlier quoted context omitted.

What about throwing as much money as it takes to not only build new towns with dense housing in places where those towns don't already exist, but to make those new places to live much more desirable than a pre-planned new development normally would be? I imagine the political will isn't there. The answer to me would be an ultimatum. Either yes in your backyard, or a tax is levied for a new development that won't be t…

This sounds like the original motivation of some ghost towns in China.

Yeah I agree. I can't think of many examples where this seems to have worked. Very much a chicken and egg problem, but I'd think with enough funds available there would be a way to make it work.

Re: If you sell a house these days, the buyer might be a pension fund

#926

Post by no-dr-onboard »

igetspam wrote: post #701
no-dr-onboard wrote: post #269

A bit late to the convo, but we literally just signed over the contract of our house in Austin. 5 days on the market, 4 offers, 1 family, 1 family trust, 2 investment firms. All offers 20-50k over asking, 0 conditions.

I hope that holds. I have a buddy/tenant that is waiting for an IPO this month. When it finally drops, he'll know what he can afford and then he'll start house shopping. I likely won't be able to have my house on the market until August. Congratulations!

Definitely hope it works out for him. Thank you for the well wishes btw.

Re: If you sell a house these days, the buyer might be a pension fund

#927

Post by briefcomment »

sagarm wrote: post #737
briefcomment wrote: post #239

Earlier quoted context omitted.

We're waiting

Rent control has been instituted or strengthened as a response to rising rents in cities across the country.

Maybe. I'm skeptical it's enough though. Clearly, the intention is to see how much they can get away with as monopolists.

"In 2016, with the real-estate market heating up in metropolitan areas across the country, single-family rental companies also started pushing the limits of how much they could raise rent every year. American Homes 4 Rent raised rents by 11 percent between 2016 and 2018; the average rents in the top 30 markets in the country increased by just 6 percent over the same time, according to Zillow. American Homes 4 Rent owned 70 percent more properties in the first nine months of 2018 than in the same period in 2014, but it collected 150 percent more rent. “It’s up to us to educate tenants in a new way that there will be annual rental rate increases,” David Singelyn, the CEO of American Homes 4 Rent, said at an investor’s forum in 2017. “This has been a very passively managed industry for 30, 40 years, up until the institutional players came in.” [1]

[1]https://www.theatlantic.com/technology/archive/2019/02/singl...

Re: If you sell a house these days, the buyer might be a pension fund

#928

Post by dragonwriter »

ta1234567890 wrote: post #913
nopeNopeNooope wrote: post #583

Earlier quoted context omitted.

That sounds insightful, but there's no point in screwing a buyer for a tiny today payday. Those agents work on volume, so if you think they're pushing you to not get the lowest price, it's so they can close the deal, not because their incentives aren't aligned with yours. If they're telling you to offer more, it's because they have better knowledge of the market and the game than you. They're banking on many commissi…

> That sounds insightful, but there's no point in screwing a buyer for a tiny today payday. Except: 1) most people will only buy a property once, so there’s very little potential downside for the agent, and 2) is not about screwing the buyer over, is about driving the whole market higher so they can keep pumping their commissions up and convincing more owners to sell. The latter is specially easy to do in smaller cit…

> most people will only buy a property once, so there’s very little potential downside for the agent,

Agents do get repeat and referral business if they don't suck; the agent we use has been involved in several sales and a purchase for our extended family in a few years, and we've referred other people to her, too.

> Specially when most of the buyers and sellers are in it for just one transaction in their whole lives,

The median person who buys a home at least once buys significantly more than one in their lifetime (the lowest estimate I’ve seen is around 3, 5+ seems more common), “first-time” homebuyers (which are just people who haven't owned and occupied a home in the last three years, not people who have never owned a previous home) only make up about third of homebuyers.

Re: If you sell a house these days, the buyer might be a pension fund

#929

Post by nathanaldensr »

game_the0ry wrote: post #384

Is it somehow crazy or unpalatable to say that there should be a law against institutional investors and corporations from owning residential real estate that was built for owner-occupiers? Bc there should be a law and it should have been passed by congress yesterday .

While this may sound great in theory, private property in the United States does not work this way. The federal government's role is not to dictate such things; states may, but even state laws may run afoul of the Constitution. Private property is a fact of life and law in the United States and only amendments to the Constitution can change that.

Re: If you sell a house these days, the buyer might be a pension fund

#930

Post by nathanaldensr »

52-6F-62 wrote: post #15
Faaak wrote: post #8

I'm sometimes afraid of these "mega-corps" that have the effect of really changing things. Sometimes in a bad way. Sadly, once you've got money, you can earn much more. What the limit to t->infinity ? One single corp dominating the world ?

I like the thought experiment of taking that to its absurd logical conclusion. I'm sure there are some fun ones. Eg, Once a single corporation is in control of everything, and everything that comes in is profit and everything that goes out is a loss then the only missive left is to cut all losses, no? How do we do that? Burn the planet? Can't lose if there's nothing to lose.

Reminds me of the paperclip problem[1].

[1] https://voxeu.org/article/ai-and-paperclip-problem

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