Ban predatory private equity altogether.
US will ban Wall Street investors from buying single-family homes
931–940 of 1001 posts
Re: US will ban Wall Street investors from buying single-family homes
#932Earlier quoted context omitted.
> They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's…
There won't BE another house for less, because of the way the real estate market works. If a house goes up in price, others do to.
There is always another house for less. You will almost certainly have to sacrifice on something (size, location, condition) in order to find that lower price but you can get there if price isn’t flexible.
Does no one remember “drive til you qualify”?
Re: US will ban Wall Street investors from buying single-family homes
#933The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…
It has definitely cooled dramatically; even reasonable interest rates make the numbers pretty meh.
This feels very similar to the Canadian narrative that foreign (read: Chinese) investors are buying all the houses in Vancouver & Toronto. Does it happen? absolutely, but it's also a nice way to blame a segment that has no voice or recourse. It also allows us to turn a blind eye to the impact of a generation of essentially zero % interest rates and a country that holds twice as much of their wealth in houses as the US. Other popular targets: out-of-province home owners, vacation property owners, multi-generational properties.
Re: US will ban Wall Street investors from buying single-family homes
#934Earlier quoted context omitted.
Property is a physical thing in the real world that has been here long before anyone "owned it", and will be here long after all the "owners" are gone. The public, i.e. the people on this planet, have a right to know who is claiming to own which part of the grass and soil that we all share.
They have the right to know that, but why should they know the transaction price?
To support a fair market of property value
Re: US will ban Wall Street investors from buying single-family homes
#935Earlier quoted context omitted.
> They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's…
It's not just raising prices - it's holding prices steady at some point without the concurrent pressure to sell, for example, or manipulating other markets in order to raise or lower prices in an area, or using other mechanics to manipulate pricing, across the entire market, depending on the intended actions. If they intend to purchase properties, it benefits them to depress pricing in the area, if they intend to ren…
if they controlled even a notable minority share this might make sense, or the majority of a specific region or type of stock where there are limited alternatives, but I don't see any examples of this. We didn't even see this type of phenomenon in the biggest US crash markets where banks owned entire neighbourhoods; even they were not immune to overall market forces. To suggest PE has anything like infinite money and/or time totally ignores that everyone is subject to opportunity cost. A fund that under performs for any length of time because they're playing some sort of marginal long game won't exist for long.
You just haven't presented any evidence or even a hypothetical where this does or could happen.
Re: US will ban Wall Street investors from buying single-family homes
#936Earlier quoted context omitted.
While that’s true, even if “Wall Street” is only holding a few percent of homes, those being released to the markets (and future ones not being purchased) might help. Corporate entity creation in America is such that I don’t think this will be enforceable (“we don’t buy homes, our Gibraltar office’s subsidiary invested in its CEO’s LLC that bought the home”) but if I’m wrong, it could help somewhat. It’s binary think…
Not really, because the problem isn't investors buying homes, its a lack of supply of new homes. Big investors don't buy homes to keep them empty, they buy them to rent them out. An exception to this might be short term rentals but that is going to be significant in only a few markets and the problem there is still fundamentally a supply problem.
But even by long term renting they’re driving up home prices.
Re: US will ban Wall Street investors from buying single-family homes
#937Earlier quoted context omitted.
You're telling a just-so story, and you can tell because there isn't a simple schematic 1-2-3 story you can make from this about how these people exert control over home prices. Words mean things; wielding scarcity requires you to control enough inventory to manipulate scarcity, and REITs and corporate buyers empirically don't. I get why people like telling stories like this: it suggests there's a single boogeyman th…
>> You're telling a just-so story, and you can tell because there isn't a simple schematic 1-2-3 story you can make from this about how these people exert control over home prices. We don't need to explain how they do it. We KNOW private equity is expecting to make profit from their investment in residential real estate. That profit ultimately comes from people in houses, making them less affordable.
>> We don't need to explain how they do it
We most certainly do. PE owns pools of rental housing; this is a fundamentally different model from speculation. While both impact the selling price they do it in completely different ways, and if institutional investors own a tiny fraction of the total stock, they're not having a huge impact on the supply side which would potentially drive up prices.
You're supposed "logic" seems comparable to magic.
Re: US will ban Wall Street investors from buying single-family homes
#938The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…
Daily reminder that the largest purchasers of residential real estate through these intermediary firms (since that's all they are... they own them in trust for others) are public employee pension plans.
Re: US will ban Wall Street investors from buying single-family homes
#939Housing prices are rising due to inflation, and specifically inflation on the raw input for houses - lumber, building materials, and labor. Granted, this is not the only reason in all regions, places like California have much more complex, systematic reasons for increased housing prices. But the bulk of the US has housing prices that are somewhat in line with the cost of building, since there's no limit on land to throw cookie cutter subdivisions on.
They don't want to admit that their abhorrent policies are hitting the pocket books of their supporters, so they latch onto popular sentiment instead of solving the problem. Typical of this administration.
I built a house in 2018 for $350k. To build the same house again today would be $650k (and it would probably take twice as long). Surprisingly, the cost of land is not much more than it was 8 years ago. All of that cost increase is in materials and labor.
The problem is, the market value of my house is $550k, at the most. Meaning it's not profitable to build new houses as the market can't sustain them. And who is going to sell their house at less than they can get another one for? Only people who are forced to move, which is probably why the there is such low inventory in the historically cheaper markets.
Re: US will ban Wall Street investors from buying single-family homes
#940Earlier quoted context omitted.
As far as I can tell, LVT only achieves what it sets out to do if it’s equivalent to market rent. As in, you never really “own” your land, you’re just renting it from the sovereign. If you can’t make good enough use out of it to afford that rent, you should move on. You can find comments on this thread that make this argument explicitly in terms of “maximizing land use efficiency”. This was the economic structure of…
How is that LVT "rent" different from any other traditional property tax being "rent"? As near as I can tell, it is just a different way of deciding how the property tax burden is levied. Downtown property gets taxed much more. Un-developed speculation property that doesn't contribute to the community (and derives value from other people's contributions) get taxed at the same rate as nearby developed property.
Property taxes have to be set high enough to fund services: Voters want more services, they pay more property taxes. The policy goal is delivering services the voters want to households and businesses.
LVT is designed to achieve a different policy goal: Maximize the efficiency of land use. So its rates have to be set to achieve that goal and, for example, force grandma to move out of that condo in a newly revitalized downtown so a young tech kid who can pay more & benefit from it more can move in.