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re: WSJ: Wall Street Has Spent Billions Buying Homes. A Crackdown Is Looming.
Posted on 4/29/24 at 12:05 pm to AUFANATL
Posted on 4/29/24 at 12:05 pm to AUFANATL
quote:
What are you going to do, call up some securities manager at Blackrock and demand someone fix or replace your crappy HVAC unit?
There are management firms that handle these issues and more.
0
Posted on 4/29/24 at 12:22 pm to BilbeauTBaggins
quote:
If you're renting, unless you broke something yourself, the landlord will foot the bill for all repairs. Updates to the home? You don't pay. Need a new A/C unit? Paid by the landlord. Plumbing issue? Landlord.
Will not happen unless you move and they think it needs updating in order to collect more rent.
quote:
People lease cars because they like having a new car every few years. New car generally means not having to worry about problems that occur later on in life, cheaper montly pricing, not having to worry about selling, and paying less throughout those short term contracts so that you can save up for the next lease.
Difference is that typically if you hold and pay for a home, it will be an asset of value when it's paid for. Cars decline. I doubt (althought it's possible) that there has been a time when a home held for 30 years didn't increase in value.
My HOA is researching adding to our rules a clause that a home must be lived in by the owner for a minimum of 1 year with a few caveats. HOA's in Houston are adding this to protect themselves from absentee and corporate landlords.
Posted on 4/29/24 at 12:23 pm to ragincajun03
As a person that was completely fricked out of the housing market during this time, I’m happy about it. frick all these greedy assholes
Posted on 4/29/24 at 12:23 pm to ragincajun03
quote:
Companies that buy single-family homes say their businesses provide renters the opportunity to live in desirable neighborhoods where they otherwise couldn’t afford to buy.
As an apartment renter, there’s plenty of complexes in desirable neighborhoods.
Posted on 4/29/24 at 12:25 pm to stout
quote:
What do you think happens to a development/local market if a firm buys up 50 of the 100 houses that DR Horton or DSLD are building?
Or if a firm frequently makes an asking price cash offer so that buyers must go above asking to win a bid with a mortgage. Sellers are frequently going to take the cash offer because it's so easy.
Posted on 4/29/24 at 12:25 pm to Oilfieldbiology
quote:"institutions" own an extremely tiny portion of the US housing market.
I read in the other thread that investor bought houses was minor. Somewhere between 1/20 to 1/5 houses being bought and owned by Wall Street/Venture Capital seems like a major portion of the market.
Posted on 4/29/24 at 12:32 pm to CatfishJohn
quote:
They aren't in this for near term profit. They aren't calculating ROI in 1,2,3 years. They are looking at 20+ years. They want to rent them out as much as they can and sit on them.
I don’t honestly think you can actually believe this. If you don’t care about your profit for the next 3 years, you won’t make it to year 4
Posted on 4/29/24 at 12:36 pm to Big Scrub TX
quote:
"institutions" own an extremely tiny portion of the US housing market.
I have seen this talking point brought up constantly. It is disingenuous at best as it ignores the recent trends.
quote:
An estimated 39 percent of rental housing units in the United States are single-family dwellings. Because larger households tend to prefer the size of single-family homes, roughly 41 percent of the renter population lives in single- family homes. In recent years, institutional and other large investors have been actively expanding their share of the single-family rental market. Between 2011 and 2017, these investors purchased more than 200,000 single-family homes at a total cost of $36 billion. Investor purchases surged again during the COVID-19 pandemic: in the first quarter of 2022, investor purchases of single- family homes averaged 28 percent per month, compared with 19 percent the previous year and the average of 16 per- cent between 2017 and 2019. This rate is much higher in certain areas of the country, reaching up to 67 percent in Lincoln County, Mississippi; 63 percent in Van Buren County, Iowa; and 52 per- cent in Tarrant County, Texas, in 2021. Large portfolio investors (those holding more than 100 properties) drove this growth. According to CoreLogic, institutional investors purchased 3 percent of homes sold in 2021, three times their typical share in prior years. Research by MetLife Investment Management suggests that, as of August 2022, institutions owned approximately 700,000 single- family rental homes.
LINK
There is a clear uptick in the homes being bought by institutional investors and it's growing.
Posted on 4/29/24 at 12:43 pm to baldona
quote:
I don’t honestly think you can actually believe this. If you don’t care about your profit for the next 3 years, you won’t make it to year 4
Do you think this is their only business? Do you know how large and diversified these corporations are? You’re out your depth here.
Blackstone has an annual cash flow of like 4 billion. Just cash flow. 90 billion market cap. They are filled with long term investments.
Posted on 4/29/24 at 12:44 pm to stout
If Jones LLC buys a home today, am I apart of that group? Where is the line drawn?
Posted on 4/29/24 at 12:46 pm to baldona
quote:
I don’t honestly think you can actually believe this. If you don’t care about your profit for the next 3 years, you won’t make it to year 4
Your problem is you are thinking on a mom-and-pop operation level.
These firms have backers with deep pockets. The same type of investors that prop up tech firms for decades while they try to become profitable.
RE "losses" also have huge tax advantages for these investors
Posted on 4/29/24 at 12:46 pm to Big Scrub TX
quote:
"institutions" own an extremely tiny portion of the US housing market.
It’s market dependent and a lot higher in some areas. But yeah, I doubt they have a big or any presence across 99% of the geographical area of the US.
Posted on 4/29/24 at 12:47 pm to PrecedentedTimes
quote:
IMO, the only rentals that should be allowed (besides vacation rentals) are owner occupied rentals. It would prevent slums from spreading.
I’m going to need you to elaborate on this because it seems completely unviable from my point of view.
Are you insinuating that long term rentals simply should not exist for single family homes? Presumably you feel as though section 8 housing should be congregated into apartments?
Who, then, is purchasing these homes? There will always be a portion of the population that can’t afford a down payment on a home, and would prefer rent either until they can afford it, or just rent perpetually.
Posted on 4/29/24 at 12:48 pm to stout
They still represent less than 3% of all SFR rental investors.
SFR investors have also sold more homes than they purchased over the last 7 years, representing a net negative in ownership.
US homeownership rate is near all-time highs. Reality is that individuals have outmuscled wall street for SFRs.
So while they have increased their %of acquisitions, it's definitely more of a boogeyman than reality.
SFR investors have also sold more homes than they purchased over the last 7 years, representing a net negative in ownership.
US homeownership rate is near all-time highs. Reality is that individuals have outmuscled wall street for SFRs.
So while they have increased their %of acquisitions, it's definitely more of a boogeyman than reality.
Posted on 4/29/24 at 12:48 pm to Jones
quote:
If Jones LLC buys a home today, am I apart of that group? Where is the line drawn?
No
quote:
Institutional investors are single, nonindividual entities such as limited liability companies (LLCs), limited liability partnerships (LLPs), and real estate investment trusts (REITs) that have portfolios of 1,000 or more housing units.
Posted on 4/29/24 at 12:53 pm to ragincajun03
quote:
would cap rental-home ownership at no more than 50 homes for many companies, requiring them to sell off any more they already own. A bill in Minnesota, meanwhile, would limit ownership to 20 homes.
Investment groups will just create one holding company that will hold several different LLCs that own 50 homes each
Posted on 4/29/24 at 12:54 pm to baldona
quote:
People lose a bid on a home and want to blame it on an institutional buyer. Most of the homes bought by these companies aren’t hitting the regular market. As stout said, an institutional buyer will go to someone like DSDL and offer to buy 5,10, 25 or whatever homes at a price. Those aren’t hitting the market.
Lol
First of all, some of these homes are on the market. I’ve owned my second home for years now but when we were buying, we lost to institutional cash buyers twice
also, it’s not as if the institution built the homes and then began renting. They were at one point on the market and would be again if it weren’t for….institutional buyers
This post was edited on 4/29/24 at 1:02 pm
Posted on 4/29/24 at 1:08 pm to ragincajun03
This is all nonsense spouted by economics illiterates. There is a market for renting and a market for buying. If corporations buy so many homes to rent that it exceeds the rental market demand then they will have underutilized housing and they will lose their arse.
The would-be home buyers, who are supposedly being forced to rent, would actually drive up the price of starter homes leading to a boom in construction.
Notice that there is no boom in construction? That’s your tell that all of this is bullshite.
Now, here is what really happened. The high interest rates have squashed the market for starter homes. This is what has caused these people to become renters - not a lack of supply due to greedy corporations buying houses.
Here I speculate. There is some big money out there that has run from stocks and doesn’t trust bonds either. These investors have decided that the housing rental market is better than traditional ways of hiding out. Let’s see if they are right, but they are not hurting anyone.
The would-be home buyers, who are supposedly being forced to rent, would actually drive up the price of starter homes leading to a boom in construction.
Notice that there is no boom in construction? That’s your tell that all of this is bullshite.
Now, here is what really happened. The high interest rates have squashed the market for starter homes. This is what has caused these people to become renters - not a lack of supply due to greedy corporations buying houses.
Here I speculate. There is some big money out there that has run from stocks and doesn’t trust bonds either. These investors have decided that the housing rental market is better than traditional ways of hiding out. Let’s see if they are right, but they are not hurting anyone.
Posted on 4/29/24 at 1:15 pm to North Dallas Tiger
quote:
It appears to me there is a fundamental conflict of interests between those who have enjoyed massive boosts in home equity and those trying to enter the homeownership market. So if this legislation becomes a reality, it's bad for the former group's pocketbooks but benefits the latter group.
And as soon as they become homeowners it’ll be bad for them if the govt decides to further limit who can buy homes.
Posted on 4/29/24 at 1:17 pm to deltaland
quote:
Investment groups will just create one holding company that will hold several different LLCs that own 50 homes each
You can't just get around it that way. This is essentially anti-trust territory and if that was a loophole, it'd be done everywhere all the time in every industry. Lina Khan don't play that shite.
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