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Message
re: WSJ: Wall Street Has Spent Billions Buying Homes. A Crackdown Is Looming.
Posted on 4/29/24 at 10:28 am to ragincajun03
Posted on 4/29/24 at 10:28 am to ragincajun03
I'm pretty damn pro-free market and small government, but this is where I become a hypocrite (admittedly). There has to be regulation on this, if left unchecked another decade it could obliterate the middle class.
This is a good start, but it can't be something that is forced immediately. It has to slowly happen. And not entirely, but there has to be some sort of anti-trust type analysis done in each market that shows when an institutional buyer is at their limit and if they go over, or the market has too low of a supply, they can't buy any more.
quote:
Democrats in the U.S. Senate and House have sponsored legislation that would force large owners of single-family homes to sell houses to family buyers. A Republican’s bill in the Ohio state legislature aims to drive out institutional owners through heavy taxation.
This is a good start, but it can't be something that is forced immediately. It has to slowly happen. And not entirely, but there has to be some sort of anti-trust type analysis done in each market that shows when an institutional buyer is at their limit and if they go over, or the market has too low of a supply, they can't buy any more.
This post was edited on 4/29/24 at 10:31 am
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Posted on 4/29/24 at 10:28 am to ragincajun03
quote:
In some American cities, institutional investors hold a much larger share of homes than they hold nationally. In Atlanta, nearly 11% of all rental homes in the five-county area are now owned by three real-estate companies, a recent study by researchers at Georgia State University found. A 2022 analysis by the U.S. Department of Housing and Urban Development said 21% of Atlanta rental homes were owned by some large institution.
Funny to see this. A friend of mine who is in finance in NY about 10 years ago was visiting me and he mused to me how cheap ATL real estate was compared to other major metros and how there was a lot of opportunity there. I remember starting to pay attention to those home shows when they were in ATL and looking up listings and I had to agree.
And here we are where apparently everyone else in finance caught on.
Posted on 4/29/24 at 10:31 am to Dawgfanman
quote:
Govt devaluing the dollar and flooding the country with money since 2020 caused this, institutional buyers are just their bogeyman.
A heavy contribution is also the decade of ridiculously cheap debt that these companies had access to.
Posted on 4/29/24 at 10:32 am to Dawgfanman
quote:
Govt devaluing the dollar and flooding the country with money since 2020 caused this, institutional buyers are just their bogeyman.
They've been buying up homes for a lot long than this. There can be more than one boogeyman.
Posted on 4/29/24 at 10:32 am to teke184
Exactly
The bills need to be bans in new buying once you hit a certain threshold limit. Not a forced sale of hundreds of thousands of units at once
The proposal in its current form feels like it’s designed to tank the market so that homebuyers will revolt and push the government to keep the status quo in place. The government will then say we tried, but the people didn’t want this. And on the system will go without meaningful change, completely ignoring that a way way better method to balance the market was always available from day 1.
In short, you don’t punish the people who played the game legally under the old, shitty system. You just update the system to prevent them from continuing to exploit it. Ban the sale of more homes to anyone with more than 1000 units, don’t force them to sell what they already have
The bills need to be bans in new buying once you hit a certain threshold limit. Not a forced sale of hundreds of thousands of units at once
The proposal in its current form feels like it’s designed to tank the market so that homebuyers will revolt and push the government to keep the status quo in place. The government will then say we tried, but the people didn’t want this. And on the system will go without meaningful change, completely ignoring that a way way better method to balance the market was always available from day 1.
In short, you don’t punish the people who played the game legally under the old, shitty system. You just update the system to prevent them from continuing to exploit it. Ban the sale of more homes to anyone with more than 1000 units, don’t force them to sell what they already have
Posted on 4/29/24 at 10:43 am to Jcorye1
quote:
et's be honest, the right people will get paid off and it will continue.
My personal theory is home "ownership" will be considered a right, and a lot of these homes will be moved to a section 8 style situation. PE gets their money, government gets their kickbacks, and people get to live in houses.
No ideal but building codes and prices are going to make it necessary. Folks got to have a place to live or they will live under bridges....and are. Can't have nice shite without it costing someone....there ain't no free lunches.
Posted on 4/29/24 at 10:44 am to funnystuff
quote:
The proposal in its current form feels like it’s designed to tank the market so that homebuyers will revolt and push the government to keep the status quo in place. The government will then say we tried, but the people didn’t want this. And on the system will go without meaningful change, completely ignoring that a way way better method to balance the market was always available from day 1.
In short, you don’t punish the people who played the game legally under the old, shitty system. You just update the system to prevent them from continuing to exploit it. Ban the sale of more homes to anyone with more than 1000 units, don’t force them to sell what they already have
Fine with this approach. But then on top of it say something like "By 2044, institutional single family home buyers must divest down to X number of homes". Maybe something like 40-50. Gives them 20 years to play the real estate market to maximize profits and doesn't cause a panic.
Posted on 4/29/24 at 10:47 am to funnystuff
What about apartment buildings? What about sky rises? What about entire neighborhoods built to rent? Where does it start and stop?
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.
If you can’t afford a 20% down payment, save. You shouldn’t own a home and worry about it. Most people try to over buy too early anyway.
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.
If you can’t afford a 20% down payment, save. You shouldn’t own a home and worry about it. Most people try to over buy too early anyway.
Posted on 4/29/24 at 10:52 am to funnystuff
quote:
Ban the sale of more homes to anyone with more than 1000 units, don’t force them to sell what they already have
Then they open another shell company and buy more. It’s not that easy
Posted on 4/29/24 at 10:56 am to CatfishJohn
So what can a corporation own? Apartments? What about farms? What about fishing boats? What about empty lots?
Who makes a new development? Don’t allow companies like Horton to develop neighborhoods anymore?
Where does all this start and stop?
If interest rates weren’t so high, no one would be complaining about corporations owning single family homes because they could afford more. The real issue is just that people got used to low interest rates.
There were plenty of times in the 80s and 90s that interest rates prevented home ownership also and corporations weren’t to blame then.
Who makes a new development? Don’t allow companies like Horton to develop neighborhoods anymore?
Where does all this start and stop?
If interest rates weren’t so high, no one would be complaining about corporations owning single family homes because they could afford more. The real issue is just that people got used to low interest rates.
There were plenty of times in the 80s and 90s that interest rates prevented home ownership also and corporations weren’t to blame then.
Posted on 4/29/24 at 10:59 am to North Dallas Tiger
Blessed to be able to say my family and I are in a comfortable situation, but I do have a family member who is about to pay over asking price on a home that's doubled in appraisal value in five years - ludicrous.
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.
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.
Posted on 4/29/24 at 11:01 am to baldona
quote:
Have you seen rent prices? Why does anyone think renting is cheap? Sure, buying isn’t cheap but renting isn’t cheaper.
This is highly dependent on where you live.
Buying assumes (rules of thumb):
Mortgage
Insurance
Property Taxes
Maintenance
Repairs
PMI*
HOA Fees*
Eventually you break even and buying becomes cheaper, but in some cases this could take 9-15 years, and this isn't 1986 anymore. I'd be hesitant to buy a nice home and fork $75k savings down in an area where I wasn't sure I'd be able to find stable employment for the next 3 decades.
Let's not forget the headache of home ownership, which people who rent don't really get until you have a house. If you like it, that's great. But if you aren't handy and don't have the willingness to learn, it can be a real pain in the arse.
* - Not always applicable
Posted on 4/29/24 at 11:03 am to ragincajun03
Wall St = Blackrock = Global Satanic .00001% = DEMOLITION CREW of the "American Dream" (and all that is Good and Holy)
Posted on 4/29/24 at 11:03 am to North Dallas Tiger
Yeah, FHA loans are 3.5% down last I looked.
Posted on 4/29/24 at 11:07 am to baldona
quote:
So what can a corporation own? Apartments? What about farms? What about fishing boats? What about empty lots?
Who makes a new development? Don’t allow companies like Horton to develop neighborhoods anymore?
Where does all this start and stop?
You're making a strawman. It literally stops at freestanding single family homes.
Posted on 4/29/24 at 11:09 am to baldona
quote:
Why does anyone think renting is cheap?
Do you think homeownership is cheap? Like anything you buy, nothing is guaranteed. Lots of new construction homes come with warranties for the first year that cover most things that should NOT go wrong in the first year. Things break, whether it be from poor craftsmanship or bad luck. We got lucky that water leak in our house caused us to have to get a new kitchen/downstairs flooring (that we wanted to do anyway) and an insurance claim covered all of it. It was much easier than having to wait years to save $30k in updates that we would have less time to enjoy.
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.
Please do not act like buying a home is a instant equity builder. As a homeowner, you are adding up costs throughout your time of owning a home. Lawncare/home maintenance add up over time, something that renters do not have to pay for.
quote:
It’s like saying new car prices are expensive so I’ll just lease
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. Don't get me wrong, I think the idea of leasing a car is pretty ridiculous and a waste of money. I would rather buy something that lasts 10+ years and can be paid off in half that time. I also realize that it's not cheap. The rules on leasing cars are also a pain. Limited mileage + making sure it is returned in the same condition you bought it as.
It's different strokes for different folks, but right now, renting is way better if you're considering the fact that interest rates are astronomically high and who knows when they'll be brought back down to even 3%. I've seen posters talk about how they've upgraded homes but are having to pay almost double their previous notes because of interest rates.
Posted on 4/29/24 at 11:15 am to CatfishJohn
quote:
You're making a strawman. It literally stops at freestanding single family homes.
Except it starts there. That’s what you don’t understand. DR Horton’s of the world develop raw land, build a home, own that home, and then…sell it.
Are you saying you can’t develop a home?
Or you are saying you can’t buy an already built home?
What if no one else wants to buy it? Can they bid? After 120 days? What if it’s a foreclosure and no one wants to buy it?
You guys are upset because you assume an institution is out there out bidding people that then have to go rent. It’s not like that at all.
Posted on 4/29/24 at 11:23 am to ragincajun03
Great. The "do something" crowd wins again 
Posted on 4/29/24 at 11:23 am to ragincajun03
Since these bills will help middle class Americans at the expense of large corporation's profits……. I don’t expect them to see the light of day.
Posted on 4/29/24 at 11:23 am to baldona
quote:
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.
Those homes would eventually hit the market if firms weren't buying them before they are finished
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