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re: WSJ: Wall Street Has Spent Billions Buying Homes. A Crackdown Is Looming.
Posted on 4/29/24 at 4:20 pm to Big Scrub TX
Posted on 4/29/24 at 4:20 pm to Big Scrub TX
quote:
The largest single owner in the US has 83K homes. Out of 82 million.
OUT OF 82 MILLION.
The 82 million number really is misleading because these institutional investors aren't everywhere. They are not in most places.
But the places they are, they are very influential on supply/demand and market prices.
It's like saying there are only 987 Whataburgers in the US, but there are hundreds of thousands of cities/municipalities! Yet if you live in San Antonio you can't fart without someone at a Whataburger being able to smell it. Damnit, now I'm hungry.
1
Posted on 4/29/24 at 4:22 pm to CatfishJohn
quote:So pick a market and give a denominator that you think isn't misleading.
The 82 million number really is misleading because these institutional investors aren't everywhere. They are not in most places.
But the places they are, they are very influential on supply/demand and market prices.
It's like saying there are only 987 Whataburgers in the US, but there are hundreds of thousands of cities/municipalities! Yet if you live in San Antonio you can't fart without someone at a Whataburger being able to smell it. Damnit, now I'm hungry.
Posted on 4/29/24 at 4:23 pm to billjamin
quote:Correct. It's highly likely some people on here bitching about it have exposure somewhere in their portfolios.
Also, don't forget the "institutional investor" just means they're managing the money. The money belongs to normal people via a 401k, pension, insurance policies, etc.
Posted on 4/29/24 at 4:31 pm to Big Scrub TX
quote:
Correct. It's highly likely some people on here bitching about it have exposure somewhere in their portfolios.
And making these institutional investors stop won't hurt these funds materially, it is a small piece of what they do.
Posted on 4/29/24 at 4:35 pm to CatfishJohn
Corporations should not be able to buy single family housing. Let them buy apartment complexes etc but not single family.
Posted on 4/29/24 at 4:37 pm to baldona
quote:
If you can’t afford a 20% down payment, save
I almost posted in the wall street journal thread about real estate how this advice absolutely screwed a lot of people. Like many things, blanket advice is no substitute for individual decision making.
I never saved 20% for all thee home purchases I made between 2014-2020.
Someone trying to obtain that number may have not only got owned by rocketing prices, their borrowing costs tripled.
This post was edited on 4/29/24 at 4:40 pm
Posted on 4/29/24 at 4:39 pm to CatfishJohn
quote:
And making these institutional investors stop won't hurt these funds materially, it is a small piece of what they do.
Forced to stop originating probably a nothing burger. Forced to sell or taxed into oblivion will have a decent impact on the portfolio owners.
Posted on 4/29/24 at 4:40 pm to Big Scrub TX
quote:
So pick a market and give a denominator that you think isn't misleading.
quote:
Three corporate landlords from out of state own over 19,000 homes for rent in metro Atlanta
17,000 total homes were bought/sold last year in Atlanta out of 284,000 residential properties (this includes mostly apartments and attached properties). Best number I can find is around 80,000 detached homes. That is a meaningful amount owned by corporate landlords.
And that denominator is still misleading because they aren't buying the super expensive multimillion dollar homes or the slums in the hood. They are buying from the pool of that middle 70-80% of single family homes, the type of home the IRL OTer is in the market for.
This post was edited on 4/29/24 at 4:42 pm
Posted on 4/29/24 at 4:41 pm to Big Scrub TX
quote:
But in the case of "zombie" houses, wouldn't we WANT someone with actual money to come in and get them back into the mainstream inventory?
Yea but the issue is it's not that simple because there are a myriad of reasons as to why they become zombie houses in the first place. Location, legal issues, Chinese drywall, etc
quote:
is to address the shortage of dwelling units, presently estimated to be 3-4 million
Yes but to do that you also need to stop Blackstone (Glad you got it right because Blackrock doesn't buy SFHs) from doing what they did in Houston when they bought 100 DSLD homes before they were even built.
I think the rise in activity from institutional investors into SFHs is worth monitoring but I think it's more of a local market issue. It Atlanta is having an issue with it (which they are) then let GA pass laws.
Posted on 4/29/24 at 4:49 pm to stout
quote:
I think the rise in activity from institutional investors into SFHs is worth monitoring but I think it's more of a local market issue. It Atlanta is having an issue with it (which they are) then let GA pass laws.
I think it just needs to get woven into antitrust law.
I work in healthcare so I'll use that example.
If Company A owns a few hospitals in Dallas, the FTC won't let them buy another. Their market share will be too high and it becomes anti-competitive. But if Company A owns nothing in Houston, they will allow it despite owning a lot in Dallas. It is not a national or even really regional thing, it is a market thing. It is just about setting a ceiling to prevent anti-competitive practices in each market. I think that ceiling should be pretty low. You'd have to look at each market size and set a threshold for % of homes per each investor.
For example, in a defined market if there are 50,000 single family freestanding homes (not including apartments), cap the ownership at 0.1% or 50 homes. Previous ownership is grandfathered in, but subject to the cap going forward (can't buy more), and in a long-term set timeframe they have to divest (20-25 years) as to not rock the boat too much.
This post was edited on 4/29/24 at 4:52 pm
Posted on 4/29/24 at 4:55 pm to baldona
quote:
If you can’t afford a 20% down payment, save. You shouldn’t own a home and worry about it.
There's tons of people who can afford a 20% down payment to avoid PMI but will still get outbid by someone like BlackRock.
Posted on 4/29/24 at 4:59 pm to ragincajun03
quote:
BlackRock.
Blackstone
quote:
If you can’t afford a 20% down payment, save. You shouldn’t own a home and worry about it.
There's tons of people who can afford a 20% down payment to avoid PMI
There are lots of young people just getting started who can't afford 20% and should absolutely still look to buy a home. We did that and it was the best financial decision we ever made.
Posted on 4/29/24 at 4:59 pm to Big Scrub TX
quote:
Correct. It's highly likely some people on here bitching about it have exposure somewhere in their portfolios.
The muh Blackrock crowd will never understand it's their money being invested
Posted on 4/29/24 at 5:01 pm to Boss13
quote:
I don't even have a problem with these companies buying houses. What I have a huge problem with is they are allowed to do it with zero risks. If the bottom falls out of the market, you know who the politicians are going to rush to save from default? The corporations. They won't have to let go of inventory at a 30% discount to relieve their obligations. Joe American on the other hand...
Completely agree, sir....or ma'am.
This post was edited on 4/29/24 at 5:02 pm
Posted on 4/29/24 at 5:01 pm to Dawgfanman
quote:
People gonna love seeing their “equity” go poof.
frick your overvalued equity.
Normal, productive, young people can't enter the market and start families.
Posted on 4/29/24 at 5:08 pm to dewster
quote:
These institutional buyers are a real threat to the American way of life. But I can't think of a way to combat this that doesn't also hit individuals and smaller companies who are trying to buy or build their own small group of rental homes.
Agree. That's the problem.
Reagan said something to the effect of being wary of someone saying "I'm from the government and here to help".
Just don't know the answer, or if this can even be properly legislated, but these firms just going out and buying 50 to 100 new build homes in the same hood, as Stout mentioned, absolutely does little but drive the asking prices of those homes way up.
Posted on 4/29/24 at 5:19 pm to ragincajun03
Novel idea: Let's disallow members of congress and their families from owning individual stocks.
Posted on 4/29/24 at 5:22 pm to LSU1018
quote:This casual edict for big government stems from where?
Corporations should not be able to buy single family housing. Let them buy apartment complexes etc but not single family.
Posted on 4/29/24 at 5:23 pm to stout
quote:This seems WAY more reasonable than the casual call for federal bans or whatever.
I think the rise in activity from institutional investors into SFHs is worth monitoring but I think it's more of a local market issue. It Atlanta is having an issue with it (which they are) then let GA pass laws.
Posted on 4/29/24 at 5:24 pm to CatfishJohn
quote:What "anti-competitive" practices are you observing in SFH?
It is just about setting a ceiling to prevent anti-competitive practices in each market.
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