re: Executive Order banning Big Wall Street from buying up single-family homes

quote:

---

FYI, there are still funds trying to buy even after the fire sale in FL and other areas started. They just shifted focus to other states. I know because I get contacted all of the time about bidding to maintain these homes and just last week one from NY reached out to me about bidding on a contract to maintain some properties in 3 states.

---

They will likely be punished in time, too.

I have to imagine private lenders will also start to increase scrutiny of these funds and raise requirements for RE-based lending.

quote:

---

Yes

The downside to the SFH market responding is that when these funds can dump properties at a loss, it artificially brings down the entire market.

The consequences of that are a loss to homeowners and even a rise in foreclosures.

---

You are vastly overstating this actually occurring. Maybe occasionally, sure. But investors are in it to make money, acting like they can just dump at a loss especially enough to bring an entire market down is absolutely laughable.

Furthermore, this thread is discussing homes being unnafforable. If you are moving the goal posts to suggest that institutional investors actually make some neighborhoods MORE affordable than that's a completely different subject, lol.

Can you explain why this

quote:

---

hedge funds are dumping inventory and are willing to take a huge loss to do so

---

leads to this

quote:

---

It has caused a ton of issues

---

And what those issues are? It seems like you're arguing against them because they artificially increase prices but then arguing against it because them selling at volume decreases prices, which I thought would be a good thing as it would make those homes more affordable for single family buyers.

I'm not totally sure how I feel about this so trying to figure it out. We've been in the market for about 2 years in one of the most in demand and expensive areas of the country. I just know that with virtual certainty more government intervention leads to unintended consequences and I'm just trying to play this out. If we're saying that corporations with a lot of money cannot buy homes, is the next step to say that really rich people cannot buy certain homes because I cannot compete with their offers?

Also, states and cities are able to implement pretty straight forward policies that can deter things like this. In South Carolina, the property tax on a second home is MUCH higher, NYC is doing their pied-a-terre tax, and I'm sure there are countless other examples. So while admittedly those are local governments doing it, they're also stopping short of saying certain entities cannot buy homes.

ETA: And the majority of this thread is working the assumption that real estate only goes up in value, which we obviously know is untrue, and real estate is also a market, so when equilibrium is met they'd theoretically take it on the chin in a big way.

quote:

---

If you are moving the goal posts to suggest that institutional investors actually make some neighborhoods MORE affordable than that's a completely different subject, lol.


No. My point is they artificially destabilize entire markets.

---

No they don't. That's just what your internet conspiracy theorists think.

The OP was about inflating markets. Which is it?

It can't be both

Let me explain why they aren't destabilizing.

1.) They are buying properties they can somehow make a profit renting.
2.) If they sell those properities at a loss, someone else can somehow purchase those and
3.) Make a bigger profit renting

This idea that VC money is clueless is just stupid.

Sure, they can be wrong and they are wrong. But they made a shite ton of money somehow. That's being right a lot.

Look I'm not for VC money buying homes.

My point still stands, if you are out paying locals to then turn a home into a rental than the local couldn't afford the house in the first place.

I own rentals. I can't buy homes that locals can pay fair market value on, and turn a profit on the rentals.

The only way to turn a profit on rentals is to routinely pay under market value: foreclosures, wholesale, etc.

quote:

---

The OP was about inflating markets. Which is it?

It can't be both

---

That's what I'm trying to understand as well. He referenced dumping entire neighborhoods in Florida, and if we're raging against a lack of affordable inventory, that should be a good thing and is a part of the "market at work".

And to Baldona's point, I'm not seeing how the finances make sense if they are "buying a bunch of homes above market" and then also inflating the rent prices on them above market. If that was the case, people would just rent non-institutionally owned places and pay market rents. It's not like these institutions own a vast majority of the housing in any given city.

quote:

---

What a retarded comment.

Why would I promote government manipulation of the market when I just criticized government manipulation of the market?

You sound like Bernie or AOC, thinking the government has to do something.

---

Any lawyer worth his salt could make a compelling argument either way. I guess you are not that lawyer. You do, however, seem to have a particular gift at opposing anything Trump supports.

quote:

---

home values crash too fast
people who already own homes lose equity
banks get stricter on loans
builders stop building new houses
foreclosures rise
neighborhoods can end up with vacant houses
then a few years later there’s another housing shortage in that area because nobody built anything

---

So play this out with me...if all these things were/are true, then was there really a need or demand for "affordable housing" in that area?

If there was that little demand for housing, then they likely wouldn't have been able to charge inflated rent in those homes prior to selling...because if the demand WAS there, someone else would buy those (now cheaper) homes from the institutional seller and start renting them out..making even more money.

quote:

---

That's not fair to consumers and is not a natural part of the market. Wasn't a natural market cycle part of your argument?

---

Large actors in a market movie are part of the market. These sorts of volatile swings can't be sustained over time due to their nature, and eventually the market will find equilibrium over the long-term.

quote:

---

You say this means you clearly have no idea how much money these lenders waste.

---

The private credit bubble is going to force them to stop wasting so much.

quote:

---

A lot of it is along the same lines as venture capitalists that waste billions looking for a unicorn.

---

Well that's different, as they're looking for unicorns, as you put it. RE doesn't really have that exponential scalability.

quote:

---

I am just saying there are zero benefits of insitutional investors existing in the SFH market.

---

Would they not help turn around a down or crashed market by coming in and buying up inventory? I'm pretty sure that was one of the factors that helped turn around things after the crash in 2009 (and preventing additional loss by individual homeowners).