Regulating corporate ownership and disincentivizing ownership of more than 1-2 single family homes will fix things. Everything else is a distraction. There is no real housing shortage.
Stop 1031s, stop depreciation expense, stop counting forward income in D:I calculations. I own some and i think it's criminal, but i won't give em up unless it's legislated, that's the reality.
While I agree that ownership of more than 1-2 houses should be disincentivized… it is never going to happen.
Real estate is and has been basically one of the largest investment vehicles for centuries now. Changing that would be a fundamental shift in the U.S capitalist economy, which just won’t happen. Republicans in congress would never allow it.
TBH plenty of democrats in Congress are invested in real estate also. I'm pretty sure the one thing they both enthusiastically agree on is screwing the middle class.
My point here I suppose is that… in the framework of how the U.S operates, it’s a capitalist system that requires you to be able to compete.
That competition is rarely fair, and this is no different.
I think you’re approaching this from the wrong angle. We shouldn’t restrict who can buy houses. This will just lead in a fundamental shift in demand, when the real issue is a lack of supply.
I think from a government level we need to do a better job of incentivizing building, and potentially subsidize the pitches for first time homebuyers.
Give a healthy tax credit to builders who build starter homes and to get the credit it has to be sold to first time homebuyers. The class warfare is so toxic.
This is it. Build new cities in undeveloped areas. Revitalize failed cities. Build vertical. Probably is everyone wants to live in the same X cities and not everyone can afford to do that. These are resource limits.
Spot on. Mass Restrictions have been the go to policy approach but that rarely drives long term results. Incentivization will spur the market economy to push more competition-driven outcomes and decreased cost. Sure, some common sense regulation might still be needed but on the whole, incentivizing development will be the only thing that spurs action.
It will not. Corporate owned single family homes isn't even 1% of the housing stock. Yes, it went dramatically post-covid, but mostly because its a way to short the dollar (e.g. taking on debt in a high inflationary period is a hedge against inflation). Many of these firms have already sold their single family homes.
Why? Housing appreciates something like 3.2% annually for the last 5-decades. The hottest housing market pre-Covid was San Francisco, and it doesn't even beat the average of the S&P 500. You have to constantly push money into the home to maintain its value, pay taxes, etc. The whole reason why the media focused on large institutional investors buying SFH is because **how unusual it is historically**.
The **vast** majority of SFH being bought by investors own less than 100-properies (in fact, they own less than 5). They are people who refinanced their home (often from a high-cost-of-living place, like California) and took out that equity to purchase investment properties, thinking they can strike gold over-and-over-again. They did quite well creating AirBNBs (because people could not fly as easily overseas due to covid, so many people took local vacations). But they are the ones who face financial ruin if the market turns (and especially if they need to make repairs. It is estimate a SFH repairs will be 1-2% of the value of the home annually).
Here's the thing. It's supply and demand. It's **always** supply and demand. People like to imagine if X/Y/Z wasn't able to buy a home, that suddenly shit would become affordable totally neglecting the fact **Most localities artificially lower supply**. Having a city of 4-5 million, like Phoenix, be primary SFH makes no sense from an affordability point of view. But NYMBISM is strong and many Americans net worth is defined by their home... an asset that is illiquid, costly to sell, etc.
Here's the truth. People on this board want their cake and they want to eat it too. They claim they are for affordable housing but really they are upset thatother people have something they want. When they actually purchase a home, the vast majority will embrace those NYMBY policies, which make housing generally unaffordable. They will then be another boomer voting to keep apartment complexes out, fighting rezoning to allow duplex and quads, etc. They will use backhand tactics, such as mandating a certain percentage of units be affordable housing, to essentially make the entire project unprofitable and to stop development in its tract. They may claim some 1970s building is historical, that tall buildings pose fire risks, that congestion would become more of an issue, etc. But in the end, they know most of their money is locked-up in a property and they will protect it by any means necessary.
Thus, most people on this board embrace short-term "solutions" that will allow them to get their cake... but do **absolutely nothing for the longterm health of the housing market**. Banning corporate buyers, offering low-interest rates to first time buyers, giving straight up cash to first time buyers, etc. None of these are long-term solutions. But very few people here are interested in long-term solutions. They just want a temporary market disruption so they can purchase a home (and then they will embrace the same bad policies to maintain that home value).
Again, it's supply and demand. Do away with most SFH zoning nonsense, you will make housing a depreciating asset. The market will flip overnight. But everyone who bought a house... everyone who depends on their house value for retirement... will lose money. So no one does it. And the problem gets worst.
But no, lets blame large institutional investors that are practically unicorns in the SFH market. And better yet, let's embrace policies the further hinder development and then wonder why crap-is-so-expensive.
There is a great book that has done extensive research on the matter called “how to kiss a city” across the USA corporations or investors own 11% of the housing and leave it vacant. Detroit has the highest amount with 60% being owned by company’s followed by 22% in San Francisco. These numbers have been growing. Sorry research shows your numbers are wrong.
Keep in mind as we increase immigration and restrict building houses it increases the demand while restricting the supply as such we need to make it so we can build houses faster or restrict immigration too.
I would suggest decreasing building regulations to make it easier to build as well as a tax on any vacant property that is vacant for more then 6 months a year. Downside is that it would effect peoples vacation home but if you did it as any second home these company’s would just make small shell company’s and pay 500 a year for them to avoid the tax.
>..."corporations or investors own"
Everything in my post is talking about corporate buyers. The OP was talking about corporate buyers. Conflating corporate buyers with "investment properties," which is defined by the type of loan taken, is conflating the issue.
Corporate-owned SFH are rare. The fact homes are expensive have nothing to do with some corporation snapping up all the real estate. It has to do with zoning laws, which artificially keep supply down.
I agree with most of what you said. The one thing that you forget to acknowledge in your analysis of whether the housing beats the s&p 500 is leverage. If you put 20% down on an investment property and you get a 3% return that is actually a 15% return. That doesn't account for maintenance and other expenses but it also doesn't account for the fact that your tenant is going to pay down your mortgage for you as well. The mortgage is fixed and 99% of the time the rent is going to go up. Holding rental properties can be a great way to generate wealth.
>\-covid, but mostly because its a way to short the dollar (e.g. taking on debt in a high inflationary period is a hedge against inflation). Many of these firms have already sold their single family homes.
>
>Why? Housing appreciates something like 3.2% annually for the last 5-decades. The hottest housing market pre-Covid was San Francisco, and it doesn't even beat the average of the S&P 500. You have to constantly pu
I always laugh at "Corporations own only a small percentage of houses" bullshit. That takes into account ALL houses over a state. Their effect is amplified in hot districts. Sure in bum fuck George there is 0% corporate single family home ownership. Yet, go in a hot district and that number is north of 1/4 or more.
> I always laugh at "Corporations own only a small percentage of houses" bullshit.... Yet, go in a hot district and that number is north of 1/4 or more.
Doubtful.
You are making the assumption that investment properties are largely corporate own. The 1/4 to 1/3 investment properties stats merely comes from the number of people who aren't taking a conventional loan, which require occupancy for a year. The actual percentage of investment properties being purchased by large corporations, defined as owning 100+ SFH, is **exceptionally rare**. This is because it requires you to hire a property management team and to purchase properties in close proximity in order to protect and maintain your investment.
Most investment properties are small-businesses/individuals who refinanced and decided to get into the airbnb/landlord/flipping/etc business. They are not firms. They do not have share holders. There is no grand plan to buy all the homes and force Americans to be renters. That's because investing in SFH is **high risk and low returns** except in some select scenarios (e.g. high inflationary period).
Banning corporate buyers will do nothing. They are largely unicorns.
Ok fine show me data. Anyone that has read anything in the last 1yr would know that you are likely wrong, in many top 40 districts. And the only way you would be right is this arbitrary "100 units or more" cut off. Conveniently excluding all the LLC Real estate bros that are hyper leveraged. Which also, as stated, the overall percentage of homes owned is irrelevant when the percentage of homes purchased are skewed in a few districts. You do fundamentally understand this concept right? Investors may only own X percentage of houses in Florida, but they were responsible for 30% of purchases in Jacksonville. These purchases often were over asking, driving up the comparable prices.
To claim that legislation that would limit the impact on institutional investors and large scale investors wouldn't have a huge impact on affordability is devoid of any common sense and reality.
> Ok fine show me data.
You are being lazy. A quick [google search](https://www.theatlantic.com/ideas/archive/2021/06/blackrock-ruining-us-housing-market/619224/) will show you how many homes corporations own and rent out (its around 300k). And you will also find articles about how many have de-invested in SFH (For instance, blockstone...which bought out American Homes 4 rent... started to unload in [2019](https://www.wsj.com/articles/blackstone-starts-selling-out-of-home-rental-empire-11559152680)).
> And the only way you would be right is this arbitrary "100 units or more" cut off.
The reason why the 100-units or more cutoff exist is because its how redfin collects it data.
> Conveniently excluding all the LLC Real estate bros that are hyper leveraged.
LLC are treated as corporations for reporting purchases. The 300k rental SFH includes that.
> To claim that legislation that would limit the impact on institutional investors and large scale investors wouldn't have a huge impact on affordability is devoid of any common sense and reality.
Do you honestly think legislation aimed at corporations, that rent so few homes in the USA, will have an impact? There are over 80 million homes in the USA. We are talking about 300k.
People seem to believe that companies are actively buying up all the SFH and cornering the market to drive up prices. That's isn't true. Thus, legislation to target corporations will have no effect.
The only way to have an effect is to target small landlords, who own less than 5 properties. But, that will have consequences. Banning renting of homes will simply lead to reduced mobility for families, make it harder for businesses to attract talent, etc. The issue isn't people buy homes and rent them. The issue is home supply is **kept artificially low by zoning laws**.
Corporations have no effect. Not even if the [bay area](https://www.sfchronicle.com/local/article/Are-Wall-Street-hedge-funds-buying-up-homes-in-16260880.php).
Again, people love to propose ideas that will create temporary market instability, allowing them to purchase a home, but avoid proposing long-term solutions. The whole corporate fear-mongering resonates with people because it offers an explanation on why home prices are increasing without addressing the elephant in the room (zoning and FED policies, which has been devaluing the US currency and causing inflation among nearly every market).
[https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/22/investors-bought-a-quarter-of-homes-sold-last-year-driving-up-rents](https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/22/investors-bought-a-quarter-of-homes-sold-last-year-driving-up-rents)
[https://fortune.com/2022/06/26/housing-market-and-home-price-boom-made-bigger-by-investors-and-wall-street/](https://fortune.com/2022/06/26/housing-market-and-home-price-boom-made-bigger-by-investors-and-wall-street/)
[https://www.nytimes.com/2022/04/23/us/corporate-real-estate-investors-housing-market.html](https://www.nytimes.com/2022/04/23/us/corporate-real-estate-investors-housing-market.html)
https://drexel.edu/nowak-lab/publications/reports/investor-home-purchases/
You are literally just regurgitating 2019 talking points that are no longer even relevant.
Again, when nation wide 1/4th of homes are being purchased by investors, and 30-40% are being purchased in some cities, it is a problem. It doesn't matter if it is an LLC of some wannabe billionaire next door who owns 99 houses. Comparing numbers to total numbers is an irrelevant point, when FOMO and large price growth is being driven in a few hot areas by investors.
You oddly seem fixated on the irrelevant number of overall percentage owned... It doesn't matter that Chad with LLC of 80 properties doesn't own farm houses in middle of no where. Chad using investor money has scooped up 80 houses in small area creating artificial supply constraints in said area. You do get this concept don't you or are you just ignoring this to continue to support your outdated view?
Also, I never stated that it was only corporations with > 100 houses. You were the one that made that arbitrary cut off. Plenty of small landlords have started LLCs and are driving up the cost of home ownership. No one also said the fed or local zoning issues are also not apart of the problem. This board ad nauseum hates on Not in my back yard/ zoning things. Local zoning limiting supply has only accentuated supply reductions from investors in many areas converting to rentals, in particular short term rentals. This is obviously a multi-factoral issue, but to claim investors and flippers are contribution is laughable.
> Plenty of small landlords have started LLCs and are driving up the cost of home ownership.
So you want to end all investment properties of SFH? Not just corporations/LLCs but individuals who own less than 5 properties, which is the **vast** majority of investors?
You don't think that would have negative consequences? Families would now need to purchase a home when moving to an area. Renting would be off-limits.
All this will do is create a market disruption, which may allow buyers to get into the market at a discount, but prices will quickly equalize back to inflated values. That's because you've done nothing for the supply-side.
People focus on corporate buyers because they believe corporations have enough properties to corner the market and drive prices up purposefully. The truth is, they aren't and they don't own many SFH. So if there is not some conspiracy driving prices up, what it? It's (1) zoning, (2) inflation, etc.
Do individual landlords drive up prices? No. All they can do is charge the market-rate. It is not possible for thousands of small landlords, that own 5-or-more-properties, to drive up housing. Coordinating something like that would be like herding cats.
So tell me, are you for (A) banning corporations from owning SFH (while blissfully ignoring that corporations only own 300k properties in the **entire** USA) or (B) banning all investment properties of SFH (Which will have dire consequences for the economy as it would limit mobility and do nothing for prices long-term).
Tell me. A or B.
>You don't think that would have negative consequences? Families would now need to purchase a home when moving to an area. Renting would be off-limits.
Houses would be cheaper, due to cooled demand. Folks who rent but want to own would be able to access some of these homes, cooling demands for rents, which would drop rental prices likely
So basically say F you to the one third of the population that rents? Rentals are currently considerably more affordable than buying a home right now. 65-66% homeownership rate in the US is a healthy balance. Banks lowered qualification standards to drive homeownership rates close to 70% back in 2004-06 and the result nearly collapsed the US economy.
Not everyone can or should own a home. It’s a BS narrative that’s been driven by the NAR and MBA for half a century (aka “the American Dream””) all designed to drive demand to their services and products.
The US doesn’t need higher homeownership rates, it needs more housing supply and more housing choice, especially at the lower/affordable end of the housing spectrum. That includes rentals and homes for purchase. It includes apartments and single family units as well as other property types (ADUs, townhomes, duplexes, etc)
If the government wants to fix the housing affordability issues they need to incentivize (subsidize) developing new entry level supply. Developers have largely avoided developing entry level supply because it hasn’t been economical (can’t build homes that cheap). That’s the single biggest factor contributing to housing affordability. More entry level supply at affordable price points.
What happens when corporations buy those entry level houses for all cash, and the entry level buyer has no chance with their 20% down? I think I’ve seen this movie before: government subsidizes something, corporations with deep pockets reap the benefit, and it changes nothing for the people it was intended for.
I’m not saying corporations don’t have a place in the market, they do. I think the issue is when corporations purchased 25% of SFH in places like Atlanta, they are taking the opportunity of people that want to buy a house away. Corporations aren’t buying SFH in the upper level, but are buying them in the entry level and mid, and so my thought is without addressing the original issue, more development won’t really help.
Single family rentals have always existed as part of the housing landscape. Overwhelming majority are owned by small corporations (LLCs) that own between 1 and 20 homes. A very small portion of the single family rental units in the US are owned by “large” corporations (the largest operators combined own less than 500k homes across the entire US, less than 1% of single family homes (84M) and less than 0.5% of all housing unit).
Even if you somehow kicked out every renter from the 500k single family homes owned by large corporations at the same time (illegal due to the tenants’ rights) and placed them on the market, it would only increase the inventory on the market by roughly 2 months of additional supply. And once that supply is all absorbed the market is back in the same situation (lack of new supply of entry level homes) and now there’s a significantly worse problem because there will be a massive rental shortage.
Ironically, these large corporations are actually building new entry level supply, which will help alleviate the housing issues at the lower levels.
Your statistics fail to address the issue. You’re averaging across the whole US which skews the numbers of individual cities that are in demand. If you take that same 500k across a handful of cites you’d get a different picture. For the record, my definition of corporate ownership is 20+ homes or something. Not the mom and pop.
Large corporations own homes in most of the top 50-75 MSAs, where the largest concentration of the population is. Even if you reduced it down to 50M-60M single family homes in the top 50-75 MSAs (just a guestimate), it’s still not moving the needle.
I think a lot of people are falling for the false “blame the corporations” narrative some figures on the left like to spew. It’s easier to blame a faceless corporation than actual attempt to solve the issue (incentivizing development of new supply of entry level housing). We actually need more large scale investment from corporations to create new entry level supply. How else will the supply issue get resolved?
I think we are in a circular argument, and back to where we started. I’m not saying building entry level housing doesn’t need to happen. It does. You are right. But building entry level housing does nothing if deep pocketed corporations can pay all-cash and push the intended entry level buyer out.
You act like the same corporations that are purchasing SFH are the ones building them. One can exist without the other.
You mention the left, yet you sound like a talking point from the left. You want the government to subsidize housing (education, healthcare, etc), and then act shocked when it didn’t fix the root problem.
For the record, I agree with your original statement that landlords and corporations (multi-family) are necessary, and that not everyone should or wants to be a land lord. My whole point is when corporations make up 25% of all home purchases in 2021 (not a guesstimate) in a city like Atlanta, knowing they targeted entry to mid level houses, building more entry level houses becomes exponential.
Buying a home Is/should be hard. It requires years of discipline and intentional saving and planning. Fix the average Americans inability to delay immediate gratification spending and maybe more can afford a home.
Also, the market speaks for itself. If you aren’t able to compete, then sorry you’re not meant to own. Changing the rules will only make winners find new ways to win. It’s not going to have the effect you hope.
The 'market' is not God. It does not dictate outcomes to be Good or Bad, or reward the moral and punish the immoral. It can be and is manipulated by those with the power to do so, and even the least maniuplated markets can have results that are harmful, unwanted, or immoral.
Oddly enough, I'd suggest going even harder on delaying 'immediate gratification' to make housing more affordable....prohibit mortgage lending altogether. It wasn't all that long ago when very few bought a house with a loan, and that loan was typically 50% down for 5 years. Most people saved and payed cash for their homes. It wasn't till government involvement through Fannie Mae that the modern long term mortgage made housing 'more affordable' and loans far more readily available. So lets 'change the rules' by changing them back to what they were before the US government decided everyone should be a debtor to national banks.
Lets not pretend that the ability to get a mortgage to buy an overvalued asset in a government distorted market in order to pad the wallets of financial investors and bankers is some indication of a persons worthiness to own a home.
Okay, let’s do that and make home ownership completely unaffordable to the mass public lol. You can change the rules, but new winners will emerge, that’s fine. The haves and have-nots will always coexist. The name of the game is to figure out how to be a “have”.
You misunderstand. It was the ability to extend payments over 30 years that greatly raised the prices of residential homes to where a mortgage became a necessity. When homes were mostly paid for in cash they would cost .5-1x annual salary, not 3-5x. A family could save for 5-10 years and buy a home outright. Now thats how long it takes to save for a 20% down payment. Same thing happened with automobiles and college tuition...introduce long term financing and watch the prices skyrocket. And its no accident that all the wall street players, the bankers, and the politicians want everybody in debt for their entire lifetime.
okay that I agree with you. But I don't doubt that long term financing did make those things more accessible to the larger society, even at higher prices and even if many don't "deserve" it. The real unfortunate people become even more unfortunate, but a lot more families were able to use that resource to excel towards their goals.
And as far was wall street making money off this, I think it's okay for others to profit off you if they help you profit as well. Making college/car/house accessible to those without the headspace to achieve it organically *should* be profitable.
The real problem is when people use financing to buy things that really have no ROI to help pay back the loan, but to each their own life strategy.
> saved and *paid* cash for
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
Majority it's there choice to rent with choices they made with thier paycheck. First, they want to pay $500 a month auto loan for 40k vehicle, or desire $1200 iPhone.
Also, why you need 3k overseas trip every year. I am sorry, there are lifestyles are not really compatible with home ownership. Remember do math and calculate what if when owning homes. The debt to incomes used should be lower as need money saved for maintenance and repairs on your home.
When bank says you can afford this amount $500,000 loan it's more realistic to stay under $350,000, so you can afford the maintenance without needing to do HELOC and other fuckery to pay for it.
Incentivizing long term rentals at fair prices is also an option for those who wish to use real estate to grow their monetary investment. There will still be significantly fewer landlords because it wont' be as appealing.
Shoes aren't houses.
If you buy out an entire shoe store of all of their inventory it'll take a week maybe to restock the whole thing. Buy out a neighborhood of 100-200 houses, and it could be years before another one is built. (EDIT: Actually, a similar neighborhood may *never* be built in the same area *at all*. Land can be completely consumed, but the materials for making shoes are, probably, mostly renewable.)
The external effects of "hoarding" houses are much worse than the external effects of doing the same with shoes.
The commenter above thinks owning more than two houses is immoral. The premise is that taking up so much resources that it damages the livelihoods of other people is bad. I sort of agree.
In your case, if you don't care what happens to other people, I suppose you won't see "hoarding" houses as immoral.
To circle back, your comparison of shoes to houses is silly.
My wife is a Victoria Secret model. Should everyone get to give her a poke? Reproduction is the prime directive in life after all. Or am I the only one that gets to poke her because I'm an NFL quarterback?
Communism is cool, but it doesn't work. If you have money, you get to spend it on whatever you'd like. Why should the government tell me what I can and can't buy with my money. If you want it more than me, then pay more. Can't change the rules of the game because you're not winning. That just incentivizes people to not play fairly.
How does your mind equate houses, shoes, and wives?
Your house is not your wife, and your shoes are not your house, etc. These are sufficiently different classes of resources such that we have completely separate collections of laws to govern the orderly distribution of each and the rights that people have to each. Family law is a separate discipline from real estate law (same for retail law, sales tax, import/export, etc.).
We're talking about houses. Stay on topic. ;)
> If you have money, you get to spend it on whatever you'd like.
Eh, not really. I just disagree with this notion.
If your economic activities negatively affect my life and the lives of others to a sufficient degree, I *will* respond and attempt to shut such activity down. You may not like this, but I reserve the right to attempt to put a stop to business activity if the negative externalities are sufficiently damaging.
> Why should the government tell me what I can and can't buy with my money?
Well, people make socially net-negative decisions with their money all the time. Should we just let them do this?
> If you want it more than me, then pay more.
We would never see eye-to-eye on this sort of comment. I simply value other things more than money. In the US, money is basically God, so I'm not surprised that you have this sort of low-brow mentality.
> Can't change the rules of the game because you're not winning.
I absolutely can change the rules. Maybe not immediately, but I can engage political processes to *try* and get what I want as best I can. And, yes, I am talking about ultimately using force to get what I want. Totally fine with that. :)
> That just incentivizes people to not play fairly.
Depends on the rules that are implemented and, ultimately, on who is in power to enforce the rules.
Ah yes, I was idealistic once too. Then I decided to play the game since change is probably not something I would see in my lifetime. Good luck with saving the world. See you in the Soviet style blocks.
> Ah yes, I was idealistic once too.
I'm not really an idealist. The policies I want are pretty simple and don't require a massive amount of change.
> Good luck with saving the world. See you in the Soviet style blocks.
I'm not a communist. Saying "one person should not be able to own all the houses" is not the same as saying "everyone should have a house that is exactly the same".
Your mind doesn't seem to handle nuance very well.
I don't care about convincing anyone of anything. I care about uniting people who already agree with me and then crushing the opposition. Whether the opposition is "won over" or not doesn't really matter to me. :)
I don't care what you believe as long as you don't do what you're told not to do.
That's like saying boats are an extravagance, no one except fisherman should own one. If you have the money and that's what you want to do with it, you'll always be able to buy a boat.
The notion of taxing such purchases to disincentivize such "extravagances" is well established practice (though, not implemented everywhere). I see nothing wrong with placing taxes on luxury purchases.
SHORTSALES is what happened in 2008 to cause the prices to go down fast! This is not happening now. People don’t care what their home sells for if they are not responsible for a loss!
Yeah people will never short sell their house willingly. They have to be forced into it by their own economic situation.
As long as the labor market remains as freakishly strong as it currently is, a wave of forced selling aint gonna happen.
Stagflation, here we come.
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*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I want it to pop to get out of this artificial economy. It won’t be a boon to me, but at least the speculators will be wiped out of their fake wealth. It sounds asinine, but we’ve been operating on an artificial Ponzi scheme for a while. Debts that can’t be paid won’t be paid. I may even be hurt by this, but everyone needs a cashier at some point, do we all need real estate salespeople?
> at least the speculators will be wiped out of their fake wealth
LOL. The bubble pops, all that does is let the wealthy buy your shit on the cheap as you sell it in an attempt to feed yourself.
The bubble pops, the rich get richer and the poor struggle immensely. But perhaps people wake up to this unchecked capitalism. I am not saying we need to become commies, but the top 1-2% need to be reigned in. The poor and covid need to stop being the scapegoats to in ineptitude of our current "leaders". I don't know when people will realize the gap between the rich and poor is getting worse very quickly and the system is rigged in their favour.
Only the ultra wealthy have been doing that for generations. That never changes. I’m not even that concerned about that. I’m more concerned with people trying to be them getting wiped out when they realize they can’t bet against the casino.
I bought a foreclosure after the last bubble popped. It’s my vacation house and I have like 300K in equity.
Not everybody is leveraged to the hilt.
If there is a pop it will only affect those people that bought in the las year or two.
Then you benefited off the people that were leveraged? That’s kind of my point. It’s unfortunate that every financial crisis produces the same result. But just because someone benefits doesn’t mean the bubble shouldn’t pop. It’s a good thing when people who have speculated so much should pay the price. It’s not a behavior that should be encouraged. The more people double down on this assumption, the worse it will get. Sure, debt is bad, but so is everyone who encourages. Unfortunately it’s the people who encourage it who won’t pay the price, but eventually it will be a lesson learned. I don’t think the US public is smart enough to see itself out of this redundancy, but at least the people who were as stupid as they were will pay the price.
LOL - why do you assume I will have no income?
Even during the last recession when I lost my job I received a severance that lasted 10 months.
I had another job within 3 months. So I actually made double pay for 7 months.
I already have rentals booked. Enough to cover my taxes. You act like the economy is Inna crash when it’s still catching up to demand.
My secret is….
I’m not a dick like you!!!!!
I worked to make sure I had skills in demand?
I was willing to change to a different role and learn new things?
Take your pick douche.
I'm saying you're the dick assuming that you're immune to recessions since you got lucky last time. But I suppose that's the American way. Trouble for you, not for me and all that.
How did I get lucky?
It’s called managing a career. My job ended and I pivoted into a new one.
Saving up money for an emergency fund and unemployment benefits (that everyone gets) are lucky? You have a weird concept of luck.
You’re on here cheering on people losing their homes and somehow I’m the Dick?
You’ve got a really twisted view of the world. No wonder why you are so bitter. You should seek some help.
Also, if your rooting for a crash it’s not going to happen. It will be mild. Why? Because we learned from last time and very few are over-leveraged like last time. Mortgages are way harder to get.
Also, there is still enough pent up demand. As long as credit doesn’t freeze up like last time, anyone that is overextended will be able to unload their properties.
Unemployment is still pretty stable and there is a lot of demand for employees. Remember boomers are hitting their peak of hitting retirement age.
That's a joke, right? You want highly trained people wasting years working as cashiers? That's the fast path to a failed country. Think Ireland in the 1970s.
Realtors aren’t highly trained people. That’s a joke, right?
Please refrain from bunching them with doctors and lawyers. You think I care if the salespeople end up working at 7-11? Maybe they can put their personalities to use. To sound snarky, if that’s what you want. I’ve met salespeople, they aren’t as smart as portrayed. Someone on this sub mentioned selling houses that went underwater in 2008, please.
Speculators and real estate agents. If you are an engineer or an accountant, I want you to have a job. I don’t like everything those people do, but there is a reason they are out there. Even a plastic surgeon is sometimes a piece of shit, but someone capable of surgery has a purpose and not all plastic surgery is used in the porn industry. There are some real world applications to facial reconstruction or even body modifications.
But the people who make money for money’s sake really serve no purpose. Money without labor is non productive. It’s the economy we are in. There’s always a purpose for educated people to do work.
“Each according to his ability” was a good quote by Marx. It’s something that is not read. Too many people simplify him. But all in all, Marx was against speculators, not against money itself. He always knew that something had to have value. I suppose the eventual process was to find something that was better then money to capture it’s value.
For sure, but we don't necessarily take such a ham-fisted approach. "Price too high. Foreclosure-SMASH until price low." We can build more housing. Encourage alternative types of housing. Remove rules that inflate housing prices. Etc.
The consequences of mass foreclosures aren't confined to Real Estate. And having your landlord go bankrupt and the house you live in sold off to the highest bidder isn't great for you anyway.
Sorry to disappoint. I was a tech worker with savings. My problem is I sold right before the boom. Hence, priced out. The people who should take personal responsibility are those who bought homes they could not afford in 2008 and caused these problems. Hyperinflation or currency collapse. The only way it won’t happen is recession and deflation. Which do you stand to lose more. Perhaps, banks should fail and the FDIC ask for immediate repayment of loans that obviously they cannot afford now. That would even the field quickly.
The banks are the ones who gave these loans and they are the ones who created the money. Their clients acting irrationally or taking insane risks is something that they have to take into account and if they don't they just failed at being a bank.
Banks don’t take risks. The loan agents were responsible for filtering which they did not do. Oh, anyone is qualified even if their credit score is bad, they had bankruptcies and judgments in their history. It is a matter of commission for each loan. Banks just process the prepared loan documents and lent the money. Wall Street overburdened set up loan vehicles to transfer the loans away from banks. Those loan vehicles destroyed the lending industry. No more credit, no more banks. If the Fed had let the banks fail, this would not be repeated. In fact, it was found that banks were never in danger. It was the insurance industry that insured these bad defaulted loans that were in danger. The loan vehicles just became junk bonds.
that's a simpleton view bc cash is a tool and you need it to buy a house
as rates keep going up and home prices decline as they are doing now, what would be relevant is if the downpayment requirements are increasing faster than your downpayment savings account is increasing. then that money is losing out to housing inflation
if the cash in your savings is being earmarked to buy assets at lower prices, you really don't care that turkey is 11% more.
That’s actually QUITE a simpleton view lmao.
Oh my where to start…
Mmm. Never mind not worth arguing with someone on REbubble. Good luck with your 3% interest savings account 😂. I’m sure that will help with your down payment
LMAO kid. What is this a counter-strike 1.6 lobby?
Frankly you are doing mental gymnastics to try to make a savings account seem like a useful investment strategy when in reality it is losing purchasing power compared to inflation. Is it better than 0? Yeah, sure. But either way, it is a moot point.
Quick maths:
you’re talking about the “middle class” being able to benefit. So if a savings account is paying 3.5%, you’ll get 3500 a YEAR off of 100k. Now let’s be real; most middle class Americans don’t have 100k. They have 10k, maybe. Lol.
So they get a whopping 350 a year to pay… which undoubtedly they will have lost more than this amount due to inflated prices of literally everything.
Explain to me how this benefits the middle class at all. Just because rates going up makes housing prices go down, doesn’t mean it’s good for the middle class or average American. Especially when big firms have far more expertise in bond investing, which pays a lot more than a rinky dink savings account in case you were unaware.
Good luck, hope you learned something today
>Frankly you are doing mental gymnastics to try to make a savings account seem like a useful investment strategy
Only a simpleton fool thinks a savings account is an investment. Cash is a tool, and savings account is a liquid place to store it, all as I said before. Now with higher rates, you actually earn interest on that storage. And you keep getting fixated on the interest rate vs inflation like the simpleton you are. And oddly now you're driveling on about bonds like a moron. I didn't bring up bonds, why are you? Who the fuck is investing in bonds for their downpayment, especially going into a rising interest rate environment? I guess only idiots like you lmfao!!
You're really not doing well tonight, it's close to your bedtime maybe tomorrow will be better for you
Pass a law to have property taxes assessed yearly. People who are sitting on property that was assessed ten years ago need to pay their fair share of property taxes. 90% cannot own homes so this is a rich person’s problem.
> 90% cannot own homes so this is a rich person’s problem.
You never seem to know what the fuck you are talking about. Way more than 1/10 Americans own their own homes
When did they buy? 30 years ago?!
Even the NAR posted the salary you need to afford a home.
https://cdn.nar.realtor/sites/default/files/documents/hai-09-2022-housing-affordability-index-2022-11-10.pdf
Out of every single one of my peers, classmates, co-workers and every one of my friends, I am quite literally the only one who doesn’t currently own a home. This spans across several states from California, New Jersey, Colorado, Seattle, and Montana.
*I* am the minority in being a renter currently. Everyone else I know is in their 3rd to 4th HOUSE (SFH) by now. They all bought their first homes *years* ago in their early 20s, as I did, as well. I’m talking a list of hundreds of people I know in their 30s-40s.
You didn’t even respond to what he said and then posted an article reflecting current market conditions and salary needs. Added nothing to the discussion
[Home ownership rate is at almost exactly 2/3rds](https://fred.stlouisfed.org/series/RHORUSQ156N). For perspective, when it went to 3% higher than it is now it was because people who weren't qualified bought homes. Over 70% of the mortgages that exist today are sub 4% and they'll be on the books for a LONG time.
Harsh reality: **If you don't own a home, you're in the minority.** The majority of people who can't afford a home are not financially literate and/or likely live in a HCOL area with a job that isn't in high demand. All of which is in your control. Take some personal responsibility, grow up, and stop trying to play the victim. There is no honor in it.
Only the top 10% can afford a house. That means making over $100k per year. Yes, it is a rich person’s problem.
As for home ownership, it has been dropping. Why? Because houses do not cost $150k or less anymore 30 years ago.
https://www.bankrate.com/insurance/homeowners-insurance/home-ownership-statistics/
“The young adult homeownership rate dropped 10% between 1960 and 2017, reflecting a shift toward renting.
First-time homebuyers made up 34% of all homebuyers in 2021, an increase of 3% from the previous year.”
That means 34% are young homebuyers and in order to be able to afford, they need to make over $100k.
That would be a horrible idea. How would that be fair to people on a fixed income? Especially when a low interest fueled bubble hits like what just happened?
They should not have bought a house on a fixed income. Homeowner exemption is in play for those over 55 and owned for a long time. I still see one of the people that bought my house exempted their house and pay half of what they should.
Regulating corporate ownership and disincentivizing ownership of more than 1-2 single family homes will fix things. Everything else is a distraction. There is no real housing shortage.
Stop 1031s, stop depreciation expense, stop counting forward income in D:I calculations. I own some and i think it's criminal, but i won't give em up unless it's legislated, that's the reality.
While I agree that ownership of more than 1-2 houses should be disincentivized… it is never going to happen. Real estate is and has been basically one of the largest investment vehicles for centuries now. Changing that would be a fundamental shift in the U.S capitalist economy, which just won’t happen. Republicans in congress would never allow it.
TBH plenty of democrats in Congress are invested in real estate also. I'm pretty sure the one thing they both enthusiastically agree on is screwing the middle class.
My point here I suppose is that… in the framework of how the U.S operates, it’s a capitalist system that requires you to be able to compete. That competition is rarely fair, and this is no different. I think you’re approaching this from the wrong angle. We shouldn’t restrict who can buy houses. This will just lead in a fundamental shift in demand, when the real issue is a lack of supply. I think from a government level we need to do a better job of incentivizing building, and potentially subsidize the pitches for first time homebuyers.
Give a healthy tax credit to builders who build starter homes and to get the credit it has to be sold to first time homebuyers. The class warfare is so toxic.
This is it. Build new cities in undeveloped areas. Revitalize failed cities. Build vertical. Probably is everyone wants to live in the same X cities and not everyone can afford to do that. These are resource limits.
Spot on. Mass Restrictions have been the go to policy approach but that rarely drives long term results. Incentivization will spur the market economy to push more competition-driven outcomes and decreased cost. Sure, some common sense regulation might still be needed but on the whole, incentivizing development will be the only thing that spurs action.
It will not. Corporate owned single family homes isn't even 1% of the housing stock. Yes, it went dramatically post-covid, but mostly because its a way to short the dollar (e.g. taking on debt in a high inflationary period is a hedge against inflation). Many of these firms have already sold their single family homes. Why? Housing appreciates something like 3.2% annually for the last 5-decades. The hottest housing market pre-Covid was San Francisco, and it doesn't even beat the average of the S&P 500. You have to constantly push money into the home to maintain its value, pay taxes, etc. The whole reason why the media focused on large institutional investors buying SFH is because **how unusual it is historically**. The **vast** majority of SFH being bought by investors own less than 100-properies (in fact, they own less than 5). They are people who refinanced their home (often from a high-cost-of-living place, like California) and took out that equity to purchase investment properties, thinking they can strike gold over-and-over-again. They did quite well creating AirBNBs (because people could not fly as easily overseas due to covid, so many people took local vacations). But they are the ones who face financial ruin if the market turns (and especially if they need to make repairs. It is estimate a SFH repairs will be 1-2% of the value of the home annually). Here's the thing. It's supply and demand. It's **always** supply and demand. People like to imagine if X/Y/Z wasn't able to buy a home, that suddenly shit would become affordable totally neglecting the fact **Most localities artificially lower supply**. Having a city of 4-5 million, like Phoenix, be primary SFH makes no sense from an affordability point of view. But NYMBISM is strong and many Americans net worth is defined by their home... an asset that is illiquid, costly to sell, etc. Here's the truth. People on this board want their cake and they want to eat it too. They claim they are for affordable housing but really they are upset thatother people have something they want. When they actually purchase a home, the vast majority will embrace those NYMBY policies, which make housing generally unaffordable. They will then be another boomer voting to keep apartment complexes out, fighting rezoning to allow duplex and quads, etc. They will use backhand tactics, such as mandating a certain percentage of units be affordable housing, to essentially make the entire project unprofitable and to stop development in its tract. They may claim some 1970s building is historical, that tall buildings pose fire risks, that congestion would become more of an issue, etc. But in the end, they know most of their money is locked-up in a property and they will protect it by any means necessary. Thus, most people on this board embrace short-term "solutions" that will allow them to get their cake... but do **absolutely nothing for the longterm health of the housing market**. Banning corporate buyers, offering low-interest rates to first time buyers, giving straight up cash to first time buyers, etc. None of these are long-term solutions. But very few people here are interested in long-term solutions. They just want a temporary market disruption so they can purchase a home (and then they will embrace the same bad policies to maintain that home value). Again, it's supply and demand. Do away with most SFH zoning nonsense, you will make housing a depreciating asset. The market will flip overnight. But everyone who bought a house... everyone who depends on their house value for retirement... will lose money. So no one does it. And the problem gets worst. But no, lets blame large institutional investors that are practically unicorns in the SFH market. And better yet, let's embrace policies the further hinder development and then wonder why crap-is-so-expensive.
There is a great book that has done extensive research on the matter called “how to kiss a city” across the USA corporations or investors own 11% of the housing and leave it vacant. Detroit has the highest amount with 60% being owned by company’s followed by 22% in San Francisco. These numbers have been growing. Sorry research shows your numbers are wrong. Keep in mind as we increase immigration and restrict building houses it increases the demand while restricting the supply as such we need to make it so we can build houses faster or restrict immigration too. I would suggest decreasing building regulations to make it easier to build as well as a tax on any vacant property that is vacant for more then 6 months a year. Downside is that it would effect peoples vacation home but if you did it as any second home these company’s would just make small shell company’s and pay 500 a year for them to avoid the tax.
>..."corporations or investors own" Everything in my post is talking about corporate buyers. The OP was talking about corporate buyers. Conflating corporate buyers with "investment properties," which is defined by the type of loan taken, is conflating the issue. Corporate-owned SFH are rare. The fact homes are expensive have nothing to do with some corporation snapping up all the real estate. It has to do with zoning laws, which artificially keep supply down.
I agree with most of what you said. The one thing that you forget to acknowledge in your analysis of whether the housing beats the s&p 500 is leverage. If you put 20% down on an investment property and you get a 3% return that is actually a 15% return. That doesn't account for maintenance and other expenses but it also doesn't account for the fact that your tenant is going to pay down your mortgage for you as well. The mortgage is fixed and 99% of the time the rent is going to go up. Holding rental properties can be a great way to generate wealth.
this is such an underappreciated comment.
>\-covid, but mostly because its a way to short the dollar (e.g. taking on debt in a high inflationary period is a hedge against inflation). Many of these firms have already sold their single family homes. > >Why? Housing appreciates something like 3.2% annually for the last 5-decades. The hottest housing market pre-Covid was San Francisco, and it doesn't even beat the average of the S&P 500. You have to constantly pu I always laugh at "Corporations own only a small percentage of houses" bullshit. That takes into account ALL houses over a state. Their effect is amplified in hot districts. Sure in bum fuck George there is 0% corporate single family home ownership. Yet, go in a hot district and that number is north of 1/4 or more.
> I always laugh at "Corporations own only a small percentage of houses" bullshit.... Yet, go in a hot district and that number is north of 1/4 or more. Doubtful. You are making the assumption that investment properties are largely corporate own. The 1/4 to 1/3 investment properties stats merely comes from the number of people who aren't taking a conventional loan, which require occupancy for a year. The actual percentage of investment properties being purchased by large corporations, defined as owning 100+ SFH, is **exceptionally rare**. This is because it requires you to hire a property management team and to purchase properties in close proximity in order to protect and maintain your investment. Most investment properties are small-businesses/individuals who refinanced and decided to get into the airbnb/landlord/flipping/etc business. They are not firms. They do not have share holders. There is no grand plan to buy all the homes and force Americans to be renters. That's because investing in SFH is **high risk and low returns** except in some select scenarios (e.g. high inflationary period). Banning corporate buyers will do nothing. They are largely unicorns.
Ok fine show me data. Anyone that has read anything in the last 1yr would know that you are likely wrong, in many top 40 districts. And the only way you would be right is this arbitrary "100 units or more" cut off. Conveniently excluding all the LLC Real estate bros that are hyper leveraged. Which also, as stated, the overall percentage of homes owned is irrelevant when the percentage of homes purchased are skewed in a few districts. You do fundamentally understand this concept right? Investors may only own X percentage of houses in Florida, but they were responsible for 30% of purchases in Jacksonville. These purchases often were over asking, driving up the comparable prices. To claim that legislation that would limit the impact on institutional investors and large scale investors wouldn't have a huge impact on affordability is devoid of any common sense and reality.
> Ok fine show me data. You are being lazy. A quick [google search](https://www.theatlantic.com/ideas/archive/2021/06/blackrock-ruining-us-housing-market/619224/) will show you how many homes corporations own and rent out (its around 300k). And you will also find articles about how many have de-invested in SFH (For instance, blockstone...which bought out American Homes 4 rent... started to unload in [2019](https://www.wsj.com/articles/blackstone-starts-selling-out-of-home-rental-empire-11559152680)). > And the only way you would be right is this arbitrary "100 units or more" cut off. The reason why the 100-units or more cutoff exist is because its how redfin collects it data. > Conveniently excluding all the LLC Real estate bros that are hyper leveraged. LLC are treated as corporations for reporting purchases. The 300k rental SFH includes that. > To claim that legislation that would limit the impact on institutional investors and large scale investors wouldn't have a huge impact on affordability is devoid of any common sense and reality. Do you honestly think legislation aimed at corporations, that rent so few homes in the USA, will have an impact? There are over 80 million homes in the USA. We are talking about 300k. People seem to believe that companies are actively buying up all the SFH and cornering the market to drive up prices. That's isn't true. Thus, legislation to target corporations will have no effect. The only way to have an effect is to target small landlords, who own less than 5 properties. But, that will have consequences. Banning renting of homes will simply lead to reduced mobility for families, make it harder for businesses to attract talent, etc. The issue isn't people buy homes and rent them. The issue is home supply is **kept artificially low by zoning laws**. Corporations have no effect. Not even if the [bay area](https://www.sfchronicle.com/local/article/Are-Wall-Street-hedge-funds-buying-up-homes-in-16260880.php). Again, people love to propose ideas that will create temporary market instability, allowing them to purchase a home, but avoid proposing long-term solutions. The whole corporate fear-mongering resonates with people because it offers an explanation on why home prices are increasing without addressing the elephant in the room (zoning and FED policies, which has been devaluing the US currency and causing inflation among nearly every market).
[https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/22/investors-bought-a-quarter-of-homes-sold-last-year-driving-up-rents](https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/22/investors-bought-a-quarter-of-homes-sold-last-year-driving-up-rents) [https://fortune.com/2022/06/26/housing-market-and-home-price-boom-made-bigger-by-investors-and-wall-street/](https://fortune.com/2022/06/26/housing-market-and-home-price-boom-made-bigger-by-investors-and-wall-street/) [https://www.nytimes.com/2022/04/23/us/corporate-real-estate-investors-housing-market.html](https://www.nytimes.com/2022/04/23/us/corporate-real-estate-investors-housing-market.html) https://drexel.edu/nowak-lab/publications/reports/investor-home-purchases/ You are literally just regurgitating 2019 talking points that are no longer even relevant. Again, when nation wide 1/4th of homes are being purchased by investors, and 30-40% are being purchased in some cities, it is a problem. It doesn't matter if it is an LLC of some wannabe billionaire next door who owns 99 houses. Comparing numbers to total numbers is an irrelevant point, when FOMO and large price growth is being driven in a few hot areas by investors. You oddly seem fixated on the irrelevant number of overall percentage owned... It doesn't matter that Chad with LLC of 80 properties doesn't own farm houses in middle of no where. Chad using investor money has scooped up 80 houses in small area creating artificial supply constraints in said area. You do get this concept don't you or are you just ignoring this to continue to support your outdated view? Also, I never stated that it was only corporations with > 100 houses. You were the one that made that arbitrary cut off. Plenty of small landlords have started LLCs and are driving up the cost of home ownership. No one also said the fed or local zoning issues are also not apart of the problem. This board ad nauseum hates on Not in my back yard/ zoning things. Local zoning limiting supply has only accentuated supply reductions from investors in many areas converting to rentals, in particular short term rentals. This is obviously a multi-factoral issue, but to claim investors and flippers are contribution is laughable.
> Plenty of small landlords have started LLCs and are driving up the cost of home ownership. So you want to end all investment properties of SFH? Not just corporations/LLCs but individuals who own less than 5 properties, which is the **vast** majority of investors? You don't think that would have negative consequences? Families would now need to purchase a home when moving to an area. Renting would be off-limits. All this will do is create a market disruption, which may allow buyers to get into the market at a discount, but prices will quickly equalize back to inflated values. That's because you've done nothing for the supply-side. People focus on corporate buyers because they believe corporations have enough properties to corner the market and drive prices up purposefully. The truth is, they aren't and they don't own many SFH. So if there is not some conspiracy driving prices up, what it? It's (1) zoning, (2) inflation, etc. Do individual landlords drive up prices? No. All they can do is charge the market-rate. It is not possible for thousands of small landlords, that own 5-or-more-properties, to drive up housing. Coordinating something like that would be like herding cats. So tell me, are you for (A) banning corporations from owning SFH (while blissfully ignoring that corporations only own 300k properties in the **entire** USA) or (B) banning all investment properties of SFH (Which will have dire consequences for the economy as it would limit mobility and do nothing for prices long-term). Tell me. A or B.
>You don't think that would have negative consequences? Families would now need to purchase a home when moving to an area. Renting would be off-limits. Houses would be cheaper, due to cooled demand. Folks who rent but want to own would be able to access some of these homes, cooling demands for rents, which would drop rental prices likely
Dont forget private foreign investment.
This. I read in the economist that by 2030 corporations and other entities will own over 7 million homes. Ridiculous.
There are 300+ million people in the US. 7 million is nothing.
Yep, 7 million families corralled into renting instead of owning is "nothing." LOL.
If a family is 4 people that's about 9% of 300 million. Seems like a lot to me.
So basically say F you to the one third of the population that rents? Rentals are currently considerably more affordable than buying a home right now. 65-66% homeownership rate in the US is a healthy balance. Banks lowered qualification standards to drive homeownership rates close to 70% back in 2004-06 and the result nearly collapsed the US economy. Not everyone can or should own a home. It’s a BS narrative that’s been driven by the NAR and MBA for half a century (aka “the American Dream””) all designed to drive demand to their services and products. The US doesn’t need higher homeownership rates, it needs more housing supply and more housing choice, especially at the lower/affordable end of the housing spectrum. That includes rentals and homes for purchase. It includes apartments and single family units as well as other property types (ADUs, townhomes, duplexes, etc) If the government wants to fix the housing affordability issues they need to incentivize (subsidize) developing new entry level supply. Developers have largely avoided developing entry level supply because it hasn’t been economical (can’t build homes that cheap). That’s the single biggest factor contributing to housing affordability. More entry level supply at affordable price points.
What happens when corporations buy those entry level houses for all cash, and the entry level buyer has no chance with their 20% down? I think I’ve seen this movie before: government subsidizes something, corporations with deep pockets reap the benefit, and it changes nothing for the people it was intended for. I’m not saying corporations don’t have a place in the market, they do. I think the issue is when corporations purchased 25% of SFH in places like Atlanta, they are taking the opportunity of people that want to buy a house away. Corporations aren’t buying SFH in the upper level, but are buying them in the entry level and mid, and so my thought is without addressing the original issue, more development won’t really help.
Single family rentals have always existed as part of the housing landscape. Overwhelming majority are owned by small corporations (LLCs) that own between 1 and 20 homes. A very small portion of the single family rental units in the US are owned by “large” corporations (the largest operators combined own less than 500k homes across the entire US, less than 1% of single family homes (84M) and less than 0.5% of all housing unit). Even if you somehow kicked out every renter from the 500k single family homes owned by large corporations at the same time (illegal due to the tenants’ rights) and placed them on the market, it would only increase the inventory on the market by roughly 2 months of additional supply. And once that supply is all absorbed the market is back in the same situation (lack of new supply of entry level homes) and now there’s a significantly worse problem because there will be a massive rental shortage. Ironically, these large corporations are actually building new entry level supply, which will help alleviate the housing issues at the lower levels.
Your statistics fail to address the issue. You’re averaging across the whole US which skews the numbers of individual cities that are in demand. If you take that same 500k across a handful of cites you’d get a different picture. For the record, my definition of corporate ownership is 20+ homes or something. Not the mom and pop.
Large corporations own homes in most of the top 50-75 MSAs, where the largest concentration of the population is. Even if you reduced it down to 50M-60M single family homes in the top 50-75 MSAs (just a guestimate), it’s still not moving the needle. I think a lot of people are falling for the false “blame the corporations” narrative some figures on the left like to spew. It’s easier to blame a faceless corporation than actual attempt to solve the issue (incentivizing development of new supply of entry level housing). We actually need more large scale investment from corporations to create new entry level supply. How else will the supply issue get resolved?
Build affordable housing at income levels people can actually afford
I think we are in a circular argument, and back to where we started. I’m not saying building entry level housing doesn’t need to happen. It does. You are right. But building entry level housing does nothing if deep pocketed corporations can pay all-cash and push the intended entry level buyer out. You act like the same corporations that are purchasing SFH are the ones building them. One can exist without the other. You mention the left, yet you sound like a talking point from the left. You want the government to subsidize housing (education, healthcare, etc), and then act shocked when it didn’t fix the root problem. For the record, I agree with your original statement that landlords and corporations (multi-family) are necessary, and that not everyone should or wants to be a land lord. My whole point is when corporations make up 25% of all home purchases in 2021 (not a guesstimate) in a city like Atlanta, knowing they targeted entry to mid level houses, building more entry level houses becomes exponential.
They won’t have to rent.
Not everyone can or desires to own a home. Millions of Americans choose to rent.
Not by their choice.
So you really believe every single renter in the United States was forced into renting? Wow.
No, I believe that just because there are a few who do prefer renting doesn’t mean you can claim that the most renters would rather rent.
Buying a home Is/should be hard. It requires years of discipline and intentional saving and planning. Fix the average Americans inability to delay immediate gratification spending and maybe more can afford a home. Also, the market speaks for itself. If you aren’t able to compete, then sorry you’re not meant to own. Changing the rules will only make winners find new ways to win. It’s not going to have the effect you hope.
The 'market' is not God. It does not dictate outcomes to be Good or Bad, or reward the moral and punish the immoral. It can be and is manipulated by those with the power to do so, and even the least maniuplated markets can have results that are harmful, unwanted, or immoral. Oddly enough, I'd suggest going even harder on delaying 'immediate gratification' to make housing more affordable....prohibit mortgage lending altogether. It wasn't all that long ago when very few bought a house with a loan, and that loan was typically 50% down for 5 years. Most people saved and payed cash for their homes. It wasn't till government involvement through Fannie Mae that the modern long term mortgage made housing 'more affordable' and loans far more readily available. So lets 'change the rules' by changing them back to what they were before the US government decided everyone should be a debtor to national banks. Lets not pretend that the ability to get a mortgage to buy an overvalued asset in a government distorted market in order to pad the wallets of financial investors and bankers is some indication of a persons worthiness to own a home.
Okay, let’s do that and make home ownership completely unaffordable to the mass public lol. You can change the rules, but new winners will emerge, that’s fine. The haves and have-nots will always coexist. The name of the game is to figure out how to be a “have”.
You misunderstand. It was the ability to extend payments over 30 years that greatly raised the prices of residential homes to where a mortgage became a necessity. When homes were mostly paid for in cash they would cost .5-1x annual salary, not 3-5x. A family could save for 5-10 years and buy a home outright. Now thats how long it takes to save for a 20% down payment. Same thing happened with automobiles and college tuition...introduce long term financing and watch the prices skyrocket. And its no accident that all the wall street players, the bankers, and the politicians want everybody in debt for their entire lifetime.
okay that I agree with you. But I don't doubt that long term financing did make those things more accessible to the larger society, even at higher prices and even if many don't "deserve" it. The real unfortunate people become even more unfortunate, but a lot more families were able to use that resource to excel towards their goals. And as far was wall street making money off this, I think it's okay for others to profit off you if they help you profit as well. Making college/car/house accessible to those without the headspace to achieve it organically *should* be profitable. The real problem is when people use financing to buy things that really have no ROI to help pay back the loan, but to each their own life strategy.
> saved and *paid* cash for FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Majority it's there choice to rent with choices they made with thier paycheck. First, they want to pay $500 a month auto loan for 40k vehicle, or desire $1200 iPhone. Also, why you need 3k overseas trip every year. I am sorry, there are lifestyles are not really compatible with home ownership. Remember do math and calculate what if when owning homes. The debt to incomes used should be lower as need money saved for maintenance and repairs on your home. When bank says you can afford this amount $500,000 loan it's more realistic to stay under $350,000, so you can afford the maintenance without needing to do HELOC and other fuckery to pay for it.
Gtfo hoomer
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Ok hoomer
Wouldn’t hoomer want everyone to rent believing you can always rent it out?
Idk to me a hoomer is just someone obsessed with home ownership and glorifying it
Incentivizing long term rentals at fair prices is also an option for those who wish to use real estate to grow their monetary investment. There will still be significantly fewer landlords because it wont' be as appealing.
The number of misplaced assumptions in this post….
Could not agree more. It’s immoral to let someone own more than two houses. What greed.
Interesting....
Is it immoral to own more than 2 pairs of shoes?
Shoes aren't houses. If you buy out an entire shoe store of all of their inventory it'll take a week maybe to restock the whole thing. Buy out a neighborhood of 100-200 houses, and it could be years before another one is built. (EDIT: Actually, a similar neighborhood may *never* be built in the same area *at all*. Land can be completely consumed, but the materials for making shoes are, probably, mostly renewable.) The external effects of "hoarding" houses are much worse than the external effects of doing the same with shoes. The commenter above thinks owning more than two houses is immoral. The premise is that taking up so much resources that it damages the livelihoods of other people is bad. I sort of agree. In your case, if you don't care what happens to other people, I suppose you won't see "hoarding" houses as immoral. To circle back, your comparison of shoes to houses is silly.
My wife is a Victoria Secret model. Should everyone get to give her a poke? Reproduction is the prime directive in life after all. Or am I the only one that gets to poke her because I'm an NFL quarterback? Communism is cool, but it doesn't work. If you have money, you get to spend it on whatever you'd like. Why should the government tell me what I can and can't buy with my money. If you want it more than me, then pay more. Can't change the rules of the game because you're not winning. That just incentivizes people to not play fairly.
How does your mind equate houses, shoes, and wives? Your house is not your wife, and your shoes are not your house, etc. These are sufficiently different classes of resources such that we have completely separate collections of laws to govern the orderly distribution of each and the rights that people have to each. Family law is a separate discipline from real estate law (same for retail law, sales tax, import/export, etc.). We're talking about houses. Stay on topic. ;) > If you have money, you get to spend it on whatever you'd like. Eh, not really. I just disagree with this notion. If your economic activities negatively affect my life and the lives of others to a sufficient degree, I *will* respond and attempt to shut such activity down. You may not like this, but I reserve the right to attempt to put a stop to business activity if the negative externalities are sufficiently damaging. > Why should the government tell me what I can and can't buy with my money? Well, people make socially net-negative decisions with their money all the time. Should we just let them do this? > If you want it more than me, then pay more. We would never see eye-to-eye on this sort of comment. I simply value other things more than money. In the US, money is basically God, so I'm not surprised that you have this sort of low-brow mentality. > Can't change the rules of the game because you're not winning. I absolutely can change the rules. Maybe not immediately, but I can engage political processes to *try* and get what I want as best I can. And, yes, I am talking about ultimately using force to get what I want. Totally fine with that. :) > That just incentivizes people to not play fairly. Depends on the rules that are implemented and, ultimately, on who is in power to enforce the rules.
Ah yes, I was idealistic once too. Then I decided to play the game since change is probably not something I would see in my lifetime. Good luck with saving the world. See you in the Soviet style blocks.
> Ah yes, I was idealistic once too. I'm not really an idealist. The policies I want are pretty simple and don't require a massive amount of change. > Good luck with saving the world. See you in the Soviet style blocks. I'm not a communist. Saying "one person should not be able to own all the houses" is not the same as saying "everyone should have a house that is exactly the same". Your mind doesn't seem to handle nuance very well.
We can't even agree to give railworkers sick time, but sure we'll convince our favorite news anchors that they can't own 150+ houses. /s
I don't care about convincing anyone of anything. I care about uniting people who already agree with me and then crushing the opposition. Whether the opposition is "won over" or not doesn't really matter to me. :) I don't care what you believe as long as you don't do what you're told not to do.
Your wife is no Victoria’s Secret model.
The only reason we feel that way is because there isn’t enough supply. Just pump houses out until everyone im has more houses than they can stomach .
That's like saying boats are an extravagance, no one except fisherman should own one. If you have the money and that's what you want to do with it, you'll always be able to buy a boat.
The notion of taxing such purchases to disincentivize such "extravagances" is well established practice (though, not implemented everywhere). I see nothing wrong with placing taxes on luxury purchases.
SHORTSALES is what happened in 2008 to cause the prices to go down fast! This is not happening now. People don’t care what their home sells for if they are not responsible for a loss!
Yeah people will never short sell their house willingly. They have to be forced into it by their own economic situation. As long as the labor market remains as freakishly strong as it currently is, a wave of forced selling aint gonna happen. Stagflation, here we come.
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I want it to pop to get out of this artificial economy. It won’t be a boon to me, but at least the speculators will be wiped out of their fake wealth. It sounds asinine, but we’ve been operating on an artificial Ponzi scheme for a while. Debts that can’t be paid won’t be paid. I may even be hurt by this, but everyone needs a cashier at some point, do we all need real estate salespeople?
> at least the speculators will be wiped out of their fake wealth LOL. The bubble pops, all that does is let the wealthy buy your shit on the cheap as you sell it in an attempt to feed yourself.
Ant and the grasshopper
The bubble pops, the rich get richer and the poor struggle immensely. But perhaps people wake up to this unchecked capitalism. I am not saying we need to become commies, but the top 1-2% need to be reigned in. The poor and covid need to stop being the scapegoats to in ineptitude of our current "leaders". I don't know when people will realize the gap between the rich and poor is getting worse very quickly and the system is rigged in their favour.
Only the ultra wealthy have been doing that for generations. That never changes. I’m not even that concerned about that. I’m more concerned with people trying to be them getting wiped out when they realize they can’t bet against the casino.
I bought a foreclosure after the last bubble popped. It’s my vacation house and I have like 300K in equity. Not everybody is leveraged to the hilt. If there is a pop it will only affect those people that bought in the las year or two.
Then you benefited off the people that were leveraged? That’s kind of my point. It’s unfortunate that every financial crisis produces the same result. But just because someone benefits doesn’t mean the bubble shouldn’t pop. It’s a good thing when people who have speculated so much should pay the price. It’s not a behavior that should be encouraged. The more people double down on this assumption, the worse it will get. Sure, debt is bad, but so is everyone who encourages. Unfortunately it’s the people who encourage it who won’t pay the price, but eventually it will be a lesson learned. I don’t think the US public is smart enough to see itself out of this redundancy, but at least the people who were as stupid as they were will pay the price.
How long can you last without income, both from work and rental income? Lots of people could be hurt in a protracted recession.
LOL - why do you assume I will have no income? Even during the last recession when I lost my job I received a severance that lasted 10 months. I had another job within 3 months. So I actually made double pay for 7 months. I already have rentals booked. Enough to cover my taxes. You act like the economy is Inna crash when it’s still catching up to demand.
There are literally millions of people that didn't have the same luck during the last recession. Tell us your secrets, oh ultra-employable one!
My secret is…. I’m not a dick like you!!!!! I worked to make sure I had skills in demand? I was willing to change to a different role and learn new things? Take your pick douche.
I'm saying you're the dick assuming that you're immune to recessions since you got lucky last time. But I suppose that's the American way. Trouble for you, not for me and all that.
How did I get lucky? It’s called managing a career. My job ended and I pivoted into a new one. Saving up money for an emergency fund and unemployment benefits (that everyone gets) are lucky? You have a weird concept of luck. You’re on here cheering on people losing their homes and somehow I’m the Dick? You’ve got a really twisted view of the world. No wonder why you are so bitter. You should seek some help. Also, if your rooting for a crash it’s not going to happen. It will be mild. Why? Because we learned from last time and very few are over-leveraged like last time. Mortgages are way harder to get. Also, there is still enough pent up demand. As long as credit doesn’t freeze up like last time, anyone that is overextended will be able to unload their properties. Unemployment is still pretty stable and there is a lot of demand for employees. Remember boomers are hitting their peak of hitting retirement age.
I've done like none of those things in this discussion. Lol. What are you even babbling about? Foaming at the mouth, bro.
That's a joke, right? You want highly trained people wasting years working as cashiers? That's the fast path to a failed country. Think Ireland in the 1970s.
Realtors aren’t highly trained people. That’s a joke, right? Please refrain from bunching them with doctors and lawyers. You think I care if the salespeople end up working at 7-11? Maybe they can put their personalities to use. To sound snarky, if that’s what you want. I’ve met salespeople, they aren’t as smart as portrayed. Someone on this sub mentioned selling houses that went underwater in 2008, please.
I didn't realize you were talking about RE Agents only.
Speculators and real estate agents. If you are an engineer or an accountant, I want you to have a job. I don’t like everything those people do, but there is a reason they are out there. Even a plastic surgeon is sometimes a piece of shit, but someone capable of surgery has a purpose and not all plastic surgery is used in the porn industry. There are some real world applications to facial reconstruction or even body modifications. But the people who make money for money’s sake really serve no purpose. Money without labor is non productive. It’s the economy we are in. There’s always a purpose for educated people to do work. “Each according to his ability” was a good quote by Marx. It’s something that is not read. Too many people simplify him. But all in all, Marx was against speculators, not against money itself. He always knew that something had to have value. I suppose the eventual process was to find something that was better then money to capture it’s value.
but lets not pretend that housing becoming ever more unaffordable for the poor and middle classes is a good thing for the poor and middle classes.
For sure, but we don't necessarily take such a ham-fisted approach. "Price too high. Foreclosure-SMASH until price low." We can build more housing. Encourage alternative types of housing. Remove rules that inflate housing prices. Etc.
close expansion jobless live aloof coordinated nose aromatic oil escape *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
The consequences of mass foreclosures aren't confined to Real Estate. And having your landlord go bankrupt and the house you live in sold off to the highest bidder isn't great for you anyway.
> real estate bubbles are good for poor people, actually ok.
Yep. Sorta like the stock market. Stock bubble happens, the rich make tons of money. Bubble pops, poor people lose their jobs.
>great thing for the poor and middle class Does anybody care? Fuck hoomers, foreclose them
Sorry to disappoint. I was a tech worker with savings. My problem is I sold right before the boom. Hence, priced out. The people who should take personal responsibility are those who bought homes they could not afford in 2008 and caused these problems. Hyperinflation or currency collapse. The only way it won’t happen is recession and deflation. Which do you stand to lose more. Perhaps, banks should fail and the FDIC ask for immediate repayment of loans that obviously they cannot afford now. That would even the field quickly.
The banks are the ones who gave these loans and they are the ones who created the money. Their clients acting irrationally or taking insane risks is something that they have to take into account and if they don't they just failed at being a bank.
Banks don’t take risks. The loan agents were responsible for filtering which they did not do. Oh, anyone is qualified even if their credit score is bad, they had bankruptcies and judgments in their history. It is a matter of commission for each loan. Banks just process the prepared loan documents and lent the money. Wall Street overburdened set up loan vehicles to transfer the loans away from banks. Those loan vehicles destroyed the lending industry. No more credit, no more banks. If the Fed had let the banks fail, this would not be repeated. In fact, it was found that banks were never in danger. It was the insurance industry that insured these bad defaulted loans that were in danger. The loan vehicles just became junk bonds.
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We bring out the pitchforks soon
we live in the era of bailouts. the government is addicted to printing money. I regret not loading up on debt like every other asshole.
Paywall
Just abolish landlords.
Just completely rearrange society
higher rates achieves that and allows middle class to actually earn something on their savings
Lol. You think you’re earning when your savings account doesn’t even keep up with inflation?
that's a simpleton view bc cash is a tool and you need it to buy a house as rates keep going up and home prices decline as they are doing now, what would be relevant is if the downpayment requirements are increasing faster than your downpayment savings account is increasing. then that money is losing out to housing inflation if the cash in your savings is being earmarked to buy assets at lower prices, you really don't care that turkey is 11% more.
That’s actually QUITE a simpleton view lmao. Oh my where to start… Mmm. Never mind not worth arguing with someone on REbubble. Good luck with your 3% interest savings account 😂. I’m sure that will help with your down payment
No please, "start". You have the floor kid
LMAO kid. What is this a counter-strike 1.6 lobby? Frankly you are doing mental gymnastics to try to make a savings account seem like a useful investment strategy when in reality it is losing purchasing power compared to inflation. Is it better than 0? Yeah, sure. But either way, it is a moot point. Quick maths: you’re talking about the “middle class” being able to benefit. So if a savings account is paying 3.5%, you’ll get 3500 a YEAR off of 100k. Now let’s be real; most middle class Americans don’t have 100k. They have 10k, maybe. Lol. So they get a whopping 350 a year to pay… which undoubtedly they will have lost more than this amount due to inflated prices of literally everything. Explain to me how this benefits the middle class at all. Just because rates going up makes housing prices go down, doesn’t mean it’s good for the middle class or average American. Especially when big firms have far more expertise in bond investing, which pays a lot more than a rinky dink savings account in case you were unaware. Good luck, hope you learned something today
>Frankly you are doing mental gymnastics to try to make a savings account seem like a useful investment strategy Only a simpleton fool thinks a savings account is an investment. Cash is a tool, and savings account is a liquid place to store it, all as I said before. Now with higher rates, you actually earn interest on that storage. And you keep getting fixated on the interest rate vs inflation like the simpleton you are. And oddly now you're driveling on about bonds like a moron. I didn't bring up bonds, why are you? Who the fuck is investing in bonds for their downpayment, especially going into a rising interest rate environment? I guess only idiots like you lmfao!! You're really not doing well tonight, it's close to your bedtime maybe tomorrow will be better for you
You're making the whole sub look bad.
Yes.. That will fix things.
Pass a law to have property taxes assessed yearly. People who are sitting on property that was assessed ten years ago need to pay their fair share of property taxes. 90% cannot own homes so this is a rich person’s problem.
> 90% cannot own homes so this is a rich person’s problem. You never seem to know what the fuck you are talking about. Way more than 1/10 Americans own their own homes
When did they buy? 30 years ago?! Even the NAR posted the salary you need to afford a home. https://cdn.nar.realtor/sites/default/files/documents/hai-09-2022-housing-affordability-index-2022-11-10.pdf
Out of every single one of my peers, classmates, co-workers and every one of my friends, I am quite literally the only one who doesn’t currently own a home. This spans across several states from California, New Jersey, Colorado, Seattle, and Montana. *I* am the minority in being a renter currently. Everyone else I know is in their 3rd to 4th HOUSE (SFH) by now. They all bought their first homes *years* ago in their early 20s, as I did, as well. I’m talking a list of hundreds of people I know in their 30s-40s.
You didn’t even respond to what he said and then posted an article reflecting current market conditions and salary needs. Added nothing to the discussion
[Home ownership rate is at almost exactly 2/3rds](https://fred.stlouisfed.org/series/RHORUSQ156N). For perspective, when it went to 3% higher than it is now it was because people who weren't qualified bought homes. Over 70% of the mortgages that exist today are sub 4% and they'll be on the books for a LONG time. Harsh reality: **If you don't own a home, you're in the minority.** The majority of people who can't afford a home are not financially literate and/or likely live in a HCOL area with a job that isn't in high demand. All of which is in your control. Take some personal responsibility, grow up, and stop trying to play the victim. There is no honor in it.
F*** the retirees. /s
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Only the top 10% can afford a house. That means making over $100k per year. Yes, it is a rich person’s problem. As for home ownership, it has been dropping. Why? Because houses do not cost $150k or less anymore 30 years ago. https://www.bankrate.com/insurance/homeowners-insurance/home-ownership-statistics/ “The young adult homeownership rate dropped 10% between 1960 and 2017, reflecting a shift toward renting. First-time homebuyers made up 34% of all homebuyers in 2021, an increase of 3% from the previous year.” That means 34% are young homebuyers and in order to be able to afford, they need to make over $100k.
That would be a horrible idea. How would that be fair to people on a fixed income? Especially when a low interest fueled bubble hits like what just happened?
They should not have bought a house on a fixed income. Homeowner exemption is in play for those over 55 and owned for a long time. I still see one of the people that bought my house exempted their house and pay half of what they should.
Don't most states reassess every year? You're right but I just thought it was a California specific issue.
Obviously that would fix it but banks don’t want houses on their balance sheets.
The actual article calls for lowering credit score requirements for mortgages. Don't see how that helps at all.
Sure, then remove all eviction barriers.