This is insane.
That's conventional thinking, but that isn't what is happening now. Today's mortgage rate is pretty low compared to where it has been over the past 55 years, except for about a 10 year period that was spaced between 2008-2021.
Private Equity is buying homes.
Why? Venture Capital is a huge sector of California's economy. Not to mention, funding Kamala.
It is insane how much the valuation continues to skyrocket on these homes. A house along my regular running route sold two years ago for $760k, some executive with Ollie's just purchased it a few weeks ago for $970k.New listings “fly off the shelf” for one reason, there are not enough homes being built or listed for sale. MLS listings were over 1.4 million 7-8 years ago, fell as low as 800,000 during COVID and have been less than a million during the entire Biden presidency.
Housing Inventory: Active Listing Count in the United States
Graph and download economic data for Housing Inventory: Active Listing Count in the United States (ACTLISCOUUS) from Jul 2016 to Sep 2024 about active listing, listing, and USA.fred.stlouisfed.org
Part of this is definitely massive pre sales to institutional investors because those houses never officially get listed.
People are significantly overpaying for houses based on illusionary influences. The illusion is that market/demand forces are driving prices, but they are not. These private equity firms are willing to buy entire, multi- hundred home subdivisions and let them sit empty just to constrain supply. The artificial supply constraint drives up prices with no underlying real economic reason other than manipulation.
Companies like Black Rock have one goal, end private ownership of houses. Once they do that they can extract money from every person for the rest of their lives. How will they do that? Greatly overvalue prices, dump into any weakness causing rapid devaluation (like happened in 08/09) and then buy everything for pennies on the dollar. They have the assets to handle that short term volatility, home owners that overextend to buy don’t.
Yep. What we are currently seeing has very little to do with the fed rate and much more to do with just not enough houses. If people want to be in the game and buy, they are forced to pay higher (even though a rate increase usually lowers prices).
that's what she said.
Which is why “banning sales” to anyone is a horrible idea. At some point, this asset class will fall out of favor for the big boys, as all investments do. The cost of maintaining these properties will result in the sale of the property, and price correction.?
Government policies created the issue to begin with. The subprime mortgage crisis of 2008 that was caused primarily by Clinton's and Barney Franks' housing and lending policies.
I remember having a conversation with what I used to think was a pretty intelligent guy. He was talking about how great negative amortizing home loans were. I countered this was a recipe for disaster for numerous reasons, which is exactly what happened.
The result - the government bailed at the (ir)responsible parties out on the backs of the taxpayers...
Here’s how much the 2008 bailouts really cost | MIT Sloan
mitsloan.mit.edu
"As for who directly benefitted, Lucas found that the main winners were the large, unsecured creditors of large financial institutions. While their exact identities have not been made public, most are likely to have been large institutional investors such as banks, pension and mutual funds, insurance companies, and sovereigns."
I'm talking about a correction that will take place in the future. Not the too big to fail situation
The older and wiser I get and they way info is available now, I am of the conclusion we have been fed a lot of bullshit throughout our time. A lot of starts in DC and by the power brokers of the world.
