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CRJ200flyer
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Corporations Buying Up American Homes

Mon Apr 19, 2021 11:23 pm

https://www.google.com/amp/s/www.wsj.com/amp/articles/investors-are-buying-more-of-the-u-s-housing-market-than-ever-before-11561023120

https://www.google.com/amp/s/amp.jsonline.com/amp/6989234002

“The Milwaukee deal proved to be the launching pad for the pair's fast-growing single-family home rental business. SFR3 now owns about 4,000 properties in at least two dozen metro areas and hopes to own more than $2.5 billion worth of properties by 2024”

This is just a quote from one property company. I’ve been researching the rapidly rising housing prices and shortages as houses slip out of my younger millennial age group’s price range in many major cities. I’ve had friends coast to coast in bidding wars they can never win, or those lucky enough to already own a home selling their houses for massive windfalls (record I’ve seen so far among acquaintances was an older couple in Seattle selling a $400k house acquired in 2014 for over $1M).

I know there are many factors, but it concerns me to see major corporations essentially buying the American dream and renting it back to people. In addition to renting houses, I see massive new apartment complexes rising all over suburban areas where homes once stood.

So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply? 2) Somewhat separately, do you see housing prices sustaining ever rising heights or do you think a fall is coming as foreclosure protections end?
 
luckyone
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 1:44 am

CRJ200flyer wrote:
https://www.google.com/amp/s/www.wsj.com/amp/articles/investors-are-buying-more-of-the-u-s-housing-market-than-ever-before-11561023120

https://www.google.com/amp/s/amp.jsonline.com/amp/6989234002

“The Milwaukee deal proved to be the launching pad for the pair's fast-growing single-family home rental business. SFR3 now owns about 4,000 properties in at least two dozen metro areas and hopes to own more than $2.5 billion worth of properties by 2024”

This is just a quote from one property company. I’ve been researching the rapidly rising housing prices and shortages as houses slip out of my younger millennial age group’s price range in many major cities. I’ve had friends coast to coast in bidding wars they can never win, or those lucky enough to already own a home selling their houses for massive windfalls (record I’ve seen so far among acquaintances was an older couple in Seattle selling a $400k house acquired in 2014 for over $1M).

I know there are many factors, but it concerns me to see major corporations essentially buying the American dream and renting it back to people. In addition to renting houses, I see massive new apartment complexes rising all over suburban areas where homes once stood.

So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply? 2) Somewhat separately, do you see housing prices sustaining ever rising heights or do you think a fall is coming as foreclosure protections end?

Bubbles always pop. Bulls are always met by a correction. A hot economy will eventually be met by inflation, and housing costs will level off for a bit.
 
flyguy89
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 1:45 am

CRJ200flyer wrote:
I see massive new apartment complexes rising all over suburban areas where homes once stood.

When you have high demand and limited supply, densification if good. Ridged adherence to inefficient single-family lot sizes/zoning can ultimately constrict supply and increase housing costs.

CRJ200 wrote:
So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply?

Densifying where possible and allowing the housing supply to catch up with demand would go a long way toward addressing this issue.
 
GalaxyFlyer
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 2:07 am

flyguy89 wrote:
CRJ200flyer wrote:
I see massive new apartment complexes rising all over suburban areas where homes once stood.

When you have high demand and limited supply, densification if good. Ridged adherence to inefficient single-family lot sizes/zoning can ultimately constrict supply and increase housing costs.

CRJ200 wrote:
So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply?

Densifying where possible and allowing the housing supply to catch up with demand would go a long way toward addressing this issue.


Rigid zoning on lot sizes and single-family homes is a feature, not a bug. Americans still vastly prefer their own homes and those zoning rules create future financial gains.
 
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Aaron747
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 2:21 am

GalaxyFlyer wrote:
flyguy89 wrote:
CRJ200flyer wrote:
I see massive new apartment complexes rising all over suburban areas where homes once stood.

When you have high demand and limited supply, densification if good. Ridged adherence to inefficient single-family lot sizes/zoning can ultimately constrict supply and increase housing costs.

CRJ200 wrote:
So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply?

Densifying where possible and allowing the housing supply to catch up with demand would go a long way toward addressing this issue.


Rigid zoning on lot sizes and single-family homes is a feature, not a bug. Americans still vastly prefer their own homes and those zoning rules create future financial gains.


Developers have needs too, not just homeowners. And more residents clustered in one place is a tax advantage for cities that are still growing. More efficient use of infrastructure resources too instead of neverending sprawl.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
luckyone
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 2:25 am

GalaxyFlyer wrote:
flyguy89 wrote:
CRJ200flyer wrote:
I see massive new apartment complexes rising all over suburban areas where homes once stood.

When you have high demand and limited supply, densification if good. Ridged adherence to inefficient single-family lot sizes/zoning can ultimately constrict supply and increase housing costs.

CRJ200 wrote:
So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply?

Densifying where possible and allowing the housing supply to catch up with demand would go a long way toward addressing this issue.


Rigid zoning on lot sizes and single-family homes is a feature, not a bug. Americans still vastly prefer their own homes and those zoning rules create future financial gains.

Until one sees a San Francisco or a Seattle, and conservatives point at liberal regulations artificially costing your average American money.
 
flyguy89
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 6:15 am

GalaxyFlyer wrote:
Americans still vastly prefer their own homes

And that’s fine, they’ll just have to go further out from the urban core if they want to live that lifestyle. Not practical to expect expansive single family zoning in high demand urban areas.

GalaxyFlyer wrote:
and those zoning rules create future financial gains.

At the expense of crowding others out of the housing markets and driving up costs for buyers/renters.
 
VSMUT
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 1:08 pm

CRJ200flyer wrote:
2) Somewhat separately, do you see housing prices sustaining ever rising heights or do you think a fall is coming as foreclosure protections end?


Much of the housing is held by the big and relatively affluent baby boomer generation. They have been able to continuously push prices up. The high prices are ultimately going to stop when there are no more baby boomers to buy the houses. This will be exacerbated by the millennial generation being economically much worse off, saddled with debt from education and more likely suffering in worse paid jobs, so unable to buy the houses at the prices expected by the sellers. The UK is expected to reach peak death around 2034.

The Economist published this article on the subject a few years ago:
https://www.economist.com/britain/2019/ ... uy-a-house

It does note that Americans are more likely to downsize or move into retirement homes than UK citizens, so it would probably happen slightly sooner in the US.


flyguy89 wrote:
GalaxyFlyer wrote:
Americans still vastly prefer their own homes

And that’s fine, they’ll just have to go further out from the urban core if they want to live that lifestyle. Not practical to expect expansive single family zoning in high demand urban areas.

GalaxyFlyer wrote:
and those zoning rules create future financial gains.

At the expense of crowding others out of the housing markets and driving up costs for buyers/renters.


Although I generally agree, that only works if facilities, jobs and public transport follows with them. Legislators have to encourage it. Nobody wants to live in the butt end of nowhere with hour long commutes. After years of centralizing state institutions in Copenhagen, the Danish government finally started moving them out of Copenhagen again in 2015 and 2018. You've got to wonder if the US wouldn't be better off if some of the federal institutions were relocated to more sparsely population areas or states.
 
LCDFlight
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 1:36 pm

It's an area to watch. It has always been legal (IIRC) for corporate money to buy houses and rent them to people. This would have been legal 100 years ago, it was legal 50 years ago and it is legal now.

There are many underlying forces. The main one I can see is the global consolidation of wealth versus workers. Worker wages, in the western world, are heading down, especially in relation to total national economic output. I think they will continue to head down relative to this. The concentration of wealth has increased, in part due to this flexibility to hire people anywhere in the world, or migrate anywhere, which is supported by both major parties in the US. The more smoothly markets function, the more smart people can compete for your job, and your house, at any time. It also means the stuff you buy will be cheaper, because it is more efficiently produced.

The US middle class, for example, was astonishingly powerful in the 1950s-1980s, and normal people earned an extraordinary salary in global terms. Maybe that was unsustainable. Maybe the idea of rich nobles owning all the land and houses is normal, and middle class owning their homes was just a temporary aberration.

The distribution of wealth is a political question. Any distribution can be achieved (Cuba is quite an equal society). But Cuba is also poor, to the extent that it equal (they do not allow you to own much stuff or become financially successful).
 
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Aesma
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 3:23 pm

GalaxyFlyer wrote:
flyguy89 wrote:
CRJ200flyer wrote:
I see massive new apartment complexes rising all over suburban areas where homes once stood.

When you have high demand and limited supply, densification if good. Ridged adherence to inefficient single-family lot sizes/zoning can ultimately constrict supply and increase housing costs.

CRJ200 wrote:
So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply?

Densifying where possible and allowing the housing supply to catch up with demand would go a long way toward addressing this issue.


Rigid zoning on lot sizes and single-family homes is a feature, not a bug. Americans still vastly prefer their own homes and those zoning rules create future financial gains.


Are you saying the free market can't cater to what people want ?

What is the windfall exactly ? Surely if a housing company can buy a few homes and make dozens of flats on the same spot, they can pay a lot for these homes ?
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
N965UW
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 6:56 pm

CRJ200flyer wrote:
1) Is there any way to control corporations from eating up housing and inflating prices because of low supply?


I'm a firm believer that there is a rational government interest for restricting corporate ownership of single-family residential homes. Even before the pandemic, we had a supply crisis with not enough homes to meet housing needs. It's only worse now, and as long as we have a crisis, LLCs shouldn't be allowed to grab up supply unfettered. Let them have their multifamily and apartment units, but give everybody else a more level playing field. I realize this may sound idealistic but it's a discussion worth having.

2) Somewhat separately, do you see housing prices sustaining ever rising heights or do you think a fall is coming as foreclosure protections end?


The level of growth we've seen over the past year is unsustainable in the long run. Interest rates won't remain this low forever, and the market will correct when only the super-rich can afford real estate.

flyguy89 wrote:
CRJ200flyer wrote:
I see massive new apartment complexes rising all over suburban areas where homes once stood.

When you have high demand and limited supply, densification if good. Ridged adherence to inefficient single-family lot sizes/zoning can ultimately constrict supply and increase housing costs.

CRJ200 wrote:
So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply?

Densifying where possible and allowing the housing supply to catch up with demand would go a long way toward addressing this issue.


Densification is efficient in cities. But not everybody wants to live on top of other people, especially in outer suburbs and rural areas. We've also seen how density and pandemics don't mix too well.
You can always go around
 
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casinterest
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 7:19 pm

CRJ200flyer wrote:
https://www.google.com/amp/s/www.wsj.com/amp/articles/investors-are-buying-more-of-the-u-s-housing-market-than-ever-before-11561023120

https://www.google.com/amp/s/amp.jsonline.com/amp/6989234002

“The Milwaukee deal proved to be the launching pad for the pair's fast-growing single-family home rental business. SFR3 now owns about 4,000 properties in at least two dozen metro areas and hopes to own more than $2.5 billion worth of properties by 2024”

This is just a quote from one property company. I’ve been researching the rapidly rising housing prices and shortages as houses slip out of my younger millennial age group’s price range in many major cities. I’ve had friends coast to coast in bidding wars they can never win, or those lucky enough to already own a home selling their houses for massive windfalls (record I’ve seen so far among acquaintances was an older couple in Seattle selling a $400k house acquired in 2014 for over $1M).

I know there are many factors, but it concerns me to see major corporations essentially buying the American dream and renting it back to people. In addition to renting houses, I see massive new apartment complexes rising all over suburban areas where homes once stood.

So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply? 2) Somewhat separately, do you see housing prices sustaining ever rising heights or do you think a fall is coming as foreclosure protections end?


These companies for the most part are taking advantage of the folks that don't really qualify for good mortage rates, or don't want them, and they are able to take advantage of demand to rent homes out for good returns to folks that don't know or understand the differences.

"Sometimes they buy these homes sight unseen. Stick a body in there, jack up the rent and use it as cash cow," Johnson said. "They're disconnected absentee landlords ... they really don't care about the fabric of our neighborhoods."


Further, the Lubar Center determined that renters often pay more in monthly rent than they would pay on a mortgage if they owned their homes.

The median assessed value of the nearly 1,000 houses owned by the nine largest out-of-state landlords is $61,500, according to the Lubar Center analysis.


Part of this rent deficit can be explained as
A. Freedom to move
B. Lack of need for infrastructural improvents.......

These investors will unload the properties when they get dilapidated enough over time ,or they will have to invest in the home. If the markets continue to rise, they sell the homes at a profit or raise the rent.


As for other areas of concern. Where there is demand, single family homes will be rezoned for more dense developments. It is a necessity for growing towns/cities.


Folks always talk about how the Millennials' lack money, but they have done better than Generation X which suffered the worst of the Financial meltdown in 2008/2009
Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did..So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.--Mark Twain
 
luckyone
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Re: Corporations Buying Up American Homes

Tue Apr 20, 2021 7:22 pm

N965UW wrote:

Densification is efficient in cities. But not everybody wants to live on top of other people, especially in outer suburbs and rural areas. We've also seen how density and pandemics don't mix too well.

Density hasn't made a difference in the pandemic. One need only look at the fact that the states with the high rates of infection are some of the least densely populated states in the United States -- North and South Dakota, each around 13,000 cases per 100,000 people take the top two spots. Wyoming and New York have almost the same infection rate per 100,000 people (9,900 vs 10,300), or that Kansas has had a higher infection rate at 11,000 than New York state, with that infection rate only being marginally smaller than the 12,000 per 100,000 some parts of NYC are currently seeing, and larger than other areas of the city.

https://www.statista.com/statistics/110 ... -by-state/
 
Tiredofhumanity
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 4:53 am

GalaxyFlyer wrote:
flyguy89 wrote:
CRJ200flyer wrote:
I see massive new apartment complexes rising all over suburban areas where homes once stood.

When you have high demand and limited supply, densification if good. Ridged adherence to inefficient single-family lot sizes/zoning can ultimately constrict supply and increase housing costs.

CRJ200 wrote:
So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply?

Densifying where possible and allowing the housing supply to catch up with demand would go a long way toward addressing this issue.


Rigid zoning on lot sizes and single-family homes is a feature, not a bug. Americans still vastly prefer their own homes and those zoning rules create future financial gains.


:rotfl: :rotfl:

Financial gains - if you can afford the down payment.
 
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Aesma
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 6:46 am

65000$ for a house ? Maybe I should invest in one, too !
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
petertenthije
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 7:01 am

Aesma wrote:
65000$ for a house ? Maybe I should invest in one, too !

You can't even get a private parking spot for that money where I live!

A tiny loft with character (estate agent code for "needs significant maintenance") will set you back 150k euro. And I am not even close to the most expensive places in the country.
The first thing to remember is always treat your kite like you treat your woman.
Get inside her five times a day and take her to heaven and back!
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Flaps
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 1:23 pm

petertenthije wrote:
Aesma wrote:
65000$ for a house ? Maybe I should invest in one, too !

You can't even get a private parking spot for that money where I live!

A tiny loft with character (estate agent code for "needs significant maintenance") will set you back 150k euro. And I am not even close to the most expensive places in the country.


Do you think this situation is a good thing? I certainly don't.
 
petertenthije
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 1:50 pm

Flaps wrote:
Do you think this situation is a good thing? I certainly don't.
Absolutely not.
Here as well investors are buying up real estate and holding on to it to make money.
There's a massive housing shortage in the Netherlands and companies and wealthy individuals are making loads of money out of it.

Plenty of new houses are being build, but mostly houses with a large profit margin. But those are unaffordable to people starting on the property ladder.

I am renting a place, because buying is impossible. It's insane. My income is just above median, on a fixed contract. I have no children to support. No debts whatsoever. Plenty of savings. I could go to the bank today and probably walk out with 200k tomorrow... but there are no houses in that price class. Unless I settle for a place half the size of my rental, with a LOT of deferred maintenance.

And when a house does come on the market, it is gone within a few days... sold for 20% over asking price.
The first thing to remember is always treat your kite like you treat your woman.
Get inside her five times a day and take her to heaven and back!
Lord Flashheart, 1989
 
PHLspecial
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 2:21 pm

GalaxyFlyer wrote:
Rigid zoning on lot sizes and single-family homes is a feature, not a bug. Americans still vastly prefer their own homes and those zoning rules create future financial gains.

I want market freedom, so single-family zoning needs to be nerfed or removed. How can we have free market and have an awful single-family zoning in place? I want choices, the market will decide what type of homes to buy.
 
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c933103
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 2:35 pm

Shortage of house is a supply problem. Companies buying and then leasing out houses do not change the supply. It neither help nor add to the problem. It just changed identity of the landlord.
But maybe these moves can make people realize building more homes is profitable and thus government should allow more homes to be built
It's pointless to attempt winning internet debate. 求同存異. よく見て・よく聞いて・よく考える
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Sokes
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 4:12 pm

PHLspecial wrote:
I want market freedom, so single-family zoning needs to be nerfed or removed. How can we have free market and have an awful single-family zoning in place? I want choices, the market will decide what type of homes to buy.

I'm curious to see who will defeat your argument.
Why can't the world be a little bit more autistic?
 
PHLspecial
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 4:47 pm

Sokes wrote:
PHLspecial wrote:
I want market freedom, so single-family zoning needs to be nerfed or removed. How can we have free market and have an awful single-family zoning in place? I want choices, the market will decide what type of homes to buy.

I'm curious to see who will defeat your argument.

Hopefully someone can because I want to understand why I would be wrong. Maybe I didn't put out the best argument but why have a rule where you can only have two types of housing. It would be nice where we can have more middle housing as well. Of course single family houses will be popular, I just think with rising debt we can't build single family houses forever
 
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Aaron747
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 5:42 pm

petertenthije wrote:
Flaps wrote:
Do you think this situation is a good thing? I certainly don't.
Absolutely not.
Here as well investors are buying up real estate and holding on to it to make money.
There's a massive housing shortage in the Netherlands and companies and wealthy individuals are making loads of money out of it.

Plenty of new houses are being build, but mostly houses with a large profit margin. But those are unaffordable to people starting on the property ladder.

I am renting a place, because buying is impossible. It's insane. My income is just above median, on a fixed contract. I have no children to support. No debts whatsoever. Plenty of savings. I could go to the bank today and probably walk out with 200k tomorrow... but there are no houses in that price class. Unless I settle for a place half the size of my rental, with a LOT of deferred maintenance.

And when a house does come on the market, it is gone within a few days... sold for 20% over asking price.


Sounds like California - the buyers are proxies for Chinese/Emirati/Russian investors who swoop in and bid over asking without fail.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
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Aesma
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 6:01 pm

c933103 wrote:
Shortage of house is a supply problem. Companies buying and then leasing out houses do not change the supply. It neither help nor add to the problem. It just changed identity of the landlord.
But maybe these moves can make people realize building more homes is profitable and thus government should allow more homes to be built


Like in China, with millions of empty flats as a result ?
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
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c933103
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 6:37 pm

Aesma wrote:
c933103 wrote:
Shortage of house is a supply problem. Companies buying and then leasing out houses do not change the supply. It neither help nor add to the problem. It just changed identity of the landlord.
But maybe these moves can make people realize building more homes is profitable and thus government should allow more homes to be built


Like in China, with millions of empty flats as a result ?

It is hard to get the supply and demand right, regardless of which market we are talking about. But at least in the private market, companies actually need to be responsible to their own investment and are thus most likely to build things only when there are demand to buy them, even if excess is still unavoidable. But at least such excess building are being paid by developers private money not public fund, unlike government instructed project to build empty ghost city in China that are using up funds from public entity and is often also a result of corruption.
In fact major Chinese cities still have housing shortage, but there are still ghost cities because they're being constructed at places with little demand hence people aren't buying those.
It's pointless to attempt winning internet debate. 求同存異. よく見て・よく聞いて・よく考える
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CRJ200flyer
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 9:49 pm

c933103 wrote:
Shortage of house is a supply problem. Companies buying and then leasing out houses do not change the supply. It neither help nor add to the problem. It just changed identity of the landlord.
But maybe these moves can make people realize building more homes is profitable and thus government should allow more homes to be built


I appreciate your thought, but this idea assumes the land is endless and the willingness/ability of people to commute is also endless. For example, if I want to live on the east side of X city where my job is, and the houses are being bought by corporations and rented, or being turned into towering apartment rental proprieties, in order to live anywhere near where I work, then I’m going to have to spend enormous amounts of money for the little supply that remains, or move ever farther from the city. It isn’t a matter of builders necessarily deciding to build more homes - not only is the land already limited, but again we’re running into the problem of being outbid by companies who will then upcharge and rent it back to me.

And for those arguing about densification, sure, that’s fine if you argue it’s a more efficient use of space. I understand the lower carbon footprint that results from this. However the problem discussed in the articles isn’t this idea though, but that people have a decreasing number of proprieties they can buy with their own money, and thus are never able to gain any equity of their own through rentals. Only those who can afford to acquire the remaining expensive real estate or corporations who can construct the apartments now succeed. Sure this maximizes profitability for these companies and individuals with the means, but is that the best outcome for the goals our country in the past aspired to?
 
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c933103
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 10:23 pm

CRJ200flyer wrote:
c933103 wrote:
Shortage of house is a supply problem. Companies buying and then leasing out houses do not change the supply. It neither help nor add to the problem. It just changed identity of the landlord.
But maybe these moves can make people realize building more homes is profitable and thus government should allow more homes to be built


I appreciate your thought, but this idea assumes the land is endless and the willingness/ability of people to commute is also endless. For example, if I want to live on the east side of X city where my job is, and the houses are being bought by corporations and rented, or being turned into towering apartment rental proprieties, in order to live anywhere near where I work, then I’m going to have to spend enormous amounts of money for the little supply that remains, or move ever farther from the city. It isn’t a matter of builders necessarily deciding to build more homes - not only is the land already limited, but again we’re running into the problem of being outbid by companies who will then upcharge and rent it back to me.

And for those arguing about densification, sure, that’s fine if you argue it’s a more efficient use of space. I understand the lower carbon footprint that results from this. However the problem discussed in the articles isn’t this idea though, but that people have a decreasing number of proprieties they can buy with their own money, and thus are never able to gain any equity of their own through rentals. Only those who can afford to acquire the remaining expensive real estate or corporations who can construct the apartments now succeed. Sure this maximizes profitability for these companies and individuals with the means, but is that the best outcome for the goals our country in the past aspired to?

- Lands are not endless and extent people commute are not endless, which is why densification is necessary to counter shortage of housing supply
- It is natural that orice of something would go up when there is a short supply, and the only way to fix it is to increase supply to match the demand
- Even if densified apartment towers are expensive, they can still attract residents who would otherwise live in individual home, thus freeing up homes for other to buy/rent/further redevelop into higher density housing to free uo even nore homes
- If too many properties are being buyout for lease, then the property price would increase and rent would decrease due to the changes in supply and demand. In such case it would be cheaper to rent a home than buying it, as in after you keep paying rent for a property for 30 years, you can save up more than the value of the 30 years old home you have on your hand if you have brought it, assuming you put the difference between loan repayment and rent into things like investment fund. But according to my understanding house market of most places in the US is still quite faraway fron such situation.
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TheFlyingDisk
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Re: Corporations Buying Up American Homes

Wed Apr 21, 2021 10:58 pm

c933103 wrote:
- Lands are not endless and extent people commute are not endless, which is why densification is necessary to counter shortage of housing supply
- It is natural that orice of something would go up when there is a short supply, and the only way to fix it is to increase supply to match the demand
- Even if densified apartment towers are expensive, they can still attract residents who would otherwise live in individual home, thus freeing up homes for other to buy/rent/further redevelop into higher density housing to free uo even nore homes
- If too many properties are being buyout for lease, then the property price would increase and rent would decrease due to the changes in supply and demand. In such case it would be cheaper to rent a home than buying it, as in after you keep paying rent for a property for 30 years, you can save up more than the value of the 30 years old home you have on your hand if you have brought it, assuming you put the difference between loan repayment and rent into things like investment fund. But according to my understanding house market of most places in the US is still quite faraway fron such situation.


I honestly don't see densification is working. It's happening where I live and it still doesn't solve the issue of expensive houses.
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Kent350787
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Re: Corporations Buying Up American Homes

Thu Apr 22, 2021 12:44 am

TheFlyingDisk wrote:
I honestly don't see densification is working. It's happening where I live and it still doesn't solve the issue of expensive houses.


But in a "free" market it will only start to address the issue if the increase in residences outstrips demand for those residences.

Pre-Covid in my city (Sydney, Australia) population growth/housing demand outstripped even the massive growth in apartment towers across the city, both strata (ie. each apartment with and individual owner) and company owned. A free-standing three-bedroom home in a bad suburb an hour from downtown will still cost you around USD$400,000. That said, real estate is supported by our government as an investment vehicle (keeping prices high) through policies such as private homes being largely tax-free, and tax incentives for owning rental properties.

I do agree that the OP's linked article is really about changing the landlord. If you can't buy with the crazy low prices in some parts of the USA, you're going to be renting, whether it's big corporation or mom and pop.
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Sokes
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Re: Corporations Buying Up American Homes

Thu Apr 22, 2021 1:34 am

TheFlyingDisk wrote:
I honestly don't see densification is working. It's happening where I live and it still doesn't solve the issue of expensive houses.

In New York housing is still expensive.
Suppose we remove all residential high rise buildings and replace them with single family houses. Would housing shortage in New York remain the same?

One also has to consider changes in divorce rates. In Germany 30 years back less people got divorced. So one already needs huge housing addition for them. If divorce rates increase and housing shortage remains roughly equal, there is already massive expansion in housing.

But I believe the main reason is attractiveness of a city. It may be 200.000 additional people would like to settle in that city. It's housing prices/ rent that stops them. You add 10.000 flats. Prices may only need to decrease 3% to find buyers. Add inflation and prices remain static or even increase slightly. But how would priced develop without 10.000 extra flats?

Or does the growth of a city increase its attractiveness? In this case you are right. Then additions can't help to bring prices down. But it helps the people in the 10.000 flats
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melpax
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Re: Corporations Buying Up American Homes

Thu Apr 22, 2021 2:53 pm

In my city (Melbourne, Australia), suburban home prices are going gangbusters. The minimum price for a free-standing 4 bedroom home in the area I live in (around 30kms east of downtown MEL) is now AUD$1 million, and that would be for something needing substantial renovation. Anything under $1mil is either a small home, or something being sold for land value. Sale prices of $1.3 million are now common in the area, this time last year it would have been considered a standout result.... Asian buyers are still pre-dominant in my area, there are also returning expats, and cashed-up Australians & permament-residency holders fleeing Hong Kong to add to the mix.

Downtown apartments are a totally different story, the overseas students, backpackers, and corporate expat market that these were mainly built to service aren't being allowed into the country at the moment. Lockdowns & WFH haven't helped matters either.

There have massive rent reductions as a result of the collapse in demand for apartments, apartments that would have rented for AUD$600 a week or more 2 years ago, now rent for $350-$400 a week, or less if there is no parking space.
 
phatfarmlines
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Re: Corporations Buying Up American Homes

Thu Apr 22, 2021 3:15 pm

What would be interesting to see from a data point, is the shift in the percentage of renters versus homeowners compared to today's figures in urban settings. Then, from the renters point-of-view, are renters leasing from your traditional mom-and-pop landlord, or from said corporations that are buying these homes. That I think would be telling to describe the impact.

No doubt in your exurb settings are you more likely to find more homeowners vs renters, which sacrifices commuting time advantages to areas with large job clusters.

CRJ200flyer wrote:

So my questions are 1) Is there any way to control corporations from eating up housing and inflating prices because of low supply? 2) Somewhat separately, do you see housing prices sustaining ever rising heights or do you think a fall is coming as foreclosure protections end?


On question #1, no. Urban areas welcome the corporate development, especially if it helps to clean up blighted areas, or as some may call it, gentrification.

On question #2, several have answered with the bubble popping, which I do think is a real thing. Problem is, COVID-19 actually created a demand increase in housing, so people are willing to shell out more for exclusive space. The next non-pandemic related crisis could cause the bubble to burst.

If corporations are buying property only to rent them out, I presume they are outright purchasing them with cash and have no mortgage connected to them. Your traditional mom-and-pop landlord likely maintains a mortgage on the property they rent out, so that group is the one that is at a higher risk if the renter stops paying. Those that have properties completely paid out with no mortgage will be the ones to avoid the effects of the bubble bursting.
 
Sokes
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Re: Corporations Buying Up American Homes

Fri Apr 23, 2021 12:34 am

What bubble?
With politicians/ central banks throwing around trillions I can't see how housing prices should go down.
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seb146
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Re: Corporations Buying Up American Homes

Sat Apr 24, 2021 3:12 pm

Sokes wrote:
What bubble?
With politicians/ central banks throwing around trillions I can't see how housing prices should go down.


Over saturation. There will come a point where no one will be able to live in these "corporate houses" because either they already have their own place or they can not afford the rent. We have been seeing this in cities for a while.
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Sokes
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Re: Corporations Buying Up American Homes

Sat Apr 24, 2021 3:54 pm

seb146 wrote:
Sokes wrote:
What bubble?
With politicians/ central banks throwing around trillions I can't see how housing prices should go down.


Over saturation. There will come a point where no one will be able to live in these "corporate houses" because either they already have their own place or they can not afford the rent. We have been seeing this in cities for a while.

That also is true. I'm not sure what to think.
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