Viewing a single comment thread. View all comments

Master_El0din t1_izxnesx wrote

In your opinion, could the government ever in the future step in and limit the mass purchase of residential homes? Also, do you feel like we will see a sharp decline in home prices in the next year or two? I have a young family and am hoping to see some better opportunities than what is available.

102

ProfBU OP t1_izxovzt wrote

Not an economist but I'd be surprised if the current trend of declining home prices does not continue for several quarters especially with the Fed continuing to raise rates.

As for limiting bulk purchases, I do not see this in the future. Too disruptive to market forces.

102

BetterMeThanYou t1_izy7xmn wrote

In other words -- the increase in housing prices is driven by speculation and housing as an investment vehicle rather than by immediate demand by people who actually want to live in houses.

46

Sheol t1_izzgutl wrote

The whole American economy is based on speculative housing and the government backstop to keep it always trending up. It's what all of the 2007 recession was about.

12

SupraMario t1_j009hpe wrote

Yea, but don't tell this to /r/realestate or anyone who got in on the over bidding....they only think their house value will increase forever. It's like everyone has memory loss and doesn't think 2008 ever happened.

8

[deleted] t1_j022wmt wrote

[removed]

2

SupraMario t1_j023g9m wrote

Realestate keeps up with basically inflation. Calling 2008 a blip? What? It had houses that sold for 270k in 07 listed for 90k in 2010. That's not a blip, thats a correction.

2

Gordonb0mbay t1_izye887 wrote

Isn’t the mass buying of homes the real disruptive force to the market? We aren’t talking about widgets here

25

ColTigh t1_izyhfnk wrote

Absolutely it is. But your speech isn’t as important as other “people’s” speech ($$$).

19

notimeforniceties t1_izziwmm wrote

No, it's been overstated.

The two largest companies, Invitation and Starwood merged to form the largest institutional owner of single family homes, and they have a total of 80,000 units nationwide (out of many millions total of course).

2

SupraMario t1_j009sei wrote

Uhh it's really not, black rock alone owns around 60k homes. Those are just the big players. There are a ton of smaller shops out there owning a few k. It all adds up really quick.

6

notimeforniceties t1_j00bj5l wrote

60k is nothing on the scale of the country.

> Institutional owners still comprise a relatively small portion of the overall market, about 350,000 units, or 1.5% of the existing 23 million single-family home rental units, according to the National Rental Home Council. But in certain target markets, the concentrations are much higher.

3

SupraMario t1_j00clfw wrote

In areas where they matter that's a ton of homes. This also doesn't include owners that own 10-20 homes either. One of the issues we have is so many of the single family homes are owned by someone else and being rented out.

4

notimeforniceties t1_j00dc3x wrote

yes most single family rental homes are owned by "mom and pop" landlords, and that's generally not seen as a problem.

if you want actual stats:

> According to data from the 2018 Rental Housing Finance Survey, for example, individual investors owned approximately 73 percent of single-unit rentals in 2018, compared to 23 percent of apartment homes in smaller properties (5 to 49 units) and just 7 percent of apartment homes in properties with 50 or more units. In that same vein, a recent Altus Group study estimated that institutional investors (firms with portfolios of over 2,000 properties), despite controlling over half (50 to 55 percent) of all U.S. apartment units, owned between just 2.1 percent and 2.5 percent of all single-family rentals.

−1

SupraMario t1_j00enrv wrote

People may not look at it as an issue, but the amount of 2nd homes people bought during this boom was a huge number. It's definitely an issue, just everyone wants to just point fingers at the big companies, but it's the market over all.

6

hillsfar t1_izzioss wrote

Also the mass increase in populational demand. Both.

1

SupraMario t1_j00a08q wrote

https://www.cbo.gov/publication/57975

What? Population of modernized societies usually decreases, we're on a downward slope now.

4

hillsfar t1_j00r35u wrote

Usually. Although we likely let slip in about 4 million in just the last 2 years, slo g with over a million or so legally. This grows the population and thus housing demand.

0

Fireonpoopdick t1_j010l6f wrote

F*ck market forces when people are dying in the streets, at a certain point the governments job is to step in and not let people die, but if people like you cared about people and not money we wouldn't be in this situation.

7

thehazer t1_izxtpd9 wrote

Fan of the landlord class?

−4

lilbluehair t1_izy5to8 wrote

He doesn't say the disruption would be a bad thing, just that it isn't likely to happen

21

Architeckton t1_izy0agq wrote

Already in the works. A bill was introduced this week in Congress.

9

ProfBU OP t1_izy5286 wrote

My first home was purchased with -0- down payment courtesy the VA and the GI Bill.

How about a similar benefit for a year of national service?

29

lilbluehair t1_izy6449 wrote

Standard term in AmeriCorps is 10 months. I loved my time and think everyone should get to do it, but I had to work a second job to pay rent and had zero savings.

This idea could work if we also subsidized housing for the folks doing the service.

19

badpeaches t1_izze9o5 wrote

> My first home was purchased with -0- down payment courtesy the VA and the GI Bill. > > How about a similar benefit for a year of national service?

You didn't have credit ratings back then.

5

H2-22 t1_j00g77l wrote

I have had a zero down VA home loan. Lots of service members and veterans have. I was in the 2nd Iraq war.

1

badpeaches t1_j00p8ai wrote

You can get approved for the loan with subpar credit ratings?

1

[deleted] t1_j023dt9 wrote

[removed]

1

badpeaches t1_j024jjt wrote

> VA and FHA loans don’t have strict credit rating requirements,

The loans don't but you can't get the loan from a bank with bad credit.

2