Community Chat

[TW]

Has anybody seen the report on insane rental prices on 60 Minutes?  They reported on Canadian companies buying houses in the sunbelt.  Florida, Arizona, Texas and a few others were mentioned.  These companies buy the homes sight unseen and cash.  They modernize the homes and rent them for insane prices.  They interviewed one of the CEO's who was one cold customer.  He was proud of the fact that they get thousands of applications on each rental. He mentioned Billions in profits last year.  He was also proud of the fact that the market justifies raising rents over $500 a click.   Canada does not allow Non-Canadians to buy houses  in Canada since last year  What's wrong with this picture?  They also interviewed a Realtor in Jacksonville and she said a 'normal' home buyer doesn't stand a chance.  They cannot compete with these Investors.  They can't make cash deals.  She said they get multiple offers the same day one of those homes comes on the market.  So these Investors drive up home prices in the process.  I suspected all along that investment companies drive up home prices but I had no idea that it was Canadians.  I wonder if they pay property taxes like regular home owners? They didn't address that in the report.  It's time our Goverment puts a stop to this.  Otherwise we will have a nation of homeless.

[Annabellethecat66]

Well my friends and I have lived in our houses for as much as 42-44 years, you you eventually pay them off.

That's the way it is for many of us.

There are people who sit and go through the records.  We are getting a few offers a week of people who want to buy our houses.

None of us has any intention of moving and/or selling our houses.  Yet the offers still come.

Same with our cars.  We are getting offers from dealerships offering to buy our cars.  If we sold them back our cars...well..what are we supposed to drive?

Things have gotten crazy.

My late husband built houses, developed land ready for builders to take over and he'd buy houses that are in terrible shape, fix them up and resell them.

I wonder what he'd have thought about what's going on today.

My youngest daughter lives in Denver.  She says the housing market is crazy there.

He paid over $500,000 for a house that just a few years ago would have gone for about 1/2 that.

This country needs a reset.

[skatting44]

just wait , the market will eventually do a reset as it did in 2008  after the price frenzy in 2006 of home prices.  Many people  will be hurt again from all the price gouging

" On December 30, 2008, the Case–Shiller home price index reported its largest price drop in its history. The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States. " Wikipedia

[781Florist]

I live in a suburb of Boston and the prices around here defy belief.

I really do not know how anyone with a cat let alone children could afford to rent or buy anything here.

The median price (MEDIAN!!) for a home in my town is $725,367.00.

A 1 bedroom apartment rent is $2,580.00 a month

A 2 bedroom is $3,055.00 a month

A studio apartment rent has inexplicately DROPPED to $1,848.00 a month

What families can afford this ?

[Wsmom]

@TW , when DD was buying her home in CA three or four years ago her realtor told her that very thing, the Canadian companies scooping up the homes.  Houses would hit the market and sell instantly well over asking price.  It was insane....but not as high as it is now.

[Foxxee]

Thanks for bringing this to our attention.  I have been following this for some time, but.....

Why didn't 60 minutes mention other foreign investors.

The top-five foreign buyers of U.S. real estate include Canada, China, Mexico, India, and the United Kingdom. Together, these five countries account for 29% of the $54.4 billion dollar volume of foreign buyer residential purchases from April 2020 to March 2021. And pent-up demand for U.S. real estate from all these countries has been building.

Source:  Financial Samurai

60 minutes also fails to mention investment firms like BlackRock.

BlackRock is one of a number of companies mentioned by The Wall Street Journal in a recent exposé. “Yield-chasing investors are snapping up single-family homes, competing with ordinary Americans and driving up prices,” they warned. The question is, why would institutional investors and BlackRock, which manages assets worth $5.7 trillion, be interested in overpaying for modest, single family homes?

The average American has virtually no chance of winning a home over an investment firm, which may pay 20% to 50% over asking price, in cash, sometimes scooping up entire neighborhoods at once so they can turn them into rentals.

Black Rock, Vanguard, and State Street control 20 trillion dollars worth of assets. Blackrock alone has a 10 billion a year surplus. That means with 5-20% down they can get mortgages on 130-170k homes every year. Or they can outright buy 30k homes per year. Just Blackrock.

Another giant private equity firm, Blackstone, is also deeply entrenched in U.S. real estate. Blackstone is the largest landlord in the U.S. as well as the largest real estate company worldwide, with a portfolio worth $325 billion. In June 2021, Blackstone agreed to buy Home Partners of America, a company that rents single-family houses, and its 17,000 houses, for $6 billion.

Blackstone became notorious for swooping in after the housing bubble burst and buying tens of thousands of homes at deeply discounted prices. They then turned them into single-family rentals, taking advantage of the recession.

In 2017, Bloomberg reported: “Blackstone built its rental-home business with an advantage few if any other buyers could match: billions of dollars in credit from large banks. Its Invitation Homes subsidiary quickly became the largest single-family home landlord in the U.S., with 50,000 properties. Altogether, hedge funds, private-equity firms and real estate investment trusts have raised about $20 billion to purchase as many as 200,000 homes to rent.”

There's much more to be concerned about than just Canada.  

Source: Strangesounds

[catter70]

I own my home so no way I'm selling. How would you be able to buy another home you could afford, and I couldn,t afford to rent. So this is where I will stay unless I have to go into a nursing home at some point.

[ScrapHappy]

In 2006 we were considering a move from California to Florida, Lighthouse Point to be exact.  I went to Florida with my husband to look at homes and was shocked.  Many of the homes were being bought up by investors.  Tearing down the old homes and building McMansions for millions.  We did see a couple of homes that were for sale the "traditional" way.  One hasn't been touched since 1950's or 50's and it 1500 square feet and they were asking over a million dollars.  My husband ended up not taking the job.  Thank goodness.

[chiclet]

I live in Florida and our motto must be "Tear down the trees".  Everywhere I look they are being torn down to build tract housing.  We constantly wonder how people here can afford these poorly constructed unattractive tract homes starting at 350,000.  We ride through a new neighborhood and every house is sold before it is built and all the workers are mexican or asian.  It is not like you only have to pay for the house...car insurance is insanely high, property taxes used to be reasonable but not now, health insurance.....  As least this investor thing makes sense to me.  

[haddon9]

@Foxxee "There's much more to be concerned about than just Canada.  "

Yes indeed!  Some of these companies like BlackRock are so large and powerful it boggles the mind....many peope haven't heard of them yet they are more powerful than many countries.  I find this deeply concerning.