2024

[DeletedUser]

I am curious to see what the lowering of rates does to home prices and inventory.

[Shirley]

Hopefully the Fed starts lowering rates in early spring and the recovery really swings into action. I have seen some reports estimating that the Fed may drop the rates 4 times next year, which seems like it will spur home purchases, loans, etc... Of course I am sure that we'll hear about how the Fed is part of the giant conspiracy to keep Trump out of the White House by trying to make the economy look good for Biden...

Of course Trump will. Even tho not only is Fed Chairman Jerome Powell a Republican, Trump hired him to be Fed Chair.

I recall being gobsmacked that relatively speaking, shortly after ascending to his thrown, Trump began regularly criticizing numerous members of his Admin. and political appointees, appointments he had made. I remember wondering why he didn't know that doing so was an incredible self-own, because it served to call his own judgement into question, if they indeed were the now scurrilous people he was tweeting about. Of course, as we all eventually learned, he has no shame and his cult members not only have no self-respect, but their expectations are lower than whale dung as long as he's cruel to the people they hate.

List of Trump administration dismissals and resignations

Many political appointees of Donald Trump, the 45th president of the United States, resigned or were dismissed. Multiple publications have called attention to the record-setting turnover rate in the first year of the Trump Administration.[1][2][3] Several Trump appointees, including National Security Advisor Michael Flynn, White House Chief of Staff Reince Priebus, White House Communications Director Anthony Scaramucci, and Secretary of Health and Human Services Tom Price have had the shortest service tenures in the history of their respective offices.[a]

[...]

[Shirley]

I am curious to see what the lowering of rates does to home prices and inventory.

As you know, there's already a shortage of housing available, so as mortgage rates decline demand to buy houses will increase, and with increased demand the price of houses will go up again.

"The cure for high oil prices is high oil prices."

Unfortunately, increasing the housing supply meaningfully will take years.

And, individual home buyers will have competition with deep pockets:

According to national data provider CoreLogic, the sizable U.S. home investor share of ownership seen over the past two years held steady going into the summer of 2023. In March 2023, investors accounted for 27% of all single-family home purchases; by June, that number was almost unchanged at 26%.

HOUSING PERSPECTIVES - Research, trends, and perspective from the Harvard Joint Center for Housing Studies

8 FACTS ABOUT INVESTOR ACTIVITY IN THE SINGLE-FAMILY RENTAL MARKET

Tuesday, July 18, 2023 | Alexander Hermann
Single-family rentals have long been an important part of the US housing stock. But according to our latest State of the Nation’s Housing report, investor purchases of single-family homes reached new heights during the pandemic, particularly lower-cost units and homes in Sunbelt markets. While many of these units are eventually resold to new buyers, most are rented out to tenants. Moreover, there have been significant changes in who owns single-family rentals over time. Most notably, a growing share of rental properties are owned by business entities and medium- and large-scale rental operators. Examining investor activity in the single-family rental market over the past two decades reveals eight key facts:

1. Single-family rentals have long been a substantial part of the rental stock
There were 10.9 million renters living in single-family homes in 2001, just under 30 percent of all renters (Figure 1). Following the Great Recession of the mid-2000s, the number of single-family rentals grew significantly, peaking at 15.2 million in 2016, as investors took advantage of the flood of distressed home sales during the foreclosure crisis. The number of single-family rentals then fell in more recent years as the for-sale market strengthened, and many of these homes converted back to owner occupancy. By 2021, there were 14.3 million single-family renter households, comprising about 33 percent of all renters. Despite the more recent declines, there were still 3.5 million more single-family renters compared to two decades earlier.

FIGURE 1: SINGLE-FAMILY HOMES HAVE LONG BEEN AN IMPORTANT PART OF THE RENTAL STOCK; INCREASED SIGNIFICANTLY FOLLOWING THE HOUSING CRISIS

2. Investor activity in the single-family market increased significantly since the start of the pandemic
According to CoreLogic, investors who owned 3 or more homes simultaneously at some point in the prior decade began to purchase an elevated share of single-family homes during the pandemic, as interest rates fell to historic lows and rents climbed to historic highs. Indeed, the share of single-family homes purchased by investors averaged a steady 16 percent share in the three years immediately preceding the pandemic from 2017-2019. But investor activity then rose quickly in 2021 before peaking at 28 percent of sales in the first quarter of 2022. Investor activity moderated through early 2023 but remained well above the levels from 2019, even as owner-occupant home purchases fell below pre-pandemic levels. As a result, investors still purchased 27 percent of single-family homes in the first quarter of this year.

3. Investors are most likely to purchase lower-cost homes
In the fourth quarter of 2022, investors purchased nearly one-third of homes sold in the bottom third by metro area sales price compared to about one-quarter of homes that sold in the top third. Investors have the potential to exacerbate the already extremely limited inventory of homes for sale, especially entry-level homes for first-time and moderate-income homebuyers, as well as in markets where investors are most active.

4. Investor activity is especially pronounced in Sun Belt markets with strong rent and population growth
According to data from Redfin, investors purchased nearly one-third of homes sold in Miami (31 percent) in the fourth quarter of 2022 and about one-quarter in Jacksonville (27 percent) and Atlanta (25 percent) (Figure 2). While investor activity is generally lower in the Northeast and Midwest, investors still purchased one-fifth of homes in markets like Philadelphia and Cleveland. These represent a continuation of longer-term trends. Large single-family operators have especially concentrated portfolios. According to a recent study from the Urban Institute, investors who own at least 1,000 homes have 45 percent of their single-family holdings in six markets: Atlanta, Phoenix, Dallas, Charlotte, Houston, and Tampa.

FIGURE 2: INVESTOR ACTIVITY IS ESPECIALLY CONCENTRATED IN SELECT MARKETS IN THE SOUTH AND WEST

5. Investor activity increased for investors of all sizes since the start of the pandemic, though much of the growth was driven by large investors
During the pandemic, investor activity grew for investors of all sizes, but especially for small (3-10 properties) and large-scale investors (1,000 or more properties), according to CoreLogic, whose holdings increased most and have remained highest relative to the same period in 2019.

6. Rental property ownership is shifting away from individual ownership toward more ownership by business entities
According to our tabulations of the Rental Housing Finance Survey, the share of rental properties owned by non-individual investors increased from 18 percent in 2001 to 27 percent in 2021 (Figure 3). Non-individual investors include limited partnerships, limited liability corporations, trustees for estate, real estate corporations, and Real Estate Investment Trusts, among other corporate entities. The growth in non-individual ownership has been greatest for small- and midsized- multifamily properties but was also evident for single-family rentals. Indeed, 25 percent of single-family rentals were owned by non-individual investors in 2021, up from 17 percent two decades earlier. This explains how investor activity in the single-family housing market has increased even as the number of single-family rentals has declined in more recent years.

FIGURE 3: NON-INDIVIDUAL INVESTORS OWN A GROWING SHARE OF RENTAL PROPERTIES

[...]

[twocoach]

I am curious to see what the lowering of rates does to home prices and inventory.

As you know, there's already a shortage of housing available, so as mortgage rates decline demand to buy houses will increase, and with increased demand the price of houses will go up again.

"The cure for high oil prices is high oil prices."

Unfortunately, increasing the housing supply meaningfully will take years.

And, individual home buyers will have competition with deep pockets:



[...]

https://www.reuters.com/markets/us/us-s ... 023-12-19/

It will be interesting to see if we continue to see the numbers for US housing starts climb and we start to see some additional single family homes hit the market.

[ousdahl]

it sucks that there are like 15 million houses sitting vacant, yet there's still somehow a shortage of housing available.

[Shirley]

I am curious to see what the lowering of rates does to home prices and inventory.

As you know, there's already a shortage of housing available, so as mortgage rates decline demand to buy houses will increase, and with increased demand the price of houses will go up again.

"The cure for high oil prices is high oil prices."

Unfortunately, increasing the housing supply meaningfully will take years.

And, individual home buyers will have competition with deep pockets:



[...]

https://www.reuters.com/markets/us/us-s ... 023-12-19/

It will be interesting to see if we continue to see the numbers for US housing starts climb and we start to see some additional single family homes hit the market.

That's encouraging news.

And according to the article you linked, (thank you), demand for rental apartments is finally softening. That should not only lower the rate of increase for rents, but also, hopefully, encourage the building of single family homes instead of large apt houses which didn't make economic sense for builders because demand for rental units has been so hign for so long.

[Shirley]

it sucks that there are like 15 million houses sitting vacant, yet there's still somehow a shortage of housing available.

Up to a third of those are empty because they're vacation homes.

On average, 26.61% of the vacant housing units across the nation’s 50 largest metros are empty because they’re for rent...while an average of 7.98% are empty because they’re being repaired or renovated. Just because a unit is unused doesn’t mean it’s unwanted or it’ll remain empty for long...

[ousdahl]

I’m trying to wrap my mind around the paradox of a shortage of housing while housing is empty and for rent.

[ousdahl]

I still am not sure what to think of “the economy.”
……..
……..

And for every “the economy is good!” sort of article, there also seems to be a concerning number of “most Americans are living paycheck to paycheck,” “couldn’t afford a $500 emergency” sort of takes too.

“Can’t afford a $500 emergency” usually has nothing to do with macro economic conditions. It’s commonly based on a personal decision of those making that statement. It’s a result of not putting away $25-50 when there is no emergency.

Disclaimer: while the above statement is applicable to a vast majority of people, I do recognize that there are many people who don’t have the $25-50 to put away.

Also trying to wrap my head around the paradox here.

Not sure whether the ability to save $500 is more a personal thing, or systemic, particularly if it’s supposed to be done $25-50 at a time

[DeletedUser]

I’m trying to wrap my mind around the paradox of a shortage of housing while housing is empty and for rent.

What don't you understand?

[twocoach]

I’m trying to wrap my mind around the paradox of a shortage of housing while housing is empty and for rent.

You live in Corado and don't understand the con ept of a shortage of housing due to many house being bought and turned into vacation homes that are made available for short term rentals?!?

[jhawks99]

I think your first four words explain it.

[ousdahl]

I guess I read “for rent” as more for rent as long term housing leases, more so than short term vacation lodging, particularly cuz Shirley’s link distinguishes up to a third of the vacant homes are vacation homes. But I dunno if that means they’re also rented as STRs when the owners themselves aren’t vacationing.

But yea, STRs are a big part of the housing shortage, yes, particularly here in CO.

Either way, it just seems like a divide between the haves and have nots.

I also wonder how many homes are being bought by private equity firms, and whether housing is being hoarded to manufacture scarcity in the market, like with diamonds and other things.

[jfish26]

You can thank, among other things, our tax policy's favorability to passive income. Especially in the real estate world, where investors are stacking tax advantages of both equity investment and investment in real estate assets.

Blackrock and Vanguard and State Street and so on aren't the cartoonish Bond villains - the globalist elite cabal - that the Randies of the world will scarify you into fearing. They're just, basically, sharps. And the market incentives right now inevitably lead to sharps optimizing for passive income.

[RainbowsandUnicorns]

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[japhy]

You can thank, among other things, our tax policy's favorability to passive income. Especially in the real estate world, where investors are stacking tax advantages of both equity investment and investment in real estate assets.

Thanks tax policy.

Is now a good time to bring up a possible extension of my tax cuts?

[jfish26]

You can thank, among other things, our tax policy's favorability to passive income. Especially in the real estate world, where investors are stacking tax advantages of both equity investment and investment in real estate assets.

Thanks tax policy.

Is now a good time to bring up a possible extension of my tax cuts?

Never a bad time, right?

[japhy]

You can thank, among other things, our tax policy's favorability to passive income. Especially in the real estate world, where investors are stacking tax advantages of both equity investment and investment in real estate assets.

Thanks tax policy.

Is now a good time to bring up a possible extension of my tax cuts?

Never a bad time, right?

I like you.

[Cassandra]

This idea that Trump was going to be off the ballet in any state is hilarious. Just shows you how far our society has fallen from looking at factual evidence and law and instead replaced it with feelings and interpretations. We must remove democracy to save democracy is funny.

[Sparko]

This idea that Trump was going to be off the ballet in any state is hilarious. Just shows you how far our society has fallen from looking at factual evidence and law and instead replaced it with feelings and interpretations. We must remove democracy to save democracy is funny.

Jefferson Davis and I talked about this with Idi Amin on the dead despot podcast.