bgr3 said:
caryking said:
FlossyDFlynt said:
bgr3 said:
FlossyDFlynt said:
PackBacker07 said:
While you guys are fixing the nation's problems yelling into your own tinfoil vortex, can you ask Q how we fix rent inflation as well? We're on a scary track there, much worse than paying 8% more for your basement Funyuns.
Stop printing money and raise interest rates. But guess what that leads to?
Ding ding ding.
I will admit, I missed where PackBacker said rent inflation. I bought my house in 2016 with the idea that when I did move out, I would turn it into a rental. Good location, multiple bed/bath, not too large, etc. Since the day I bought it, my property tax has gone up roughly 41%. If I were renting it out, there is no way I wouldn't have been able to keep my prices the same year over year. I do still think a large part of it would be inflation overall (repair costs have shot through the roof this year due to lack of supply). I think fixing inflation in general would help out with rent prices.
If I were moving today, I would sell it without a seconds hesitation. Home value is way above what I bought it at and I don't think I could resist that type of tax free windfall at this point.
My wife's closet friend said that her neighbor (they live in Preston) bought their house, two years ago, for 500K. They just sold it last week for 1M.
I know the market is hot; but, that's ridiculous!!! My understanding is that they did nothing in renovations.
A recent report said: of all the housing sales that have happened this year, 20% were by companies like Blackrock, Vanguard, etc...
I work in this space, and I can tell you that big firms like that have been buyers, but so have REITs and eBuyers like Opendoor and Zillow, the later of which quit their home flipping business and laid off 25% of their workforce late last year because they dont' really have any idea how to actually value homes. Their "zestimates" completely miss some of the most important pricing factors and are worth exactly what you pay for them. Opendoor and Zillow have had distortionary effects on supply and prices though. If you can't turn a profit flipping homes in this market you never will lol.
I think its reasonable to keep an eye on the share of the market going to big firms but in this area at least its a combination of (IMO, obviously): artificially low interest rates/restricted supply through zoning (going on everywhere) + investors (both large and small, using their capital and ability to borrow, which is happing more here than other places) + people moving from high cost of living areas who have more cash to start with (Part of this is older buyers, who have the most money, they are the ones you hear about offering a ton over list price because their kids live nearby or something like that).
I have a foot in this sandbox as well right now, and in my personal experiences this initiated in the true multifamily market (apartments), then transitioned into townhomes (6 unit pods going under contract before the slab(s) are even poured) - and now the newest trend is entire communities of stand alone single family construction leased like an apartment complex... as soon as it is 100% leased, it is bought up by one of the hedge funds for astronomical amounts. Cap Rates are running as low as 4% for true multifamily (apartments) right now... and the hedge funds don't care... they have to park that money somewhere!
Literally every single volume builder down here on the coast is looking for land to be 100% committed to the stand alone rental community market right now. Multiple funds are tripping all over themselves to purchase anything they can get their hands on after these guys build it.
I'm only seeing it with portfolios though (entire communities)... since I don't "do" residential, I'm not exposed as much to what is going on with the onesies and twosies - but my limited exposure there is still "assuming" end user purchasers as 90%+ of that market... at least down here anyway.