***Official Real Estate Thread***

[PRCD]

That specific quote, yes, however Figure 3 shows how much is owned by non-individual investors through 2021. Even with lumping in small partnerships the share of single family homes owned by any investor who is not a sole proprietor is around 30%. Of those partnerships, large head funds are still in the minority.

What effect does large hedge funds and investors moving into the market have on the price in the case of limited supply? Seems to be badly affecting big metros where teh jobs are:

https://journal.firsttuesday.us/institutional-investors-crowd-out-california-homebuyers/86358/

Cool stories bro. To review, "Investor Owned" includes everything from hedge funds down to individuals who own a small handful of rental properties. Your "Activist house flipper" and Atlanta links are paywalled and even then are still anecdotes.

That said, there are specific markets that have been especially hard and Atlanta seems to be one of them. I feel for those who are trying to buy there

So the Harvard people are lying about the share that belong to individuals. K

I retract that statement. Did you actually read the Harvard article? I think it's making my case better than yours.

There are a lot of other things driving prices up - taxes, regulations, massive unchecked immigration.

 

[grapedrink]

Interesting that the statistic you've pointed out is the conclusion that hinges most on data that ends in 2018, largely leaving out the Post Covid era trends that were being referred to.

I don't know if it is intentionally capping that data at 2018 or if if it was simply the last time the data was collected. Like I just mentioned above, if you bought that long ago you are sitting on a cash machine. Some certainly did, but I doubt it was enough to completely flip the numbers on their head. If you have access to better data feel free to post it.

Literally every other conclusion the paper makes says there are increasing levels of investor (large and small) participation in the market.

So again- are we concerned about all investors or only the wall street players? Small investors still own the vast majority. Only 2% of housing units are owned by investors with 1000+ units.

While I agree to some of your point about poor housing development and taxation (lots of nuance and likely differences of opinion not withstanding), it seems like all of the other points made in that paper point to that number shifting when they incorporate data that isn't 5 years old.

Sure but again, that's probably the last time that data was collected. The gains since then are not enough to completely flip those numbers.

 

[grapedrink]

What effect does large hedge funds and investors moving into the market have on the price in the case of limited supply? Seems to be badly affecting big metros where teh jobs are:

https://journal.firsttuesday.us/institutional-investors-crowd-out-california-homebuyers/86358/

Of course it has an effect on the metros that they zero in on. What I'm countering is the idea that Wall Street will be the dominant landowner in every semi-desirable city in the US like Starbucks is to coffee. Individual investors are far more savvy and connected within their locales than Wall Street is and can make better deals. We saw this with Zillow in 2022.

I retract that statement. Did you actually read the Harvard article? I think it's making my case better than yours.

I didn't read it from end to end. I pulled out the key data points that showed that most investor owned single family homes are in fact still owned by small individual investors, and a very small % are owned by wall street.

If you disagree, it's on you to show better, not me.

There are a lot of other things driving prices up - taxes, regulations, massive unchecked immigration.

Always are.

 

[PRCD]

Of course it has an effect on the metros that they zero in on. What I'm countering is the idea that Wall Street will be the dominant landowner in every semi-desirable city in the US like Starbucks is to coffee. Individual investors are far more savvy and connected within their locales than Wall Street is and can make better deals. We saw this with Zillow in 2022.

I've seen foreign and institutional investors hose first-time home buyers for the past 15 years.

I didn't read it from end to end. I pulled out the key data points that showed that most investor owned single family homes are in fact still owned by small individual investors, and a very small % are owned by wall street.

If you disagree, it's on you to show better, not me.

I showed data. You said it was anecdotal. Tracking Blackstone and Blackrock's presence in the housing market turns out to be hard.

https://journal.firsttuesday.us/institutional-investors-crowd-out-california-homebuyers/86358/

Even your data said that while the absolute presence was small, the delta was big. More and more SFHs are being built for rent, meaning big investors buy up entire new developments.

If the effect size is small and needs to be nipped in the bud, I'm sure we agree it's better just to outlaw institutional investors from buying SFHs.

 

[grapedrink]

I've seen foreign and institutional investors hose first-time home buyers for the past 15 years.

Anecdotal. Again- what volume are we talking about?

I showed data. You said it was anecdotal. Tracking Blackstone and Blackrock's presence in the housing market turns out to be hard.

Yes- a single data point (HotLanta) is an anecdote. Doesn't mean I'm saying it's not real- what I'm saying is that this is a small piece of total investor activity.

Even your data said that while the absolute presence was small, the delta was big. More and more SFHs are being built for rent, meaning big investors buy up entire new developments.

Delta was big because it started from such a small starting point.

To further cement my point, here's data through 2023.

No, Wall Street investors haven't bought 44% of homes this year - HousingWire

Despite the hype, big investors are still a tiny percentage of homebuyers and not to blame for extremely low housing inventory.

www.housingwire.com

.

 

[PRCD]

View attachment 170448

I'm not sure what this chart is showing. The percentages of sales don't add up to 100. I think your Y axis above is sales, but I can't tell how many houses are included in a sale. For Tier 1 investors, one sale is probably one house. In links I included above, houses built to rent are often sold to iBuyers as entire developments, thus sales to iBuyers or Tier 4 investors might include dozens or hundreds of houses.

 

[grapedrink]

I'm not sure what this chart is showing. The percentages of sales don't add up to 100

Thats because the remainder is owner occupied. The percentages add up to the total percentage of investor purchased.

I think your Y axis above is sales, but I can't tell how many houses are included in a sale. For Tier 1 investors, one sale is probably one house. In links I included above, houses built to rent are often sold to iBuyers as entire developments, thus sales to iBuyers or Tier 4 investors might include dozens or hundreds of houses.

Yes- Y Axis is total transactions. A 500 unit wound be a single transaction. Large scale Investors generally prefer multi family because they cash flow better.

 

[EastCoastBrah]

if individuals owning their primary residence is good for communities (and therefore the country), why wouldn't we significantly increase homestead tax exemptions (and then increase property tax to offset)?

Houses would become much more affordable for the average person?

 

[hammies]

if individuals owning their primary residence is good for communities (and therefore the country), why wouldn't we significantly increase homestead tax exemptions (and then increase property tax to offset)?

Houses would become much more affordable for the average person?

I'm not sure there is very much homestead-able land any more. Maybe in the middle of the Nevada desert, but where people actually want to live the land is all spoken for.

 

[EastCoastBrah]

I'm not sure there is very much homestead-able land any more. Maybe in the middle of the Nevada desert, but where people actually want to live the land is all spoken for.

it's not a literal homestead, whatever your house is is your homestead and your exempt from taxes for the first x dollars in taxes if it's your primary residence. so you pay $0 in property taxes if it's a 300k homestead exemption and your home is worth 300k. If thats your second home you pay property taxes on the 300k. If it's worth a million you pay taxes on 700k.

Florida Dept. of Revenue - Property Tax - Taxpayers - Exemptions

Florida Department of Revenue - The Florida Department of Revenue has three primary lines of business: (1) Administer tax law for 36 taxes and fees, processing nearly $37.5 billion and more than 10 million tax filings annually; (2) Enforce child support law on behalf of about 1,025,000 children...

floridarevenue.com

.

there may be a more general term for this, im not a real estate guy

 

[ghost_of_lewis_samuels]

Anecdotal. Again- what volume are we talking about?


Yes- a single data point (HotLanta) is an anecdote. Doesn't mean I'm saying it's not real- what I'm saying is that this is a small piece of total investor activity.


Delta was big because it started from such a small starting point.

To further cement my point, here's data through 2023.

View attachment 170448

No, Wall Street investors haven't bought 44% of homes this year - HousingWire

Despite the hype, big investors are still a tiny percentage of homebuyers and not to blame for extremely low housing inventory.

www.housingwire.com

.

it's true that institutions don't own a large % of homes across the country, but the impact can be seen in areas where investor ownership is more concentrated.

On top of that, look at where institutions are funding / building 'btrr' (build to rent) communities

 

[EastCoastBrah]

it's true that institutions don't own a large % of homes across the country, but the impact can be seen in areas where investor ownership is more concentrated.

On top of that, look at where institutions are funding / building 'btrr' (build to rent) communities

My understanding is that since only a small portion of homes are for sale at any given time, even a small amount of institutional ownership can really drive up home prices. It's a small portion of the overall homes setting the market prices, since only a small portion is for sale at any time.

 

[ghost_of_lewis_samuels]

My understanding is that since only a small portion of homes are for sale at any given time, even a small amount of institutional ownership can really drive up home prices. It's a small portion of the overall homes setting the market prices, since only a small portion is for sale at any time.

there's a big construction shift underway into the building of single family homes intended to be rented an managed

 

[grapedrink]

it's true that institutions don't own a large % of homes across the country, but the impact can be seen in areas where investor ownership is more concentrated.

Yes and I’ve acknowledged that a few times already. The broader point is that investors have always been there, it’s simply more newsworthy when it’s Wall Street, even though their presence is a small minority overall.

On top of that, look at where institutions are funding / building 'btrr' (build to rent) communities

Sure ok. They wouldn’t do that if there wasn’t demand. For someone to be a renter someone else has to be the investor.

 

[EastCoastBrah]

there's a big construction shift underway into the building of single family homes intended to be rented an managed

it's probably a good move, i think a lot of people are better off renting than owning, people on average dont put down roots like they used to, lots more moving. especially without kids

 

[r32]

3 homes in Dana Point, hanging over the edge

California Coastal Records Project - Image 200803600

Side note. How tf did this guy get approved to build this home? What a location!

California Coastal Records Project - Image 200803523

 

[StuAzole]

I've seen foreign and institutional investors hose first-time home buyers for the past 15 years.

I showed data. You said it was anecdotal. Tracking Blackstone and Blackrock's presence in the housing market turns out to be hard.

https://journal.firsttuesday.us/institutional-investors-crowd-out-california-homebuyers/86358/

Even your data said that while the absolute presence was small, the delta was big. More and more SFHs are being built for rent, meaning big investors buy up entire new developments.

If the effect size is small and needs to be nipped in the bud, I'm sure we agree it's better just to outlaw institutional investors from buying SFHs.

How on earth do you do that?

Do you include duplexes?

How about detached homes entitled with a condo map rather than a standard sfd TM/FM?

The Tricons of the world aren’t going to stop building rental homes unless/until the market dictates, like it already is in places like Phoenix. Then they’ll drop back and the Lots they were competing for will go exclusively to homebuilders. Until homebuilders pull back, and the cycle continues.

The reality is that corporate sfd rental builders are supplying a much needed product. Just like multi-family builders do with apartments.

 

[StuAzole]

3 homes in Dana Point, hanging over the edge

California Coastal Records Project - Image 200803600

View attachment 172743

Side note. How tf did this guy get approved to build this home? What a location!

California Coastal Records Project - Image 200803523

Always confused by stuff like this. Places that have been there 50 years and built before the bluff started to fail are one thing, but….

Im more baffled by people who build these homes without understanding the risk. I’ll take the ocean View on the hill in Solana Beach way before I risk the bluff top home.

 

[CutnSnip]

damn, i remmeber when all those houses in Laguna Niguel slid down the hill. That area is cursed - all homes built on hills that are moving. my folks house down there is falling apart because the hill their on.

 

[hammies]

People threaten to sue if they are denied permission to build on a cliff.
When the cliff slides they threaten to sue because the city didn't protect them from sliding cliffs.