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Millennials just have to snap them up before investors do. And will investors have enough money and appetite for risk in a heavily crashed market? My intuition

Millennials just have to snap them up before investors do. And will investors have enough money and appetite for risk in a heavily crashed market? My intuition is that they'd be too spooked and would want to preserve capital rather than deploying it.

light_hue_1 4y ago
Except that institutional investors can be counter-cyclical. They know that the capital will be there and that housing prices will go back up. So they can buy houses when the economy is bad and Millennials can't. We should bad institutional investors from owning homes.
- dont__panic 4y ago
  What we really need is a huge tax writeoff for primary homes. Own a second home? Owe massive taxes on it. Company owns thousands of homes? Massive taxes on every single one of them. There's a massive homelessness problem in the USA right now. Lots of people are struggling to buy their first homes. I suspect it would take a long time (and involve lots of loopholes) to completely ban investor-owned properties... but I would support that as well.
CuriouslyC 4y ago
Housing demand isn't going anywhere, and a faltering housing market means less new house construction which will keep rent high. Investors can make all cash offers, get houses for cheap and rent them out, and if they control enough of the rental market they can push heavily inflated prices to juice their profit margin. What else are they going to do with their money? Securities and bonds are trash. Mortgages are brutal right now and going to get worse, so Millenials who can't make all cash offers are still going to be fucked.
- rdtwo 4y ago
  Treasury bonds pay 4.5% right now, so you would at least need to make 6% on your housing investment. There aren’t a lot of properties that you can buy that would yield 6% (of purchase price) rent a year.
  - CuriouslyC 4y ago
    It doesn't need to yield 6% from rent, it needs to yeild 6% from rent + (home appreciation - maintenance), which is pretty easy if home prices are depressed due to temporarily high interest rates and a glut of new construction, since appreciation will kick in hard as soon as interest rates cool off and new construction scales back.
    - rdtwo 4y ago
      That’s assuming that we will ever see 0-2% interest rates again. Where we are right now is right in line with historic norms and they will probably hit a lot higher. People are already getting squeezed in other areas I don’t see how they are going to be able to push rents much higher
      - CuriouslyC 4y ago
        Easy. Push rents higher slowly, and when occupancy rates start to go down enough that expected future rent increases will result in a profit loss you stop.
pixl97 4y ago
>Millennials just have to snap them up before investors do. Um, have we forgot 2008 already with banks pulling dark inventory shenanigan's? Also you're assuming mellennials have any savings and it's not been destroyed by inflation and rent increases over the past few years.

light_hue_1 4y ago

Except that institutional investors can be counter-cyclical. They know that the capital will be there and that housing prices will go back up. So they can buy houses when the economy is bad and Millennials can't. We should bad institutional investors from owning homes.

dont__panic 4y ago
What we really need is a huge tax writeoff for primary homes. Own a second home? Owe massive taxes on it. Company owns thousands of homes? Massive taxes on every single one of them. There's a massive homelessness problem in the USA right now. Lots of people are struggling to buy their first homes. I suspect it would take a long time (and involve lots of loopholes) to completely ban investor-owned properties... but I would support that as well.

CuriouslyC 4y ago

Housing demand isn't going anywhere, and a faltering housing market means less new house construction which will keep rent high. Investors can make all cash offers, get houses for cheap and rent them out, and if they control enough of the rental market they can push heavily inflated prices to juice their profit margin. What else are they going to do with their money? Securities and bonds are trash. Mortgages are brutal right now and going to get worse, so Millenials who can't make all cash offers are still going to be fucked.

rdtwo 4y ago
Treasury bonds pay 4.5% right now, so you would at least need to make 6% on your housing investment. There aren’t a lot of properties that you can buy that would yield 6% (of purchase price) rent a year.
- CuriouslyC 4y ago
  It doesn't need to yield 6% from rent, it needs to yeild 6% from rent + (home appreciation - maintenance), which is pretty easy if home prices are depressed due to temporarily high interest rates and a glut of new construction, since appreciation will kick in hard as soon as interest rates cool off and new construction scales back.
  - rdtwo 4y ago
    That’s assuming that we will ever see 0-2% interest rates again. Where we are right now is right in line with historic norms and they will probably hit a lot higher. People are already getting squeezed in other areas I don’t see how they are going to be able to push rents much higher
    - CuriouslyC 4y ago
      Easy. Push rents higher slowly, and when occupancy rates start to go down enough that expected future rent increases will result in a profit loss you stop.

pixl97 4y ago

>Millennials just have to snap them up before investors do. Um, have we forgot 2008 already with banks pulling dark inventory shenanigan's? Also you're assuming mellennials have any savings and it's not been destroyed by inflation and rent increases over the past few years.