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>Among my friends seeking to buy houses, the greater problem is the ability of large companies to buy up whatever is on the market, which they then immediately

>Among my friends seeking to buy houses, the greater problem is the ability of large companies to buy up whatever is on the market, which they then immediately turn into a rental. It’s nearly impossible to compete with a company who will pay $50k over asking price, in cash, for the house you’re trying to get. Comparatively, immigrants don’t have the purchasing power to compete, so saying they’re the problem is a weird conclusion to draw. While I bear zero animus towards immigrants, this seems obtuse. Why are those companies willing to pay so much? Because they predict they can charge enough rent to make it profitable anyway. Why would they think that? Because immigrants can compete down at the level of rents. This seems like the same mistake people make about "luxury housing," but on the other end of the market. Building housing at the top of the market does indeed make things cheaper at the bottom of the market, and bringing in people at the bottom of the market does indeed make things more expensive at the top.

titzer 3y ago
> Why are those companies willing to pay so much? Because they are buying assets with debt just like everyone else, and they don't actually care about ROI via rents, either due to "appreciation" (really, further inflation), or they're expecting the financial system to collapse.
- jlmorton 3y ago
  Blackrock doesn't care about the ROI of their housing investments, and they expect the financial system to collapse? Damn. Big if true.
Workaccount2 3y ago
These companies hardly exist, "evil corporations" is just super memeable and denizens of the internet will accept it as the answer to anything bad. In reality, the economy has been booming for the "haves" and those people are the ones bidding up homes and pay $50k over asking with a 6.5% mortgage. Corporations don't care much for home rentals when treasuries are paying 5% with zero overhead and zero risk. Sucks to be poor and sad to be poor and still eating the "evil corporations" delusion.
- mikrotikker 3y ago
  So BlackRock and Vanguard didn't buy up swathes of housing out competing individuals by offering above asking price and then rent or landbank that housing?
  - Workaccount2 3y ago
    That was two years ago.
    - mikrotikker 3y ago
      so?
  - HDThoreaun 3y ago
    Not to a level that would make them one of the main culprit's for the housing crisis, no.
    - mikrotikker 3y ago
      Do you have a source for that?
- escapedmoose 3y ago
  The worrying part is that my friends aren’t “sad and poor” by any means. But they’re still regularly outbid (by huge margins) by these companies, which they then watch turn the properties into rentals. I don’t know what the larger trends are, but as my circle attempts to break into homeownership for the past 3 or 4 years, I am the only person who managed to dodge this trend (truly through luck alone) and remain the only homeowner.
mhuffman 3y ago
> Because immigrants can compete down at the level of rents. On a per house level, undocumented immigrants can often pay more than others because they are willing to live many more people to a house with rents being charged on a per-person basis. If the house is all male workers, homeowners can charge $100 per week per person (now, it used to be $50 and before than it was $25) and can have up to 4 people per bedroom (I've seen up to 8) and often multiple in the living-room. If families, there can often be 3-4 families in a single house, all paying less than they normally would to rent an individual house but much more total than the house would ever rent for otherwise.

titzer 3y ago

> Why are those companies willing to pay so much? Because they are buying assets with debt just like everyone else, and they don't actually care about ROI via rents, either due to "appreciation" (really, further inflation), or they're expecting the financial system to collapse.

jlmorton 3y ago
Blackrock doesn't care about the ROI of their housing investments, and they expect the financial system to collapse? Damn. Big if true.

Workaccount2 3y ago

These companies hardly exist, "evil corporations" is just super memeable and denizens of the internet will accept it as the answer to anything bad. In reality, the economy has been booming for the "haves" and those people are the ones bidding up homes and pay $50k over asking with a 6.5% mortgage. Corporations don't care much for home rentals when treasuries are paying 5% with zero overhead and zero risk. Sucks to be poor and sad to be poor and still eating the "evil corporations" delusion.

mikrotikker 3y ago
So BlackRock and Vanguard didn't buy up swathes of housing out competing individuals by offering above asking price and then rent or landbank that housing?
- Workaccount2 3y ago
  That was two years ago.
  - mikrotikker 3y ago
    so?
- HDThoreaun 3y ago
  Not to a level that would make them one of the main culprit's for the housing crisis, no.
  - mikrotikker 3y ago
    Do you have a source for that?
escapedmoose 3y ago
The worrying part is that my friends aren’t “sad and poor” by any means. But they’re still regularly outbid (by huge margins) by these companies, which they then watch turn the properties into rentals. I don’t know what the larger trends are, but as my circle attempts to break into homeownership for the past 3 or 4 years, I am the only person who managed to dodge this trend (truly through luck alone) and remain the only homeowner.

mhuffman 3y ago

> Because immigrants can compete down at the level of rents. On a per house level, undocumented immigrants can often pay more than others because they are willing to live many more people to a house with rents being charged on a per-person basis. If the house is all male workers, homeowners can charge $100 per week per person (now, it used to be $50 and before than it was $25) and can have up to 4 people per bedroom (I've seen up to 8) and often multiple in the living-room. If families, there can often be 3-4 families in a single house, all paying less than they normally would to rent an individual house but much more total than the house would ever rent for otherwise.