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I think I agree with you in principle. I don’t understand how the consolidation of the housing market doesn’t create a feedback loop that prevents that counter

I think I agree with you in principle. I don’t understand how the consolidation of the housing market doesn’t create a feedback loop that prevents that counterfactual reality? A few asset management companies have been purchasing the entire supply chain. From land to homes, from builders to agents. These companies have a large amount of capital to deploy to make sure their assets go up and to the right. It also seems like that capital being deployed to create a positive feedback loop pricing buyers out of the market is being funded by … buyers in the market. It’s partly their retirement assets. It seems that, in a very real way, buyers are bidding against their own retirement accounts trying to maximize returns in a decelerating market. I very much agree that it’s government policy that gave rise to this, and that the counterfactual reality would normalize prices, but I’m not sure you can separate off corporate buyers from the feedback loop. It all seems to be part of the same death spiral.

ZoomerCretin 3y ago
There is no evidence that the housing market has reached a level of consolidation needed for cartel-like activity (i.e. withholding supply to increase total rent revenue) to be feasible. No one is withholding supply. Asset management companies don't buy houses and leave them vacant. They rent them out. There is no net-loss in supply. There is no effect on rents, only purchase price. > These companies have a large amount of capital to deploy to make sure their assets go up and to the right. These companies are required by law to share their investment strategies. They explicitly state that they are only interested in buying housing in areas with strong job markets and _restrictive supply policies_. It makes no sense to buy housing in an area where the bottom can fall out on rents because other people with money can just build more housing. Blackstone et al. are a convenient boogeyman, but they are merely taking advantage of our housing crisis, not creating it.
carom 3y ago
From two different articles. It is less than you think. >Large institutions owned roughly 5% of the 14 million single-family rentals nationally in early 2022 >Institutional investors, referring to entities that purchase 100 or more properties, accounted for under 3 percent of home sales in 2021 and 2022, according to Freddie Mac. So-called “mom-and-pop” investors, who own fewer properties, are growing at faster rates, and according to the National Rental Home Council, only 1.16 percent of single-family rental homes were owned by rental companies. Americans for Financial Reform estimated that as of June 2022, private equity firms owned about 3.6 percent of apartments and 1.6 percent of rental homes.

ZoomerCretin 3y ago

There is no evidence that the housing market has reached a level of consolidation needed for cartel-like activity (i.e. withholding supply to increase total rent revenue) to be feasible. No one is withholding supply. Asset management companies don't buy houses and leave them vacant. They rent them out. There is no net-loss in supply. There is no effect on rents, only purchase price. > These companies have a large amount of capital to deploy to make sure their assets go up and to the right. These companies are required by law to share their investment strategies. They explicitly state that they are only interested in buying housing in areas with strong job markets and _restrictive supply policies_. It makes no sense to buy housing in an area where the bottom can fall out on rents because other people with money can just build more housing. Blackstone et al. are a convenient boogeyman, but they are merely taking advantage of our housing crisis, not creating it.

carom 3y ago

From two different articles. It is less than you think. >Large institutions owned roughly 5% of the 14 million single-family rentals nationally in early 2022 >Institutional investors, referring to entities that purchase 100 or more properties, accounted for under 3 percent of home sales in 2021 and 2022, according to Freddie Mac. So-called “mom-and-pop” investors, who own fewer properties, are growing at faster rates, and according to the National Rental Home Council, only 1.16 percent of single-family rental homes were owned by rental companies. Americans for Financial Reform estimated that as of June 2022, private equity firms owned about 3.6 percent of apartments and 1.6 percent of rental homes.