5 ms·

For anyone who didn't click into the article, the headline may be misleading without the sub headline, which currently is "Relatively speaking, California is no

by xoqem 1y ago

For anyone who didn't click into the article, the headline may be misleading without the sub headline, which currently is "Relatively speaking, California is not a hot spot for housing investors". The map graphic shows that 19% is lower than other large states (e.g. 22% in Texas, 21% in Florida, 20% in New York). And lower than other west coast states generally (22% in Washington and Oregon, 25% in Nevada, and 23% in Arizona).

taeric 1y ago
It would probably be easier to understand if worded the other way? 81% of California houses are owner occupied.
- deleted 1y ago
  [deleted]
- dgrcode 1y ago
  I think the 81% group would also include unocuppied houses, right?
  - taeric 1y ago
    I have to confess I'm not sure. :( Searching for vacancy rate shows that is around 9%. I would expect these are owned by someone, though, such that I don't know why they would not be counted as investments? Doing the same search for "owner occupied" shows only around 50%, though. I don't know where to get the data that teases apart housing units and standalone houses.
    - tptacek 1y ago
      Where are you seeing 9% vacancy rate in California? According to FRED, the current rental vacancy rate in CA is below 5, and the current home vacancy rate is below 1.
      - taeric 1y ago
        Hmm... I thought I just took the basic google, but that seems to give a different result now. Maybe I just fat fingered copying into here, not sure. I know that my main assertion there was it was a relatively lower number. Adding it to the 19 of this story would still leave owner occupied higher than 50ish. Such that I clearly need help to put a lot of this together.
- brentm 1y ago
  But how is that going to trigger someone?
jondwillis 1y ago
Yeah but that nuance doesn’t fit into the current “California bad” memetic onslaught being peddled by my owners.
tims33 1y ago
But it is also the largest state with the most expensive home so on a $ weighted basis it is a big chunk of the national total.
- bigbadfeline 1y ago
  Good point. Similar to how the share price of a company is meaningless, total capitalization is the only useful metric. Similarly, investors have gone to great expenses to commit their money into 19% of California's housing, greater expenses than any other state, even when considered on per-capita basis. To understand the meaning of this, consider that supply/demand curves are naturally non-linear and even 5% increase in demand can double the prices.
joe_the_user 1y ago
The headline isn't misleading unless your only concern is placing California in relative position. The headline is true and relevant if you are wondering how investors influence housing prices - with a 20% share, clearly investors influence prices a lot. Moreover, California is where the housing bubble began but it's quite logical it's no longer where the bubble is concentrated so again 20% doesn't imply investor ownership is unimportant.
grafmax 1y ago
And yet 20% of the market being captured by those who already have a home, while so many go without one, indicates a shortcoming in our society’s ability to distribute resources from those who don’t need them to those who do.
- bpt3 1y ago
  20% of CA residents are homeless? Citation please!
  - esseph 1y ago
    That's not at all what they said.
    - bpt3 1y ago
      To spell it out, they seem to be completely ignoring that those rental properties are not vacant. Instead, they house people, just like they would if they were owner occupied.
      - esseph 1y ago
        20% of market capture does not cause homelessness, but there are many very valid arguments that treating housing as an investment isn't a stairway to ending homelessness.
        bpt3 1y ago
        > 20% of market capture does not cause homelessness Right, which is why trying to link the two is misleading at best. > there are many valid arguments that treating housing as an investment isn't a stairway to ending homelessness Such as? We seem to agree that the existence of rental units isn't a cause of homelessness.
        esseph 1y ago
        Turbo Greed (acquire all the things) and lack of monopoly protection and enforcement. If we're going to tackle homeless, we have to remove systems that incentivize the collection of homes as a financial asset. Make more homes by one person or entity less desirable or simply undoable.
hn_throwaway_99 1y ago
I think another metric that's probably just as important is what percentage of those investors are large institutional investors vs. "Mom and Pop" landlords with one house for rent. I mention that because I remember reading during the pandemic that institutional investors generally make shittier landlords: they're quicker to evict, quicker to raise rents, less likely to work with a tenant on a payment plan, and they have fewer ties to the community. There was a concern that with all the eviction moratoriums during the pandemic that large landlords could wait it out, while smaller landlords got screwed and got out altogether in some cases, leaving their housing stock to be gobbled up by the shittier institutional landlords.
- Gibbon1 1y ago
  George Orwell made a comment that the landlord in the impoverished coal mining town he visited was usually an old widow. Always gets me is the ideological contortions people will get up to in order to not face that California is short a couple million units of housing. Really the US has been investing in looting schemes and not in build out for the last 40 years.
comfysocks 1y ago
California houses are not popular with professional “landlord” investors because the cap rates (net operating income / house value) are poor. Rents are limited to what potential renters are actually able to pay, while the prices are very high. On the other hand, during the upswing in prices, house flipping in California was really popular with investors because the (then) low interest and likely capital gain made things easy.

by xoqem 1y ago

taeric 1y ago

It would probably be easier to understand if worded the other way? 81% of California houses are owner occupied.

deleted 1y ago
[deleted]
dgrcode 1y ago
I think the 81% group would also include unocuppied houses, right?
- taeric 1y ago
  I have to confess I'm not sure. :( Searching for vacancy rate shows that is around 9%. I would expect these are owned by someone, though, such that I don't know why they would not be counted as investments? Doing the same search for "owner occupied" shows only around 50%, though. I don't know where to get the data that teases apart housing units and standalone houses.
  - tptacek 1y ago
    Where are you seeing 9% vacancy rate in California? According to FRED, the current rental vacancy rate in CA is below 5, and the current home vacancy rate is below 1.
    - taeric 1y ago
      Hmm... I thought I just took the basic google, but that seems to give a different result now. Maybe I just fat fingered copying into here, not sure. I know that my main assertion there was it was a relatively lower number. Adding it to the 19 of this story would still leave owner occupied higher than 50ish. Such that I clearly need help to put a lot of this together.
brentm 1y ago
But how is that going to trigger someone?

jondwillis 1y ago

Yeah but that nuance doesn’t fit into the current “California bad” memetic onslaught being peddled by my owners.

tims33 1y ago

But it is also the largest state with the most expensive home so on a $ weighted basis it is a big chunk of the national total.

bigbadfeline 1y ago
Good point. Similar to how the share price of a company is meaningless, total capitalization is the only useful metric. Similarly, investors have gone to great expenses to commit their money into 19% of California's housing, greater expenses than any other state, even when considered on per-capita basis. To understand the meaning of this, consider that supply/demand curves are naturally non-linear and even 5% increase in demand can double the prices.

joe_the_user 1y ago

The headline isn't misleading unless your only concern is placing California in relative position. The headline is true and relevant if you are wondering how investors influence housing prices - with a 20% share, clearly investors influence prices a lot. Moreover, California is where the housing bubble began but it's quite logical it's no longer where the bubble is concentrated so again 20% doesn't imply investor ownership is unimportant.

grafmax 1y ago

And yet 20% of the market being captured by those who already have a home, while so many go without one, indicates a shortcoming in our society’s ability to distribute resources from those who don’t need them to those who do.

bpt3 1y ago
20% of CA residents are homeless? Citation please!
- esseph 1y ago
  That's not at all what they said.
  - bpt3 1y ago
    To spell it out, they seem to be completely ignoring that those rental properties are not vacant. Instead, they house people, just like they would if they were owner occupied.
    - esseph 1y ago
      20% of market capture does not cause homelessness, but there are many very valid arguments that treating housing as an investment isn't a stairway to ending homelessness.
      - bpt3 1y ago
        > 20% of market capture does not cause homelessness Right, which is why trying to link the two is misleading at best. > there are many valid arguments that treating housing as an investment isn't a stairway to ending homelessness Such as? We seem to agree that the existence of rental units isn't a cause of homelessness.
        esseph 1y ago
        Turbo Greed (acquire all the things) and lack of monopoly protection and enforcement. If we're going to tackle homeless, we have to remove systems that incentivize the collection of homes as a financial asset. Make more homes by one person or entity less desirable or simply undoable.

hn_throwaway_99 1y ago

I think another metric that's probably just as important is what percentage of those investors are large institutional investors vs. "Mom and Pop" landlords with one house for rent. I mention that because I remember reading during the pandemic that institutional investors generally make shittier landlords: they're quicker to evict, quicker to raise rents, less likely to work with a tenant on a payment plan, and they have fewer ties to the community. There was a concern that with all the eviction moratoriums during the pandemic that large landlords could wait it out, while smaller landlords got screwed and got out altogether in some cases, leaving their housing stock to be gobbled up by the shittier institutional landlords.

Gibbon1 1y ago
George Orwell made a comment that the landlord in the impoverished coal mining town he visited was usually an old widow. Always gets me is the ideological contortions people will get up to in order to not face that California is short a couple million units of housing. Really the US has been investing in looting schemes and not in build out for the last 40 years.

comfysocks 1y ago

California houses are not popular with professional “landlord” investors because the cap rates (net operating income / house value) are poor. Rents are limited to what potential renters are actually able to pay, while the prices are very high. On the other hand, during the upswing in prices, house flipping in California was really popular with investors because the (then) low interest and likely capital gain made things easy.