3 ms·

>That's quite a short-sighted move that makes a quick buck now, but lowers home value in the long term. In areas where there are a lot of single family residenc

by geogra4 13y ago

>That's quite a short-sighted move that makes a quick buck now, but lowers home value in the long term. In areas where there are a lot of single family residences, there is usually also demand for better schools. When the schools worsen, so do property values. This is part of the reason why this trend is so terrible. The Hedge Funds do not care about long term investments or the long term health of the neighborhood. You squeeze as much money out of your investment as you can and then get out of it before the day of reckoning comes. It's the stock market mindset applied to every single assert class.

mbillie1 13y ago
> It's the stock market mindset applied to every single assert class. This is an excellent phrase to describe this phenomenon (and probably many others).
- VLM 13y ago
  "bad money always drives out good money" is another interesting phrase.
- patrickk 13y ago
  Wall Street also bets on other basic commodities like food and oil, which drive up their prices. If two parties want to sell each other stocks bonds (asset classes likely purchased by deep pocketed, sophisticated investors), and the asset blows up, fine. Both parties can afford to take the hit. But where those assets are basic essentials, it's just downright slimy. Oil: http://www.nakedcapitalism.com/2012/05/les-leopold-how-wall-street-drives-up-gas-prices.html http://www.nakedcapitalism.com/2012/05/les-leopold-how-wall-... Food: http://www.theguardian.com/commentisfree/2013/may/23/goldman-sachs-agm-drive-food-prices-up http://www.theguardian.com/commentisfree/2013/may/23/goldman...
malandrew 13y ago
Upon further reflection, the purchases in the subdivisions are also going to be very interesting to watch since the hedge funds are basically buying influence and maybe even control on the homeowner's associations when there is one. Their decision to focus on renting is often very against the goal of HOAs. Many HOAs try to restrict the percentage of homes in a subdivision that can be rentals and IIRC the ability to get either federal mortgage loans is impacted by this ratio as well.

by geogra4 13y ago

mbillie1 13y ago

> It's the stock market mindset applied to every single assert class. This is an excellent phrase to describe this phenomenon (and probably many others).

VLM 13y ago
"bad money always drives out good money" is another interesting phrase.
patrickk 13y ago
Wall Street also bets on other basic commodities like food and oil, which drive up their prices. If two parties want to sell each other stocks bonds (asset classes likely purchased by deep pocketed, sophisticated investors), and the asset blows up, fine. Both parties can afford to take the hit. But where those assets are basic essentials, it's just downright slimy. Oil: http://www.nakedcapitalism.com/2012/05/les-leopold-how-wall-street-drives-up-gas-prices.html http://www.nakedcapitalism.com/2012/05/les-leopold-how-wall-... Food: http://www.theguardian.com/commentisfree/2013/may/23/goldman-sachs-agm-drive-food-prices-up http://www.theguardian.com/commentisfree/2013/may/23/goldman...

malandrew 13y ago

Upon further reflection, the purchases in the subdivisions are also going to be very interesting to watch since the hedge funds are basically buying influence and maybe even control on the homeowner's associations when there is one. Their decision to focus on renting is often very against the goal of HOAs. Many HOAs try to restrict the percentage of homes in a subdivision that can be rentals and IIRC the ability to get either federal mortgage loans is impacted by this ratio as well.