Housing Bubble?
- Thread starter jethreauxdawg
- Start date
Yeah. There was a lot of talk about a “Vibe-session” last fall. Meaning, people were gloomier than the numbers.
I don’t know if that’s a story of income inequality or algorithms, but the economy under the hood is ticking right along. Fed Futures has no real indication of a cut or increase in the immediate future. It seems like we’re dialed in at this 400 BPS range which kills the idea that millions of people are on the verge of living on the streets.
Ironically, we get new Case-Shiller data tomorrow morning.
People in neighborhoods need to start outlawing rentals like this just as some have forbidden AirBNBs and such. Allowing corporations to buy up homes for tax purposes or for rentals only makes homeownership harder for people.
We tried to do it in our neighborhood but it failed. It was a pretty heated debate.
My neighborhood was at the forefront of banning AirBnBs and that was ugly as well. Now we have homes owned privately and publicly with rent reaching $8k for some homes. A lot of the homes are owned by people that don’t even live in TN. I wish people would just refuse to pay the amounts they’re asking.
What about the older couple looking to sell and downsize or move to an assisted living? Investors being excluded reduces their home’s value.
In my personal experience, houses in neighborhoods that disallow rentals sell for more than in other neighborhoods that allow rentals.
Now to your weirdly specific scenario. Who cares if they miss out on some money? If the premise is these corporations are artificially inflating prices when Mawmaw and Pawpaw are going off to the home and can offer them more money than the market says it’s worth, we shouldn’t want this to happen. Sorry Mawmaw and Pawpaw.
I’ve taken more credit card payments in the last year as I have in the 6 years I’ve been in business before that. It’s pretty crazy tbh
Your first sentence seems possible. I’d be curious about that.
Your second comment is interesting. for argument’s sake, I’ll take the opposite stance. You can just pay a little more for a house than make mawmaw get less in the sale.
eta: a better argument
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Really? I can't imagine our masters of finance and big banks would ever do anything that might harm Americans or the economy. Nor would the government not properly regulate these institutions. No way any of these things would happen ever again***
In this scenario, if the home prices are inflated, so is assisted living. Everything will be more expensive.
I'm with the Cajun Hillbilly Jethreaux on this sidebar.
Remember, 97% of single family rentals and 99.5% of all single family homes are owned by non-institutional investors. So the likely scenario is mamaw and pawpaw don't sell the house. They rent it out and use the income to pay for shuffleboard at the Villages until they croak and then the kids rent it out our 1031 it into a portfolio of rentals. The vast majority of rental homes are owned by individuals. I mean 3/4 of this board seem to own at least one rental.
In 2021 when institutional investors were at peak single family buying, they only accounted for 0.74% of single family homes purchased in the US. So 99.26% were bought by regular folks.
Institutional Buyers Data
So we have somehow created a boogeyman that's really just a little boogie on the end of your pinkie finger that you can easily roll up and flick away. Any arguments to prevent the sale of ones personal property to the highest bidder is an argument against capitalism and for some form of socialism. I will sell my property to the Ayatollah if that 17er is willing to close in cash.
The real issue is we need to build more homes. We need more labor and less regulation to make it more affordable.
Yeah. That's recessionary type data there. Consumer spending = jobs = strong housing market. When the first one stops, the musical chairs are gone.
If a neighborhood forbids Airbnb and rentals, that’s not socialism. It’s a covenant restriction. As stated before, it’ll make a neighborhood more exclusive and desirable. That’s my observation and opinion from such.
I think the "exclusive and desirable" is subjective. If you have a nicer starter home type neighborhood, I could see where rental restrictions would keep some of the riff raff out. But that's not exclusivity, just protectionism. Truly exclusive and desirable neighborhoods don't have to worry about riff raff because the pricing/value makes it exclusive.
FYI, HOA's are socialist in my book. A group of people who share their resources collectively and create rules and regulations that limit individual rights. The community pool that has limited hours and bans skinny dipping is socialism, putting that old aluminum Sears catalog above ground pool in the backyard and cannon balling butt naked at 10:30 PM is freedom.**
Forbidding AirBnB is one thing. That's basically a zoning issue and if a hotel or true BnB can't be located there, then to argue against that is to argue against zoning (which I might be open to but generally think zoning by HOAs is reasonable).
But forbidding renting period is pretty bad from a public policy perspective. People need places to live even if they aren't in a position to purchase. If you want to live away from people of moderate means, the way to do that is pony up for a neighborhood they can't afford, not just artificially restrict them from having access to housing.
Should I be OK with a man consolidating power by putting only people more loyal to him than our country in power and siding with our enemies? If our Judicial system doesn't hold, we are screwed. And make no mistake it is a "we".
I was just weighing in on another political thread not started by me. Headline about something terrible Biden put in place and implication that poor orange man was going to be unpopular for rolling it back, as if real estate makes a damn bit of difference under dictatorial regimes...
Worrying about real estate bubbles and if some stupid policy was going to be the thing that makes trump look bad is quite ironic, so I was just highlighting the absurdity of the OPs concern for both real estate and how "orange man" was going to be thought of because of it...
im not a real estate expert by any means, but I think folks knew what was coming when helicopter money came floating down from the sky....Inflation was coming and folks needed a place to park money and could do it a record low interest rates....my brother in law did it for that reason, a friend sold his house sight unseen by someone 200 miles away for the same reason....and my dad had a guy offer stupid money for our farm and cabin....all of this was 2022-23....
Not to mention that it is likely unconstitutional. Unreasonable restraint on alienation. The best way to control rentals is not to outlaw outright. It's to regulate to the point that would-be owners/developers choose other areas to invest. A good way for neighborhoods to control rentals is to use restrictive covenants to regulate the term of rentals to "not less than 90 days nor more than 6 months." In this way, a would be property owner is blocked on both short term and long term rentals. If a would be owner wants to buy and rent out, they can do so, but it would be a pain in the @$$. For more flexibility, they would need to find a different neighborhood.
That was discussed as well and we nearly had an agreement on something very similar to that but it ultimately failed
Almost impossible to get amended restrictive covenants approved after lots are sold. Only way to truly handle is before lots are sold since the developer controls the content of the covenants and can amend freely.
+3.9% YOY and +50% last 5 years. Last year's Case Schiller actually looked "normal." Similar to the mid 1990's and 2010's.
Good points from you and Jethreaux. I’d like to see the large firm concentration and rentals percentages of SFH period in lower COL areas of the US. My guess is certain communities feel taken over because they have been targeted via some analytics built by the large firms.
All I can speak to is my experience. Neighborhoods with rental restrictions in my area were more desirable. To be clear all of them were complete rental bans. Nothing targeted at big companies.
Agreed. When I looked before cities like Atlanta, Memphis, Houston, and Birmingham were targeted. Atlanta was really bad with institutional SFH buyers.
I’ve heard Memphis was targeted because home prices were very low compared to the national average. Many out of town investors were buying house unseen, then finding out they are in horrible areas, but 3/2 for $50k was too good to pass up.
And don’t get me started on that. Developer completely 17ed up the covenants. It ended up dissolving our HOA
Totally right - I'd rather live in a dumpster than Belle Meade or Chickasaw Gardens, for instance.
I’m a landlord in the central MS area (nothing in Jackson by choice), and I tend to get a higher quality tenant that wants to move for schools, work (Amazon), or needs somewhere to live while building. That said, the easy money was made pre-Covid. Very tough to find any cashflow at 7%+ rates and these prices. Home price appreciation definitely outpaced rent growth in this market.
Are you saying you're having trouble renting out your properties for more than the mortgage payments you're making?
More likely saying that you can't buy today and rent it out for enough to cover your mortgage. There's not a ton of opportunities for individual investors to scoop up property right now. But if you already own it and locked in those sub 3% rates, you probably have a cash cow rental.
... unless your local taxing authorities have raised the assessed valuation commensurately with market values and, therefore, the resulting tax obligation. AAAANNNNNNNND, unless your insurer has raised your premiums to an ungodly level.