The Problem with Real Estate Speculation
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- čas přidán 31. 05. 2022
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There is a housing crisis in America, and though large firms buying up suburban houses isn't the cause, it may be exacerbating it in ways that are only just now becoming clear...
sources:
Durham’s “COVID Land Grab”: How Real Estate Speculation Makes Our City Less Livable - DataWorks NC
dataworks-nc.org/2021/durhams...
www.princeton.edu/~wxiong/pap...
Housing speculation and its economic consequences | VOX, CEPR Policy Portal
voxeu.org/article/housing-spe...
Housing Speculators Could Bring on Repeat Crash | by Texas McCombs | Big Ideas | Medium
/ housing-speculators-co...
Blame Regulation, Not Speculation, for High Housing Prices
www.city-journal.org/blame-re...
Preparing for the Post-COVID-19 Land Grab
nextcity.org/urbanist-news/pr...
Tech and finance firms buying up homes doesn’t bode well for everyone else - The Washington Post
www.washingtonpost.com/outloo...
When Private Equity Becomes Your Landlord - ProPublica
www.propublica.org/article/wh...
Global investors profited from U.S. rental homes, foreclosure crisis - Washington Post
www.washingtonpost.com/busine...
Investors bought up a record share of homes last year - Washington Post
www.washingtonpost.com/busine...
The Big Short | Donald Mullen Jr. | Pretium Partners
therealdeal.com/2016/10/05/fo...
Capital Gains Tax On Real Estate & Home Sales | Rocket Mortgage
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Rents reach 'insane' levels across US with no end in sight | Lifestyles | stltoday.com
www.stltoday.com/lifestyles/r...
Goldman Executive Who Made Millions on Housing Bust Now Wants to Make Millions on Housing Un-Bust
nymag.com/intelligencer/2012/...
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In spite of how everyone is frightened and calling the crash, there is already an excessive amount of demand waiting to absorb it, which is another reason it's less likely to happen that way. This forecast was not made in 2008, at least not by the general public, as I will explain below. The ownership rate peaked in 2004, according to the other statement. We reached a peak in the second quarter of 2020 and are currently at the median level. From 2008 to 2012, it fell by 3%, and in the second quarter of 2020, it dropped from 68 to 65.
The fact that the US stock market had been on its longest bull run ever makes the widespread worry and enthusiasm understandable given that we are not used to such unstable markets. As you pointed out, it wasn't tough for me to earn over $780k in the last 10 months, so there are chances if you know where to go. I hired a portfolio advisor since I was aware that I needed a solid and trusted plan to survive these trying times.
@@alexanderjames3043 Due to the significant falls, I need advice on how to rebuild my portfolio and develop more successful tactics. Where can I find this teacher?
@@patrickperez7387 Sure , I don't know if I am permitted to drop this here, but do run a check on Sharon lee casey, she was in the news a lot in 2020. She’s my coach and handles my portfolio also
Here in the netherlands we have this new rule in some big cities: "if you buy a home, you have to live in it yourself". This blocks out investors. To be honest, this should be applied everywhere until the housing crysis has been solved.
Ikr! I don't understand why houses are being build and nobody are living in it. It's such a waste! We're better off just buying very expensive NFTs at that point.
I love you Europeans. You do things differently and it works 💪
Who rents out the properties?
I like it better when the rule is for the property to be occupied, not that you have to live there. So you can rent it to someone. That solves part of the problem of having empty properties, mainly in big cities.
What about people who aren't ready to buy a house, and would rather rent instead? If homes aren't allowed to be rented, where do those people go?
Just sold my house here in Ohio. So glad I sold it to a nice family from Texas instead of a mega corporation!
Is it cheaper in Ohio?
@@unknown-by9kf, it's all relative. I'm in one of the more expensive cities around the Columbus area. But, there are plenty of affordable areas in Columbus. I think Columbus was rated as one of the best cost of living areas in the US recently. Our 2500 ft² home with 0.2 acres we purchased for $260k 10 years ago. We just sold it for $475k. Compared to Los Angeles or Austin, this is a steal. But other parts of the US not so much.
@@davidavanderburgh Good to know. I am a realtor in TX, and have never heard of anyone from here moving to Ohio.
Too bad rentals are becoming as expensive as paying a mortgage while building no equity.
The poverty trap has been set, and many will never escape.
"as expensive a as paying a mortgage" would actually mean "literally paying landlord's morgage plus allowance", right?
Paying a mortgage of 4% is a different to paying one with 7% interest rate.
You have a good point, but never is a long time 😉. It's true rentals are becoming very expensive, so the trick is to save as much money as you can and purchase. Renting has ZERO Equity, but owning even if the market takes a turn, allows the owner to gain equity.
There's just no way in hell the Average Joe can compete with a multi-billion dollar corporation. This system is unsustainable.
All us younger folks chillin' out here hoping the bubble just bursts so we can actually buy a home.
Good news and bad news. The bubble is almost certainly going to burst, but it's going to burst because the Fed raised interest rates and 30 year mortgages that were at 3% a year ago are now at almost 6%. If you are making payments, the collapse of housing prices isn't going to help you much because your payment isn't going to be lower. The first 10 years of a 30 year loan are mostly interest. 30 year, $100,00 loan at 3% = $421, 30 year loan, $75000 = $449
@@Tyneras TBH though, watching the people who've hoarded generational wealth for 3 generations would also be pretty funny.
@@Tyneras Well said that is even mostly true and really awful that some think boy when the bubble pops everything will be great.
No.
1. Some if not many People loose the job.
2. No job . No loan. No house.
3. Less demand for homes, less homes getting build.
Same
I can't wait to pass down my 2000 toyota echo to my kids
Americans: YOU CAN'T FIX IT WITH REGULATION.
Other OECD Nations: We, uh, just put in laws that require you to actually live in your house if you're buying in a major city.
The housing crysis is caused by many different things like low supply, speculation, inflation, zoning regulations.
We CANNOT solve the housing crysis with only one solution!
We need to slow down inflation, build more houses, get rid of zoning regulations and keep investors out of those homes.
@@chase-warwick There's a limited supply of land in most cities, especially those on the coast. Incentives will only ever go so far.
Europe has strict rental codes that set maximum rents for the year. Additional laws limit foreign buyers and charge huge taxes if you don't live in your home.
There are many better solutions than building incentives, though they can also be part of a multi pronged approach.
Or we need to stop building single family housing in general
They do this in some major cities
With so many exemptions the laws are basically for show, to say institution is the solution when it’s rife with corruption is a lie.
Why is renting not considered capital gains in the US? And how come offshore companies are allowed to own property and rent it on US land without paying tax? Neither of these is possible in my country...
well if the renting cost is more than or less than mortgage, there should be no tax or tax credit.
Capital gains tax is lower than income tax. Rental income is income. The gain of equity as the property value goes up is capital gains.
@@zebranator you mean they pay income tax in US but not capital gains tax because they rent and not sell their assets?
@@aleksandarjovanovic8888 Yes. Rent - (PITI + Expenses) = Taxable Ordinary Income
Rent is ordinary income which is taxed higher than long term capital gains. When the property is sold, that's when the increase in value is taxed as long term capital gains.
3 things: politicians in the US are well known to have investments in these private equity firms, heck, some even CAME FROM THE PRIVATE EQUITY SECTOR. That's the first conflict of interest. Second, the entire social security system, pension funds,... are based on equity, so if housing crash, the entire system goes with it. Third, property tax is tied to housing value, local governments don't have any incentive to build more housing that could cause a drop in housing prices, hence lowering their revenues.
Well said and perfectly analyzed.
At first I asked myself who is this person without a mustache. But glad people are shedding light on this topic. I hope they make it illegal with corporations to buy residential properties.
My grandfather was a teacher in the 1960s. He was able to buy the family home, earn master's degree, and retire debt free. My mother is a teacher now. She has a high 5 figure debt from just earning her credential. We were force to sell the family at a loss shortly after my grandfather's death, and the house flipper who bought it sold it for over a million dollars. The housing crisis is just a symptom of our broken system
Dang... You sold your family at a loss... Woof...
I'll see myself out (☞ ͡° ͜ʖ ͡°)☞
Ouch, that hurts. 😞
Teacher's wages are very bad in the US.
It is often about 50 to 60K a year more for higher positions. But it is bad compared to median pay of 75K in the US.
In Europe teachers are well paid and have a good often safe position and get state pensions and insurance included.
America gets an F in economy. We fucked it up.
@@paxundpeace9970 not true the median is mid 50k. Teachers are paid average/ overpaid since they only work 3/4 of the year
We bought a house in 2013 and we are so glad we did. We bought at the bottom of the market. We could not comfortably buy it now.
All of this junk that is blocking people from being able to get a home is so wrong.
But what is stopping the speculators from just buying up all the new houses. If they buy up all the new ones they can still maintain the market
How much money do you think these speculators have? Eventually, they won't be able to rent them out to anyone, so if they buy a new home it will sit empty (or they will have to offer it for a lower rent, still losing money on it). Eventually, if you build more housing, you will have enough housing for everyone.
There is a simple solution which has been recently implented in some of the biggesr cities in The Netherlands. If you buy a home now, you have to live in it yourself. This completely blocks investors :)
The way I see it, housing cannot both be a good investment and affordable/accessible, unless wages rise in tandem. If real estate is the only option people have to realistically save for retirement, we will time and again get bigger and bigger booms and busts.
Wage is (or should be) a function of supply and demand for the job. Jobs in high demand but with fewer people doing them pay the best. Jobs that anyone can do and aren't in high demand pay the least. And if you arbitrarily set a price floor (ie minimum wage), you end up with a surplus of workers (ie unemployment).
That is basically what happened in China until it started to eat all the money out of the economy, just to have the CCP put regulations so harsh that crashed the whole sector
" If real estate is the only option people have to realistically save for retirement" Good news! It's not.
See Europe where almost everyone rents outside of the UK.
@@Iffy50 more likely because in the big cities like berlin, paris, etc the cost of buying is way way out there.
I'm interested in investing, but I'm not sure where to start. Do you have any advice or contacts who can help me out?
Investing can be complex, so it's smart to get professional guidance when building your financial portfolio.
It's a great idea to have a conversation with financial advisors like Naomi Dean to reshape your portfolio.
I spread out my $25k portfolio across various markets to diversify my investments.
That's awesome! I ended up making a net profit of about $115k by investing in high dividend yield stocks, ETFs, and equity.
Naomi Dean stands out from other brokers because of her realistic approach, unlike those who often set unattainable targets and fail to deliver. She's truly unique!
Switzerland doesn't deal with this nonsense because their government is sensible. Housing is a place to live, not an investment to get rich on. Not mentioning Switzerland is another nail in the coffin of sensible American real estate.
What does the Swiss government do to prevent this issue?
@@abarbar06 Switzerland has made it an unattractive prospect to buy housing as an investment. They do not incentivize real estate by providing tax breaks on mortgage interest. They have also provided unparalleled renters' rights. A renter can even request a decrease in rent that a landlord must respect. If buying a house won't get you rich, suddenly fewer people want houses and prices remain stable. They have had less than a 40% increase in housing prices since later 20th century. Other nations have dealt with over a 300 to 400% increase as a direct result of their policies that push home ownership. I live in Canada and 60% of our GDP is mortgages. America is around 52% of GDP. Our economies are now locked into the idea that people must buy and own homes. Turning back now would be a tough pill to swallow for many. But continuing on will continue to divide wealth into two camps: haves and have nots.
@@blakebeaton8410 Exactly, I live in Canada as well and it's eye-popping how much leverage (read: mortgage) people will take on just to "own" a property. Our economy is far far overdue for a crash to correct all of this because it's all so very unsustainable.... and it won't be pretty when it does crash so god help us all.
@@blakebeaton8410 Last year i met a guy from Switzerland. He told me he had a 110 Year long Mortgage because otherwise he couldn't pay for the house that the houses where so damn expensive there.
Swiss take care of the Swiss, while making money on the rest of the world.
There was a house needing repair selling for a lower price, and the bank refused to loan me because of that, a mofo with money then bought, repaired for cheap and now is selling it again.
Its too unfair of a game. I need cheap alternatives, not expensive ones.
Housing should be out of the profit game, like health and education.
lol house flipping does not work here. The repairs, even if you do it yourself outweighs the return you get from selling.
building more houses will provide more cheap inventory for the corporate landlords, they still have an enormous buying power compared to families. the only way to do it is to introduce a massive corporate ownership tax: if you're buying a house as a company, then please pay 35% fee
@WhatsApp㊉⓵⓽⓪⓽⓹⓶⓽⓼⓺⓻⓸ couldn't find a way to report for spam, so reported for terrorism instead.
If you built enough housing, then competition would force those landlords to lower their rent. But for that to happen would need a /lot/ of housing, and there are a lot of barriers to that happening. It would mean building more high- and medium-density housing, which a lot of city governments are opposed to.
No, we need a Land Value Tax.
@@rimfire8217 i'm sure anyone who bought a house 10+ years ago will appreciate their "property tax" jumping by 1000%
Amazing breakdown of the problem. Thank you
One thing you didn't mention that would deter investors from buying up rental properties left and right is if the 1031 exchange laws were less desirable than they are now. As it stands, someone who bought an investment property can defer the capital gains tax on the sale of that property when they purchase a new investment property with the proceeds of the sale of the first one.
We love to see a video on alternative housing like tiny homes and modular homes like boxible, incredible tiny house, etc. Love your YT channel and all the good info.
28 and I surprised myself when I was able to buy my first home for my family and myself last year. I'm very lucky, but this economy sucks. My mortgage costs over half of my monthly income. I'm kind of happy, but I wish I had more money now. Although, I can't imagine Id be paying much less for rent where I live in the Colorado Springs area.
Love your videos! Thanks for all the advice.
Over half of your income on housing is a dangerous place to be. I hope you are careful and able to save up an emergency fund. Best of luck!
Jesus, over half of your income. Im just over 30, and i pay gladly under 20% of my income. I understand your still happy. If the situation gives you no other options... i understand.
If anything ever happens to my job or my wife's job, we're totally screwed. Hopefully the storm will pass. It's all the extra things the lenders tack on to your mortgage as young people who have no collateral and as first time home buyers they pretty much have you wherever they want you. My interest rate is at a smooth 3.3% but the extra things they force you to pay for are ridiculous. Once I pay down a certain amount of the balance off, Im told that one of the things theyre charging for (insurance on the mortgage itself) can be dropped. The economy in general sucks.
@ stephenadam you mean pmi your paying lenders insurance because you paid less than 20% down
Sounds like your term is too short. Try to push it to 40 years.
You two are usually so measured and genteel, it's encouraging to see you be critical when judgment is deserved (and in Pretium's case it most certainly is).
I'm happy this channel is still here after all these years. I for one am still watching, and it's still as valuable! Thank you guys!
This channel is co-sponsored by PBS isn't it? So it will always be here.
@@edselgreaves6503 I don't know, they can still decide to discontinue some of their channels I guess.
@@davidm2.johnston684 who knows. I sure that doesn’t happen. I would be highly upset
Kudos to you guys for your great videos! The sync at the end are always perfect
Thank you guys! This video gave me hope for the future.
In my area the prices rise faster than a normal income can even keep pace with saving for a 5% down payment.
I had my house built in 2010 when the market was still recovering. Service plumbers will always have a job, what you Going to do when the shitter breaks.
Payed it off 6 years ago. Bank and people have been calling me none stop for the two years wanting to buy my home and the 28 acers it sits on.
I wish I could put photos on CZcams comments. I have a stack of offer letter in my office 3.5ft tall, This is not a joke.
Having a place to live should not be a “game” in the first place.
thankfully bought a house last october in San Antonio. you guys are such a great financial guide to my life
"the reality is most people don't own a home - they rent the home from a bank" - You know, I'd almost respect these people more if they just came out and said, "yeah so we're just going to do whatever we want, if you don't like it - tough!" Why even bother with the bad faith statements.
Because they want to keep their employees believing what they are doing is good for the world. A facade to avoid backlash from the community and their own employees.
the "rent from the bank" at least gives you some return. unlike regular rentals where your landlord's mortgage gets paid.
Thats not true…with a mortgage you own the home but you owe a huge debt with the house as collateral
Why is there a housing Crisis in America? Because the average cities land is 20% car Infostructure
More like NIMBYs. The overreliance on cars and utter lack of reliable public transit in the US is a massive problem, but when it comes to why housing isn't being built, it's always the NIMBYs.
It's not only in America. In Europe as well (in my country 3 room apt. 70-75m2 went from around €140 000 to over €300 000 in 2 years)
I think it’s more complicated than one reason
Blaming this on cars is just bs. There is more than enough land to allocate 20% for cars. The main issue is the building codes that limits supply.
@@robobrain10000 Lol LA has more land dedicated to parking lots than the entire land area of Manhattan.
I have been looking at entering the housing market on my first home. I am in my lower mid 20's now and it seems almost impossible to find anywhere decent to rent or buy right now. All the older homes for sale in my area seem to be in poor areas and not well maintained so I am thinking about purchasing a new construction single family home with 20% for the down payment. There are a lot of new construction homes and apartments being built all around me right now. Mortgage interest hikes are concerning me though as a 6% interest rate mortgage will be difficult to pay even with a fairly high paying engineering job but housing costs in my area have gone up about 25% in the last two years. The lease for my current apartment expires in about 2 months so I don't know what will happen from then.
As always, every video you guys share is just so full of information 🥰!
Great video as usual. Very informative and to the point. Thank you.
Your channel is so informative! Thank you so much for everything you do 💕
Another downside of all the inflation is feeling "stuck" even if you're already in a home and want to relocate. Sure, I could sell my home for a huge profit right now, but that profit would go toward a down payment on an overpriced mortgage that I would be stuck in for 30 years.
This is what I hear a lot of torontonians say. My question to you (in a general hypothetical sense) is why not move somewhere cheaper? Another geographical region I mean.
You could just rent your owned property, and with that money move wherever you want.
@@hillfortherstudios2757 That's only kicking the can down the street & doesn't actually solve the problem of increased housing prices. Assume this situation w/ only 2 people, A & B. A & B both buy a house in 2010. In 2020 they decide to sell & move onto each other's houses. Over the last 10 years, their houses have appreciated 20%. But now the buy price for the house has also gone up a subsequent amount. Any gained 'income' is just lost on the next move. The housing economy is just that with more people in the chain. Unless the number of houses surpasses the number of buyers, then any actual gains are reliant on someone else entering the equation for you to pass the buck on to.
Would it solve this individual's problem assuming the rest of their life doesn't get worse from such a move? Absolutely. But by definition not everyone can make such a move, and any individual gains along the chain are illusory.
Such a tragedy; I’m building equity and benefiting over soaring property values due to sheer luck but Im feeling stuck in my gilded cage.
If you truly wanted to see profit then you would sell and relocate to a cheaper state/town. You just want your cake and to eat it too, as they say.
@@Zero_Chaos I did what Hillforther suggested. We moved out of California and moved to a vastly cheaper state - thanks to the good graces of our jobs allowing work from home AND in other states - we were able to afford a much bigger home than we ever thought we would and in a nice and quiet town. Internet is top notch and city life isn't too far off.. This is obviously not a solution for everyone but i think that some people who can, choose not to because of other aspects of their expensive areas and will just grumble about the expense.
been looking for a new house for a couple years since getting married and new houses in my small town in iowa are being built but there for $350k or more which is ridiculous! the old houses are selling for $160-$200 (for the same size house) but it's rare one of them come up. so even if new houses are out of reach with the price hikes at least that i'm seeing locally
I'd be super curious to see a breakdown on what kinds of zoning laws would improve the speed at which homes and apartment buildings are built and what kind of zoning laws slow it down.
I'm glad you asked! In the US and Canada, most cities have zoning law that allows developers to build only single family houses and nothing else on the vast majority of the land available. Not Just Bikes explains it pretty well in this video: czcams.com/video/CCOdQsZa15o/video.html
"there's a bit of a housing crisis in America"
*Laughs in Australian*
It's a global problem, we got the same in whole Europe.
Is Australia good or bad in their housing?
Love this video. My main takeaway is big companies, again, taking advantage of average people
@ghost mall that's fair. Good point. I was wondering about the source of that statistic. Just curious
Or how the average person doesn't understand the real estate market. I wish they would teach this in school.
@ghost mall wrong. They are accounting for about 25% of home sales in the last year alone. You are so unashamedly clueless about everything you say.
Lol no one in this thread is linking to actual articles or studies, every body's just claiming a number and leaving it at that.
Your videos are useful, entertaining and easy to follow, I really like them, thanks!
really interesting vid, appreciate your discussion
As a Canadian I try to camp in my car in summer months to save on rent. I'm honestly really surprised that more Americans with milder climate don't say "screw it" & start camping in their vehicles. No property tax. No lawn cutting. No condo fees. You can park close to work. I honestly save so much money simply by not buying stuff because I just don't have the room for it.
California has a lot of homeless (the milder temperatures is nice even though the prices make it almost impossible to get out of homelessness). Homelessness has become much more common (and not usually a choice but some do choose to save money this way) because of increased cost of living. In the past few years many decided to use an RV as a home, which is why many RV camp sites are fully booked all the time even with very high fees.
If I did not have children, I would definitely camp in my van! I would save so much money.
You should see the speculation in Canada. It’s unreal and unsustainable with 30% year-over-year increases in many cases. As interest rates rise, people are retracting from the market and even walking away from deposits in some cases. The bubble finally appears to be bursting and realtors have to scramble for their Audi payments.
Hey I like your videos a lot. Can you do a video of buying a house to live (hot market)vs buying a rental property(medium market) and still renting vs renting and investing the rest
hey guys I just want to say I love your Channel
there is something I would like you to look into if it's probable there is this a tiny house movement that's building the different houses different companies just building the small houses like boxable in the Casita and there is other a little more Cherokee button they're trying to solve the problem could you share your thoughts on the Casita house from boxabl
'You will own nothing, and you'll be happy'
We were warned in 2016 this was coming.
Sort of. The quote comes from a speech given at the World Economic Forum, and refers to an economic transition from goods to services. It wasn't really a warning: It was a promise that this transition would, in many ways, be a good thing because services can be potentially delivered more efficiently.
For a clear example, look at car ownership. It's expensive! You have to buy the car, which then gradually loses value over time - so in effect you are 'renting' it anyway. For most of that time it is going to be sat in your garage doing nothing. Worse, it incurs a hidden cost: That's a chunk of land used for your garage or driveway that could otherwise be put to other uses, or just left out so you wouldn't have to pay so much to buy the house. Then you have to pay the cost of maintaining and repairing the car, insuring it, getting the regular inspections that are required. But what about if the car was a service - if you were to use a rental or car sharing provider instead? Then the car costs the same amount to maintain, but the cost is spread out over a much larger number of people. So to someone who just wants to use a car - especially if they only need to use it occasionally - this service model is potentially a lot cheaper.
Not that it's all good. Service models provide a lot more opportunity for lock-in, for a start - once the customer is committed, prices can be raised. But neither services or ownership are inherently 'better.'
It's frustrating that these properties go up in value even as the maintenance is not kept up. I wish these companies got more press than bezos and musk being the bad guy... I feel like more people would not sell to these companies if it had more media coverage. I could be wrong.
Because some times people are buying just for the land value.
USA have too much financial institutions playing games with capitalism with rules they wrote themselves. Winning they become a robber barons, loosing they provided with golden parachutes and bail out. We dig our own graves with these kind of businesses.
I sincerely appreciate your content, so balanced and informative. Thanks for disclosing the truth
Why would a speculator NOT rent out their property while they have it? Seems like a waste to me. (In reference to 2:15)
I guess it complicates their business plan. it's easier to just let the house sit until you're ready to sell it for a profit.
Thank you.
The more people hear the truth, the better things may become.
I just straight up gave up on the idea of homeownership. It's too difficult anyway and I'd rather just not deal with this nonsense.
Normalizing these type of businesses around such a basic human need like housing, shows you how broken the system is.
I say theirs must be a change in property tax Say after owning your 5th home your property tax goes up by 1.5% percent. Not only would this allow mom and pop landlords. But mega corp that own about 10000+ units will have a big impact on the profit they make. Plus it will force this company to sell a lot of property witch would mean more taxes for them selling the homes.(side note I know this will crash the housing market. I DON'T CARE!!!!)
Now, here is another thing, I am currently stuck in government housing, the maintenance team is very lazy and the unit is over 50 or so years old. They are charging way too much for a unit with no Air conditioning or roach infested, the windows are not sealed properly that dirt comes in the unit. Now that company you mentioned is not the only one that isn’t reliable. Government housing is not reliable
I live in an area where people buy these homes and either rent them out short term or leave them empty, and it causes a lot of issues in the neighborhoods as well. No one takes care of the empty properties, and it's easy to tell which houses are vacant. I live somewhat near a large research university, and renters stay in the apartments for a year or two. They're not going to be motivated to help keep the neighborhood looking nice, and why would they? No one takes care of the yards, weeds and dead grass take over everything, people toss their garbage in the street.
Why can’t we look at homeownership rate like we do literacy rate? As in more families owning their homes is good for everyone
Exactly, money to spend in the actual economy, no just a nobility living out of rent
Loved the video, although I'm still mad about the lack of mustache
I demand the mustache back.
You’ve just explained a LOT of what’s happening in my Black Chicago neighborhood.
whos this new guy without a mustache?
Any advice on how to raise crowd funding to start a business?
You missed how real mortgages only made 5% of the money being gambled in the ‘07 housing crash. For every dollar of mortgage there was another $19 of money being bet on the performance of those mortgages by Hedge funds and other investors.
No mention of the community investment act
After the 1994 Los Angeles earthquake happened, property prices absolutely *cratered* as many people got scared and skipped town. Property was not dirt cheap but very inexpensive. Those speculators that picked up bargains madoff, like Bernie.
How do you think prices will come down
0:50 holly cow I didn't recognize him 😂
Great video. Investment firms buying housing is a SYMPTOM of the housing shortage, not the cause. Because they expect more housing scarcity in the future to drive the value up. We need to build more housing to drive investment firms away and allow people to afford homes again.
I’m buying a house in TX right now & they’re saying it’s a buyers market. Our offer was immediately accepted.
You see two cents I watched your videos since I was 14 I’m 20 now.
I experienced everything from renting to homelessness to considering purchasing a house based on investment principle but mathematically everyone is getting bent over backwards for complying with that.
It’s objectively cheaper to build your own and the skills aren’t hard, pulling permits, getting materials squared away and scheduling inspections. 52345.68$ later I have an 1800sq ft house valued at 375000$.
It is not hard. It is possible. Laziness is the reason most people are poor, to you I say you aren’t creative.
A good method which the US government can use is Affordable Housing Scheme of India. The Indian govt. grants some land to large private builders for making houses. Price and design of houses are fixed and the houses are sold to individuals. A good example of PPP model.
Yeh this method works but as an indian let me tell you few points , 1) these houses couldn't be sold for few hours cause they are provided at low rate
2) these houses are often on outer region of main city with a slightly hard connectivity
3) few private players build even cheaper house in that area
4) the distribution system is more of like a lucky draw due to population
5) it's a good scheme but I don't know if it's a fit for USA because houses are completely different in both places
Lol I’d rather not model anything after India, thanks.
I never meant it to be a copy and paste scheme. One can always modify it in accordance to one's need. We need to think in terms of learning from each other.
@@dw309 you need not, but maybe some do...
The government grants land to builders? According to your statement large private builders.
So the builder gets free land to build on and then they sell the houses to individuals? Who pays for the materials?
Sounds to me like the government gives their friend the builder land for free and the builder makes a bunch of money.
Very grateful my parents were able to get me a condo 2 years ago. Here's hoping I can rent it out when it's time to move in a few years (and I can find a place to move to!)
Former Real Estate Agent here, as interest rates rise, buyer pools are shrinking, thus decreasing asking price. This is the tippy top of the housing bubble, if you are planning on selling do it now. If you are thinking about buying, wait a year for this bubble to burst.
Are new builds shielded from corporate sweeps? What would stop companies from buying new houses when they already have a huge advantage to the average buyer?
No, corporations can buy new property, but the buy algorithms don't have data to do their calculations.
If upzoning was interesting to you, please check out 'not just bikes' or 'oh the urbanity' for more information!
Yes!! Love them!
Where's the Keynes-like mustache? Jk. Great video!
My granddad bought a home in 2002 and sold it in 2021 for 19 times what he paid for it in 2002.
As far as I can tell this is the AVERAGE appreciation of the AVERAGE home over that time period, for the entire metroplex, possibly the country and it makes me want to cry.
But did you adjust for inflation over that period?
@@talknight2 No but "inflation" is about 8x, if we do inflation by median annual salary. If we judge inflation by housing price it is 19x.
Please bring the moustache back!
Loan to buy stock is called margin. Ibkr offers it 1.5% above base rate. Meaning it's better than mortgage rates.
So margin loans to banks and hf are cheaper.
A home that you live in as your primary residence is not an investment it is a savings account at best. The rest of your commentary was pretty spot on.
Why can't a home be an investment? If you bought a home for $30K in 1980, the value of that $30K in 2022 would be $105K according to the US inflation calculator. A home purchased for $30K in 1980 is certainly worth more than $100K in most locations. Admittedly, you need to pay for maintenance, but that is much less than the cost of rent. (new roof, new flooring, new siding, new doors, new windows, etc., kitchen/bathroom remodels) I believe that the rate of return for homes tends to be better for "average" priced homes than "high end" homes. You need to factor property taxes into the equation too, but offsetting rent will easily pay for property taxes and home maintenence.
I blame the mega corporations the most but I also don’t think the general public should be buying rental properties either. If people and corporations want to invest, it should be in local companies within their country to help promote economic growth and sustainability.
Did thjs video even explain what a speculator is? I have no idea what it is and makes the whole video confusing
The government could easily make investing in real estate illegal. Revoke corporations' right to be legally people and forbid corporations from owning homes.
I'm not sure that will solve the problem, or not create new ones.
If the government should do anything, they should incentivize cities to build more starter homes with the stipulation that they must be owner occupied for a fixed period of time or until the housing market cools down.
You don't need the feds for that, your state government can do it too, you can start a measure to get a bill passed yourself, it all starts with signatures.
Lol “easily”
Consider the property taxes. You could vote for higher local property taxes and local social programs funded from it. You could bleed the corporation's money back into your local economy.
@ghost mall Imagine something as simple as a small tax hike that went to support a local fund that gave every single family a rental stipend that could be used to pay mortgage or tax payments on your primary dwelling. This would also raise Blackwater's taxes. The stipend would be Blackwater paying extra taxes in order to pay a stipend to its tenants. It can try to pass the buck back to the tenants but doing so requires it to hike rent and become non-competitive with smaller local groups that benefit from their tenants having stipends paid for by Blackrock.
Hell you could even write in a mom and pop exclusion for corporations making less than X billions of dollars or hiring fewer than X local workers.
They use the tax system as an economic weapon to bleed you dry. You can turn the barrel back on them.
You didn’t talk about historically low interest rates. Raising interest rates would deter big companies at least somewhat.
If big firms pay cash instead of borrowing to purchase homes, why would raising interest rates affect them?
"You're welcome, Poors." LOL. Great summary, very informative.
Man, thank god I got a house right before Covid hit. It was already bad enough with how people vote on zoning laws, but competing with private firms who get government loans for cheap rates? That is just unfair.....
7:30 The solution is to build more houses so as long as the real estate lobby and other interest don't buy politicians to keep that from happening. That's entirely the reason why we're in this mess in the first place.
Well here in Stockholm, the house prices are finally slowly falling. The inflation and rising interest rates has got people worried. I do hope for a more responsible future for real estate in the future where its not used for speculation, but my guess is that history will repeat itself… its like we are doomed to keep making the same stupid misstakes
Real estate prices are surging all over the world if you guys are wondering. My family owns a rental apartment in Tel Aviv that increased in value by over %10 in just the 2-3 years since we bought it!
The housing market/bubble needs to pop soon. I cannot afford to move out, as the rents for a studio apartment are more than I can afford. I have a decent job and salary, too.
It's the same here in Eastern Europe. It looks like the real estate is getting crazy everywhere.
Yeah but also building a bunch of new houses it's detrimental to the environment to a degree that we have never seen before. We keep flattening wetlands and wild forests just to build single-family homes. It's disgusting. They literally clear out acres of woodlands just to build 4-5 low quality homes and then they have the audacity to plant 2 pine trees with it.
Nice hit piece on Pretium
I'm surprised you guys didn't touch on the reason Landlords, especially Corporate Landlords, don't reduce their rent prices even with completely empty complexes is because the can write it off as a business loss and get taxes paid back to them for it.
mind blowing. capability to own a home is one of the best signs to start a family. good thing it is not the end, building more houses could help
No mention of the Federal Reserve?
I think you might be ignoring a future focus by the government to subsidize home-building, loans made to single-family individuals, and the price of the resources used if for the purpose of home-building. The most likely outcome would be that the combined maintenance of the owned units by these companies would eventually be higher than the value of each of the properties that are owned or bought. This is to say that it is more expensive to maintain a home than to buy one. The company will start pivoting from the ownership of homes to something different, and the price of homes will ease, at which point gov't should ease the subsidization.
Please also don't tell your viewers that owning a house at this point and getting into the market is "still worth it" right after you just said that the goal and plan are to create more homes and devalue them. It makes more sense for the regular person to stop buying houses. This by the way will also ease demand while govt acts. When the regular person sees a significant decline in the prices, that's when it makes sense to buy a house that fits their means, at a price they can afford to buy and maintain.
Send Pretium my way, I'm trying to sell and buyers are on strike. Gas prices and interest rates scaring buyers bad right now.
I guarantee you that a neighborhood that has robberies, gunfire, and high crime brings lower values.
????
Great video, hopefully you guys have a house already
Can you expand on “rent is not capital gains”? I know it’s QBI, but any income is still taxable, right?
Rent goes under income tax, apparently.
@@talknight2 that’s what I thought… I feel like they are being very misleading at 7:00
Also, there is massive immigration INTO the United States, some legal, mostly illegal. The massive influx of people who - let's face it - need to live SOMEWHERE is going to increase the demand for housing. More demand = Higher prices!