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The Facts

7/30/17       
Pat Gilbert

Here's the facts

The Facts

7/31/17       #2: The Facts ...
Larry

So we are back to the area of what was the long term average # of units sold. The price data shows the affects of inflation and trend towards bigger and more elaborately decked out houses. It would seem like the # of units sold should increase as the population grows. I suspect that isn't totally true because people feel like they "need" lots of other stuff, cars, boats, vacations, eating out, on & on. Do you really "need" a McMansion?

7/31/17       #3: The Facts ...
cabmaker

The problem is that Blackstone is the buyer for all these houses.

Blackstone will get their cabinets from China.

7/31/17       #4: The Facts ...
Bill

Yes Blackstone bought every one of them.
We should all pack it up. It was in the Wall Street journal you know. Go ahead try and buy a house, it's impossible.

7/31/17       #5: The Facts ...
cabmaker

Bill,

What are you going to do when Blackstone comes to you with a full price offer, is willing to waive all inspections, write you a check you can cash this afternoon and throw in another $50K for your furnishings if you can be out by 4pm?

Residential Rental Real Estate is now a Wall Street Product. That really wonderful young couple that want to buy your house are completely outgunned.

As soon as they own 75% of the rental properties in your neighborhood they will become a market-maker and decide what rent levels will be in your town.

Get used to it.

7/31/17       #6: The Facts ...
David R Sochar Member

cabmaker -

What evidence do you have that wall Street investors are buying up residential real estate, as in all of it? That is what you are saying, correct - that they are in the process of buying real estate that is listed for sale, or even not listed for sale?

What percentage of US housing do they now own? With sources? Do they state goals?

What is the motivation? I know the 2-3 oil wars made them uber wealthy, and the recession really iced that fat cake, so they dol have many billions. But, what is the end game? Own it all? Mass economic slavery? A Pinky & The Brain style take over?

Perhaps a little less internet and strong coffee, and a little more work in the shop is in order.

7/31/17       #7: The Facts ...
cabmaker

David,

Of course the end goal is to own it all.
Not because of any necessarily evil goals but simply as a course of financial physics.

In the same way we did not move from the country to the city in one lifetime this too will take a couple of generations to work thru. But it is going to happen.

7/31/17       #8: The Facts ...
cabmaker

As each community gradually has fewer and fewer houses available for purchase rents will go up.

As rents go up so too does the financial incentive for Real Estate Investment Funds.

Look at what is happening to the retail real estate sector. Shopping malls are having to become very creative in order to find tenants for all this space. The dollars that once flowed into creating shopping malls or (according to today's WSJ) grocery stores are being freed up for other purposes.

The pile of money grows every day and it needs to find a home.

7/31/17       #9: The Facts ...
Pat Gilbert

Larry

It's all about the demographics in about 3 years the Millennials are going to be at the 31 year-old Prime buying age for starter homes that will change the picture a lot.

The houses that are bigger now are being sold to Boomers.

One effect of the Millennials is that they're waiting longer to get their first house so that may show the difference on why the houses aren't being sold as fast as they were in the past.

7/31/17       #10: The Facts ...
Pat Gilbert

Tim

I agree with Dave let's see some backup for your stories.

7/31/17       #11: The Facts ...
cabmaker

Pat,

Four REITs currently own 700 houses in Springhill, Tennessee. While these purchases represent only 5% of the homes owned in Springhill they account for 75% of the rental properties.

The important thing here is to look at trends.

The attached graphic shows houses purchased by Wall Street firms over a five year period.

What do you think this dot pattern will look like in five more years?


View higher quality, full size image (2200 X 1676)

7/31/17       #12: The Facts ...
Bill

How do you sleep at night? Agree with the statement earlier. More work less internet.

7/31/17       #13: The Facts ...
Alan F. Member

You can still buy buggy whips at a premium, the low end farmer is now using a Ford so he doesn't need one.
I assume all the commodity makers ate each other or closed their doors.

But the premium buggy whip is still available under a new name.

Where to buy a buggy whip

7/31/17       #14: The Facts ...
cabmaker

Alan,

I like that! I am thinking of creating an iphone app that is very similar to the buggy whip.

Step 1 is to ascertain the nationality of the workers in front of you. Step 2 you click on an icon of the flag from whence they come.

As you snap the phone at them it will say "Faster Fu*ker" in the language that they speak. At the Platinum level it will offer the plural form of "Faster Fu*ker" if there is more than one worker.

7/31/17       #15: The Facts ...
Alan F. Member

You just need to add it to apple car play and android auto maps. Then you could say okay Google or Siri, please reroute the FF in front of me onto surface streets.

Whatever the Google ladies name is (I call her Miss Google) she reroutes me based on current traffic and I love it. Love that Android Auto.

7/31/17       #16: The Facts ...
Larry

I don't have any idea how many houses are out there but it would take trillions to capture even a small % of the market.

7/31/17       #17: The Facts ...
Pat Gilbert

Recently the Census Bureau reported that 610,000 new homes were sold and the year over year growth came in at 9.1%.

8/1/17       #18: The Facts ...
Mark B Member

They are buying in prime rental locations where they can scoff up properties and rent them for less that people can purchase for or where you have a transient population that is not willing to purchase and re-sell for the short time they will be in the location.

They are not buying up properties on-mass. There are countless markets where they simply will never be able to be profitable renting single family homes (the rent will far and away exceed their profits as well as what an individual can purchase for).

This whole scenario may be a boondoggle for shops like ours that are in rural/unattractive areas for the goons and when people decide to make a shift to permanence we will be the places they will land.

The country has a diverse demographic and siting the goons snatching up properties in profitable single family rent regions is far from a blanket for the entire country.

If you live in one of those regions, I feel for you. Move.

8/1/17       #19: The Facts ...
Pat Gilbert

The demand for rentals will go down as millennials start buying houses.

I predict that we have seen the peak, or close to it, of rental prices.

8/2/17       #20: The Facts ...
DS

Not sure if this is relevant to this topic, but it might be a fun little game. Without looking up on Zillow or the like, have a guess how much this house is worth.

https://www.google.com/maps/place/10607+NE+14th+St,+Bellevue,+WA+98004/@
47.6231066,-122.2001305,745m/data=!3m2!1e3!4b1!4m5!3m4!1s0x54906c8d8a2bb353:0xf82
ec3990d80370a!8m2!3d47.6230767!4d-122.1979223?hl=en

This city block is likely one of the most valuable pieces of undeveloped real estate on the west coast. If you built this house in the 1960's, you're a multi-millionaire.

8/3/17       #21: The Facts ...
Pat Gilbert

Why would it be worth more than a million or so?

8/3/17       #22: The Facts ...
DS

just zoom back on Google earth to see what's a few blocks to the south. We're doing a home about a block from that one, the owner's paid 2 million for 2 homes, tore them down and are building a 4 million dollar home on the 2 lots. There's a builder in that neighborhood buying houses for a million plus and letting the occupants stay there for as long as they like, until they move or become deceased (they wouldn't sell otherwise). Plus, it's zoned to allow for office or high-rise condominiums.


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