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Source: Yahoo Finance

Category: Real Estate, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

19 Responses to “This Housing Recovery Is Different: Big Investors Are the Buyers”

  1. Mike in Nola says:

    Robert Shiller says we’re living in a totally artificial real estate economy

    Just another consequence of Bernanke’s cheap money policy which produces rising housing, food and energy prices, but, according to him, not inflation.

  2. hammerandtong2001 says:

    Big investors?

    I guess they think that any margin achieved on rental income will more than cover maintenace and upkeep? And that increasing housing value/price will more than cover total outlays? Just wait until the house needs a new roof.

    I dunno. On a “personal investor basis,” I think this can work on a sweat equity basis, and there can be some pretty nice tax dedcuions. But at scale?


  3. stonedwino says:

    Smoke and recover mirrors basically…this will not have a positive outcome either. Proof that the housing market recovery is a charade. Until incomes rise and inequality is squashed, we will not see a real recovery in the housing market or for that fact a real recovery on Main Street.

  4. moobycow says:

    There are a lot of potential problems with the amount of RE investors now in the market, but that was an inane segment. There’s a reason that there are a lot of companies that exist to manage properties, because it is lucrative at scale. You probably won’t be pulling in huge margins, but it doesn’t appear most of the new players are looking to pull in huge margins, they are looking for relatively steady cash flow and RE makes great sense as a yield play. If you don’t need your capital back the chances are that real estate will be a good play.

    Where this becomes tricky is it is really hard to sort out how many of these new players will want their capital back in the short term or if rates start to rise and they think they can get better yield elsewhere.

  5. MikeNY says:

    Word, stonedwino.

    Welcome to the Potemkin economy.

  6. AHodge says:

    if you pass on the latest bubble flavor,or avoid housing cause its not a “real” investment you will miss out this whole recovery will have major bubble aspects or you can sit and wait for a real fundamentals based investment
    good luck with that!
    just dont be too late getting out


    BR: Your advice is to Jump On & Off before the bubbole pops?

    • AHodge says:

      of course
      what is there to invest in thse days but bubble
      the extreme version being your TBTF or my recent bad timing Fannie
      if you stayed out of the bubble so far you probably missed more than half its eventual run
      to the next business cycle peak

      this aint “jumping”necessarily
      you might want to be in years till the economic peak
      i would not advise anyone but a trader to trade the coming end of QE for example

  7. cowboyinthejungle says:

    I cannot speak to RE investing at a large scale, but having been initially forced into the role of landlord, I have come to appreciate this asset at least as much as any other. For a lowly wage-serf, the cashflow, tangibility, and relative stability of value are an appealing set of positives. Will prices crash again? Probably. But as with equities, how relevant these crashes are depends on the timeframe involved. In fact, if the market tanks again, it’s more likely I’d add to our real estate position, rather than liquidate.

    • BuildingCom says:

      That’s great but the reality is nothing cash flows at current asking prices because they’re so massively inflated.

  8. AHodge says:

    there is still a business cycle, and the market will likely continue it to follow it
    you can cyclically time that a la zaulauf and ” jump off”
    even with no “bubble” or not much–grey area
    still a good rule even if the recovery is massively third world style bubble enhanced
    that make sense?

  9. wally says:

    Oh, I think housing is recovering at the consumer level… no reason to keep looking for excuses that it is not. Builders are building again, people are shopping, asking prices are rising. “Recovering” never means “all the way back”; it means exactly what it says.

  10. louis says:

    Me- “Hello I’m calling about my new neighbor who seems to have a chicken farm in the backyard and has 5 cars parked on his lawn.”

    Hoa- ” That’s odd, we gave him the rules, let me call the owner.”

    Me- ” Who’s the owner?”

    Hoa- ” Let’s see, it say’s someone named Blackrock, no first name? I’ll get back to you.”

  11. BennyProfane says:

    I predict a new set of laws written soon to protect the renters of single family homes from the ever growing new landlord class. Well, not if the Republicans are writing them.

  12. sureseam says:

    So the bigger the investor the more credible they are and the more likely to be right.

    Let’s see how that plays in the gold market; so then, when do central banks buy heavily and when do they sell heavily – at the worst possible times.

    Maybe these investors have it right – there has been a correction of sorts. Hard to call.

  13. Apinak says:

    So, the obscenely wealthy destroy the economy, we lose our jobs, we bail them out, they foreclose on our house, they then use our bailout money to buy our house cheap, and then we rent our houses from them?

    Does anyone else find this new form of serfdom disturbing?

    • eliz says:

      Short answer: Yes.

      The new America: “Of the banksters, by the banksters, and for the banksters.” “The Small People” (and their businesses) be damned.

  14. Joe Friday says:

    NICOLAS RETSINAS, Harvard Business School, on the PBS Newshour:

    “Foreclosures have slowed dramatically over the last year. Banks are worried about getting sued. They’re being much more careful. They’re much more aggressive with loan modifications.

    But lest we forget, there are three million households who are either seriously delinquent or started a foreclosure process. At some point, the pig is going to get out of that python. And when it does, it will add to inventory. And when that happens, we will see a price – the price increases will start to moderate substantially.”

  15. rd says:

    Interesting little column here on how difficult it is to predict which mortgages will default:

    However, I think they miss a couple of important things here with respect to mortgage investing:

    1. FICO, debt-income etc. don’t measure the likelihood that somebody will lose their job or have a serious illness after you give them a mortgage.
    2. The purpose of a decent loan to value ratio is not really to prevent default, but to make sure you can get your money back if they do default and you foreclose.Although it will give the homeowner more skin in the game unless he is underwater.
    3. Even an 80% loan to value ratio won’t cover you if the housing prices tank 30% or more because of a housing bubble.

    It looks to me like somebody is trying to come up with an apologia that high rates of foreclosure and losses are not forecastable.