The wealthy have never had it so good. (capitalism, credit, debt)

[texdav]

I think what many homebuyers want is to not have to compete so as to lower prices to the disadvantage of those that actually own the home. They don't want anyone in those bidding wars that can increase the price. Kind of a no competition clause.

[8 SNAKE]

Originally Posted by texdav

I think what many homebuyers want is to not have to compete so as to lower prices to the disadvantage of those that actually own the home. They don't want anyone in those bidding wars that can increase the price. Kind of a no competition clause.

Of course they do. No buyer in his/her right mind wants more demand on the item that is being sought. Conversely, every seller wants as many potential buyers as possible. That's basic supply and demand.

[chuck22b]

Originally Posted by 8 SNAKE

It isn't an opinion. Look at the available inventory in those areas that you mentioned (NV, FL). You will find that inventory still exceeds demand.

Ah man, 8 SNAKE, there are so many variables here that can be contentious... the "investors" may be able to snatch up the "better" properties prior to the normal buyers, etc., etc.

CA inventory has been in the 6 month range for some time. Even dataquick says that investor activity has picked up quite a bit in these markets.

Anyhow, what can't be refuted is that the new rules favor investors. Even Fannie admits so - which in turn means that it is less favorable for normal buyers.

Originally Posted by texdav

I think what many homebuyers want is to not have to compete so as to lower prices to the disadvantage of those that actually own the home. They don't want anyone in those bidding wars that can increase the price. Kind of a no competition clause.

I'm actually a home owner... but the no rental income clause rules out a lot of people who have the incomes and could previously buy a rental to compete with previous investors/wealthy.

It's not about competition. If the price is "right" (sorry about the cliche)... buyers will come and compete. It's about who can compete and how competition is skewed through regulation. If rules were set back to how they were pre-bubble, then there wouldn't be any new favoritism for investors or homeowners or buyers. Then the market will find a price bottom faster. As it is, the rules favor investors at the expense of regular home buyers and current homeowners that want to buy another home.

-chuck22b

[8 SNAKE]

Originally Posted by chuck22b

Ah man, 8 SNAKE, there are so many variables here that can be contentious... the "investors" may be able to snatch up the "better" properties prior to the normal buyers, etc., etc.

The highest price takes the prize. As a seller, I don't care if you are a homeowner, investor or something else. I care if your check clears the bank.

Originally Posted by chuck22b

CA inventory has been in the 6 month range for some time. Even dataquick says that investor activity has picked up quite a bit in these markets.

I agree that investor activity has picked up in many areas. That still doesn't mean that the average home buyer is missing out.

Originally Posted by chuck22b

Anyhow, what can't be refuted is that the new rules favor investors. Even Fannie admits so - which in turn means that it is less favorable for normal buyers.

Fannie wants investors to come back into the market to reduce the excess inventory. That doesn't mean that the average home buyer is left out in the cold.

[davidt1]

Originally Posted by Stac2007

Just like during the depression the wealthiest individuals are seeing this period as an opportunity to buy real-estate at very low prices. Thousands of homes are being auctioned off so low that many of them are being purchased at 40% to 50% of their original value. The middle class might be disappearing but the nation's wealthiest persons just made a killing.

They always have made a killing in good and bad times. Hence the phrase, "it takes money to make money."

Here is a list of the 20 wealthiest Americans. You can expand this list to 400. Almost all of them acquire their wealth through stock ownership by being CEO and upper management of their companies -- stocks they pay little or nothing for. Keep in mind that in the stock market game, there have to be a buyer and seller for a transaction to take place. So for CEOs to sell their stocks, there have to be buyers. Who have been taking stocks off the CEOs' hands? Mutual funds, especially, 401K backed mutual funds. When the market declines, the CEOs have paper losses because they never paid for the stocks. The little guys, the employee who participate in 401K, suffer real losses because they paid for their stocks out of their paycheck.

Winner: CEOS;
Losers: little guys.

The 400 Richest Americans sorted by Rank - Forbes.com


Now let's look your point about discount real estate. Sure the rich benefit in several ways by having more money. We all know it's been difficult to borrow money from banks. If you have millions, you don't need to borrow money. You can buy with your own money while the little guys can't borrow and therefore can't buy. A guy with $10M can buy more properties than a guy with $500K. He stands to make more money.

Winner: rich guys
Loser: little guys

Hence another phrase "the rich just get richer"

[8 SNAKE]

Originally Posted by chuck22b

I'm actually a home owner... but the no rental income clause rules out a lot of people who have the incomes and could previously buy a rental to compete with previous investors/wealthy.

It's not about competition. If the price is "right" (sorry about the cliche)... buyers will come and compete. It's about who can compete and how competition is skewed through regulation. If rules were set back to how they were pre-bubble, then there wouldn't be any new favoritism for investors or homeowners or buyers. Then the market will find a price bottom faster. As it is, the rules favor investors at the expense of regular home buyers and current homeowners that want to buy another home.

You're mincing terms, here. In the scenario that you describe, you want to become an investor. You've got a home, but you want to acquire another one as an investment. To do so, you need to show rental income so that a bank will loan you the money. That is much, much different than a homeowner shopping for a place to live (which is what we've been discussing).

[chuck22b]

Originally Posted by 8 SNAKE

The highest price takes the prize. As a seller, I don't care if you are a homeowner, investor or something else. I care if your check clears the bank.

I agree that investor activity has picked up in many areas. That still doesn't mean that the average home buyer is missing out.

Fannie wants investors to come back into the market to reduce the excess inventory. That doesn't mean that the average home buyer is left out in the cold.

I never said any of that, of course the highest price wins. Of course competition will find the market price.

All I'm saying is rules favoring investors give merit for dissatisfaction between the classes. As by favoring one group over another reduces the opportunity for another group.

That is ALL that I said from the get go.

-chuck22b

[8 SNAKE]

Originally Posted by chuck22b

All I'm saying is rules favoring investors give merit for dissatisfaction between the classes.

You still have yet to show me how an investor has a more favorable circumstance than an average home buyer.

[chuck22b]

Originally Posted by 8 SNAKE

You still have yet to show me how an investor has a more favorable circumstance than an average home buyer.

I'll lay it out one more time...

A) They are allowed to buy more units than before
B) Rules have been tightened higher than pre-bubble limits. Therefore favoring those with higher levels of capital than before.
C) Rental Incomes have been excluded while pre-bubble they were allowed
D) Favor multi-unit housing units.

And the most straight forward answer:
Because Fannie and Freddie "favor" investors.

If you ease lending requirements for one, while making it more stricter for the other... then guess what? That's favoritism? Unless you have another definition?

-chuck22b

[Mathguy]

Some of the blanket comments and *analysis* (Like the gem where the guy investing less money should somehow get a higher rate of return...) are pretty interesting.

I am astounded at how many people have strong opinions on things like this when they obviously lack even basic financial education. It's like going to a football game and having some guy sitting next to you cheering his favorite goalie to kick a homerun!