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It all makes sense. The wages of the common American are deflating and as a consequence housing prices should be falling as well based 100 years of data trends. Instead the government in collusion with the banksters are keeping the prices propped up and we see why now. They want a rentier class in order to put them in more debt and extract more wealth from them.
Glad you posted that. Meant to mention that Harvard study. "The Rent Is Too Damned High" | Zero Hedge
quote:
“Cost-burdened” means you’re paying more than 30 percent of income for housing and “severely cost-burdened” means you’re paying more than half. “By 2011, 28 percent of renters paid more than half their incomes for housing, bringing the number with severe cost burdens up by 2.5 million in just four years, to 11.3 million,” according to the Harvard study, which was conducted with partial funding from the MacArthur Foundation.
Look at the map of states in this article and notice from my other article post via OS, the states.
quote:
Blackstone's bonds were backed by rents from more than 3,200 houses located primarily in Florida, California, Arizona and Georgia, the company said this week. The group owns about 40,000 homes across the United States, including 1,255 in the four-county Orlando market, according to a new report by the RealtyTrac research company.
Apparently, Blackstone has felt the need to defend and explain what it is doing. Interesting breakdown. People really need to understand how the economy and markets work and the massive affects institutional investments are having on everyone.
quote:
Following widespread discussion of the impact that Wall Street investors (gorging on the Fed's free-money extravaganza) have had on home prices, today's final straw for Blackstone appears to be the New York Times' editorial suggesting/blaming them (and others) for driving up the prices of single family homes and reducing the supply of affordable housing for first-time home owners. Blackstone decided to hit back with some of its own version of real estate truthiness via its' blog and why it is "proud of what it is doing in the housing market." So here are the six reasons that Blackstone believes laying the blame for housing bubble 2.0 at their (them being Wall Street) feet is wrong (and a few short responses to their perspective).
Government put this in motion, tried to fix it and failed.....as usual.
People are profit driven.
It is part of our evolution.
The free market will always outsmart government.
This is not free market. We don't have that. You need to look at who those institutional investors are. All stocks are about 70% institutionally held, according to 2010 data.
quote:
With up to 30% of all home sales in some markets going to funds that have been notable for buying with cash at the asking price, it is not hard to conclude that the big funds are driving up prices.
....
In the past twelve months, Blackstone has raised over $8 billion to buy up medium- and low-priced housing, while JP Morgan has initiated a fund to buy up to 5,000 homes. Morgan Stanley has raised a billion dollars to buy up to 10,000 homes.
If it strikes you as odd that the big banks would be bailed out by the taxpayers and then turn around and use that same money to buy homes to then rent back to those same taxpayers, then we hold the same view.
....
In the past twelve months, Blackstone has raised over $8 billion to buy up medium- and low-priced housing, while JP Morgan has initiated a fund to buy up to 5,000 homes. Morgan Stanley has raised a billion dollars to buy up to 10,000 homes.
.... If it strikes you as odd that the big banks would be bailed out by the taxpayers and then turn around and use that same money to buy homes to then rent back to those same taxpayers, then we hold the same view.
It all makes sense. The wages of the common American are deflating and as a consequence housing prices should be falling as well based 100 years of data trends. Instead the government in collusion with the banksters are keeping the prices propped up and we see why now. They want a rentier class in order to put them in more debt and extract more wealth from them.
And their targets are the Millenials, but they are too brainwashed to realize it.
It all makes sense. The wages of the common American are deflating and as a consequence housing prices should be falling as well based 100 years of data trends. Instead the government in collusion with the banksters are keeping the prices propped up and we see why now. They want a rentier class in order to put them in more debt and extract more wealth from them.
Glad you posted that. Meant to mention that Harvard study. "The Rent Is Too Damned High" | Zero Hedge
quote:
“Cost-burdened” means you’re paying more than 30 percent of income for housing and “severely cost-burdened” means you’re paying more than half. “By 2011, 28 percent of renters paid more than half their incomes for housing, bringing the number with severe cost burdens up by 2.5 million in just four years, to 11.3 million,” according to the Harvard study, which was conducted with partial funding from the MacArthur Foundation.
Look at the map of states in this article and notice from my other article post via OS, the states.
quote:
Blackstone's bonds were backed by rents from more than 3,200 houses located primarily in Florida, California, Arizona and Georgia, the company said this week. The group owns about 40,000 homes across the United States, including 1,255 in the four-county Orlando market, according to a new report by the RealtyTrac research company.
Most of the properties Blackstone is buying are bought at auction, sight unseen. Not all bank owned properties are sold at auction. There are reasons why an asset manager will decide to auction instead of listing the property in the MLS, including but not limited to regional gluts, condition and occupancy by squatters. These factors rarely appeal to first time buyers. Most of these properties would not qualify for financing.
This is not free market. We don't have that. You need to look at who those institutional investors are. All stocks are about 70% institutionally held, according to 2010 data.
quote:
With up to 30% of all home sales in some markets going to funds that have been notable for buying with cash at the asking price, it is not hard to conclude that the big funds are driving up prices.
....
In the past twelve months, Blackstone has raised over $8 billion to buy up medium- and low-priced housing, while JP Morgan has initiated a fund to buy up to 5,000 homes. Morgan Stanley has raised a billion dollars to buy up to 10,000 homes.
If it strikes you as odd that the big banks would be bailed out by the taxpayers and then turn around and use that same money to buy homes to then rent back to those same taxpayers, then we hold the same view.
....
In the past twelve months, Blackstone has raised over $8 billion to buy up medium- and low-priced housing, while JP Morgan has initiated a fund to buy up to 5,000 homes. Morgan Stanley has raised a billion dollars to buy up to 10,000 homes.
.... If it strikes you as odd that the big banks would be bailed out by the taxpayers and then turn around and use that same money to buy homes to then rent back to those same taxpayers, then we hold the same view.
Blackstone did not receive a bail out. The others have repaid those loans. The percentage of properties that have been acquired by investment bankers is rather insignificant, albeit concentrated in areas that experienced more foreclosures than others.
Most of the properties Blackstone is buying are bought at auction, sight unseen. Not all bank owned properties are sold at auction. There are reasons why an asset manager will decide to auction instead of listing the property in the MLS, including but not limited to regional gluts, condition and occupancy by squatters. These factors rarely appeal to first time buyers. Most of these properties would not qualify for financing.
Yes, the link I posted makes this clear. However, this does affect pricing.
quote:
Of course I had been tracking this phenomenon for a while. But I had not been aware that Salt Lake City had been one of the targets, so I asked him how the deals worked there. Apparently, the hedge funds make "full ask" price offers, sight unseen and without conditions (such as inspections and the like), for whole baskets of available properties, typically in the middle to lower price ranges.
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