Bulk Buyers Driving Up Home Prices And Rental Rates (Sarasota: bank owned, short sale)

[ClearSkyView]

Wondermint2 posted a link to this article yesterday and I see it didn't draw any comments yet.
I felt compelled to post the link again.
Investment firms snap up southwest Florida homes | HeraldTribune.com

[coastal chic]

The papers flip flop so fast about the housing market, it's ridiculous. Of however many houses these investors have purchased, they found a few that were significantly higher than the last person paid. So what? Anyone purchasing a home right now is paying more than a person did at the bottom.

And we have no idea what the last buyer did to the house after they purchased it so low the last time. For all I know, they were bank owned run downs that needed tons of work. Maybe the previous buyer did the work, then flipped it. I would expect someone to make money. Otherwise it wouldn't be worth the hassle.

And, remember, the county assessments only adjust once a year. If you can buy a house at county appraised value, you're getting a steal.

There isn't going to be another boom anytime soon. Everything has just been UNDERvalued for so long, things are now adjusting back to realistic prices.

[d4g4m]

There are also listing of homes purchased during the bubble where people are attempting to sell at their purchase price, minus what they put down and any principle reduction, just so the sale won't be a short sale. But the asking price is still $40,000 more than what the house is worth.

[touretteboy65]

Originally Posted by ClearSkyView

Wondermint2 posted a link to this article yesterday and I see it didn't draw any comments yet.
I felt compelled to post the link again.
Investment firms snap up southwest Florida homes | HeraldTribune.com

My reason for giving up on buying a home in the Sarasota market. Garbage homes going for sky high prices. I got raked over the coals for voicing my opinion a few weeks ago by some die hard Sarasotians who are out of touch with reality. For whatever reason, these folks things it's just dandy to pay nearly $300K for a dump of a home and put an additional $100K in upgrades and repairs because, well, it'll be such a steal! Whatever. Good luck.

[Cardiff by the Sea]

This post is not intended to defend the notion that prices are a steal. It is to point out that there are many factors to consider.

Interest rates are at a record low. The payment on a house whose price has run up may be reasonable because of the interest rates. The price on the house is just a number. The amount of the payment--that is real money.

The price difference between what you are selling and what you are buying matters. We could ride the current appreciation wave here in California for a couple of years and get much more for our current home (bought in 2007) which is now back to what we paid for it. But if we did that, how much more would we have to pay for a comparable place buying a few years from now. And what would interest rates be then?

The long term matters. We own a property that was our family home for 17 years. It seemed obscenely expensive when we bought in 1990. It dropped 20% in value immediately after we bought it and stayed there for years. Now it is worth 300%-400% of what we paid for it.

One of my favorite real estate maxims is "get where everyone else is going first". The migration patterns are out of old population centers and to Florida and Texas.

This is not to lambast you. It is just to point out that buying and selling are complex decisions with many factors.

[bbronston]

I will add that it is a free country (mostly) and these companies are free to do what they wish as long as it is legal. I have A LOT of trouble believing that these companies are consistently over-paying for properties as part of their business model but, even if they are, that's their right. I'd prefer to not see prices inflate rapidly but that is what a free market is all about.

[touretteboy65]

Originally Posted by bbronston

I will add that it is a free country (mostly) and these companies are free to do what they wish as long as it is legal. I have A LOT of trouble believing that these companies are consistently over-paying for properties as part of their business model but, even if they are, that's their right. I'd prefer to not see prices inflate rapidly but that is what a free market is all about.

That kind of thinking nearly brought down this nation's economy several years ago. Just because it's "legal" and involves the "free market" doesn't make it right, let alone, ethical. I get where you're coming from, but don't agree to it. Greed corrupts; greed destroys.

[bbronston]

Originally Posted by touretteboy65

That kind of thinking nearly brought down this nation's economy several years ago. Just because it's "legal" and involves the "free market" doesn't make it right, let alone, ethical. I get where you're coming from, but don't agree to it. Greed corrupts; greed destroys.

It was not free markets that brought down the economy. It was bad regulation that allowed abuses and poor decisions. I realize that we are talking about two sides of the same coin to a certain extent but this article seems to be raising an alarm that, in itself, should not be alarming, IMHO. Think of it this way...would you want to see laws that limit the number of properties an individual or company can own? Would you want to see laws that regulate the prices of properties or the amount of profit that can be made on the sale of a property? I would hope that you would say no to these.

[gypsychic]

Originally Posted by Cardiff by the Sea

This post is not intended to defend the notion that prices are a steal. It is to point out that there are many factors to consider.

Interest rates are at a record low. The payment on a house whose price has run up may be reasonable because of the interest rates. The price on the house is just a number. The amount of the payment--that is real money.

The price difference between what you are selling and what you are buying matters. We could ride the current appreciation wave here in California for a couple of years and get much more for our current home (bought in 2007) which is now back to what we paid for it. But if we did that, how much more would we have to pay for a comparable place buying a few years from now. And what would interest rates be then?

The long term matters. We own a property that was our family home for 17 years. It seemed obscenely expensive when we bought in 1990. It dropped 20% in value immediately after we bought it and stayed there for years. Now it is worth 300%-400% of what we paid for it.

One of my favorite real estate maxims is "get where everyone else is going first". The migration patterns are out of old population centers and to Florida and Texas.

This is not to lambast you. It is just to point out that buying and selling are complex decisions with many factors.

I agree with all the points you made. It really is all relative, at the end of the day. A lot of people just don't get the "big picture."

[wondermint2]

Blackstone (and the others) are not doing this to become long term landlords. They have no real experience in the landlord business and once interest rates start to rise (within a few years) - they will all bail out en masse. This is when the real problems will begin....