Loading ...Been looking for what Fall st has cooked up as the next disaster…..and may have found it.
Housing Market
Even the housing market suffers a dearth of supply.
Private equity, now the largest single holder of single-family residential real estate, has taken a massive supply of homes off the market and converted them to rentals, partly due to the lower cost of capital caused by the manipulation of the Treasury yield curve. Will these investors start to sell down their inventory as rates move higher, or just continue to raise rents, which could create a real political problem?
…one-fourth of the country’s single-family rental homes are now owned by institutional investors, with more than 200,000 families paying their rent to just nine giant Wall Street-backed firms. According to a report by the Harvard Joint Center for Housing Studies, the majority share of all U.S. rental units (52.2 percent) are owned by institutional investors, and the investor-owned share of single-family homes increased by nearly 40% from 2001 to 2015.5 – ACCE
We suspect a populist message from a 2020 presidential candidate railing against the “Wall Street firms, who were bailed out then bought your homes in bankruptcy and are now raising your rents” would resonate with the hoi polloi. Even if it’s true, or not.
In California, rent increases by some of the largest Wall Street landlords have been astronomical. For example, Colony Starwood Homes reported that in Northern California rental renewal rates increased by 9-13%, the largest in the nation. This means that if tenants already living in a Colony Starwood home want to continue to rent, they must pay between 9 to 13% more each year. A survey conducted in early 2017 of Los Angeles County tenants renting from Invitation Homes and Colony Starwood shows consistently high rental increases in the Southern California market as well. Of the 100 tenants surveyed, 77% reported rental increases and the average reported increase was 9% or $171 per month. – KCET
Does “truth” even matter today? It’s only true if you believe it to be true in our postmodern Trumpian era.