Investors Buy 25% of SFR

I don’t know about you guys, but I get unsolicited offers to buy my home all the time.

Investors bought nearly a quarter of U.S. single-family homes that sold last year, often driving up rents for suburban families in the process.

The issue is especially acute in some Sun Belt states amid evidence that investors often can outbid other buyers, keeping starter homes out of the hands of would-be owners, especially suburban Black and Hispanic families. Some local officials in those states are pushing for increased regulation of investor purchases, but many Republican lawmakers oppose such controls.

https://www.pewtrusts.org/en/research-and-analysis/blogs/sta…

2 Likes

I’m undecided whether to FA this post due to politics.

Next time, leave the politics out!
Wendy

I don’t know about you guys, but I get unsolicited offers to buy my home all the time.

Me too, and what makes it even more annoying is that the home in question was sold more than ten years ago.

2 Likes

I’m undecided whether to FA this post due to politics.

Next time, leave the politics out!
Wendy

Gotcha. I didn’t really notice the political aspect. If you’d like, you can FA it and I can modify and repost. I think it is fairly innocuous though.

So, without taking sides, the problem is best analogue by the price of Broadway Show ticket prices. When I was growing up, tickets to Broadway shows were within the budget of average blue-collar wage earners - secretaries, stock clerks, etc. Each year the theatres showed a wide variety of new shows and the experience was available to most residents of the City.

The problem was that the Broadway area had become exceedingly “seedy”. Streetwalkers openly plied their trade along the streets, peep shows and porn theatres dotted the area and, frankly, it was a bit unsafe to walk there at night.

SO, New York City, in partnership with the theatre industry, cracked down and cleaned up thee area.

Nowadays, the streets are lined with Disney souvenir shops, M&M shops and assorted tourist restaurants.

A large number of the plays filling the theatres became multi-year events (Lion King, Les Misérables, Phantom, etc.) and revivals. Having actors with recognized names from the movies became a staple. The selection of shows became a function of business rather than art. Marketing for them became world-wide and it became “mandatory” for every tourist to see at least one Broadway show when visiting NYC.

And the theatres have discovered that, if they turned their ticket sales over to firms like Ticketmaster, their computer programs would maximize revenues/profits.

Nowadays, ticket prices running into the hundreds of dollars are the norm and the local population has a rough time scraping together enough shekels to buy a ticket. Sure, there are sources like TKTS, rush seats, lotteries and so on, butt they rarely work for hot shows and frankly, there are comparatively few really new shows as the producers squeeze money out of the blockbusters year after year.

So, rather than being the philosophical center of NYC for its residents, Times Square has become a tourist Mecca, which NY’ers, unless they have business there, tend to avoid because the rube tourists, and those who prey on them, are nearly as annoying as the hookers and peep shows that used to fill the neighborhood and the theatres in their own city have become too expensive for most NY’ers to patronize.

Jeff
(Who has more than “broken even” by flying to London and “binge-watching” the same shows on the West End for a fraction of their costs in New York)

2 Likes

I don’t know about you guys, but I get unsolicited offers to buy my home all the time.

Out of curiosity, I reached out to one of these when considering selling our rental. I had quite the honest conversation with the guy who admitted that yes, they would be low balling on the price and it probably wouldn’t be for us. Rather it was for those who didn’t want to put the work into getting the house ready for sale or find their own agent. This investor was pleasant to speak with, openly and honestly answering my questions and not trying to sell me something I didn’t need. YMMV.

I follow our real estate market pretty thoroughly, and noticed what seemed a trend of the elderly falling for these direct marketers, selling their home for what appeared to be around 50 cents on the dollar. Sure, some work got done on the place, but they were amply rewarded when a house they bought for $250K and put at most $50K into then sold for $550K. The house without the improvement would have sold for $450K easily. I suspect it is an issue of the elderly not realizing how much their property had appreciated.

As far as regulating to preserve the ability of people to buy properties as primary residences, the solution is pretty simple…charge a higher property tax rate for non-primary residence purchases and put the extra taxes towards affordable housing. Eliminate some of the federal tax breaks for investment real estate. The tax benefits of owning rentals are skewed heavily towards landlords.

FWIW,

IP

7 Likes