“Real estate CEOs must `learn to live’ with lower sales, say resistant buyers”.
The amount I can pay each month hasn’t changed drastically. If interest payments to my credit union go up, then the principal payments I can make to a seller have go down. The price I can pay is less than it was a couple of years ago. That means your commissions will be dropping, too, Mr. Liniger. You’ll just have to live with it.
Sellers will have to learn to live with price discovery based on mortgages governed by wage income. You’ll still have some volume driven by older folks with various equity (home or stocks) but less investor driven acquisitions with the risk free rate beating out cap rates. Wage earners buying will eventually drag prices down, it’s just going to take time and be painful. Lots of people don’t want to sell and lose their Goldilocks rate, but those who must sell (death, divorce, relo, etc) will contribute to (hopefully downward trajectory) comps.
1.8 million people over the age of 55 die every year in the US, and there are about 650k divorces every year. These are potential price discovery opportunities in the real estate market. (Excuse the morbidity)
Political spin isn’t needed here. The debt and wealth gap are both increasing exponentially regardless of who is in office. When Trump was in office you could have flipped the parties and made the same statement.
I guess my deeper point is, someone could make a law - you can only max own 2 homes, after 3rd home and thereafter, taxes go through the roof for capital gain.
Having homes as a speculative investment is a great way to have an entire generation having low home ownership.
And I agree, both sides are equally worse.
With colleges, homes, healthcare, daycares, food becoming so expensive, the effects will be huge but we’ll feel it decades later
I mean what do you want to do with companies that work by owning (or ...) 200 homes and renting them out? There's a LOT of these, responsible for a big part of the rental market.
Economic systems are systems of dividing up stuff. Capitalism and communism, and everything in between change who gets which housing. They cannot solve housing shortages.
They (obviously) do not change the quantity of housing without the government at least allowing large housing developments.
There are rental multi family units and single family homes.
Dense multi family units - companies can go crazy building and renting them out.
Single family homes is a special American dream. Having them subject to rent seeking greed is not great.
It’s along the same lines of cities saying - in this zones you can’t have Airbnb short term rentals, in this zone primary home owners or second home rentals only, in this zone go crazy capitalistic do whatever you want.
I honestly don’t care about billionaires. But if they are taking a huge pie away from finite resources like livable land/housing, then that is a problem.
Focusing on income inequality or giving free money as universal income is wrong way to look at it.
We just need a healthy distribution of finite resources that yield supply of basic needs.
Needs being Food, water, electricity, internet, housing, clothing, transport, electricity, healthcare etc.
Price gouging of utilities is restricted, no reason why we can’t encourage building more homes and ensuring a healthy gradient of distribution.
Sure they do. If his real estate company closes a lower dollar volume of deals, because money that would’ve been going to sellers is now going to banks as interest, then its stock is likely to go down.
This is largely a zero-sum game: if the bank is taking more money out of the transaction, sellers (and their agents who work for a percentage of the selling price) will be taking less. It’s not like buyers can magically afford to pay the same principal as before plus new higher interest rates.
This assumes that most people spend the absolute most they can afford for their home purchase. The question is going to be how often is that actually the case?
More often than not? That's why auto dealerships talk about the monthly payment not the sale price. A majority of Americans are consistently maxed out on all types of debt with Covid resetting that a bit but those savings are rapidly depleting.
The amount I can pay each month hasn’t changed drastically. If interest payments to my credit union go up, then the principal payments I can make to a seller have go down. The price I can pay is less than it was a couple of years ago. That means your commissions will be dropping, too, Mr. Liniger. You’ll just have to live with it.