I have assembled relevant material to bring Aussies up to speed on the incredible drive by the financial elites of Wall Street to buy up American homes. The quest is to make people renters. This, by definition, is a return to feudalism, but with all the worst elements of modern global capitalism, which has in turn, like an evil virus, also absorbed the worst elements of communism as well, to create a living hell at the end of days, neo-Feudalism. I suppose endings are seldom pleasant, and the ending of the West will be traumatic, miserable, pitiful. Those with eyes wide open, see it unfolding now. We all report it, daily at this blog, doing our Cassandra best to issue warnings.
“Major investment firms are buying up thousands of homes, and sometimes entire neighborhoods, across the country and turning them into single-family rental houses as the housing market experiences a major boom.
More than 200 companies and investment firms like BlackRock and J.P. Morgan Asset Management are canvassing the United States in search of such homes, according to John Burns Real Estate Consulting. Many of these companies are competing with families and individual investors alike for homes.
Florida and Texas are ground zero for these kinds of house hunts, according to Ryan Dezember, a Wall Street Journal reporter and author of "Underwater: How Our American Dream of Homeownership Became a Nightmare."
"One in every five houses will be bought by someone who will never move in, meaning an investor of some sort," Dezember told the Sinclair Broadcast Group, referring to areas in the West and in parts of the South. "That's going to be some sort of rental owner, somebody who's more likely to pay cash."
Institutional investors have accounted for 24% of home purchases in Houston, according to John Burns Real Estate Consulting.
Institutional operators owned about 300,000 single-family units in 2019, according to Laurie Goodman, vice president for housing finance policy at the Urban Institute. There are roughly 15 million one-unit detached single-family rental homes in the country, compared to 80 million homes total in the U.S.
Goodman says institutional investors were an important part of the market shortly after the last housing market collapse in 2008. The last housing boom between 2004 and 2005 was fueled by loose lending, which could only go on provided home prices continued to increase.
Eventually, the market tanked, wiping out $11 trillion in household wealth. Financiers eventually jumped into the market in 2011 and began buying up foreclosed homes at steep discounts. They made up the bulk of the market after banking regulations made it more difficult for individuals homebuyers to secure a mortgage.
Institutional investors “grew up in 2010-2013 buying distressed properties that no one else would buy and in fact put a floor on the market, so they provided a very, very valuable service and they basically cleaned up the distressed market, a lot of which required repairs,” Goodman told Vox.
“A bidding war broke out this winter at a new subdivision north of Houston. But the prize this time was the entire subdivision, not just a single suburban house, illustrating the rise of big investors as a potent new force in the U.S. housing market.
D.R. Horton Inc. built 124 houses in Conroe, Texas, rented them out and then put the whole community, Amber Pines at Fosters Ridge, on the block. A Who’s Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals.
The country’s most prolific home builder booked roughly twice what it typically makes selling houses to the middle class—an encouraging debut in the business of selling entire neighborhoods to investors.
“We certainly wouldn’t expect every single-family community we sell to sell at a 50% gross margin,” the builder’s finance chief, Bill Wheat, said at a recent investor conference.
From individuals with smartphones and a few thousand dollars to pensions and private-equity firms with billions, yield-chasing investors are snapping up single-family houses to rent out or flip. They are competing for houses with ordinary Americans, who are armed with the cheapest mortgage financing ever, and driving up home prices.”
https://www.financialsamurai.com/institutional-real-estate-investors/
https://www.corporateletscompany.co.uk/lloyds-bank-plans-to-become-private-landlord
https://nypost.com/2020/07/18/corporations-are-buying-houses-robbing-families-of-american-dream/amp/
“One morning in 2012, Phoenix real-estate developer Geoff Jacobs was playing golf when he got a surprising phone call.
One of his employees, trying to bid on a house they wanted at auction, told him the price had reached their agreed-upon ceiling of $85,000 — a rare occurrence, since they usually snagged the homes they wanted without competition.
Jacobs told his employee to go up to $87,000. But the price kept rising.
“The price jumped to $90,000. Then $95,000. The home wound up selling for about $100,000,” writes Ryan Dezember in his new book, “Underwater: How Our American Dream of Homeownership Became a Nightmare” (Thomas Dunne Books), out now.
“Jacobs was bewildered. Who was this aggressive bidder? By the end of the day, he had a name. The bidder was from an outfit called Invitation Homes.”
Invitation Homes, it turned out, was owned by Blackstone Group, the world’s largest real-estate investor. Created after a company called Treehouse Group was folded into Blackstone, then renamed in 2012, Invitation Homes was on a $10 billion spree, purchasing $150 million worth of houses per week.
“At an auction in Sacramento, a house flipper named Ryan Heck was bewildered by a bidder who bought every house that hit the block,” Dezember writes, noting that the bidder went one dollar over every other bid until the other bidders conceded.
“Neither Heck nor the other regulars recognized the dollar-over guy. It turned out he was with an out-of-town concern called Treehouse and had instructions to buy everything that cost less than what it would cost to build a similar house. Every house auctioned that day fit the bill.”
Moving forward, Heck tried to compete, sometimes even peeking over other bidders’ shoulders to “run the dollar-over routine on them.” But he was outmatched.
“He had a handful of cashier’s checks,” Dezember writes. “The new guys had duffle bags full.”
‘Underwater” describes how, in the wake of the 2008 financial crisis, corporations began buying suburban houses en masse and then renting them out, often for more than residents would have otherwise paid in rent or mortgage.
This has become so common that, while the phenomenon “didn’t exist a decade ago,” corporations bought one out of every 10 suburban homes sold in 2018.
Corporate homeownership can not only subject tenants to higher living costs, but often destroys their ability to buy these homes themselves, as companies pay top dollar to take them off the market.
As a result, America is quickly becoming a renter nation.
“Between 2006 and 2016, when the homeownership rate fell to its lowest level in fifty years, the number of renters grew by about a quarter,” Dezember writes.
While he notes that companies own around 300,000 US homes so far, this is just the tip of the iceberg, as they’re wealthy enough to buy, and tech-savvy enough to manage, “multiples more” with “ruthless efficiency.”
These companies aren’t just depriving potential homeowners of a place to call their own, he writes: they’re destroying the ability for thousands of middle-class American families to accumulate wealth.
“Home-price appreciation has historically been how Americans achieve financial prosperity,” Dezember writes. “Unlike stocks and bonds, ownership of which is concentrated at the top, houses are widely held. Roughly half of housing wealth is owned by America’s middle class.”
The bonanza really took off in 2011, when Morgan Stanley issued a report called “A Rentership Society.” With over 1.6 million foreclosed homes in the United States and more on the way, the report forecast “a surge in the number of renters and a potentially massive opportunity for investors to convert the glut of repossessed homes into rental properties.”
America’s investment managers were all in. By 2012, “more than $1 billion had been raised by investors for the purpose of doing just that. Some of the biggest names in finance were hoarding houses.”
Individual investors were soon mostly gone or absorbed into larger companies with investors like Warren Buffett, KKR of “Barbarians at the Gate” fame, and investment behemoth The Carlyle Group. Heck himself wound up joining American Homes 4 Rent, which was founded by billionaire self-storage magnate B. Wayne Hughes, and would own about 48,000 houses by the end of 2016. There is even a lobbying organization, the National Rental Home Council, to look after their interests in the government, such as defeating rent-control laws.
As the industry grew, foreclosure auctions in certain cities became major affairs. The first Tuesday of every month is auction day throughout Georgia, and corporate homebuyers fly in “for what was known among investors as Super Tuesday.”
“Heck and others of B. Wayne’s bidders would gather at a Sheraton Hotel the evening before, and divvy up $20 million or so of cashiers checks,” Dezember writes.
Their mission was to buy homes near good schools that families would feel comfortable in, nothing older than 20 years or smaller than three bedrooms and two bathrooms.
The industry’s ideal buyer was well-defined. Dezember notes that a company called Progress Residential, which owned around 20,000 homes, sought to provide “an aspirational living experience to tenants who were typically about 38 years old and married, with a child or two, annual income of about $88,000, less-than-stellar FICO credit scores around 665, and a hobbling $45,000 of debt. If they wanted to live the middle-class lifestyle to which they were accustomed, they’d have to rent.”
Buying foreclosed homes had its pitfalls, as buyers couldn’t see inside the homes before the purchase. While occasionally they’d get a treat, like marble countertops, often the surprises were more horrific.
“There were wild stories,” Dezember writes. “A corpse in the Carolinas. Basement marijuana farms. A turnover crew that renovated the wrong house in California, surprising a family just back from vacation with a new kitchen and news that their possessions were in a landfill.”
As investors realized the extent of their gold mine, they branched out beyond simply buying foreclosures and hit the open market, competing with everyday homebuyers.”
https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/
Australians are experiencing the same move to dispossession, with the Chinese buy-ups of real estate, but there is something that could be done to control foreign buy-ups, if there was the political will, and the sheeple sat on the pollies, which they are too apathetic to do. Globalist elites, who have US citizenship, but loyalty only to the money power, are even more difficult to control.