Comment by lazide

Comment by lazide 4 days ago

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People aren’t “buying up homes for investing so that prices of homes go up and people can’t afford homes.”

That may be an aggregate and long term effect, but i’ve never seen anyone actually motivated by something like that.

At least not statistically.

People with excess money (often dentists, doctors, middle managers, small business owners, etc), who don’t trust stocks or the banks, are buying houses because they think they can rent them to people for cashflow in the future (aka not have to eat dogfood!), or rent them out now to other people for money. People that otherwise couldn’t be in these houses, or those people would be buying them instead.

Aka put their money to work.

IMO, people doing that right now are going to lose their shirts, but that is risk/reward. I could be wildly wrong.

kelipso 4 days ago

I am not saying it’s their motivation, but it is the end result. And since that is the end result, it is immoral.

I’m sure every person and corporation has some reason for buying homes in excess, but it’s still wrong because homes and land are limited resources that people need to live.

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blindriver 4 days ago

Why do you think they will lose their shirts

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  • potato3732842 4 days ago

    When everyone gets sick of it and votes for punitive taxes on residential property that is not owner occupied.

    I would prefer they deregulate the living shit out of constructing additional housing so all the small money can get into that (i.e. something productive instead of literal rent seeking) instead but I am not hopeful.

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    • dboreham 4 days ago

      This has happened in places like Scotland but I doubt it'll happen in the US. And if it did, courts would strike the law on the grounds "can't take property".

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      • potato3732842 3 days ago

        I am not nearly as hopeful as you.

        First, states like RI are already making incremental steps toward it (they have started taxing non owner occupied non rented properties above a threshold, mainly to get the billionares with fancy waterfront vacation real estate to either live in the places or rent them out). It's only a matter of moving that stuff down the economic ladder.

        Second, all the "people oughta hang for this" quality legal precedent that enables. If you own a parcel and the government passes a bunch of laws saying you can't do things to the parcel going forward without jumping through economic non-starter sized hoops is that not a taking? They're basically forcing you to sell out to a developer big enough to jump through the hoops like in that supreme court case, only instead of a named developer it's basically a class of developers. And that's considered "not a taking". Straight up taxation is even less of a taking by comparison.

        I'd be much more in favor of the taxation if it weren't for all the laws preventing small time land owners and speculators from developing on a scale and budget that befits them but if new punitive taxes get passed without rolling back all sorts of other regulation it's probably very bad for them.

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  • lazide 3 days ago

    At some point the number of vacancies (for renting) causes enough cash flow issues people go bankrupt, or the number of non-investor buyers drops enough that it’s clear it’s just an investor bubble and investment value tanks.

    Real estate always goes through these cycles.

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