February 20, 2013

Some reality about the housing market

Mike Whitney, Counterpunch - The banks are deliberately keeping the majority of distressed homes “off market” in order to keep prices artificially high, fleece another generation of credulous buyers, and effect the appearance of a revitalised and soaring housing market...

Even so, it looks like John Q Public has swallowed this latest load of public relations malarkey judging by data that shows that sales of new and existing homes are gaining pace. Ahh, but looks can be deceiving. A closer inspection of the data suggests that it’s not Mr. Public who’s buying all those homes, but deep-pocket speculators who’ve piled into the market seeking short-term gains. Check this out from Bloomberg:
“Transactions involving investors jumped 75 percent in November from a year earlier in 25 metropolitan areas tracked by Radar Logic Inc. It’s a market that could total 12 million homes, JP Morgan analysts led by Anthony Paolone wrote in a note last month.

Blackstone, the largest U.S. private real estate owner and the only firm with more homes than Hughes, has spent $3 billion on rentals, Jonathan Gray, Blackstone’s global head of real estate said today at a Credit Suisse Financial Services Forum in Miami. Blackstone said last month it spent $2.7 billion on 17,000 properties, accelerating purchases as prices rose faster than anticipated…

The New York-based firm, which started buying single-family houses last year, has bought so quickly it’s “warehousing” more than half of the inventory as it completes purchases, renovates and rents the properties, Gray said in January…

Whether the single-family rental market grows from “a $10 to $20 billion market to a $100 to $200 billion market” will depend “on how successfully institutional investors are able to execute over the next few years,” Bordia said.”

1 comment:

Anonymous said...

I wonder how those "institutional investors" would feel if non-owner-occupied housing were suddenly socialised.

That's the real solution to housing problems: make them a right of citizenship.

Likewise food, healthcare, edu, and work.

It's going to have to happen if we intend to continue as a species - Capitalism is destroying Earth's habitability, and the only way out is to get rid of it and start reducing the human population by post-partum sterilisation. If we wait for Nature to do it, we won't be part of the picture after.