I seriously have been scratching my head for the past year wondering what in the bloody hell is going on in the real state market. You see, people are supposed to be out of money, people are not paying their mortgage, their rent, and yet the prices keep on going up.
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Call me an insider
I may not have renewed my real state license in a few years now, but I know how the game is played. I know how the market "discovers" pricing, and how the banks usually work their loans.
It's because I was a participant in said game, that I can honestly tell you: things don't add up. They simply don't.
More so because most of the purchases are being done in cold hard cash, no financing involved, and if that's not weird, then I got a bridge to sell you too.
Some digging
As you might imagine, I've been looking around. I want to understand who is buying up homes these days. Yes, there is some refi going on, but that's not what I'm worried about at all.
As it turns out, it's very, very scary. You see, what is happening right now is a recipe for disaster, and I have no idea why it's not being talked about enough.
The market is overheated, homes are too expensive to make any sense, and there is no real buyers per say. Yes, they are being sold, but not to people, to companies.
As if companies taking homes is not scary enough, that's not even the worse of it. These companies are not using "their money" to buy the homes, they are using yours.
What ya mean?
Well, it's real simple. Private-equity groups, hedge funds and mutual funds (people's retirement money) are buying up homes. Why? Well, because they are speculating of course, but also because they probably are counting on the government bailing them out if they fail.
The latter might make you think that this is not an issue, since the "good government" will keep us safe, but that's not at all how it works.
You see, if these private corporations own a huge chunk of homes, they also control markets, thus destroying the idea of free markets all together. Monopolies my friend, I'm talking about monopolies.
So we are fooked?
Seems like it, to be honest here. I don't see how this is not just a power grab bubble designed to destroy the middle class. I mean, how else is this going to play out.
It's a 2008 but with a twist. They found the way to rig the game yet again, and nobody will go to jail, yet again.
This is such an interesting time to be alive.
MenO
Very interesting. Which area are you talking about?
Big companies know the US dollar's days are numbered - they are not fools.
The more advanced ones are going into BTC and ETH in a big way while others are looking for more traditional stores of value.
Residential property is generally considered a safe haven against currency debasement and collapse because people always need somewhere to live.
Although the US's fertility has dropped a lot over the last decade and long term there will be less people needing homes.
But currency collapse will very likely occur on a much shorter timeframe than demographic collapse so owning homes and renting them out is probably still a good medium term bet.
Currency debasement has been causing the prices of all assets that seem a better store of value to skyrocket and its getting worse as the end of the current fiat system nears.
This sounds like part of the Great Reset to me... "You'll own nothing, and you'll be happy..."
Your reason wouldn't come as a surprise. The housing market in my city is stupid, and I can't see many reasons to stay or want to move in. But what are you basing your idea on?
To me the inevitable jump in inflation is like a tsunami, coming for us but still offshore. I figure the strong market is people with cash (individuals or institutions) trying to stake down their wealth so it's not washed away.
check out this reporting.
there's more than enough evidence out there of this.