Is Wall Street REALLY Buying Up All the Homes?

Black stone is black rock.😅

I live in a Florida town. And Invitation Home is an absolute menace in our area. They overpay for poor quality houses across the town, renting them out for the same prices one would pay for a mortgage while doing feq if any repairs ror renters. The locality of where these companies do aggressive buying has an extreme effect here.

Appreciate the research and hard data. But as for prediction goes, please remember that everyday layman logic does not apply to big corps and wall street. There are operations and deals beyond the visible. it's best be vigilant before it's too late. The gov is having a harder and harder time to find funds to bail out corps or support citizens.

As usual, RFK Jr is madder than a bouquet of wet ferrets. And I was a little surprised to find out how little of the market was under the control of big-ass companies, sounds like they're not yet the main source of the problem. Thank you for being informative.

Online misinformation is so classic. "Blackcap is buying 50% over asking! No you completely confused different numbers. Blackroad has 10T in investments! No thats Blackstone, a completely different company to Blackrock"

No one would be willing to have that much exposure. Even with moderate estimates 50% of US Houses are worth 20+Trillion Dollar's. If Home Values drop 10% that's 2 trillion dollars of loss. Who could absorb that ? The " bright idea " of buying up whole neighborhood's was a huge flop. As soon as buying was detected the cost per square foot shot up making the rest of the neighborhood overpriced and a horrible investment. Homes should as they've always been priced based on how much it would cost to replace them. Any other gauge or measurement is just silly.

Corporations buying a large percentage well over asking price cause smaller groups to bid higher, and residents stuck being underwater to buy an inflated home. Same with the driving rent prices up. It starts with the corporations.

he seems like such a nice guy but you can tell people mixing up blackrock and blackstone just about broke the homie

It is totally unsurprising to me that RFK Jr. is full of crap on this topic. That's pretty on brand for him.

What happens when corperations own entire school districts? They control the supply and price legally .

Great Video! Thanks for using data, nuance, logic and reason to inform your opinions. What a concept!!

I have never heard that it was one company. I have heard exactly what you said that it's multiple investors buying up properties and that it seems to be happening in the states where home prices are going up at the most alarming rates. I also read from NPR and Forbes that Zillow (not Black Rock, Black Stone, Black Guard, Black & Decker, whatever) is now having to sell many of the homes they bought at lower prices than they bought them.

Finally, I just want to point out that before the 2008 housing crisis, there were a lot of people, including reputable news outlets, who were saying there was nothing to worry about with the housing market, that people were being paranoid, and then of course, that individual buyers were the real cause of rising home prices. Then, of course, it turned out it was predatory lenders and investors artificially propping up the market with mortgage backed securities. Given that history, maybe it would be good to... y'know... not lampoon this situation and treat it like it's just a bunch of tinfoil hat wearing conspiracy theorists crying wolf, because it's not. I don't doubt that there is misinformation out there about the exact details of the problem and it may not be entirely caused investors buying up properties, but housing sales are way up, the median home price in California is currently $680,300, and both of these issues are comparable to what we saw in 2007. I have a hard time believing that's the result of individual investors.

Mostly agree with your assessment. BIG but…just because a company like black rock has minority share in a company does not mean it is not involved in the business of buying up properties. Having minority stake gives it voting powers which influence the trajectory of the company they invest in.

If I had billions and I invested in a bunch of companies at say 20% stake, and they are all into buying up property, does that make me not partly responsible for the housing problem?

Question is: why AREN'T these giant equity firms buying up 60% of the single family homes? It's a great investment!

Im eating and everything bagel while watching this and it feels like a crime

idk about wall street, but the bastards who started a real estate business in my very small rural hometown can suck eggs. there are 2 competing moguls who have now bought a large amount of properties and are turning them into rent-only lots. not to mention only creating more suburbs. it's terrible.

The conspiracy that everything is conspiracy is a conspiracy.

Swartzmann goes into it in his book. A good read tbh

Sure, it's way blown out of the proportion right now, but just give it a decade. There's not a single thing that greedy people/corporations won't abuse to their advantage.

I have been watching more of your videos, and I appreciate your well thought out takes on these topics. It's refreshing to see better informed content on this platform and not clickbait short form garbage that is usually in the finance space.

I don't even worry about those haters. RFK is a democrat. Of course he's going to point his finger at everyone except the people who don't know how to increase their income or live within their means.

Can you speak about the predatory practice if trying to buy homes at 35% if fair market value? They prey on people they think might be in financial trouble.

At this point we all need to live in our cars for a year and suddenly a lot of foreclosures should appear and we can actually afford to buy.

I love capitalism, however I am not a fan of corporations buying residential homes and charging astronomical rents so they can take the depreciation to offset gains.

I am a builder. Houses are for families.

There's a lot of inflation, and specifically asset inflation. The stock market being at or near all time highs will of course be reflected in real estate assets as well. More money to go around increases prices everywhere, people. If there is a paper loss with a stock market decrease it will bring real estate down with it. But at these prices and mortgage rates there will be very sticky inflation if something doesn't go down. Housing is a significant cost factor for people, their jobs pay will need to keep up with it, and cheap foreign labor and favorable exchange rates bringing down the price of consumer goods only does so much to help curb inflation. Asset values reflect inflation, and price increases for those assets due to demand for Investments that give a return on equity are stretched very thin with current P/E ratios being so high that a government bond can give you the same earnings per year.

I would like to see a building boom and normalizing of tearing down older homes to build more desirable housing. There are many very cheap downtown-adjacent neighborhoods with homes in many Middle-sized cities, but they are all 1000 sq ft post wwii homes that practically nobody really wants to live in. I guess the issue with this is the trend called "gentrification" in higher population cities, but the real estate these homes are on should be very valuable, but the homes themselves are practically worthless despite being in a prime location.

I mean even the supposed Father of Capitalism, Adam Smith, who coined the term, "The Invisible Hand of the Market" saw landlords as parasites, and rent as undeserved profit. So ban landlording and see how quickly prices decrease as wannabe real estate moguls can no longer afford the mortgages with insane interest rates, insurance, and taxes on their properties, since no one is paying it for them anymore.

That's... Wow. I'm a little mindblown. You flipped my entire economic viewpoint. Thank you.

But it's happening right? Does it matter who is doing it?

A roof over people’s heads should not be treated as a monopoly game by sharks

Nevermind that connection and co ownership by board members...

Here is my idea: we implement a federal property tax. If you have 1 home, no federal property tax. If you have 2 homes you pay 1% tax on all your property. If you have 3 homes, you pay 2% tax on all your properties, and so on.

Someone send this to Hassan so he can do a react video




It would be cinema

Housing shortage aside. Investors look for the most in demand areas, and the most profitable places. Plenty of counties with high paying jobs are gouged by investment corporations. Which forces those affluent buyers into farther away areas, which in turn forces the less affluent farther out and so forth. Its a cascading domino effect, where a bottleneck due to a lack of space is leveraged to hurt everyone but that savvy investor.

Small landlords are the problem.

Thank you so much for your videos, the research and detail you go into on them. There's no way I could have researched these things for myself. As someone who is incredibly pessimistic about the... lets call them "super powerful", having the details and facts is very important to keep my pessimism from shooting me out of reality.

Black Rock/ black stone it's all part of the same multi headed snake...

Who is going to pick up all of those properties once individuals and small companies can no longer afford them? If I wanted to acquire a large position of something I would not do it while the price is high. The greedy small fishes will be eaten by the whales soon enough.

The Plain Bagel is a rat for his masters, whom only allegedly enslaved everyone openly in a well-documented manner because come on, guys, why can't we just be imperialists?

To add on to all of this, companies which build homes (which requires capital) rely on a well-functioning secondary market to sell these homes. If companies were prohibited from entering this market, it would have the negative effect of making it more difficult/costly (I.e. increasing the necessary return) for companies to build new homes.

Attempts to ban institutional home-buying address the effect of the problem rather than the cause, which is (local) zoning regulations and excess bureaucracy crimping supply growth of the U.S. housing market.

Though there could be some benefits, I worry of the negative unintended and unforeseen consequences of such government action.

As someone who writes insurance for quite a few 1-4 family rentals, I see a lot of homes being scooped up for cash. I think you nailed it when you referred to the types of homes being built. Simple 1-2 bed & 1-2 bath homes just aren't being built. To me, it just doesn't seem like it would be profitable for a builder to build these at scale these days. They used to exist 50 years ago but not anymore.

Dude blackrock clackstone purple pebble it's a small group who owns them all they do the divide between companies so wagons like you are like ahh it's not suspicious they split in the 80s yea they did cause their smart they out think the majority of people and if y'all don't start getting REAL news to show it ain't much longer

Do not have a weak mind and don't fall for fear of missing out. Oops too late. Alot of folks needed to hear that mid 2022. Well, what do we expect watching the behaviors during the plandemic

Can't say I blame the Hedge fund Capital firms lol 🤣.. id do the same thing . I don't plan on having kids nor do I won't a home lol. It's a money pit . U got high property taxes on them lol. & Upkeep lol . & Insurance lol.

It's interesting that you mentioned Fundrise and their connection to the build-for-rent industry. I am an investor in Fundrise and thought it strange that they had so many build-for-rent deals in their portfolio, because I had never heard of such developments of single-family homes before. It does make a lot of sense though, especially given a lot of zoning codes that require single-family homes, because it's a lot easier to service your rentals when they're all in the same place as opposed to being scattered all across town and they're all built to your specifications. Our firm does have a couple clients who have managed to buy multiple properties near each other, but it's pretty much impossible to buy up all of them, and even in their case the different history of the different buildings must make it at least slightly harder to service them compared to having them built from scratch to be rented.

It is naive to pretend that blackstone and blackrock are separate entities in reality and also "minority" stakes, publicly known only, are enough with the name behind them to drive actions, bit naive to pretend otherwise that "oh they just hold the puppet strings on this specific case" but meanwhile everyone knows that pissing them off inevitably yields worse financial outcomes in other areas where they invest which is pretty much everything else you can think of. We are discussing facts so thats fair but it is also naive to pretend these public facts account for the reality of the human influence factor in all the "backdoor" dealings.

Absolutely LOVE your shows. Decoding what is "really" going on adds immense amount of value.

As soon as I'm re-employed given being laid off currently, we'll get you that adult beverage!

Keep up the awesome work.

Richard fails to acknowledge in his summary that the point of this proposed law is to stop a predictable outcome . Maybe he lacks the foresight to tell what's going to happen in a market where competition disappears as fast as the middle class. Perhaps he's not bright enough to put 2 and 2 together when it comes to who will hoover up properties in future recessions.

Hey Richard, do you think laws should be put in place to prevent inequity? Or should we wait for the financial devastation to occur first and then go back to try to remedy the issue after it's far too late?

A lot of developers are pushing towards build-to-rent models, especially in the UK, as a way to maintain ownership of strategic land, and secure a reliable income. This is where the property will never go on sale, the developer will get a property management company to run the development for them, and the rent income will pay back the debt.

However, with recent changes to interest rates, these long and slow investments are much less viable, as is all property investing. I imagine a long slow down period with property prices maintaining value, but not growing, alongside a collapse of new home building without significant government subsidies.