Yep as they should be. That’s why you have to be willling to walk away if they try their tricks. they know most people won’t pack up the house for 100/mo
Sure but these people aren’t happy with 6-7% returns. So the party is over unless they corner the entire market and control rents over the nation. Likely a wet dream for them. And highly possible if they’re not stopped with the amount of cash they control.
That’s why rates needed to go higher so their other investments dropped as well and p/e came back to a historically normal number. With markets at an all time high so is their power.
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They also include “estimated appreciation” to pad their numbers, so the big bold percentage return estimate was quite attractive 
For people with too much money who don’t understand real estate, I can see buying in to “diversify” their portfolio. Since I’m in that world, I scratched the surface of their proposal numbers and the only people getting rich off that is - you guessed it - the institutions owning/managing the properties.
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At least 2 other posters in this thread have commented how low overall inventory is. It’s certainly not “on the high end historically” as you claimed
That’s anecdotal. In my area, for sale signs are way lower than when they were during the 2005 peak and even during the 2010 uptick. Please post a chart that shows overall inventory of US homes are on the high end, every one I see does not indicate that.
Jim: Please explain this to me. It would seem that 10% rates would only favor investors or rich consumers as they could buy homes without having to finance. Why would corporations put their homes on the market if they financed at lower rates and because there are less buyers, the rental pool is stronger thus driving income toward their rental stock.
Portfolio loans are arms that adjust every 5 years or so. So if they had 10 mill at 3% and it goes to 9-10% their costs just rose drastically. With pricing high they would likely sell the asset and cash out as rents couldn’t support that 9-10% rate. If lots of inventory hit the market at once pricing would drop. It’s easier to qualify for these loans which is why they’re used. They don’t look at dti but dcsr.
Sure you could buy housing in cash, but if your returns are only 5-6%, why not buy tbills at 10%? Unless you’re purely speculating on appreciation then investing in sfr wouldn’t make sense, as it doesn’t now even at current rates in most markets. Or they would find other investments that have better returns. There’s always going to be a point where high enough rates will bring down housing prices. We didn’t seem to get there. Or if we did it didn’t stay there long enough. I believe they hit 8% but dropped back into the 6s soon after.
The other issue keeping the market high is the amount of new people coming into the country. I’m not gonna get political about that but it is a factor as they need housing too, and that will further hurt supply. Lots of slumlords are currently taking advantage of that situation I’m sure and doing so in violation of zoning laws. Many places you can not have more then 3 unrelated people living in one unit.
Everything that could go wrong with housing is currently happening at once and it’s really going to hurt the next generation. Home ownership is the number 1 way the middle class builds net worth (and stability) and its median cost shouldn’t exceed median income. I don’t have the data but I’m willing to bet this is the first time that has ever happened. Theres really no solution except changing zoning codes. Commercial property changing to residential would be a start. Allowing more multi family housing would help as well, but many neighborhoods would oppose that.
Affordable housing should be priority #1 in this country and it’s rarely mentioned.
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Ahh… you were referring to corps that had ARMs on their inventory. I would think that when rates were low they would have converted those to fixed but unsure if that’s something that is done.
I totally agree about affordability. I couldn’t imagine trying to get a starter home in my area… even 2br condos start at $700k+ and 2br SFRs are over $1m (and these are older properties).
For all the reasons said before, along with a statement such as this, i’m done engaging with you. You don’t have a grasp of any of these issues and apparently have no real world experience with real estate as well.
Who’s buying this? Looks like a good deal for such a big lot
Buy and flip - house down the block going for $8 mill
https://www.zillow.com/homedetails/2028-Deerfield-Rd-Water-Mill-NY-11976/32724223_zpid/
The only problem is when NY needs to raise money all it takes is one budget cycle to force a change in the valuation metrics and suddenly you have to appeal and tell them why your house isn’t worth what you paid for it. Happening all over upstate, and even for folks in Southampton and other HNW w/ low population density areas, 20-30k a year in property taxes on 1 mil in value is repulsive. Other places where you can surround yourself with affluence get more attractive the higher the taxes go up here.
I’d take that caddy in the driveway!
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South Florida is 2% tax also and can’t use the schools! No state income tax though so a plus there.
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Nothing nice about that house at all IMO, other than the pool and the lot.
My initial impression (of the exterior) was it reminds me of a renovated 1970’s-1980’s hotel. I wasn’t far off. 
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forget the house – its the lot and area – house needs to be demolished and rebuilt
Know what a rebuild in that area costs? Carrying costs etc. if it was worth it someone there would have bought it fast. Plenty of sharks looking for easy money in NY. There’s no deals anymore unless you do volume rentals in Kansas. Very few and far between in desirable markets. Get lucky and steal something off an estate or dementia granny.
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Eh dementia granny prob not the best move - really interesting article
https://www.wsj.com/style/neumann-family-art-collection-feud-basquiat-44555db7
Read that the other day! But no one cares when it’s a few 100k. Happens all the time in real estate. Plus many have no heirs. Sad
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People I know do high end rebuilds on the west coast. Rebuilds aren’t a typical flip- takes couple years easily to get zoning changes, permits, etc. a lot can change with the market in a couple years so the risk/reward can insane (at least compared to the dollars I deal with)
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That is crazy. Working with a multi-year timeframe, you would almost HAVE to have a higher end (i.e. higher dollar) project. Otherwise, I would assume that the margin just isn’t there.
I know one of our more local investors has been getting into property, mostly large apartment complexes. down in Alabama. His early COVID project was purchasing a retired hospital and revamping into apartments. I don’t know how the guy sleeps at night. 
I’ haven’t heard much on Kansas yet.
Then you have my mother & stepfather who closed on a Nashville condo last month. Great location to invest in IMO, as that market has exploded these past years and seems to continue to do so. They do seem to never lose with their choices, but man. 
So what’s the verdict? Is current overall inventory low or high?
It’s low in my area and seems lower than the norm in other areas but I keep getting told I don’t know what I’m talking about so someone (else) educate me.
This is important because if you follow @Jrouleau426 's chart… the inventory numbers tells you the story of what rates and inventory do to pricing.