The path we’re on right now is one where the window is closing on home ownership. Private equity, hedge funds, corporations and the wealthy get to own homes and everyone else gets to rent them. Those already owning will be grandfathered in, and a select few will climb out of the lower castes to achieve home ownership.
Once it’s basically impossible to buy a home for most people, rents will chew up a bigger and bigger percentage of income and basically chew up all wage growth by pacing it.
It’s the most efficient way to suck wealth away from the middle class and below, and fuck if our late stage capitalism isn’t kicking ass in finding the best ways to do that.
Yeah, the walmart model for homebuilding is something I thought was coming for a long time here. One or two small corporations owning all the property in the country sounds about right. The only dark consolation is it’s going ot squeeze out the medium and even relatively larger landowners as well.
Yeah private equity is buying a lot of houses but I think this view is way off the truth. Real estate is still specific to local markets and there hasn’t really been any trend toward a national “winner take all” market dynamic nor are there such obvious supply chain economies of scale as we have in retail. There’s also no evidence of small mom and pop landlords (much less mid size) being pushed out of local market due to larger competitors.
It’s very likely that more attractive interest rates in the bond markets slow this process of increasing corporate ownership of houses. Private capital buying houses may have been something of a response to stocks being overvalued, bond having poor rates, and basically what some were calling the “there is no alterative” investment climate of long term zero interest rates. Surprise private equity found a good alternative after all. As a long term trend, owning and managing real estate is probably not all that attractive in an environment where bonds are paying 5-10%
This is also happening but I see it as a parallel course to the skyrocketing cost of home ownership. High home prices and interest rates shouldn’t encourage more investment.
I agree with the general concept. One thing that will make residential home ownership attractive for the absolute worst capitalist vultures is that once they attain a critical mass they will apply their monopolistic powers in absolutely devastating ways. Real estate developers are already bad enough when it comes to leaning on municipal regulators to approve dubious exemptions from city rules, but a world where ghoulish hedge fund types are setting municipal zoning regulations and city policy will be much worse. American neighborhoods are already unlivable disasters but hedge fund bros will find ways to make them much, much worse.
I think the opposite. The local nature of real estate regulations will be an anti monopolistic force. There may be some municipalities that fall to regulatory capture, but the same tactics that work in one place won’t work in each local market and a lot of towns and small cities will use local government to fight back against assholes who don’t live there buying a bunch of real estate and jacking up rents or trying to evict grandmas.
2008 but with a red hot job market sounds like it might be… ok? Like even if Unemployment rises a few points, most people should still be employed and inflation should come under control? I guess that’s the best case scenario. The people who will get hurt the most in that scenario are not the working/middle class.
Im very very skeptical the job market is going to hold in if we hit a fairly deep recession and expect little to no help from Washington on the fiscal policy front for those that are laid off barring a hail mary Dem House win.
I also think there’s a material chance that the latest student loan relief is going to get tossed out in the courts and people are going to get student loan payment loads shoved back on right as the economy hits the shitter and while real wage growth is anemic-to-negative.
Just not at all convinced the less well off skate through this.
One other thing, state budgets are in fairly good shape now, but pensions have taken a hit and have a big illiquid mark down coming. If 2023 looks like this in the market , then states with pension obligations are going to start becoming a further drag on aggregate demand and employment figures as budgets will come under pressure.
I mean they pushed the working class to the breaking point in good times. There’s no way to get blood from a turnip. The workers are already at the point where if it gets one iota worse they start opting out entirely or organizing.
Anecdotally the amount of people seeking bankruptcies or bankruptcy consultations is already skyrocketing. From the start of Covid through about now bankruptcy volume in my district has been down about 40% or so due mostly to all the Covid relief stuff. Suddenly this fall it’s back to pre-covid levels at least.
Rising interest rates plus inflation is already hammering the middle class and below who often have lots of adjustable rate debt and/or who have needed to take on new debt in the most recent period. A huge percentage of people live paycheck to paycheck and instead of cutting back(if they even could) it seems like people are just borrowing money to pay the increases in price of stuff like rent, gas and food. Mix in even moderately higher unemployment and things are going to get bad fast imo.
It’s also the same with evictions as it is with zoning and permitting boards or whatever regulations there are. Maybe my perspective is different from growing up in a really small town and then living in big cities and not experiencing much in between but the way I see it, the local Sheriff is an elected politician in most of the USA. There’s always a money aspect but if these guys are seen kicking grandmas or long time residents out of homes owned by some Canadian private equity investors who jacked up the rent after the people had lived there for years, then I could see that playing badly in small town elections and the Sheriff may just choose to not do it or drag the process out forever.