Lets discuss the story that BlackRock is purchasing entire neighborhoods for 20-50% over asking, funded by the federal reserve, and using your tax dollars to buy real estate – Enjoy! Add me on Instagram: GPStephan
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Here are my thoughts on the current state of the housing market, housing inventory, and the future of the real estate market in 2021.
So, basically…here’s what’s actually going on.
It’s understandable that people are ANGRY, and it’s easy to blame a faceless, nameless wall street corporation as the root cause…but, truth be told…you want to know who’s driving up the housing prices? It’s literally EVERYONE looking to buy a house, incentive to own real estate because interest rates are really, really cheap. That’s it.
Think about it RATIONALLY…for a giant company like BlackRock, taking the time to compete with 20 offers in random residential neighborhoods across the country would be logistical nightmare. For them, it DOESN’T MAKE SENSE, and in order to make a profit – they need to operate within the economy of scale, and have the infrastructure already setup and running in order to make offers, keep properties leased, and make repairs. They aren’t sending handymen out from city to city fixing leaky sinks…
Instead, institutional investors are WAY more likely to DEVELOP THEIR OWN subdivisions IN SCALE, PURPOSELY BUILT to be rented out as a long term investment. This way, they keep the profit margins to themselves, they pay significantly less than it would cost to build each home individually across the US, and they can maintain quality control from start to finish. If anything, they’re HELPING add more inventory to the market, and taken AWAY the burden of a housing shortage that’s plaguing the entire country.
The Urban Institute also argued that “there really isn’t any evidence in our research that institutional investors led to higher rents or greater eviction rates for our sample of counties tracked through the recovery.” meaning…institutional buyers are NOT the ones responsible for the current state of the housing market.
I would bet that, instead…it’s every day, ordinary home buyers who are paying over asking because they want to lock in a rate, knowing that – historically – real estate does well if inflation begins to increase.
ALL SOURCES:
Fundrise Buying The Neighborhood For $32 Million Dollars:
https://fundrise.com/investor-update/518/view
Financial Samurai Article:
https://www.financialsamurai.com/institutional-real-estate-investors/
Investor Sales:
https://www.marketplace.org/2021/04/13/institutional-investors-are-stiff-competition-homebuyers/
https://www.realestateconsulting.com/the-light-200-companies-revolutionizing-housing/
2018 & 2019 Housing Report:
https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/
The Impact Of Single Family Home Buying:
https://ideas.repec.org/a/gam/jsoctx/v8y2018i4p93-d171162.html
CoreLogic Survey:
https://www.corelogic.com/intelligence/special-report-investor-home-buying/
Federal Reserve Survey:
https://www.federalreserve.gov/econresdata/feds/2015/files/2015084pap.pdf
Redfin On Cash Buyers:
https://www.redfin.com/news/all-cash-home-purchases-smallest-share-since-2007/
Institutional Buyers:
https://www.rentalhomecouncil.org/wp-content/uploads/2021/04/SFR-Get-the-Facts.pdf
BlackRock on Federal Reserve:
https://www.reuters.com/article/uk-usa-fed-blackrock/blackrock-conflicts-managed-extremely-carefully-feds-powell-says-idUKKCN24U38E?edition-redirect=in
New Housing Stats:
https://fred.stlouisfed.org/series/RHORUSQ156N
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https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
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What a clown. This guy's evidence that black rock will play by the rules is literally quotes from the fucking federal reserve. The most untrustworthy non government entity in the country. He just skims over all the areas of obvious cooperate/government overlap. Hey Graham, historically when large corporations get in bed with the government or even worse the federal reserve, is it to help the American people? And do they usually come out squeaky clean? This dummy trusts people who actively want to destroy the Middle class. Also, I'm sure big business and black rock had nothing to do with the crash right? They definitely didn't push for loans that they knew would default and financially support politicians who pushed that agenda and then scoop the properties up for pennies on the dollar right? What a corporate shill.
Wonderful overdue. Rents too high
Bro Black Rock and Vanguard own pretty much everything. They own most companies and they were buying a lot of homes during this time.
Love the sense of humor
Graham, can you address the difference between black rock and black stone? Someone was telling me you have it wrong and that it is actually black stone that is doing the alleged scandal buying. Black stone was a company that broke off of black rock. I have no idea and would love your opinion on it.
I think its hard to tell. Zillow for example doesn't buy off the MLS. I think they often resell to larger investment companies and probably has a good volume for investors. But you are probably right that the sky isn't falling because of blackrock.
If your going to spew corporate wallstreet propaganda your not worth listening to or watching
Important note about reporting:
If you don't know its validity, assume it's false. It's fine to entertain the possibility of that information being true, as long as you tell your audience that its validity is at best unknown.
Heyy I live in that big state called Texas
I love that he's comfortable joking like that. X-D
How is anyone able to afford a apartment and save up to buy a house… just wondering here single dad making 50k a year 🤔it hasn't been easy since most of my income goes to rent
Vox is the biggest pile of rubbish there is. All their articles are insanely angled.
This put my mind at ease.
that was seriously interesting and well put together. very convincing
My home is up 100K in the last year. Absolutely insane time to own a home if you had it 12+ months ago. Prices will not be dropping any time soon.
Love the "endless stream of money" gif. Also, first time watching: Did Mr. Stephan get his real estate license when he was 7? : D
Graham "however investors do make up 20% of all low cost housing sales"
Bro, THAT IS THE PROBLEM!
Those low cost homes that need fixed up are what USED to be called "starter homes". If investors take those off the market and all we're left with is higher end homes and rentals……those investors basically destroyed the American dream for your average buyer.
Say you’re getting sponsored by black rock , without saying you’re getting sponsored by black rock.
That was a good joke to end
Also, given that these institutions usually have the resources to build homes in new areas this also decreases the likelihood of people building for homes in lower cost areas as what's left is usually the high cost, close to hand locations.