Re:Krugman Sees Possible U.S. Recession with Little Fed Wigg...
by pureliquidhw on Monday February 11, 2019 @02:41PM
(#19137554)
Assuming your mother and yourself each have your own residences, your 2 households own 12 properties. Your situation isn't unique. Investors over the past decade went on a massive buying spree that has reduced the pool of affordable, available homes.
Assuming you put down 20k on the 100k homes, you've returned 500%. That is incredible, but also fairly common story from the past few years. "I made it rich with real estate!" "How?" "Easy, buy at a historically low price."
The word is out, it's not a secret to success anymore. There is a pile of money out there waiting to invest in under-priced homes. This drives prices up! Because of this, a recession will not trigger a home price drop.
Property values will likely remain stable/inflated until something happens to break whatever math it is that keeps investors invested. It's the massive stockpile of homes investors gobbled up in 2009-12 that need to be released back to the market. It is a self-perpetuating cycle, people rent a home because home prices are too high due to investor held inventory. Then investors keep renting their asset out because renters don't graduate to buying.
I could be way off, or have missed something obvious, but I don't think real-estate is going to be the big moneymaker form this recession unless something happens to dramatically increase inventory in places with jobs.
Assuming you put down 20k on the 100k homes, you've returned 500%. That is incredible, but also fairly common story from the past few years. "I made it rich with real estate!" "How?" "Easy, buy at a historically low price."
The word is out, it's not a secret to success anymore. There is a pile of money out there waiting to invest in under-priced homes. This drives prices up! Because of this, a recession will not trigger a home price drop.
Property values will likely remain stable/inflated until something happens to break whatever math it is that keeps investors invested. It's the massive stockpile of homes investors gobbled up in 2009-12 that need to be released back to the market. It is a self-perpetuating cycle, people rent a home because home prices are too high due to investor held inventory. Then investors keep renting their asset out because renters don't graduate to buying.
I could be way off, or have missed something obvious, but I don't think real-estate is going to be the big moneymaker form this recession unless something happens to dramatically increase inventory in places with jobs.