Will this housing bubble pop already?

I think it was the New York Times that did an article a few weeks ago about the foreign investment funds that have jumped into the US market. One of the funds has partnered with Lennar or one of the other big builders for this purpose. They are funding entire subdivisions that will be 100% rental from day one.

 

I remember my grandparents in Germany renting all their lives and I asked how much homes were and they were very expensive way back in the 70s-90s. I can’t recall when but I think it was the equivalent of $500k and my parents house was less than $60k at the time.

 

Be careful with that. If the intent is to write down the interest while pulling the cash out, the rules changed a couple of years ago. Unless the money out went to the property/repairs/upgrades, that part of the interest was no longer able to be written off.

 

Ill have to check but I think your thinking of a HELOC. I am doing a complete re-fi and as there is a mortgage attached to the money, there isnt any stipulations for how it can be used, from what I can find.

The HELOC interest deduction did change a few years ago so you have to use it on the house to write that portion of the interest off your taxes.

 

if you think about the situation for just a bit....developers/builders would be happy to pre sell all the product coming out of the ground in one fell swoop...
Investment funds have the cash and the leverage to pull off purchasing the complete inventory of the developer/builder with a built in discount for purchasing the whole deal....
I’m sure the have run their numbers, and if they make 6-8% annually plus management fees they’ll be doing fairly well...
Even if the market falls off a cliff those big players will not get hurt...they’ll just BK the project and move on...
The “blue collar middle class” will be forced into becoming a “rental class” and that’s the end of the “American dream of home ownership”....
I’m in San Diego, and I’m seeing mixed use retail/apartment buildings going up in the coastal areas that are pure junk from a builders point of view...and on top of shitty construction quality, these folks are asking $2,500-$4,000 for 1-2 bedroom apartments in these buildings...

 

Ok, I may have missed the nuance between complete re-finance and HELOC. Mine was a HELOC and my accountant was very emphatic about it & what could count.
Glad you are on top of it.

 

You seem to be assuming these buyers are only putting 10% down on these home buys. There are cash offers and some folks putting 50% down. Some folks have built equity in their current home by paying extra and/or appreciation. Some get $ from mom & dad toward a big down payment on this home or their previous home. Some may have made big bucks in bit coin.
Yeah, some are probably leveraged to the max and eating bologna sandwiches as well.

 

We are selling all of our rental properties. Some have gone to some interesting investors. One group bought a couple of our houses and the driver's license from the buyer was from Israel.

 

from what I have read the common ones are Canada, Israel, UAE, and Ireland.
And don’t misunderstand - I’m not faulting builders for selling in bulk. Their goal is to move units. The faster they sell them the sooner they can build more, and their job is selling units.

 

this thread makes me sad.

 

The Irish Gov. Is attempting to block investment firms from buying up whole/part developments.

 

In Ireland or here in the states? If the former, then it makes sense why the money is flowing here. If the latter is it because they are trying to keep the money in-country?

 

In Ireland.
They'll still be able to buy up apartment/mixed use blocks in and around the cities.

 

Are yours in Louisville by chance?

 

No. Central Indiana. We didn't start the real estate thing until after we left the Louisville area.

 

Gotcha. I knew you spent time in the Ville...just looking for some comps if possible.

 

I follow a few feeds on Telegrahm.

One of the theories are investments firms are moving towards hard tangible assets such as property.

Apparently once the world moves away from the green back the shit is going to hit the fan in the States.

I’d learn how to plant gardens and stock up on the bang bangs.

 

https://www.cnbc.com/2021/06/28/stock-market-futures-open-to-close-news.html

 

We aren't whistling past the graveyard.

We've got a 1.21 gigawatt system in the trunk blasting Winger at 11.

 

people have been saying this since I was a kid. probably long before that, and long after.