Bubble watch: Investors are 51% of Southern California’s homebuying surge

Was at an open house this weekend.
I spent some time talking to the agent afterwards. He told me he had done a house the previous day with an insane number of visitors. At one point a family of 10 shoved themselves into the living room to form a prayer circle in the hopes of getting it. It's mad

Bring on the comments saying how this is not such a big deal and we really have to just build more homes. They are both a part of the problem. We need homes going to families and not investors if supply is so low. The corporate ass kissing is unreal in this sub for home investors putting families on the street due to greed. We need serious regulations to restrict home buying to only people who will use it as a primary home. This is unsustainable as is.

“These weren’t fixer-uppers, by the way, as the typical sales price for these deals was $898,000.” I definitely toured a fixer upper for this price a month ago.

My business has been about 75% investment clients since 2019. I don't like doing business this way and would prefer it otherwise but that's what it's like right now.

I sincerely hope to see the days when I can handover keys to real homebuyers again.

Good luck. Wages will not catch up with inflation. When the rates increase they won't be able to borrow like before.

It's so depressing....just looked at a 650 sq.foot condo for $700,000 with a $600 HOA fee.

The same market forces that allow homeownership to build wealth for the middle class allow corporations to build wealth for shareholders. Depending on appreciating home prices to substitute for a real social safety net is always going to help a small slice of people win out at the expense of everyone else.

Headline is misleading. The portion of purchases estimated to be investors is up to 17% this summer, from 14% last year. They’re nowhere near half the total purchase, they just account for “half of the increase”.

Funny how California is always regarded as a liberal state. Not seeing a lot of that in the housing market. Would like to see some actual liberal policies that help the average family out. The saving grace might just be that eventually there will be many more renters than owners which should hopefully allow the public to claw back some of the gains.

Wait until corporations own all the housing. Imagine the bargaining leverage debt peasants will have when losing your job means losing your family’s healthcare + home?

Something else I should point out, is that a big surge of these investment buyers, they started flooding in after covid rent relief started being a thing. Landlords and private owners still had mortgages to pay, utilities, taxes, their own bills and with their tenants not having to pay anything, they had no income. Selling their assets was the only solution for them. The investors buying them up had the resources to take a short term loss for the long term gain. That wasn't the case for the property owners who had to sell.

Where is this 51% number coming from? They cited 17% of buyers as investors. Also what % of sellers are investors? And what are investors doing with this inventory? If this is just an increase in house fix&flip companies, then I don’t think this is what’s causing the price spike.

To be clear: the price spike is real and not good.

Just to clarify, this does not mean that 51% of all home purchases in Southern California are by Investors. That number is more around 18-20% or so (in Los Angeles, 19.1% of home purchases in Q3 2021 were made by investors).

I can't wait for 2008 part 2. Fuck every "home investor" driving up prices

The math is pretty simple. Low fixed interest rates and frozen property taxes. And with every house you buy, supply is reduced. Socal's mild climate also means upkeep costs are probably the lowest in the country.

You repeal prop 13 and that equation begins to change. In addition, you rewrite zoning laws and streamline building approvals to tackle supply. The more expensive it is to hold property that they're building more of, the less incentive there will be for investors.

This is the first time I've seen them call it at "5 bubbles." It might be an interesting 2022.

Revise Prop 13 so the maximum annual increase for tax valuation is capped at inflation or 8%, whichever is higher, for all non-primary residences. Of course it should never be higher than the market value. For primary residences, cap it 5%.

What we need is more affordable for-sale housing. The more rental units we build, the more we become slaves to these mega multi-billion dollar corporations that essentially have all of us staying in long term hotels. Homeownership is a great way for families to invest their money and also to build equity.

This needs to be highly regulated - it really should be outlawed, actually. This type of investing practice during an inflationary period during an ongoing housing crisis amidst a global pandemic… but they gotta keep their retirement funds growing. And the pensions, too. Once they opened all of that up to private equity, it was game over.

This will all crash again, let’s just hope this time the people do things French Bastille style instead of bailing all the pigs out with our own money.

So these guys are basically house scalpers right? Buying up tons of homes because they have huge capital and can pay cash/​waive appraisals/​whatever they need to sweeten the deal. Then they turn around and sell them to us with inflated prices since they own the whole neighborhood.

Am I understanding this?

made an offer a week ago, and was told buyer received 25 offers total, and 15 of them are higher than mine. Back to saving money🥴

Investors are the plague. Unfortunately they come in with all cash offers and sometimes close in less than 20 days. For the seller it’s a no brained. I think the tide is changing though, couple of my friend turned down an investors offer and sold their homes to a family that was much more deserving.

Why is this not regulated. It is messing up middle class and lower class housing needs

I don’t understand what the long term plan is- are they buying and holding to rent out? Or are they trying to flip?

Houses Are For People. If politicians start running on this they’ll get elected.