OfflineRobert Shiller, recent winner of a Nobel Prize in Economics, points out that the view that all markets are efficient simply is not the case with housing. With the government massively subsidizing housing for the “regular buyer,” the expectation is that many of these regular wage-earning middle income people will buy homes and the economy will prosper. However, the result has been the opposite, with big banks and major institutional and investment buyers scooping up millions of homes as rental investments.
Home prices have been rising across the country, and the median home price is approaching its high before the market crash. This isn’t considered sustainable, with low levels of new construction being one reason cited. Builders were expected to respond to higher prices with a surge in new home construction, but that hasn’t happened. They see this price trend as investor-stimulated and they also see that the current credit and cash situation of many would-be buyers is pushing them into rentals.
The number of homes for sale is historically very low. While a healthier market would have around a 6 month inventory of homes for sale, current levels have been between four and five months of inventory. Shiller’s contention is that this ongoing government subsidy stimulation is doing more damage than good.
Simply engineering a market with rising prices isn’t the answer according to Shiller. With wages stagnant and a poor job market, people can’t buy homes at any price, much less higher prices. They’re going to rent for the time being. Of course, investors can continue to monitor their local markets and scoop up bargains, as there should be a steady demand for rentals for years to come if Shiller is correct.
This brief article explains many local things. I'dlike to see the little guys be able to buy their own home instead of shelling out rent money to investors like me. Somewhere, someone must have a solution to this dilemma which bodes no good to our communities or nation. How about massive renter-purchase programs and/or housing for disadvantaged where they could "earn" their house? Many of the investors buying houses here are from other countries; who is benefiting from this?
Pauline Timmons
The overall real estate market is so huge and driven by so many internal and external factors that I believe it is beyond stabilization. Just as the stock market moves up and down based on micro and macro factors, in the end it steadily moves upward over time. The real estate market is very similar.
The fact that many families cannot afford to own a home should not be considered a negative indicator of economic progress. Germany which is the 4th largest worldwide economy and the strongest economic force in the EU has over 80% of the population in the rental market.
I want to cancel my 3 day work shop and when I called customers service number given on the back of the purchase order I kept getting a voice message stating they will call me back. I purchased this on 10/24 and tried to cancel it on 10/25 within the 3 business days as indicated on the Purchase Order. Please do NOT run my card I am cancelling this offer at this time.
No one is going to see your cancellation request here, this forum is for sharing ideas and learning. You need to continue trying to reach customer service to make sure your order is cancelled.
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
if anything, investors have helped boost the re market, and have helped keep neighborhoods from getting ruined due to vacant, foreclosed properties. Investors have purchased foreclosed properties, rehabbed them, and sold them to homebuyers. Or rehabbed them and renting them to families who are happy to rent. Renters don't have to worry about home insurance costs, taxes, maintenance expenses... Everyone benefits from this... investors, contractors, tenants, neighbors, cities...
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...