Originally Posted by
Stone
I have a theory. Why would Blackrock and other investment firms be buying homes up when they are on a high? Actually,....they are offering over asking price just to get the property. Why would they do this? Certainly goes against conventional thinking. You buy low and sell high of course. In fact,...everything points to the real estate market heading for a major drop in value. In fact the worlds economic system is heading for a crater. Hmmmmm.
My theory? They want them for rental properties only. But why would you want to be in the rental business during a massive recession/depression event only to spend all of your time in and out of eviction court and chasing money from people who dont have it because they are broke? You wouldnt.
But what if economic conditions changed so drastically that there would be no home ownership any more? With no way to pay the rent on your own the GOVT would basically section 8 the whole country and pay your rent for you. The investment firms would now have guaranteed payments month after month year after year in perpetuity and YOU would be a slave living in your quarters with your minimum basic needs met.
You will own nothing and you will be happy.
Well it might be a theory, it is an idiotic one.
There are currently over 82 million homeowners in the US. About 65% of US households own their home. If we assume that the average home is valued at $250,000 that would put the value of those homes owned by homeowners at over $20 trillion which is roughly the entire GDP for the US last year.
Basically, you are saying that the hedgefunds are going to be able to borrow more than the entire US GDP and buy up all the homes. And then the US govt will pay over 2 trillion per year to house people?
If the markets changed so drastically that the value of those homes went down, the hedgefunds owning all those homes would all go bankrupt because under federal law they need to hold assets that cover their investments. At that point, they would have to start selling all those homes which would drive home prices down and all the renters could buy homes for less than they are paying for rent.
"We are all born ignorant, but one must work hard to remain stupid."
"Any fool can criticize, condemn and complain - and most fools do."
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