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“This Is Wealth Redistribution”: Blackrock And Other Institutional Investors Buying Entire Neighborhoods At Huge Premiums

Tyler Durden
June 16th, 2021
ZeroHedge
Comments (17)

This article was originally published by Tyler Durden at ZeroHedge. 

EDITOR’S NOTE: Remember, the rulers have already told us we will own nothing and be happy.  They didn’t tell us that they will own everything and you’ll be charged to live and breathe their air. This is only one step toward that dystopian nightmare that we are already on the path to unless we wake up quickly. Masters own everything, slaves own nothing.

As the real estate market continues to break records, a cabal of institutional investors has been tossing gasoline on the fire – buying up properties hand-over-fist as middle-American renters watch their dreams of homeownership fade at the hands of pension funds and other financial behemoths.

“You now have permanent capital competing with a young couple trying to buy a house,” according to real estate consultant John Burns, whose firm estimates that in many of the country’s hottest markets, roughly one 20% of homes sold are bought by someone who never moves in.

“That’s going to make U.S. housing permanently more expensive,” said Burns, who thinks home prices will climb as much as 12% this year, on top of last year’s 11% rise.

“Limited housing supply, low rates, a global reach for yield, and what we’re calling the institutionalization of real-estate investors has set the stage for another speculative investor-driven home price bubble,” his firm concluded – finding Houston to be a favorite location for investors, who have accounted for 24% of home purchases in the area.

The coronavirus pandemic sparked a race for home-office space and yards. Occupancy rates reached records and rents are rising with home prices. The ecosystem of companies that service, finance and mimic the mega landlords is booming.

Burns counted more than 200 companies and investment firms in the house hunt: computer-assisted flipper Opendoor Technologies Inc., money managers including J.P. Morgan Asset Management and BlackRock Inc., platforms such as Fundrise and Roofstock that buy and arrange for the management of rentals on behalf of individuals and builder LGI Homes Inc., which now reports wholesale home sales to bulk buyers in its quarterly results. –WSJ

In one example, a bidding war broke out over a D.R. Horton complex in Conroe, Texas – after the homebuilder put the entire subdivision up for sale. After a “Who’s Who of investors and rental-home firms flocked to the December sale,” the winning bid of $32 million came from an online property-investment company, Fundraise LLC, which manages over $1 billion for around 150,000 individuals, according to the Wall Street Journal.

D.R. Horton ended up booking roughly twice what it typically makes selling houses to middle-class homebuyers according to the report.

“We certainly wouldn’t expect every single-family community we sell to sell at a 50% gross margin,” said CEO Bill Wheat at a recent investor conference.

What does this mean for the average American family? We’ll let Twitter analyst @APhilosophae take it from here in this ominous, yet soberingly accurate thread:

Click on any of the above tweets to continue reading.

President Trump is Breaking Down the Neck of the Federal Reserve!

He wants zero rates and QE4!

You must prepare for the financial reset

We are running out of time

Download the Ultimate Reset Guide Now!

    Author: Tyler Durden
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    Date: June 16th, 2021
    Website: https://www.zerohedge.com/

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    17 Comments...

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    1. This is just awful – With this heat wave all the snowflakes in Kalifonia will melt.
      Lets hope the normal folks look after the elderly,

      • Darth Skippy says:

        I saw the same bad color of yellow paint used on 5 adjacent properties, in California, always harboring the same, urban people, who don’t know how to contain a pitbull.

        One foreign family, dressed head to toe in purple dress clothes, in the summer heat, was heard to comment how strange looking all the locals were, loudly, as we walked by.

        But, where they really like to resettle WASP extinctionists is in the reddest states of all.

    2. Anonymous says:

      Buy a RV. No place to rent. FU.

    3. Anonymous says:

      If homes are selling at an average of 20% above listing, think of all the money the home owners are making.

      • Genius says:

        If you sell your house then what? Yer screwed thats what. Our house is worth almost 3X what we paid but if we sold it there is nowhere else to go. There are hardly any houses for sale here and when there is it is sucked up asap. RV parks are full, living at the cabin would be tough full time. Make a bunch of $$ and f*ck yourself over doing it? Better rethink that one…

        • The Deplorable Renegade says:

          Genius, remember me? How you been? I’ve been in north GA going on 3 years now. Just recently had a little work done on my cabin. Still stacking and praying. I’ve been coming back to the site off and on and noticed some of the old-timers still come around. What about Sgt. Dale? Haven’t seen him post on here in a long time. I wonder if he ever found land in TN. He was looking real hard last I knew. I’m still enjoying what I call “the good life” here in north GA and not going anywhere else.

          • Genius says:

            Hey DR! Good to see yer still kickin’. I’m in the middle of getting my pension and just hangin out. Hot as hell and idiots starting fires everywhere. Starting a wildfire should be the death penalty IMO. Bought me an old 02 dodge ram 1500 5.9L at a yard sale for 1200 lol. Runs like a champ but like all dodges the rest of it is just cheap plastic CRAP. Ebay has replacement parts cheap so I have been fixing it up. Just need it for towing. Hope you are having a good summer, stay cool!

    4. Bill says:

      State law here forbids local governments from assessing for tax purposes one’s property higher than the market value. For example, a county cannot say your property is worth 300k if the market value places it at 250k. If this check did not exist, there’s no limit to what local gov’t would try to get away with to collect more in property taxes. That’s the good news.
      The bad news is if one has no intention of selling and moving, and property values keep going up, the property owners will pay more in higher property taxes.
      There is a concerted effort on the part of major buyers to get nice properties and homes. Each week I get at least one solicitation in the mail wanting to buy my house, and at least one email from an entity I never heard of. Occasionally, even in my partly rural area, a realtor will stop buy and ask me if I’m interested in selling, I always reply in a curt way and ask if I contacted them. He/she says no but was approached by a buyer. I always tell him/her no and don’t come out here again. Other property owners around me have had the same experience but so far have not sold. I suspect when an old codger dies his kids will sell though.
      However, I have read in other areas of the US monied buyers are placing constant pressure on owners to sell. One day, these monied organized buyers will get tired of waiting and pay local officials to somehow force individual owners to sell their properties.

    5. Frank Thoughts says:

      Welcome to Canada and the U.K.!! First time buyers have been forced to compete for housing with money launderers and Asian hot money for the last 20 years. Yes it has made a narrowing and dying group of seniors very rich but it has screwed everyone else.

      One of the problems is how ill informed most people are about this.

    6. Jocko says:

      Gentrification is not new, just accelerated. They can move those poor people to homeless encampments really fast today.

      • Frank Thoughts says:

        Big data is making the big difference. It detects homeless hot spots and clears them out, often before you even notice.

        Tuning and curating neighbourhoods is the future. No more do we have to be prisoner to waves of poor or criminal people moving into areas and dragging them down.

        Even when the government tries to move blacks in we can counter with better data and move them back out.

        In big data what matters is the thicknesses of data. And blacks data is thick with crime, poverty, disease and social dysfunction.

        Money likes to follow success.

        You are more likely to want to go to restaurants full of babes rather than tattooed aggressive morons. You do not want to crawl over homeless people and walk through reams of beggars and drug addicts to get into the restaurant.

        Big data and AI will win because it can churn 24/7.

    7. Frank Thoughts says:

      This is a good trend. Once neighbourhoods are in corporate control they can then be professionally managed.

      It is clear governments, the police and social services have failed to address crime and social dysfunction in most communities. But big data can change that.

      Violent blacks can be removed, law abiding Asians moved in. Data can be used to ensure the right people are encouraged: people who are healthy, well behaved and look good. I live in such an area already and it is amazing. They moved the black criminals out and replaced them with beautiful women doing yoga and families with children. Mornings now are very chilled.

      Companies like Palintir can do this.

    8. Burn them down... Any and All owned by the corporate demons says:

      Burn them down…

    9. Flames says:

      Burn them all down

    10. Dartarth Skippy says:

      Property taxes pay for cradle-to-grave daycare.

      Teach your own kids a productive trade.

      Restore the victims of property crimes, not the criminals.

      No social promotions for the inept, non-competitive denizens of Bizarro-World, where up is down, and evil is good.

      No property taxes that pay for cradle-to-grave daycare.

    11. Darth Skippy says:

      Property taxes pay for cradle-to-grave daycare.

      Teach your own kids a productive trade.

      Restore the victims of property crimes, not the criminals.

      No social promotions for the inept, non-competitive denizens of Bizarro-World, where up is down, and evil is good.

      No property taxes that pay for cradle-to-grave daycare.

    12. Anonymous says:

      These slime bags can sell half the properties back to the FED and rent the other half out to the wave of illegals coming or free gubermint housing to integrate your suburban hood for dreams of my father obongo!

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