Posted on 03/31/2017 1:47:07 PM PDT by Lorianne
Between 2007 and 2016 approximately 7.8 million homes lost to foreclosure. ___ It is now official that the United States has turned into a renter’s paradise. Think that is hyperbole? Fifty-two of the 100 largest cities in the U.S. are now majority renter in terms of household composition. And there is no clear pattern here. You have places with incredibly affordable housing like Detroit tipping over into the renter majority category at the same time places like affluent Irvine have tipped over as well. Bottom line, more renter households are forming at a time when real estate values are once again peaking.
And where did all of these renter households come from? Well between 2007 and 2016 nearly 7.8 million people lost their homes to foreclosure. Of course this flies in the face of the #YoLo real estate movement and the mantra of “always be buying” real estate because heck, even our current president is a real estate mogul, therefore buy. People have massively short-term when it comes to financial spankings.
The renterfication of the U.S.
We have discussed the unrelenting trend of renter household formation for years largely because younger households are having a tougher time paying inflated prices for crap shacks. The flood of Millennials buying households just did not materialize. What did happen is that inventory remained tight, investors stepped in, foreign money hit, and a mania took place. Basically an artificially constrained market made crap shacks look attractive. Look, even old hardened bread must appear like paradise to the starving person. Still doesn’t change the fact that the bread is old and stale.
Many cities have tipped into the renting majority category only in the last few years:
Look at how many cities tipped into the renting majority category since 2009. We see a few California cities here like San Diego, Sacramento, Stockton, and Irvine. This will definitely shift the political perception as we saw with local SoCal measures being slammed down that favored current homeowners. Many people including professional couple households are balking at paying ridiculous prices for dumpy old shacks just so they can say they own and “hey, now I can paint my wall magenta.”
SNIP
They could instead have been sold to a the new market rate to first time homebuyers or small time investors.
Does this 1/2 correlate with the 50% living off of welfare, etc.?
Maybe not, but I am cynical of this whole ‘economy’.
AFter my divorce in 1997 I became a renter (Seattle area). I ended up renting until I bought My small farm in KY and moved there in 2011.
Thing is, my monthly rent varied from $1400 to $1600 right up to the housing bust. And that $1600 was for a five bedroom three bath home on a quarter acre with professionally designed lawn and HVAC air conditioning in an upscale neighborhood near Newcastle.
If I had owned it, a 30 year mortgage would have put me at about $3600 a month, not including RE taxes.
We had to buy our farm, for obvious reasons, but our car payment is more than our monthly payment there - on a 15 year mortgage. And the annual taxes are about the same as a single car payment as well.
Somebody is getting rich.
But most of these people are going to wake up at age 50 and realize the are no closer of a rent/mortgage free life.
Instead of selling ‘cheap’, as the market would imply,
They held them (subsidized by govt), otherwise they should have been sold at ‘a loss’.
Kind of like the diamond market. We got a lot, but there’s only a few for sale, thus high prices, while the govt enabled that scheme.
Owning is foh suckahs.
You mean Landlord’s Paradise.
Yes, I think they got the title wrong ... or were using it sarcastically.
Somebody owns those houses.
What is REALLY needed is some kind of massive government program that forces mortgage companies to sell houses to people who have no income or not enough income. That will really help.
That is genius!
You should run that one up the chain of command so it can be implemented straight away!
More renters makes it easier for leftist politicians to sell property tax increases. For some reason, renters just can’t seem to comprehend that it is they who will pay for the tax hike through increased rent.
That rent/mortgage free lifestyle still includes property taxes, insurance, maintenance as well as your labor. As a retiree with a fixed income and declining health, renting is becoming more of an attractive option for me.
“Obama administration and sold in bulk and cheaply to big politically connected institutional investors like Blackrock (who are now selling them back to the government at a big profit).”
I’m unaware of this. How did Blackrock buy up blocks of homes for investment purposes in contravention of HUD rules? I do know that Blackrock bought up homes that individuals weren’t interested in. And selling them back to the government? If you know what you stated is fact, you’re sitting on a blockbuster story.
I’ve been watching this story for a long time.
The media, of course, didn’t give it much play.
Here is the beginning:
A Huge Housing Bargain — but Not for You
https://www.thestreet.com/story/11224917/1/a-huge-housing-bargain—but-not-for-you.html
And this is how things are turning out:
Government’s Fannie Mae will back PE giant Blackstone’s rental homes debt
http://www.cnbc.com/2017/01/25/governments-fannie-mae-will-back-pe-giant-blackstones-rental-business-debt.html
A lot of other stuff happened in between those two posts, you can find them by searching.
I said the wrong real estate conglomerate in my post. It is Blackstone, not Blackrock. Also there are many other big investors who were in on the deal.
A lot of people are following Dave Ramsey’s rule buy everything with cash. I know a lot of churches are teaching this way of life. My wife and I are living it now. We are not debt free because of the house but putting every penny towards it as possible to pay it off so we can yell, “we’re debt free”. So many are renting longer to put money away to buy a house out right. There is a huge no debt momentum going on in America. And as Dave Ramsey says, we’re weird as we have no debt.
Thanks for the info, Lorianne.
I got trumped on several real estate deals and haven’t yet figured out why. I’ll pursue your link tomorrow.
Need a cheap place to stay? : )
525sq/ft for just $1,729 a month. Plus you pay utilities...
http://www.malibucanyonliving.com
For 1070sq/ft you only pay $3002 and up!!
I drive by this on the way back to my apartment about 15 miles away where it is cheaper, much cheaper.
This place is at least 8 miles from Malibu. No view of the ocean. It is right next to a tall hill so no view. The google reviews tell of thin walls where you can hear your neighbors.
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