Toward the end of the first Trump administration, both my sons were buying their first homes. What they ran into, nonstop, was being outbid by buyers representing Wall Street investment groups. Blackrock. Vanguard. Their offers were 5 to 10 percent above the asking price. All cash. No…zero contract contingencies. In two different states.
Why? Steady, dependable return on investment, turning their accumulated residential mega-holdings into a giant, nationwide apartment complex. Rental payments and standard appreciation in the residential market are viewed as a stable and collateralized investment basis. The ROI? Better than other market investment instruments. It’s gotten way worse. The following are a few good articles on the topic. The headlines are linked.
Something needs to be done like as suggested in the WSJ article. At the federal level this almost rises to the status of monopoly law violations. It most certainly can be done state by state.
Young people have a solid gripe. They are being blocked from one of the very fundamental basics of the American Dream. Owning your own home. Where instead of simply making a landlord rich, they then can participate in wealth generation by having their monthly payments going toward principle reduction and realizing the benefit of a traditional appreciation value added to their property as the years go by.
This issue needs some serious sunlight. Ours and their future depends on it.
The big challenge? These institutional buyers own an awful lot of lawmakers.
Speak up. We need to demand that the music sheet be changed. It’s time to take on another Goliath.