A very dangerous trend has been discovered as of late: hedge funds are buying up American housing. The Wall Street Journal, Federalist, and ZeroHedge have all reported on the problem, but the most succinct and useful depiction of what’s happening is this Twitter thread (you’ll want to read the whole thing and the articles in it. the info is important):
The basic story, for those that didn’t have time to read the entire thread, is this: hedge funds and big banks are buying up the US housing supply. Using cheap money from the Federal Reserve and investment dollars from their wealthy clients, they’re snapping up everything on the market. Entire neighborhood developments have been bought, houses are being instantly sold for 50% above the asking price, big banks like Lloyd’s are getting in on the action, throwing yet more greenback fuel into the raging housing fire.
Thanks to that, now 1 in 5 homes sold are bought by landlords in the top real estate markets and home ownership is permanently more expensive. BlackRock alone could snap up over 100k homes a year, just imagine the pressure on the market as more and more hedge funds and banks join in the buying spree…
And, because there are few other places to turn to for yield in such a loose monetary environment, there’s no indication this will stop; the funds will keep buying up every house on the market, especially in areas where there will be renters.
While potentially lucrative for the hedge funds and banks, this trend is a disaster for the American middle class.
For one, the renting lifestyle is not one of freedom. It is one of slavery to passion and a landlord, a life of tossing money down the drain rather than building equity and saving money. Most Americans recognize that, hence why homeownership is so popular in the US. But if there are no houses on the market, if the greedy Wall Street goons have bought them all up, more and more Americans will be forced to remain renters. Rather than raising their children in a house they own, they’ll have to live in an apartment or rented house, moving at the whim of a landlord. That’s not the American dream, it’s a nightmare for the average middle-class American.
The other, related problem is that hedge funds buying up houses destroys the concept of owned space. It’s good to own something, to be surrounded by what is yours. It’s healthier and generally leads to a happier life to own a house and raise your kids in your house, surrounded by your white picket fence. It’s what appeals to our basic instincts and satisfies the human urge for property.
Being forced to rent does not a happy man make. To toil day in and day out, sending off a check not to pay your mortgage and own a home, but to line a landlord’s pocket is not a recipe for happiness. Americans want housing because it makes them happy (in the satisfaction-based sense of the word).
So, logically, if they can’t buy a house, there will be unrest. If the oligarchs continue buying up everything on the housing market for far above market value, ensuring that the average, middle-class American has to rent rather than own, that will become problematic.
As the thread says, “The Great Reset is real. It is happening. This will be the greatest transfer of wealth, and greatest consolidation of power in the history of mankind. If they get away with it revolution will be the only cure. It will be awful. Wake up. Get active. Stop this now!! This is warfare. Make no doubt about it. Lloyds bank in London is doing it, as is every great financial institute across the world. This must be stopped. Its a greater threat than the slow creep of Communism, BLM or anything else you can think of COMBINED. It is a death stroke.”
That’s far more correct than most would like to believe. Commies, BLM thugs, and Antifa are huge threats to our continued freedom and prosperity. But the greatest threat of all is the oligarchic “Great Reset” crowd. By their own admission, they don’t want you to own anything. They hate the idea of property ownership for commoners, leading as it does to individuality and freedom, so they’re coming after it. The hedge funds and banks are waging a war on your ability to own a home. Fight them.
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Yep…We get unsolicited offers all the time here in AZ. I’m now guessing that some of them are fronting for these evil hedge funds, funded by the Fed Reserve….
SAME HERE IN CENTRAL FLORIDA
We get all sorts of ads from realtors out of St. Louis, Memphis and even Kansas City wanting to sell our land and/or home. A huge tract of pasture/woodland (several hundred acres) a few miles north went up for auction in lots and sold in ONE bid, so they are here too, I’m guessing, grabbing the hunting rights from the residents of the Mark Twain National Forest community (that’s what I’m gonna call us for now).
This already happened (kind of) back prior to the last crash. And guess what happened? When the market took a big steamy dump, the owners of these dumped them for far below what they paid. And guess who took the hit? The owners of the pension funds. Did anyone watch The Big Short? I lived through it as a fairly new agent. Does anyone think they are not doing the same thing, just calling it something else?
The market goes up, the market comes crashing down. This is the only way to make money in real estate nowadays. You buy low and sell high or you buy rental properties low and hold them and collect rent.
The problem here is they are financing these in one form or another based on ridiculously low interest rates and printing.
When the market craps out yet again, and this time I believe it will make 2008 look like a cake walk, these guys will lose their shirts yet again. Which means all the investors will lose big time too.
Usually these funds are the last to the party, and generally a very good indicator the end times are nigh.
Everyone drinks in the money like the party will never end, prices going ever higher based on absolutely nothing really. Rentals are only worth the income stream you derive from them. If your leveraged on them very heavily, and the tenants either cannot or will not pay (and we have seen the government can just suspend rents and evictions with the stroke of a pen), then where is the income stream? A house doesn’t MAKE anything. It simply is. While everyone needs shelter, the precedent set via Covid-1984 shows that it doesn’t matter if you legally are owed rent. On the flip side, you still must maintain the property, pay the taxes, pay the insurance. Then your asset now becomes a liability.
So these investor groups hoping the rental streams will just keep coming in, and rents will continue to go up and away, are just as delusional as they were the last time.
Gird your loins, and if you have investment properties now is the time to sell as you will not see returns like this in a very long time.
Or this could be part of the ‘you will own nothing and be happy’
If the govt, hedge fund basically owned by the govt, buys up all these properties it will be like 50’s Russia. The govt will allot you a living space, give you an electronic stipend that will only meet your ‘needs’, determine your job even, perhaps sweeping the streets with a corn broom. Papers please…
Agree completely; my thinking and experience have been the same. The only real unknown is the timeline. The Fed has to raise rates and that combined with the stock markets going down will force virtually all asset values to decline – some sharply, some over longer periods of time. Again, the real unknown is the timeline.
Most of the world’s sovereign rates are at or near zero, we are one of the highest, long term the trend will be down.
The Fed has the inflation it wants now, they will appear to combat this by raising rates slightly, which will neutralize equities…for a time.
The Fed knows they are cornered and can’t get out.
Plan “A”…. slow the rate of change…..of everything…so they have more time to react and keep things going.
Plan “B”…. There is isn’t one.
We used to own lots of rental property. Sold most of it and will never, ever, ever be landlords again. Look at the BS rent moratoriums. No rent for you Mr. Landlord, however, your taxes are still due, ditto for repairs, maintenance, insurance etc. The quality of tenants is way lower than what it once was, they don’t care and will trash the place in a heartbeat and steal all the copper wiring. plumbing fixtures and what all, leaving a filthy mess, pets and assorted detritus in their wake.
Pup has nailed it. Wonder what Freddie/Fannie are going to be propped up with next go-round?
Good morning Pup.
Posted a link yesterday ….. EIGHT MILLION foreclosures / evictions are coming down the pike, starting in July when the gooberment covid-rent-moratorium comes to an end.
As a realtor, can you please (if you have the time) comment on this in general? Or, specifically …
— won’t so many houses coming on the market lower home prices across the board?
— why would any group buy up houses when they know millions will soon come to market? How they gonna unload their inventory?
— doesn’t this have the potential to cause a housing/market crash that will make the last mortgage induced crash look like child’s play?
If these are dumb questions, well, I never pretended to know about financial / economic stuff …. never ever wrote even one article, and for good reason.
TIA
The fed keeps pumping money into markets, you learned from the video that the largest funds provide money to the Fed. If the stock market went to 8000 and housing prices fell by 50/60%, what happens to all that money? Vaporized…and no longer in circulation. TPTB don’t care how much funny money disappears out of the equation.
Something FAR more sinister is afoot with BlackRock than buying up houses. This here is a very scary little article.
“This isn’t just about spying and data aggregating, this is a structural setup to move us into the social/climate score system and beyond, and Biden is penning the orders to build the framework that BlackRock has devised”.
Seems banks are allowing companies like Yodlee to access your money in your bank account, determine what your money is spent on and send that information to the government and determine if you are following green agendas among other things….
Blackrock owns Yodlee.
BlackRock has positioned itself in three high-ranking positions at the White House, manages $7.8 trillion in other people’s assets making it the largest money manager in the world, is in the top three shareholder positions in every major company and industry (just check for yourself), invests heavily in “climate change” and shuns fossil fuels, and has gobbled up much of its competition. Rulers BlackRock and Vanguard, are expected to be managing $20 trillion by 2027. It’s no surprise that BlackRock and the White House have a revolving door through the Clinton, Obama, and Biden administrations. In addition to staff shifting between the them, board members of BlackRock, such as Cheryl Mills, who served for both Clintons during their time at the White House, also seem to drift over to BlackRock. They are the designer of the Going Direct Reset and are helping to lead the way.
It gets worse….
As you will see in the timeline below, Yodlee is one of the largest financial aggregators, who also happens to sell your data and has a class action lawsuit against them, but that won’t stop this train. They were acquired by Envestnet back in 2015. To put this in perspective, Envestnet works with 17 of the top 20 banks along with 5,200 other banks, financial institutions, and companies. They serve $4.8 trillion in assets, manage $229 billion in assets, and power more than 2 million financial plans a quarter. Envestnet services 500 million aggregated accounts each day.
The owners of Envestnet died in a car crash soon after BlackRock bought in to the company…
Three years later, in 2018, BlackRock, the world’s largest investment manager, bought an equity stake in Envestnet and partnered with them to integrate their technology with Envestnet’s. The following year, Envestnet’s CEO and his wife, died in a fatal car crash, just after the “Going Direct” reset was signed into place.
What this means is that the Great Reset is in place and ready to go. The net is tightening and soon all the controls will be in place. The BlackRock group now owns the government, especially the White House which explains why Trump had to go. They needed the Biden puppet to finish taking over the country, push the Green Agenda and gobble up all the nation’s resources.
Re Financial Takeover article. I think this is the bottom line:
Under the guise of “financial wellness” and “climate-related financial risk,” they have shifted the financial industry to streamline and surveil everyone’s financial data so that they can control it through a social score system, tell you how and where to spend your money, and siphon what they deem should go to the IRS.
CRAPITALISM…
https://www.zerohedge.com/economics/usa-2021-capitalism-powerless-crony-socialism-powerful
Per the Charles Hugh Smith article, collateral is for the little people…
Collateral is unnecessary in Crony-Socialism; that’s just a excuse given to the powerless.
and might explain why BlackRock is willing to pay such inflated prices.
An investigative reporter attempted to trace ownership of these funds and at a certain point 25 trillion of it was listed as Private, end of story. I could provide a link to it but you would have to listen to the whole hour because I wasn’t listening for that purpose. The video was related to Covid. Ultimately it’s “Them” and “Them” doesn’t have to tell us anything incriminating.
MyG – Read about social scoring long ago, it’s coming no matter what we do. I’m on the downside of caring due to age but feel sorry for the young folks, too much control…..way too much.
I will be moving my business to a credit union soon for my personal banking.
Careful there, you can read their privacy agreement statements. I went to the Randolph Brooks website, they’re a local credit union. I got this….
https://www.rbfcu.org/privacy-policy
It may get extended again, else it will take years to work all that inventory thru the courts. back in 2010 my worthless sister lived in her home with out payment to the bank for over 4 years before they booted her. 4 years. She is a home owner today, her, and the bank. (go figure)
They will section 8 them and always receive govt money.
Realestate pup,
Something doesn’t add up. These behemoths like Blackrock, Lloyd’s ,Vanguard, etc. are buying homes at near the current top plus 20%. They aren’t stupid. Why wouldn’t they wait until the market dives before purchasing like they did in 2008-10?
It must be that either hyperinflation will continue to push home prices into the stratosphere and stay there (very doubtful) or they know the FED will secretly backstop their paper losses once the markets crash.
The FED is already buying all the garbage in the markets primarily through Blackrock to keep this ship of shit afloat.
Eventually, the FED being the lender and buyer of last resort will own the world with currency “printed” out of thin air. Breathtaking really…
Yes, your will own nothing. I’m sure you won’t be happy about it.
BASTARDS
This is it. For them, it doesn’t really matter. And it doesn’t even have to be secret.
Make no mistake, Blackrock and Vanguard (at least their institutional wings) will not be allowed to fail. Does anyone remember what actually happened in 2008? It will be even more egregious next time.
Steve: I just posted an article about this exact subject. The Great Reset is already in place, the resources and controls are also in place and what is happening now is the acquisition of the resources and control of the money.
We are fucked and I don’t know what to do about it.
This isn’t just about spying and data aggregating, this is a structural setup to move us into the social/climate score system and beyond, and Biden is penning the orders to build the framework that BlackRock has devised.
https://www.wsj.com/articles/if-you-sell-a-house-these-days-the-buyer-might-be-a-pension-fund-11617544801
Very informative.
It’s a different country than it was before the last crash.
I don’t think there will be another. Asset prices cannot be allowed to fall, and the government and Fed will do everything in their power to ensure they don’t. They will double down until a dollar collapse ends the party.
Think about it. The COVID response evaporated trillions of dollars in productivity. The markets took a temporary dip then screamed back above where they were (all time high after all time high) in a matter of months. That includes pretty much all financial and housing markets.
Over the last year, liquidated all commercial properties and my residence in the NC Mtns. Kept the rural SC Lowcountry Marsh House owned 50/50 with Sweetie Pie.
In the last two months have put in several cash offers $5-10K above listing price on 3BR/2BA SFR rental properties that are <$300K. Each time, there are 5+ cash offers. Zero success. About to give up. Winner is $15-25K above listing everytime.
I would imagine that somewhere deep in the laws that CONgress wrote after the last crash is a bailout fund for these bastards .
Or they will just do it. And no one will do anything about it.
Looking forward to the dollar demonetization and all these rubes realizing they sold their real estate for monopoly money. Also holy crap the buying pressure is real. Before the plandemic I saw a real estate agent setup on a table in the local coffee shop with a sign that read “free $20 gift card for 15 minutes of your time.”
How long before Blackrock and Vanguard own everything?
Three months.
And, they have all these homes to fill with poor, deprived “immigrant” families in all those racist, white neighborhoods.
If you stop paying your taxes, who owns your house?
Your tax money is like paying rent to the guberment… stop paying and they will come for your property and put in a new rent payer, or give it to a gender/racial/outside national or all round special person whom tics the most woke boxes. And… you’ll still have to pay the arrears…
Shut up slave, and get back in your cubicle.
Not a society I want to be part of.
Not a society that should survive.
Does anyone agree with me yet?
G.R.E.E.D is the most destructive human trait.