1 of 15: It has been hard to convey, through anecdotes or data, how bizarre the U.S. housing market has become. For example, a Bethesda, Maryland homebuyer working with @Redfin included in her written offer a pledge to name her first-born child after the seller. She lost.— Glenn Kelman (@glennkelman) May 25, 2021
Its 100% small time landlords buying a 2nd or 3rd property as well as enormous hedge funds or Blackstone et al that are buying up properties. Probably more the latter, but the former is why it's happening in podunk nowhere as well.
If housing is an investment or profit machine, you can afford tighter margins on rent to mortgage because your plan is to own and rent for the next 50 to 100 years. So who cares if it costs 2 times over asking? You'll make it back 30 years later and then make pure profit for another 30. Plus, rates are historically cheap and the fed has shown 0 capability of raising rates to higher than 5% or so (prior to 2008 it was usually near 10%).
Its 100% small time landlords buying a 2nd or 3rd property as well as enormous hedge funds or Blackstone et al that are buying up properties. Probably more the latter, but the former is why it's happening in podunk nowhere as well.
If housing is an investment or profit machine, you can afford tighter margins on rent to mortgage because your plan is to own and rent for the next 50 to 100 years. So who cares if it costs 2 times over asking? You'll make it back 30 years later and then make pure profit for another 30. Plus, rates are historically cheap and the fed has shown 0 capability of raising rates to higher than 5% or so (prior to 2008 it was usually near 10%).