Wall Street Homebuyers are running out of money. β
In Pandemic Boom they raised $32 Billion to fund home purchases.π
Last 3 quarters? Only $3 Billion.
Very soon they will need to sell properties in order to fund new acquisitions.
That's when things will get fun.
In Pandemic Boom they raised $32 Billion to fund home purchases.π
Last 3 quarters? Only $3 Billion.
Very soon they will need to sell properties in order to fund new acquisitions.
That's when things will get fun.
1) My prediction is that Wall Street will begin liquidating houses in mid-2023.
Starting in markets like Phoenix and Vegas.
Because that's where rental vacancies are surging the most. Meaning it's less profitable to be a landlord.
Watch out if you're a homeowner in theseβ¦
Starting in markets like Phoenix and Vegas.
Because that's where rental vacancies are surging the most. Meaning it's less profitable to be a landlord.
Watch out if you're a homeowner in theseβ¦
2) Especially if you live in one of the ZIP Codes where investors bought 50% of the homes sold in 2022.
Seriously: in certain neighborhoods these investor buyers were nearly half the purchases.π¬
Means massive downside when they sell.
Seriously: in certain neighborhoods these investor buyers were nearly half the purchases.π¬
Means massive downside when they sell.
3) What's amusing is how people are still reporting on "Investors taking over the Housing Market".
That's over.
With the surge in Interest/Mortgage Rates, it is simply not profitable to be a real estate investor.
Mortgage Rate > Cap Rate means its a money-losing proposition.
That's over.
With the surge in Interest/Mortgage Rates, it is simply not profitable to be a real estate investor.
Mortgage Rate > Cap Rate means its a money-losing proposition.
4) Progress Residential is an example of a Wall Street landlord that is having these issues.
In 2021 they were raising MBS capital to buy houses at a cheap 3.1%.
Now they're having to pay 5.7%. With very little investor interest.
In 2021 they were raising MBS capital to buy houses at a cheap 3.1%.
Now they're having to pay 5.7%. With very little investor interest.
5) Of course - there is still lots of delusional groupthink in the Real Estate Industry.
Investors, realtors, and flippers haven't realized yet that we've entered Year 1 of what's likely to be a 5-Year Housing Downturn.
So they're still thinking and saying optimistic things.
Investors, realtors, and flippers haven't realized yet that we've entered Year 1 of what's likely to be a 5-Year Housing Downturn.
So they're still thinking and saying optimistic things.
6) But slowly but surely Wall Street Buyers are running out of money.
And once that $32 Billion in capital from 2020-21 is used up, they will need to start selling houses to keep their acquisitions business going.
And that's when you will see them start acknowledging theβ¦
And once that $32 Billion in capital from 2020-21 is used up, they will need to start selling houses to keep their acquisitions business going.
And that's when you will see them start acknowledging theβ¦
7) The data in this thread comes from free, publicly available sources. Check them out.
Finsight: for single-family MBS offering data
finsight.com
Apartmentlist: rental vacancy data
apartmentlist.com
Redfin: investor purchase data
redfin.com
Finsight: for single-family MBS offering data
finsight.com
Apartmentlist: rental vacancy data
apartmentlist.com
Redfin: investor purchase data
redfin.com
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