The New Danger to Housing

By
Real Estate Agent with Keller Williams Whittier BRE# 01724300

The normalcy of private parties buying and selling is still fragile as it recovers from the errors of 2006.  In our area, inventory turnover has slowed and prices are not climbing as rapidly. Interest rates are expected to inch up by next year so says the Federal Reserve Chair.

This is in itself plenty of dampening pressure. It is also known that it is still cheaper to own really than to rent the same orange because of the tax breaks associated with home ownership.

The lastest is a two prong alarm

The first is that families are regrouping back together.  I remember when I was in my 20's how I was looked down upon because I still lived at home.  Now the trends are even "professional" kids are returning home because rents are artificially high and do not correspond to income.  Mom and Dad, make room for the kids...theyre back.

I read in the Los Angeles Times that Colony plans to buy many more properties to rent out .... the idea is that BIG MONEY will of course control the rental market pushing the small investor out.  The extra whammy is that inventory will tighten ever more and prices will go further up.  Blackstone and American Homes 4 Rent are not far behind and although they are not saying so they are keeping an eye on this to jump in at the right time.

This manuevering is harmful because housing is typically a cyclical process.  It will become artificially inflated and put the american dream further out of reach. We need to let the natural market forces dictate the flow and stop trying to control it. Home ownership needs to breathe in and breathe out. The institutional investors are drugging it.

Remember how GODZILLA came to be...human alteration of the environment (in the case nuclear testing)... Godzilla always loved power lines.

Do you want the housing market to be controlled by GODZILLA?  There was a time when homeownership was reachable....now it is rising beyond reach.

Why is the government not looking at this the same way they would treat an AOL and TIME WARNER merger?  Is it healthy to own more than half the market? I guess it is if youre the one owning it.

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