The Phaserl


Now What in America’s Mucked Up Housing Market?

from Wolf Street:

The US housing market has become a special creature. The government subsidizes it in a myriad ways, and more than ever. The Fed has repressed interest rates to ludicrous levels. This has given Wall Street a great opportunity to borrow hundreds of billions of dollars to buy up single-family homes and rent them out. Thus, PE firms have become the deep-pocket force at the lower end of the market. They’ve driven up prices and have become the largest landlords in the US. And they’re now selling a new kind of synthetic structured security – one backed by these rents.

Central banks in other countries have also created enormous credit bubbles, particularly in China, and those that benefited from it have been trying hard to take their money out of harm’s way, beyond the reach of their government, and invest it elsewhere, including in US homes. These folks have emerged as deep-pocket buyers at the upper end of the market.

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1 comment to Now What in America’s Mucked Up Housing Market?

  • rich

    Real Estate Price Insanity San Francisco Style

    This would never, never happen

    without Janet Yellen pumping massive amounts of money

    into the Silicon corridor.

    A four-bedroom home, located in San Francisco’s Outer Sunset neighborhood, was listed for $799,000 in February and sold for $1.21 million just two weeks after coming onto the market.

    The listing warned: “in a deteriorative state; needs everything, not for the novice.” According to Redfin, the buyer paid in cash.

    This what the new owner has purchased:

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