Wolf Richter, at wolfstreet.com, provides a good overview of the housing market, and the shifting ownership of the housing stock:
People buying homes to live in – rather than as investments to be rented out – form the bedrock of a healthy housing market. It was once called the American Dream. Then came the bubble, its collapse, and the new boom that is already a bigger bubble than the prior one in many cities. And in some metro areas, investors are now the majority of buyers!
In the first quarter, the proportion of owner-occupant buyers fell to 63.2% of all residential sales, down from 65.8% in the fourth quarter last year, and down from 68.6% a year ago, RealtyTrac reported today. It was the lowest quarterly level in the data series going back to 2011.
Who were the other buyers? Investors. The report defined them as buyers who purchased a property but then had their property tax bill mailed to a different address. And these investors accounted for a record of 36.8% of all home sales.
In some metro areas, investors went hog-wild, elbowing owner-occupants into minority status. Here are the metro areas with a population of at least 500,000 where this miracle of our “healed” housing market has occurred in Q1, the miracle being that investors make up the majority of all homebuyers:
In some states, a similar picture is developing. Of course, there’s tourist-paradise Hawaii which is fully loaded with vacation-rental condos, to where 78.5% of all home sales in Q1 were to investors. But note the next three states in line. So here are the 10 states where investors play the largest role:
This is what happens when the Fed “heals” the housing market with its six-year money-printing and interest-rate-repression campaign. It doused the land with nearly free money so that investors could take this money and buy assets and drive their prices into absurdity, and thereby raise the costs for people who want to live in those assets.
To continue reading: Housing Bubble 2
