Big Corporations Buying Out Entire Neighborhoods
Pushing home ownership further out of reach
I’ve been following Gerald Celente for a few years. He is the producer of The Trends Journal and regularly informs his followers what he sees developing before it develops. Celente is also a regular contributor at KingWorldNews. His latest post there titled, ‘Why Six-Figure Earners Still Rent A Home Instead Of Buying’ points out that high income earners are staying out of the home buying market because home prices remain elevated while interest rates have pushed up monthly payments on a $400,000 mortgage by $230 just since last month, even after forking out 20% as initial down payment.
Of course, it makes sense to stay out of the market and wait for home prices to come down as the FED continues to raise interest rates but an issue has slowly crept into view that may prevent people from buying homes in the future, making matters even worse.
That issue is big corporations swooping down and buying up entire neighborhoods at reduced prices from home builder / contractors who are struggling to sell in this high interest rate environment and then turn around and rent them out at sky high prices, trying to lure in high end earners who aren’t ready to buy.
According to Celente, mortgage rates topped 7% at the beginning of February. The FED just raised another 25 basis points yesterday (0.25%), meaning all those variable rate loans out there just got a little more expensive to hold.
Private equity investors and the likes of Blackstone have purchased tens of thousands of homes during the Covid mess in order to rent them out. This makes the housing market even tighter as these homes are kept off the market.
Personally, I think these investors have set themselves up for a mighty crash in the near future. What happens to these homes when the renters lose their jobs or lose their savings after a bank crashes? These renters are high end, earning $150,000 or more.
After they’re gone, who’s going to be able to afford paying such high rent costs. The answer is… nobody. I predict all these homes will one day soon be empty and with no one living in them for extended periods of time, the homes will begin to crumble. With no rent money coming in, these investors will be stuck with properties they can’t sell, even at depressed prices.
This may have played a part in the explosive popularity of ‘tiny homes’, people living in their trailers or vehicles or even worse, in a tent on some city street.
It’s as if we’re being pushed back centuries to the days of Fiefdom, where the wealthy aristocrats owned all the lands and the serfs, aka poor people had to pay to live on those lands, usually by working their asses off growing all the foods for their masters, chopping all the firewood, doing all the repairs. You get the drift…
It’s better to temporarily sit on the sidelines at the moment regarding the purchase of a new home and wait until the dust settles. Who knows, you might even scoop a property up for just 100 ounces of silver after everything blows over.
I expect silver to eventually go to 3 digits and beyond. Silver, relative to inflation is at 1970s prices, believe it or not. It’s just a matter of time before it plays super-catch-up and that time is fast approaching. Higher interest rates literally guarantee this.
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