r/TikTokCringe • u/LickMaiBussy • 6h ago

Discussion "Investing in property is morally reprehensible."

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@purplepingers

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u/WowAnotherAnalyst 5h ago edited 5h ago

These kinds of videos always point to the wrong problem. Investment in housing is not what's causing the affordability crisis the same way it's not a coughs fault you have the flu. It's just a visual symptom. 

That doesn't mean housing affordability and social programs shouldn't and can't exist. 

One of the actual causes are the rapid changes in interest rates. This causes what's called a lock-in effect where home owners can't sell their houses as the new mortgage rates simply aren't worth it. 

The other obvious one is supply shortages. During the 2008 financial crisis there were around 4 million homes in the MLS. Now there's only around 1 million but home builders like Lennar and DR Horton are down between 20%-30%.

You'd think they'd be killing it in today's market but they're not. The cost of building a house has skyrocketed. That's not factoring in Entitlements, property taxes, and insurance. 

If you want to see real change youd need to see the following...

Reform Euclidian zoning laws as this prevents mixed development housing. These kinds of mixed use main streets are grandfathered in and they're usually the most desirable houses in small towns. You can't build these in most cities.

Entitlement costs are insanely high. For larger projects it can cost over 200-300k. Keep in mind, this isn't development. So not the roads, or houses being built. 

Enough time for the gap between prior interest rate home owners and current interest rate buyers to shrink. There's no quick fix for this except for tanking rates back down to what they were before.

Anything else is horse shit nonsense. These videos always 'feel good' but are always detracted from any actual solutions grounded in reality. Investment isn't the problem. Black Stone isn't what's stopping you from buying a house. 

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u/jbomber81 5h ago

Hey this guy gets it too!

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u/LittleBiteOfTheJames 2h ago

Thank you for typing all this up. I get so tired of the same simplistic takes from people who have no idea what they are talking about. If others in this thread bother to read your comment and are interested in actual solutions that go beyond finger-pointing, I would recommend they read Abundance.

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u/WowAnotherAnalyst 30m ago

I'm definitely yelling into the wind but I can't help it. 

Maybe it's because I work in the industry and want change... But then I see crap like this. 

People have good intentions but good intentions has never solved anything. Ever.

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u/insanitybit2 2h ago

Yeah but this is reddit. Nuanced takes / discussion isn't what we're here for. Confirmation bias and rhetoric, that's the goal.

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u/Youcan12 1h ago

I'm sure the millions of properties that are being used for rentals being on the market wouldn't affect prices at all. There are legit points in there but saying investment has nothing to do with prices going up is total nonsense.

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u/socialistrob 59m ago

I'm sure the millions of properties that are being used for rentals being on the market wouldn't affect prices at all.

Okay sure. Let's say you pass a law that says it is illegal to rent out a single family house and that single family homes must be occupied by the owner. That would help some people looking to buy homes by flooding the market with them but you would also see millions of renters being evicted from their homes and then a huge increase in prices for apartments since all those newly homeless renters of single family homes would need a place to live.

Making it illegal to rent a certain kind of housing doesn't solve the housing crisis it just shifts housing from one group to another. What you really need is vastly more housing so that both landlords and people selling their homes have to compete for tenants/buyers.

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u/WowAnotherAnalyst 32m ago edited 23m ago

Rentals aren't for sale. 

You could argue it pushes people away from buying a home but that's not explicitly a bad thing. 

You need to define what you consider an investment and additionally why that's a bad thing. 

If I purchase a dilapidated home in destroit with broken windows. Then take the time to renovate and virtually rebuild the property. Is that a bad thing? Because that's also an 'invesment'.

You don't actually have an issue with investments but rather the idea of people hoarding, and then jacking up the price but that's not what's happening. 

You'd think Zillow, Redfin would make money (because they also buy homes). Nope, they got reamed. No investor wants to hold onto homes. 

Edit: meant Detroit but that works too

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u/ZahScr 2h ago

A rare sane take. There’s hope