Banks don’t buy properties, they foreclose on them. They will unload as fast as possible and take a write down.
Big hedge fund and other similar large investors don’t hold onto money losers, and they care about maximizing their return. If the spread between rent and sales price is this high, I’d expect some of the ones that bought a while ago to be considering selling and taking their appreciation gains vs holding onto a cash flow that is multiples lower. Plus corporate lending is a completely different animal than homeowner loans and many of these properties will soon be needing to refinance into a much higher rate. Their owners will sell rather than take a huge hit to cash flow. And many of these bought properties 5-10 years ago and did capital upgrades that are now aging. They’ll be looking to exit before the next upgrade cycle.
Smaller investors can get pretty badly burned in these markets and may not be able to hold on.
Not saying a crash is inevitable or even likely, but real estate is cyclical and we are almost certainly near the top of our current cycle.
Banks don’t buy properties, they foreclose on them. They will unload as fast as possible and take a write down.
Big hedge fund and other similar large investors don’t hold onto money losers, and they care about maximizing their return. If the spread between rent and sales price is this high, I’d expect some of the ones that bought a while ago to be considering selling and taking their appreciation gains vs holding onto a cash flow that is multiples lower. Plus corporate lending is a completely different animal than homeowner loans and many of these properties will soon be needing to refinance into a much higher rate. Their owners will sell rather than take a huge hit to cash flow. And many of these bought properties 5-10 years ago and did capital upgrades that are now aging. They’ll be looking to exit before the next upgrade cycle.
Smaller investors can get pretty badly burned in these markets and may not be able to hold on.
Not saying a crash is inevitable or even likely, but real estate is cyclical and we are almost certainly near the top of our current cycle.
Lol
https://www.cnn.com/2021/08/02/business/family-homes-wall-street/index.html