The Rentification of America
The American Dream - Killed by Wall Street
Home ownership has been the cornerstone of "the American dream" since the founding of our country. As Robert Kennedy said, "you work hard, you play by the rules and you're going to be able to afford a home."
Equity growth in real estate ownership has also been the source of American generational wealth, literally for centuries.
However, during the past 20 years real estate has been impacted by unprecedented Wall Street dynamics starting with the 2008 mortgage crisis - created by Wall Street.
Who benefited? Wall Street investment firms who purchased foreclosed single family home portfolios, turning them into rental properties.
Fueled by the success of this strategy, firms like Blackstone ramped up their investments in single family homes during COVID creating all cash bidding wars which pushed traditional home buyers out of the market. Advanced AI analysis super charged national acquisition strategies.
In discussions on Clubhouse in 2020 and 2021, I heard insights into the "backstory" on this dynamic directly from Wall Street REIT fund managers and AI experts providing advanced market analysis algorithms used for large scale REIT acquisitions sending the real estate market into a tail spin.
In addition to purchasing homes listed publicly through subsidiary LLC's, distressed properties have been acquired by portfolio level Wall Street acquisitions - why foreclosures on the market are down. Not because there aren't distressed homes. They are purchased by REIT's before ever hitting the market.
An example of this is highlighted in the video report regarding Blackstone's purchase of Signature Bridge Bank's $17B distressed real estate portfolio.?
Wall Street's acquisition of distressed single family portfolios during COVID was confirmed by various inside sources. Although I provided details and contacts to a top-tier national real estate reporter, it remains an untold story.
Ironically, the all-cash no inspection bidding wars during this time fueled the backlash against realtors as seen in recent NAR national lawsuits. The untold story rests on Wall Street's acquisition strategies, pushing home buyers out of the market and creating a false perception regarding listing agents' value proposition.
Homes were selling with multiple offers as soon as they were listed. It makes sense that sellers would be upset about commissions. But it wasn't realtors or how they are paid that created this market dynamic.
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Real Estate Professional
3 个月This is important information Sussana. I was actually on a flight to Tampa years ago with a Blackstone executive going on a buying trip.