Comments by "worn down" (@worndown8280) on "Something BIBLICAL is Happening With New Construction" video.

Thats not really what happens. They cut prices even further and then they leverage the losses and use it as a way to protect themselves from houses. DR Horton, Lennar, Poulte, and Seeno have done this every downturn. As I have stated on this channel multiple times I got a home in 2007 for about a 46% total price cut from DR Horton. All they have to do is make enough to service any debt they have. But when they do it is important, for tax purposes. The corporations you are worried about buying all these homes are being hammered with losses and most have seen at least 15% losses to their portfolios. Rental ROI only works at ultra low interest rates. That time has past, respectfully.
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@realestatemindset Fear. Fear of an unknown future makes people rather bothersome.
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@realestatemindset I have my moments where I worried. Then I remember that most of history was much more cruel and brutish than today. Keep the faith friend. We will make it.
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@AJSHOPE indeed. Another factor that many arent taking into consideration is that commodity prices have fallen to points where these houses being constructed now are almost half as cheap to build as they were a year ago. Home builders have huge margins that they can cut before they hit any flesh.
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@breannahorton what year?
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@breannahorton The time period you said all this happened.
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@breannahorton I dont assume. Which is why I asked. So they started selling them in groups after prices collapsed and after interest rates dropped and after most people had left the housing market either due to foreclosure or job loss (Unemployment rate was 10% nationally in that time period). Thats not a shock. The ROI was very high then. It is not now. You can get a 2 year treasury bond with a higher interest rate of return than you can purchasing real estate and renting it now minus the hassle. So the question is, why would people do it going forward. The answer is, they wont. Which is why most of the smart corporations have stopped buying real estate. And a few are even selling now. Real estate going forward, due to real demand, will be a deflating asset.
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@breannahorton Why would you not want anyone to buy rentals? People need rentals. Not everyone is in a need or position to buy a house. Rentals are an important part of the real estate market. Yes I lived in Japan for near a decade. They give away property outside major metro areas. Its literally free. But you seem to be arguing both sides. So I am not really sure what your point is. Who would buy something as an investment if it is free or even declining in value with a negative ROI? That seems, to put it politely, stupid. Maybe as a tax right off? But that only works if you have profits. There will always be small time land lords. There will always be some moderate sized land lords. But in the coming years, hedge fund types with huge housing portfolios will go the way of the tulip bulb merchant.
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Many of these master planned communities require builders to put in many amenities and complete a build out before they are ok'ed from a legal standpoint. Communities learned after 2007 and 2008 that not forcing builders to do that leaves those communities half finished with little to know long term viability. I am wondering, did they have that requirement in this subdivision?
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