So Apparently Blackrock is Buying up all the Houses

As someone in real estate, this isn't that bad for me as the values of our assets go up (although there's almost nothing to buy. But it's not good for the average person trying to buy their own home and get their foot on the first ring of building up a nest egg. (And of course, it's all being subsidized by ridiculously low Federal Reserve rates these major investment banks can borrow from at next to no interest.)

As The Wall Street Journal notes,

"The bubble has room to grow before it bursts, according to John Burns Real Estate Consulting. But it is inflating fast. The firm expects home prices to climb 12% this year—on top of last year’s 11% rise—and increase at least 6% in 2022, a period of appreciation reminiscent of 2004 and 2005...

"...The coronavirus pandemic sparked a race for home-office space and yards. Occupancy rates reached records and rents are rising with home prices. The ecosystem of companies that service, finance and mimic the mega landlords is booming.

"Burns counted more than 200 companies and investment firms in the house hunt: computer-assisted flipper Opendoor Technologies Inc., OPEN -0.36% money managers including J.P. Morgan Asset Management and BlackRock Inc., BLK -0.67% platforms such as Fundrise and Roofstock that buy and arrange for the management of rentals on behalf of individuals and builder LGI Homes Inc., LGIH -1.63% which now reports wholesale home sales to bulk buyers in its quarterly results."

The article doesn't discuss how technology has made it much easier to manage such portfolios, which I think is a large part of the reason big investment funds are buying houses now. Indeed, I don't know how you could handle a large portfolio without things like property management software, ShowMojo boxes, lead management systems, GPS, etc. etc.

You would also think this will also put downward pressure on rents, but we haven't seen that yet. I guess we have seen a growing spread as home prices rise faster than rents, so perhaps the rest is just general inflation, which is going up quite a bit as well.

I suspect this will increase political instability and anti-landlord sentiment even more (although it should increase anti-Federal Reserve and anti-Wall Street sentiment). We shall see...