Wall Street appears to be monopolizing the housing market as small landlords, regular homeowners, and renters are getting crushed.
Much of the difference in these outcomes all comes down to who is getting the huge sweetheart deals on taxes, versus those that are being victimized by taxes.
Wall Street Follows The Remote Work Trend
As hard as they’ve tried to sell and insist on going back to the office in the city, workers just aren’t buying it. Especially not for companies that do not know how to operate efficiently in the new economy, and want to work them to death 100 hours a week, in high cost cities, with relatively menial pay.
That hurts for big institutions that have recently built giant multi-billion dollar office buildings, and even warehouses.
Meanwhile, the Federal Reserve Bank of San Francisco reports that 60% of recent equity appreciation in real estate has been driven by remote work migration. With home values growing by 1% for every 1% of the workforce leaving for remote work. At least in the areas that they are favoring.
So, Wall Street has had no choice but to shift strategies to make up for pending losses in other sectors.
Wall Street Taking Over Housing
Since the beginning of the year it has been reported that Wall Street institutions have been plowing tens of billions of extra dollars into buying up the housing market. Especially apartment buildings and entire new home communities.
Among some types of properties in some areas, they are now buying up 40% or more of all the housing stock. Often paying as much as 50% over retail prices, just to price out regular homebuyers and soak up all of the housing stock.
The New York Times reports that big publicly traded companies are now reporting record profit margins, while small landlords are being financially squeezed out of business. With middle class home buyers being priced out, even if they could find something for sale, and renters struggling to keep up with big rent increases.
Of course, this is likely to have a double financial impact on civilians as they are being set up for huge losses on their investments and retirement portfolios. While of course, big bonuses will still get paid to these CEO and money managers, no matter what.
Taxes continue to be one of the biggest differentiating factors in this mix.
Big companies get the big tax breaks. Whether that is write offs as they lose their investors money, various deductions and write offs for building, or years of property tax exemptions worth many millions of dollars.
That is all paid for by those they are already squeezing financially.
Small landlords can't keep up with the rising costs of maintaining rentals. Especially with rising property taxes and other taxes to pay for their larger competitors to put them out of business.
Individual renters are being crushed by taxes, lockdowns, inflation, and crime to ice the cake.
Fortunately, taxes are also your chance to even the playing field. Get educated about all the tax breaks, exemptions, and discounts you should be receiving as a business or home owner. Get help filing appeals to correct your annual property tax bills, and stay ahead of the financial storm that is brewing.