[quote=kev374]This sounds EXACTLY like a Ponzi scheme reminiscent of the last big bubble and crash. In the last bubble the actors were average Joe’s, in this bubble the actors are investors. In either case there will be a spectacular crash in 2-3 years. Will the taxpayers be picking up the pieces? Who knows.[/quote]
Sorry, kev, but I don’t agree. The last big bubble’s bad actors bought property with “funny money” and had little to no skin in the game.
IF there is a RE bubble in the coming years with “investor actors,” it can’t crash. WHY? If one pays cash, how can they “crash?” A “cash buyer” doesn’t HAVE to sell unless it suits them. If values should decline again, these “investor-actors” will just continue to hold and rent these many thousands of properties out, which is 75% of the reason they are being bought up today. Meanwhile their REIT investors will have nice monthly or quarterly returns on their “investments.” :=]
Your definition and my definition of a “bubble” are likely very different. In many parts of SD County, the residential RE market over-corrected in the last bust, causing many good, improved properties to sell at (or less) than land value. The fundamentals had run amok, due to too many lazy lenders waiting too long to foreclose or accept a short pay. These lazy lenders ended up falling down on their appraisals and taking anything they could get while letting their defaulting trustors squat indefinitely. This was bad for ALL owners and had the impact of severely reducing the values of the majority of thousands of longtime owners who were never in distress.
