How the biggest players in Wall Street will take advantage while the average buyer will be frozen in fear and lose out.
Neel explains quickly and effectively what the Wall Street players are planning and will be doing. This is what happens in Recessions. The major players in Wall Street engage in the tried and true principle: buying the dip. Buying when prices drop.
The simple fact is, California is not building enough housing to meet demands. Not by a long shot. This is no secret, you know this to be true. This is why demand for housing as well as for rental housing are both rising and have been for years. It is simply an issue of supply and demand.
So what happens when there is a lot of demand but not enough supply to satisfy that demand? Prices go up. This is what has been happening for years and especially for the last couple of years since the pandemic. So to slow down the rising prices and inflation, we are now dealing with rising interest rates and the certainty of a Recession. Remember, the rising in rates is manufactured by the government to slow down the demand.
The average buyer is shocked by the rapid rise in rates and the fear mongering from the news is further contributing to the fear. People are simply choosing not to do anything. But life happens. Kids still grow up and people move from one state to another. These people will not stop living because of the fear of rising rates.
Watch the big players. They have been slowly buying up residential real estate all over the country for the past several years. That is one of the largest reasons for the rapid rise of housing prices. The average buyers could not compete with funds like Blackrock which has out bid and swallowed up all of the prime housing and turned them into rental properties.
Do your own research and see why housing prices are not falling off a cliff like people were hoping for. We don’t have an abundance of supply. We still have a shortage and these massive funds have plenty of money to buy an asset that has performed very well during recessions: real estate.
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