Ryan Dezember
speaker
644 appearances
11 recordings
1 series
first heard May 2018
last heard Jun 2024
Ryan Dezember’s voice in public audio — every appearance, attributed to the second.
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Appearances
We've seen this playbook before, a big run-up in prices of homes and then a crash.
So, again, that could be a matter of, you know, the psychology at play.
Like, I don't want to buy into a bubble.
I'll sit it out and rent and wait.
You know, remember, because borrowing costs are so low, that's indicative of historically low interest rates across a broad swath of investing options for people.
And home rentals are one place that people are finding, whether it's, you know, the doctor and dentist that have a few houses in town to rent or a big company or a private equity fund.
Rentals are something that are yielding, giving a significant return at a time when most other investments are not.
Geographically, they're located generally in what we call the smile states.
So basically along the West Coast, down through the Sun Belt, across Texas into the Southeast, and up into the Carolinas.
The price point of the homes is generally what we'd consider a starter home these days.
One of the problems, though, is after the financial crisis and the housing crash, banks stopped lending money to people who didn't have very high incomes.
And in response, Builder said, well, you know, if you're not going to give the lower middle class people a home loan, why should we buy homes for that price point?
So you have seen in the last 10 years a dramatic decrease in the number of homes, new homes that you can buy for under $200,000, while you've seen a surge of those that you can buy for, say, $400,000 or $500,000 and up.
And what that's done is it's created a really big dearth of that home for people who are
in between an apartment, but don't have the wherewithal to buy a house.
They might need the space because there aren't a lot of three and four and five bedroom apartments out there, but they can't necessarily buy a house or for whatever reason they're unwilling to.
And that's the sort of market that these companies are targeting.
On one hand, there's a lot of suburban homes and good school districts and nice neighborhoods, nice suburban neighborhoods and stuff that now they can live in that sort of environment and that sort of place without having to commit their life savings to a down payment or enter a 20 or 30 year financial contract and a mortgage.
The flip side is you don't build wealth by renting.
And as we discussed, there's a big dearth of homes that could be bought for say 200,000 or less, particularly new homes.
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