WEF part 3: the housing crisis
How the WEF has led to massive changes in homeownership
Many of you may have noticed that the price of homes has shot through the roof. The great housing collapse of 2008 seems to be a distant memory to many people. Remember what got us in trouble then? Subprime lending, inflated home values, people buying homes out of their budget, so they did creative lending like balloon payment options after a 5/10 year low monthly payment option. People could not afford their balloon payment after the 5-10 years of cheap payments. They could not refinance their home. Many people chose to short-sell or foreclose. Home values dropped by 50% in many areas. By 2017, the credit woes people had from that housing collapse had “exited stage left” off their credit report, and they were able to buy a home again. The housing boom started. I am acutely aware of this as I was selling a house in 2017 and it was nearly impossible to find a home to buy! I ended up renting for a year until the housing market became a little more plentiful to buy.
And the consumer trend started all over. Interest rates kept dropping. Home prices kept going up. Those in starter homes suddenly had a lot more equity than they did a year ago, so starter home owners sold and “upgraded”. Then the pandemic started. Interest rates dropped to historic lows. Refinances were at an all time high. Since the pandemic started, the housing crisis of another type began: there are not enough houses to accommodate the needs of buyers. Supply and demand drove up the price of homes to historic levels. It was a sellers market! New builds are stacked up. Existing homes are going for tens of thousands over asking price. Sounds great, right? Thriving housing economy!
Here is the problem. First, we have inflated the value of homes so high that they are unable to appraise for the value needed to get a mortgage on them. So cold hard cash is needed to make up the difference. So you have a financial investment that from day 1, you paid more for than it is worth. Because the values will drop. That we know. 2007-2008 taught us that. Buying a home at the over-inflated rate all but guarantees you are going to lost at least 25% of that homes value when the market comes back down to reality.
The second problem? We have priced the starter home buyer out of the market. First time home buyers can no longer afford to buy their first home. They are stuck. Starter homes are now flying off the market at the same inflated value that moderate to pricier homes are. So those of us who bought a starter house 20 years ago and built up good equity to put into our second or third home had an advantage that current starter home buyers do not have. There are no affordable starter homes!
Why is that? This is where the WEF comes into play. Remember the “you will own nothing and you will be happy”? Starter homes are just that.
Here is a clip from 60 minutes. https://www.cbsnews.com/news/rising-rent-prices-60-minutes-2022-03-20/
This just aired a couple of weeks ago. Look who is buying up the starter home market. Investment firms!!!!! Companies like Tricon. An investment firm who, when a “starter house” or a “fixer-upper” come on the market, they swoop in with all cash offers and buy up houses at a rapid pace. They own more than 30 THOUSAND properties! And they charge more for rent than previous market rent value once they do their “spit shine” fix on the property. Who is Tricon? Well, they are a housing investment firm who is worth over 8 billion dollars in assets, and who, coincidentally, (not), was just bought out by Blackstone.
Blackstone was founded by Blackrock. You remember Blackrock from a few days ago, right? The trillion dollar investment firm who owns more assets than any other company, aside from maybe Vanguard? The company that owns most of our pharma, media, and financial institutions? The company that has many members on the WEF board? The company pushing as hard as Klaus and Yuval for the “great reset”. The company that advocates “you will own nothing and be happy”. So this is a great “real life” example of how the World Economic Forum tentacles into the housing market. Blackrock (WEF evil spawn) created Blackstone. Blackstone invested in and then bought out Tricon. Tricon is paying cash for all the starter homes they can. So this does two things: 1, they buy all the existing starter homes on the market, and 2. They set the price of what a starter home will sell for. They have unlimited cash to buy anything they want. The average buyer cannot compete with that. A new buyer with FHA lending makes an offer. Tricon comes in with an all cash, short escrow, waive appraisal offer. You as the seller, which option would you take if you had NO KNOWLEDGE of how dirty Tricon/Blackstone/Blackrock are? Well of COURSE you would take the all cash short escrow option! Your realtor would thump you upside the head if you DID NOT take that cherry of an offer! So the consequence is a first time homebuyer walks away without a home, and Tricon/Blackstone/Blackrock just got another house they will charge an inflated rental rate for. And that first time homebuyer? They will end up in rental purgatory, renting that same house from Tricon, building zero equity and wealth for themselves, as Tricon continues to chew up and spit out young people trying to buy their own home.
This shenanigan isn’t new. Blackrock/Blackstone did the same thing in 2008. They bought up all the short-sell/foreclosure properties, sat on them until the housing market rebounded, and then rented them for inflated prices OR sold them for double what they bought them for.
Classy group, aren’t they. They are working hard to end the American Dream of homeownership for millions of people by buying up the entire starter home market. And charging high rent that makes it nearly impossible for a young starter family to save enough money for a down payment on a house IF they are able to find one. Such a sad situation.