[gnopgnip]

High prices in some areas is about the price of land and not about construction prices.

Residential REITs need to profit when they buy a house. An individiual homeowner doesn't, they can pay more if they want to. And individual homeowners get subsidized loans, and in many states subsidized property taxes, they can have a much lower monthly payment, and afford to offer a higher sale price. So for move in ready homes, the seller will almost always go with an owner occupant.

The real problem is with investors buying homes that aren't move in ready. Rehab loans are expensive and risky, individual buyers can't compete with investors, and the sellers are the ones with the short end of the stick.

[mlac]

Private Equity funds are using homes as a store of funds - to diversify their holdings and as a long term move. This can be in cash or financed, but they can afford to eat the loss because there is excess capital right now. It's been this purchasing for years that is contributing to the crunch right now.

From an article in September: "Blackstone Group, which blazed a trail for Wall Street in 2012 when it formed Invitation Homes and became the largest owner of single-family rental homes in America, has returned to a familiar watering hole." [1]

It's another way to milk the middle class.

[1] https://www.housingwire.com/articles/blackstone-gets-back-in...