House prices skyrocket:
In a January report, Georgia Multiple Listing Service found that the price of homes in the Metro-Atlanta area had increased 22.8% from the previous year. Realtors had sold 17% fewer homes in that same time.
The median price of a home sold last month was $350,000. This price is a 23.5% increase from January 2021.
The prices of single-family homes have increased dramatically since the beginning of the pandemic. Conditions during lockdowns created or exacerbated trends that have led to this increase.
On a material level, issues with the global supply chain have made wood and other materials harder to obtain. This supply chain issue has increased the cost of building new houses and caused the housing market to inflate.
However, what caused an even more significant tightening of the market within the last year has been purchasing homes by private-equity firms and hedge funds. These finance giants have turned their gaze to the housing market in an attempt to garner extreme profits, and it is working.
Investment firms such as Blackstone Inc., Cerberus Capital Management and KKR & Co. have been some of the most prominent players in this game. These groups have purchased thousands of homes across the country, including homes in our very own backyard.
The intent behind these purchases is to give prospective homeowners no other choice than to rent from these large firms that have complete control over what the renters pay.
Firms have strategically planned these home buy-ups to coincide with societal trends. In the past two years, Americans have been fleeing big cities all across the country.
These people’s destination is the suburbs. Such a significant shift in where people live would have caused a crunch in the housing market on its own.
However, it has become unbearable for the average consumer to find a house considering these factors
These large firms are not working alone either. Some of the most popular home listing sites, such as Zillow, are helping fuel this consumption of homes.
Reports digging into Zillow found the website was selling 20% of all the homes listed on the service to investment companies like Blackstone.
The national trend is even more pronounced in the Sun Belt, stretching from Orange County, California, to Savannah, Georgia.
This region has the fastest-growing population in the country. Zillow sold up to 40% of all the homes in this area listed on the website to these equity giants.
Most of these houses were not publicly listed on the site either. They were sold directly from Zillow to these firms, with consumers not getting a chance to even look at them.
These same homes are now popping up on Zillow and other sites as being available to rent.
This trend has some very major implications for the future of the American middle-class. For the past 200 years of American history, owning a home has been the number one way to accumulate intergenerational wealth.
Spokespeople from these firms and some experts in mainstream media believe that this is the future. They claim the model of Americans no longer owning their homes but renting from a small number of housing giants is the next step in our society.
The climb in house prices is benefitting current homeowners. The value of their homes is at an all-time high.
At the same time, companies are pushing those wanting to purchase a home out of the market. This shift is especially pronounced in younger generations of Americans.
The rate of homeownership among people between the ages 25-35 is at an all-time low compared to other generations at that same age.
This fact coincides with other economic metrics that show a bleak landscape for future generations in our country.
Jeff Bezos’ yacht faces eggs-istential threat:
The largest sailing yacht in history will set sail within the next few months. Commissioned by Amazon founder Jeff Bezos, the super-yacht cost a reported $500 million.
People have marred the vessel’s virgin voyage with controversy. The 417-foot yacht is being built in Alblasserdam, the Netherlands, by Oceano. To leave port in Alblasserdam, the ship must pass through the Dutch city of Rotterdam.
Rotterdam hosts the historic Koningshaven Bridge, a railway bridge built in 1927. While the bridge has not been in use for nearly 30 years, when city officials proposed dismantling it, the people of Rotterdam vehemently opposed it.
Due to these pressures, the bridge was instead declared a national monument in the 2010s. The bridge underwent restoration during this time, and officials said it would stay up indefinitely.
The Koningshaven Bridge only has a clearance of around 131 feet, hundreds too low to allow the super-yacht to pass through.
The city officials will temporarily dismantle the bridge to allow the ship to pass through to get around this problem. Although Bezos will be footing the bill for the dismantling and rebuilding of the bridge, locals are still unhappy.
Locals are so unhappy that Rotterdam resident Pablo Strörmann created a Facebook group titled “Throwing eggs at super-yacht Jeff Bezos.”
The planned event is to throw eggs at the half-a-billion-dollar yacht that has received thousands of people interested or planning on attending.
While the logistics of launching eggs the near 250 feet it would take to hit the passing vessel are challenging to overcome, the amount of attention this has received shows how important this monument is to the people of this very historically important city.
