House Flipping is destroying NYC Neighborhoods NYPost Article
https://nypost.com/2018/04/28/house-flipping-is-de...
I just came across this article, being an Investor maybe I'm a little bias but after reading all I could think about is glad I'm an Out of State investor & granted I dont flip I'm a buy & hold investor. Going to meet ups I talk to flippers and I know how much work, time & sacrifice its put into flipping a house especially when starting out Flipper is doing most of the work themselves.
Not only are Landlords viewed negatively now NYC flippers are now to blame for the outrageous prices in NYC.. I guess high demand, low inventory, foreign investors have nothing to do with it..
Its a good reminder of how Investors are viewed outside this community..
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tabloid journalism
It’s the post. It’s meant to be inflammatory and create buzz. This isnt even real news. Are any of us actually going to get worked up over an article that actually writes ...
“While many Americans still mistakenly attribute the start of the Great Recession to mortgage defaults by low-income subprime borrowers, speculators were actually at fault, according to a groundbreaking 2017 report by the National Bureau of Economic Research.”
The post’s interpretation of the NBERs research seems to take some liberties.
It actually seems that the NBER is saying that it wasn’t just sub prime but also prime loans that defaulted, and the Post just to make the jump to blaming flippers exclusively.
( The study itself is behind a paywall. )
“We find that real estate investors play a critical role in the rise in mortgage debt only for the middle and the top of the credit score distribution,” wrote researchers Stefania Albanesi, Giacomo De Giorgi and Jaromir Nosal in the NBER report. ” The share of mortgage balances of real estate investors rose from 20 percent to 35 percent between 2004 and 2007 for quartiles 2 and 3 of the credit score distribution. Most importantly, we find that the rise in mortgage delinquencies is virtually exclusively accounted for by real estate investors.”
This article is actually interesting;
http://mitsloan.mit.edu/newsroom/articles/rethinking-how-the-housing-crisis-happened/
Although, the NBER seems like it’s blaming the middle car in a multi car pileup.
Sure, investors (flippers) will default in the middle of a crisis when housing bubbles pop; but it wasn’t the root cause.
My ex was working in derivatives on Wall Street in 01-07. All I can say is, Watch “the big short”. It will make more sense why flippers were absolutely not the cause.
I actually think a lot of people look negatively on house flippers. After talking to them I learn that they don't. I see their side of the coin, driving prices up, however, at the end of the day something is worth what someone will pay. If buyers weren't paying the price and lenders wouldn't lend on it, the flipper wouldn't be able to sell so high.
From a personal perspective as someone looking to get out of renting into a home of his own its tough to even find a fixer upper in the city when flipping is so profitable here and guys can come in with all cash offers and sellers know this. That said I don't hat flippers, wish I was them.
garbage article. not all flippers come out on top. On my block, there is a house that was renovated and it has the for sale sign up for over a year. flipping in NYC is a science and an art. not everyone can do it.