Friday, September 9, 2022

Risk Big! Lose Big!

Instapundit pointed me to this over at BattleSwarm.  If you are one of those people who think the left is taking advantage of the current economic crisis to enrich themselves at your expense, read:

Then: Commercial Investors Are Sucking Up All American Housing! Now: They’re Losing Their Shirts!

If you can remember all the way back to pre-Flu Manchu 2020, housing prices were soaring and there were a raft of articles decrying how commercial investors were snapping up housing as fast as they possibly could, pricing ordinary Americans out of the market.

Now, some two years later, it’s evident that a lot of those commercial investors kept buying right up through the peak of the market, and are now proceeding to lose their shirts on those deals thanks to the Biden Recession.

Take, for example, OpenDoor, the company that sends out those endless “We want to buy your home” letters. They promised investors they were going to use the Internet to revolutionize home-buying by flipping homes at scale and cut out the middle man. How well did they succeed?

Now that they’ve had a while to run their system, the answer is: Not so well.
Holding on through the dips without panic is a good thing.  The COVID-19 disaster had me down $300K at one point, but rather than realize those losses, I held on and all the lost value came back and more.  Things are not so good at the moment, but markets are remarkably resilient.

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