Is this Growth Sustainable?

[Moses Opondo]

While existing home sales are on the rise all over the country, is there a cause for concern because those buying the homes are not first time home buyers.Instead, the buyers are investment trusts, private equity firms and other investors.These investors are scooping up thousands of single-family homes around the country, renovating them, and renting them out. Then, when prices rise in the future, they'll sell them.
Is this growth in the housing sector sustainable?

[Damap]

Absolutely not.

[TJay]

No. It never lasts anyway, it always goes in waves but particularly so now that first time buyers are on the decrease. We need them to keep it bouyant and now there's more supply than demand and frst time buyers generate more home sales.

[Property4Prosperity]

Investors-led growth will not last because investors only buy based on numbers. As long as home prices are still low and the net yield (or cap rate) is still high compared to the return on other asset classes then investors, large and small, will continue to invest in the property market. However, there are signs that first homeowners are starting to get into the market and are driving up prices in many cities in America. If this transition continues across America, then the growth will continue, making it "sustainable". Having said that, the property cycle will always be there regardless. Hence, we will always experience an even greater boom and an even greater bust and this will never stop repeating. I am bullish on American property market because I buy based on cash flow, and as long as the number makes sense then I will continue to buy.

[Veethim]

Absolutely not.

Any reason?

[michael.davidson110]

nop, I don't think soo...

[annaharper87]

No, the growth is very unstable due to the uncertainty in the economy. It is better to stay away as long as there not strong indicators of growth as the money which is on stake is too high.

[RexyJames]

Not stable at all as the economy isn't stable. A lot of these investors could in fact lose money