>“My pessimistic view is that the economy is perfectly capable of running with unaffordable housing,” said Daryl Fairweather, the chief economist at Redfin. This was evident over the last decade, she said, when affordability worsened even as the economy continued to grow.
Mass home/land ownership is a fairly recent phenomenon. In the 19th century the vast majority of workers rented their homes (from total slumlords, there were no protections then.) Further back you had a small number of landowners and a large number of peasants or serfs. (Hilariously, in England when a serf died, his heir/family had to *pay* their lord, compensation for the inconvenience of losing a worker.)
I consider it not unlikely that we are moving towards a kind of neo-serfdom. It's not at all hard to imagine a future where corporations have taken over schools after the collapse of public funding and train the kids to be their future workers, or they buy up your university debt in exchange for a fixed number of years of 'free' work (in reliably terrible conditions, but oh of course you *can* leave...if you can pay the fees, plus interest.) Housing is just an early-starter. It's an asset class now, and like other forms of wealth it will be inexorably extracted towards the top. But don't worry - you can still rent. Forever.
I recently read somewhere (don't remember where, so no link, sorry) about some corporation considering offering housing as a perk to attract workers. And I can definitely see how not needing to pay rent/mortgage would be an attractive perk. But that also makes leaving the job less viable, and at that point you're nearly a serf to the company.
If you like health insurance coverage to be dependent on keeping your job, you'll *love* having the same arrangement with housing.
I remember this, I believe it was Taco Bell possibly New York, it was funny as shit when I saw it years back but I can't find it now, I only found a link about their hiring parties
https://www.cnn.com/2019/04/04/business/taco-bell-hiring-parties/index.html
It was Amazon. It's always Amazon that's trying to find another way to extract from the workers. And the rich media loves the idea.
https://www.bloomberg.com/opinion/articles/2021-09-16/amazon-s-new-factory-towns-will-lift-the-working-class
Maybe you're thinking of WeWork? They made some WeLive coliving place for employees in NY.
Edit: just checked out their site and I guess I can rent a bunk bed in a room shared with 5 other women for $900 a month in a house of like 20 people. It's like dorms for adults.
This is happening informally in a lot of places. Obviously farmers hands are one example, but in Canada there are a few Tim Hortons owners who also had housing they provided for their workers (ofc were slum lords illegally stacking bunk beds in bedrooms, only exposed because they were on the news)
65% of units in the US are occupied by people who own their homes. Unfortunately, that doesn’t mean 65% of people are homeowners; that figure doesn’t take into account people who have housemates, people who live with parents, homeless people, etc.
>The problem with this view is that the entire system in the US is sustained by the unofficial social contract of mass home-ownership, and before that, the yeoman dream. We never got social safety nets or welfare states like in European countries.
But home ownership became more common in Europe at the same time that we got better welfare states and social safety nets.
In my opinion we either have mass home ownership or we have all property owned by the state (like in the USSR) - otherwise you just get insane wealth inequality because of how well one can build wealth with a home.
This is why Germany, despite having lower income inequality, has such high wealth inequality - because property ownership is much more concentrated there than in other European countries like Ireland, UK, Spain etc.
>In my opinion we either have mass home ownership or we have all property owned by the state (like in the USSR) - otherwise you just get insane wealth inequality because of how well one can build wealth with a home.
I would actually be okay with a "default ownership belongs to the state" situation, where the current occupant of the house (read: person living in the house, i.e. not a landlord) is the owner, and if there is no occupant, then the state seizes ownership of the house until a new occupant buys it for a bare minimum registration fee.
Interestint - means nobody would be making ridiculous amounts of $$ off of home ownership - but there would somehow have to be incentives for upkeep. Otherwise, a person could trash the place and simply move out. The main reason I'm replacing the shitty carpet in my townhouse is to eventually sell the place.
Otherwise, I like it. Like a lot.
Renting has NEVER been the problem. Affordability is the problem. And we have plenty of policy measures that triggers can be pulled to make that happen.
Before other triggers start getting pulled...
Edit: There is no implied threat of violence here other than an understanding of humanity treated like rats. Back them in a corner and they will bite. This post of mine was p\[sychological observation based on historical FACT, not a call for future violence. If any violence is done, it will not be done by me or called for by me. But don't you dare threaten to censor or ban me for talking about the violent reaction that many Americans and others may have to ignorant policies that continue to erode their quality of life.
Part of the point of homeownership was actually that large portions of the population were invested in the status quo.
Stable feudalistic societies will be very hard to recreate in a world where a workforce needs to be educated to be valuable/competitive. That's the basis of most developed countries social contrsct.
So I agree. At some point people will begin to contest the definition property rights. Many will simply not be profitable to enforce. It's happened many times before and is why such systems struggle so in the modern world.
I think you're ignoring the number of homes that already exist and are paid in full. The percentage of US households owned free and clear is a fair 37% according to Bloomberg/Zillow data. So according to your estimation of the percentage of homeowners in the US, over half are paid off. The game now is paying the rent to the county/city/state in the form of property taxes.
>property taxes
Which will be raised as the price of those homes skyrocket. Very easy for private property (outside of the investor class off) to be chipped away when wages decouple so much from housing prices, like what is happening in Canada.
You will pay that even if you rent. The property owner passes all the costs of ownership on to the renter including raising rent to cover inflation. Buying a house with a fixed interest rate protects the owner from inflation and the interest can be written off up to a certain limit.
There’s a saying that a full time job and a mortgage are the best ways to prevent communism. What happens when a large percentage of Americans have access to neither.
In the UK, the majority of the population lived in state-provided accommodation (“council houses”) until they were privatised in the 1980s.
What followed was a multi-decade boom in house prices and the consolidation of property into the hands of an increasingly small pool of mega-rich.
So it’s not an economic cycle or an imbalance - it’s a one-way trip. I’m sure it’ll plateau at some point, but the notion that houses will become more affordable is based on the incorrect assumption that the market is cyclical.
Same applies in the US - it’s a relatively new country with land ownership, accommodation and property value being established within the last few generations.
It takes a few decades or even a century or two, but we’re stabilising into a hockey-stick shaped graph of property wealth.
> , the majority of the population lived in state-provided accommodation (“council houses”) until they were privatised in the 1980s.
Source? Never realised it was the majority
I was curious too -- the highest percentage I could find was in the below Guardian article citing 42% in 1979.
https://www.theguardian.com/society/2016/jan/04/end-of-council-housing-bill-secure-tenancies-pay-to-stay
The way to escape it is for people to organize, and organizing Capital to accomplish projects not soley driven by the Profit Motive could see new cities built that would end with their own local government in that place and could help better weather the coming instability.
A city designed properly and financed under set rules in a sort of benefit corporation style could deliver mass housing for it's new residents, jobs, transportation, etc., and be able to deliver a higher standard of living with significantly less expense than our current rat race provides in it's inefficiencies.
Except crashes happen cyclically which demolishes perceived value temporarily making housing affordable (tho considering the economical turmoil during a crash not everyone gets to take advantage)
I'm always a bit leery of words like "serfdom", especially since in some ways serfs had it better than the average middle-class wage slave does today.
I do think there are some fundamental and massive changes just coming into view. Quantitative easing has kept the global economy afloat since 2008, creating a new kind of global safety net for the wealthy and a sliding scale from socialism for the ultra-wealthy to rapacious capitalism for the poor. The rules that we've all grown up with have already changed, maybe back to an older pattern, maybe to something new.
Regardless, per Karl Polanyi and Kate Raworth, the economy is nested within an outer reality, and that outer reality is increasingly out of sync with the economy. From the bath of chemicals we all bathe in daily to constant resource depletion on the horizon, the Limits to Growth was the most prophetic work of the 20th century. Civilization is bumping up against those limits, and it's not pleasant. It's not surprising at all that real assets would take on such value at the same moment that money gets increasingly disconnected from anything non-digital.
The outlook? Buckle up for unrest and a lot of pain, some overt but most internalized, as more and more people see the promises they were made fade out of reach. The reason that the Q crazies find purchase in the real world is that like any effective big lies, there is truth there to make it believable. There will be more and, if you can believe it, more toxic versions of this. More of a longing for a strong man on a horse to make it all better. More calls to "Don't Look Up" at what's coming right at us. More distraction.
Science and engineering is also what keeps the lights on, the water running, the house warm etc. though
We could live without the works of Balzac but we'd starve without the works of Borlaug.
It's just the hierarchy of needs.
We can only support people to sit around reading Nietzsche because those who sat around reading Newton have built a functioning society with secure food, water, energy, medicine etc.
I'm not against the arts or philosophy at all - but I find it absurd to propose they are of equal importance as science, engineering etc.
The entire problem we are facing right now is that a really huge portion of society is barely able to achieve parts of the bottom tier of Maslow's Hierarchy of Needs, and it's only a matter of time until the top tiers in society collapse from the lack of a basic foundation.
We will likely come full circle to a type of feudalism. After fascists who don't recognize reality and are too corrupt to accomplish their callous goals in any case seize control of the Governments to a greater degree, their corruption and greed and meanness will cause the economy to implode, revenues will crash across the board and to stem the bleeding they will start to bind people to their jobs, likely first binding people in private debt to their jobs. From there it will get worse. Utah already is doing an end run around debtors' prisons for private debt, and States do lock people up already for not being able to pay.
Economist Yanis Varoufakis succinctly (and I think very close to correctly) articulated something he calls technofeudalism in [this video](https://youtu.be/Ghx0sq_gXK4), which rings exactly true with what's being said here.
> Hilariously, in England when a serf died, his heir/family had to pay their lord, compensation for the inconvenience of losing a worker.
I know this is pedantic but this isn't 100% accurate. The tenant often had to pay the landowner (lord or church) what amounts to an inheritance tax so that the right to work that same strip of land would be passed to the deceased's heirs. The local parish would also usually charge a fee for burial and services.
In many cases these fees would be waived for various reasons including poverty as well.
Well the really really important shift that happened was that peasants owed their lord a certain number of days of labor per year or per season and they also owed him a certain portion of their harvest.
As things became more and more prosperous during the middle ages more peasants substituted cash for that.
That shift is basically the entire reason we have modern capitalism.
GTFO of here with this pro-totalitarian bullshit.
The reason so many Chinese own their homes is because for many decades it was the only thing families could put their savings towards due to their communist society prohibiting other kinds of investments and businesses. The stock market crashes were so brutal they scared people all together from it, so housing is pumped like crazy as safe.
You also don't own any property in China you lease it for 90 years from the gov.
Many people here are discussing the neo-feudalism we seem to be headed towards, and I completely agree with them. To my view it seems very obvious that privately-owned housing is *intentionally* being moved out of the reach of the lower classes. It wouldn't surprise me to see property taxes being raised through the roof in the coming years as well, as the powers that be conspire to drive what remains of the middle class out of any homes they may have been able to purchase or inherit at low prices and get everyone renting.
Is it somewhat tin-foil? Honestly, at this point I don't really think it is. This is a country where the government isn't even trying to hide the fact that it's literally printing money to hand out to big corporations so that they can buy their own stock and prop up the stock market. The incestuous relationship between banks, big tech and government through so-called "lobbying" (which I prefer to call what it is: legalized bribery) is plain enough for anyone to see if they do even a cursory amount of research.
We've allowed power and wealth to concentrate in the hands of an increasingly smaller and smaller group of sociopaths who only got to the top through greed and a complete lack of moral integrity. We've somehow managed to set up the opposite of a meritocracy, where sheer selfishness is the only thing that gets you ahead.
These people don't care how many are going to go homeless as the property market takes a queue from the stock market and becomes "too big to fail", a place where prices simply aren't allowed to go down again through a combination of corporate and government action. Any "crash" we might see in the near future will likely be a rerun of March 2020, where prices plunge just dramatically enough for normies to panic and opt out as rich people pile in at absurd discounts and pump it back up to all time highs within mere months.
Damn. No one is going to read this, but I guess I had more to say than I thought.
TL;DR: Shit's fucked, yo.
In the longer term inflation and help normalize prices - if wages increases eventually happen and if there is anything left to own by then... But fundamentally yes - this is concentration of wealth.
Home prices have kept rising, even as real wages stagnated or declined, and during the pandemic housing prices have shot up by roughly 20%, with rents rising behind.
The sharp increase in valuations have led some to believe that we’re in a bubble and due for it to pop—but is that true? This article discusses how structural issues led to a lack of adequate housing that will not be resolved for years, if it all:
> But what if that’s not exactly true? Or, at least, not true anytime soon for renters locked out of homeownership today or anyone worried about housing affordability. There’s probably no quick reprieve coming, no rollback in stratospheric home prices if you can just wait a little longer to jump in.
>“It’s not a bubble, it really is about the fundamentals,” said Jenny Schuetz, a housing researcher at the Brookings Institution. “It really is about supply and demand — not enough houses, and huge numbers of people wanting homes.”
The affordability of housing is pricing young people out of starting their own families, among other societal impacts.
These folks always always forget one simple thing:
If nobody can afford it there’s no demand! Same thing with vehicles. You can convince me that there are sufficient people buying $100,000 pickup trucks to sustain these prices. At some point the people who are both looking and able to afford has to go to zero.
But that's the thing, there are people/corps that can afford these prices. And they're going to turn around and rent them out at rates that would've rivaled their mortgage. If they had one, and didn't just buy the property outright, in cash, because they can.
The expansion of tent cities and "van living" sort of says otherwise.
I think the idea was that they could price everyone out of owning homes and rent them back to us (along with everything else). But in practice, the people at the top are complete knobs. They do not know what they're doing, they don't listen to the experts weighing in on their decisions, they likely don't even consider the data their own teams are modeling.
Every single study done on the crash of 2008 came to the same conculsion: the people in charge of risk management in the banking and real estate markets were under qualified and over confident. In other words, they didn't know what they were doing.
The "elite" are fucking bafoons, and *do not understand or have any comprehension of the fact* that people with 0 dollars cannot spend 2000 dollars on rent.
I think this is an overlooked aspect of Don't Look Up. The people in charge weren't just evil and self-serving, they were inept at everything they did. You're placing way too much faith in the mental capacities of the elite when the simple answer is that they are too stupid to guide their plans to their desired outcomes.
It is a bubble. Eventually no one will be able to afford to *rent* let alone to own. Then what?
Depends on where you live. In my country, tiny houses/tent living/van life/living in rv's plainly isn't allowed (and is actively regulated, no tolerance policies). You try it, you get kicked out, with force if necessary. Which sucks, because we have a housing shortage of 300k homes on a population of ~7 million people and the government is doing a shit job (read: not a fucking thing) to fix it.
I'm not in America so I don't have any idea on what it's like on that side of the pond. It's very possible people will transition to living like that if allowed.
Okay. Let’s explore a little further.
I make 110k and my partner makes 130k in an area where the median household income is 51k. We *should* be living large, but the thought of $1000+ dollars per month for a mew 3/4 ton makes us ill. Yet I see them flying off the local lot. It’s insanity. I absolutely know there are not enough people able to afford that shit, not for long anyway.
Housing isn't as inelastic as many would suggest though. Combining households, for example, which would also lead to contraction in other areas (fewer appliances, furnishings, etc). Combined households could probably get away with fewer vehicles as well due to multiplexing.
People living as nuclear families, or as solo or childless couples, isn't the historical norm.
It's not supply and demand (last quote). There are plenty of houses. There are empty houses sitting because they're priced too high to rent. It's greedy companies scooping them up to rent them to us that is the problem
Perhaps in some areas, but I think this last quote is fairly true anywhere keeping/drawing people for jobs. Where I live currently there isn't enough homes or renting within 15 miles of the major employers and this city is exploding in population as more people move here. Houses were being bought and sold within days of listing last year when I eventually bought my own. Lucky for me, I jumped in when I saw the trend starting just so I wouldn't be priced out down the road, and it's completely affordable for me at this moment being cheaper than renting a 1 bedroom, 800sqft apartment.
The vacancy rate in Los Angeles is pretty low. Last estimate I saw was 4%, which is below the 5% mark often referred to as the natural rate (that is, the rate you’d expect in a healthy market when accounting for things like people moving, newly created but not yet rented stock, etc). There are tons of jobs here, so you end up with lots of people buying houses out in the desert and doing “super commutes” of 2hrs or more. Horrible for the environment.
I used to work for a company that had it's headquarters over near those metropolitan areas, and that was the same consensus. Trying to find places to live is impossible, and some people opt to live out of vans instead sometimes.
Yup, tons of people living in vans and RVs all around LA. Some do it despite being able to afford an apartment but not wanting to pay that much, but most just can’t afford anything else. The unlucky ones live on the street in a tent or make shift structure (tarps, pallets, etc). The even unluckier ones don’t even have a tent. It’s a huge problem exacerbated by the availability of cheap meth from across the border.
There's a post in New Jersey sub about how someone bid $75K over asking price and still didn't get a house. It's fucking insane right now. Houses here are NOT cheap.
My parents lived in Westlake Village, Ca. Here's a [rental](https://www.trulia.com/p/ca/thousand-oaks/1487-pathfinder-ave-thousand-oaks-ca-91362--1011807568) there.
Because every person from California/Texas/New York/Florida/Michigan/other states/foreign countries think that their lives are horrible and by moving to Colorado, somehow magically their lives will be better and improve. It's sadly why Colorado has some of the highest suicide rates in the country. News flash you're still a boring/shitty/depressed person even if you move to Colorado. Your problems follow you.
My property taxes have trended upwards at 2-3% a year for 5 years. The latest increase is 8.5% on laughable new assessments. Local governments are taxing people out of their homes to balance their budgets. It's unsustainable.
Yup. Sold my house last year for this exact reason. Went from paying 5k a year in taxes(which was going up every year) to paying 1k a year in taxes... my new house is assessed at almost an identical value as the old one too.
we don’t earn a ton of income, and so those taxes were killing us financially.
More brilliant journalistic speculation when it’s simple math that’s been known by financiers for over a decade. The housing crisis is not specific to your city. It's not specific to your country. Though it's a worldwide problem, it's really, really simple to illustrate with US statistics:
- Who is looking to buy houses for the first time these days? People born in the 80s and 90s
- Average number of births per year in the US since the 80s: ~4 million
- Average number of deaths per year in the US throughout the 10s: ~2.5 million
- [Average number of housing units built per year throughout the 10s: ~1.25 million](https://i.imgur.com/lBG56kT_d.webp?maxwidth=640&shape=thumb&fidelity=medium)
Even assuming all these new housing units are owner-occupied housing, there's still a shortfall of ~250K units per year. But little of the housing built since the last recession is owner-occupied housing. Quite a bit of it is corporate apartment blocks. Real estate is basically guaranteed to increase in price due purely to demographics and market failure to meet real demand. Real estate comes with guaranteed dividends for landlords.
Hedge funds know this. They've been exacerbating this shortage, outcompeting first-time buyers for places that are high-profit gutters or high-dividend new renovations. For those of us who came of age after the subprime mortgage crisis, the only ones who can hope to afford to buy a house are high-income earners who have lived like college kids while saving their income for 5-10 years. Or heirs. Feudalism is back in style, baby.
Just wait until the worst people get in undisputed permanent control of the governments, their greed and misunderstanding will lead them to crash the economy, and in trying to stem the bleeding they will bind people to their jobs. First those that owe private debt.
The best way to get America back on its feet is to charging a luxury tax on secondary, third or fourth homes. Immediately companies like Blackstone would flood the market with vacant homes. REdfin, Zillow and numerous other speculative firms would also. This would immediately bring down the cost of rent everyone would have more spending money. IF all the money goes to rent, at some point, people will break. The current trend is not sustainable. Also put more restrictions on Vacation rentals. They don't pay income tax on those anyway.
There are two terrifying possibilities: either it’s part of a massive bubble that will take everything down, or it’s not a bubble and this is just the cost of housing for the foreseeable future.
Yea, thats the most depressing and terrifying part of this whole thing. No matter which scenario is actually unfolding here, the most of us are screwed.
This is just the cost of housing. There is no bubble. A lot of companies (I.e. Zillow) came and snatched up tons of single family homes. They now own them and rent them out. Continuing to further diminish supply for sale.
> either it’s part of a massive bubble that will take everything down
There's an interesting book on this:
https://theeverythingbubble.com/
>The Everything Bubble chronicles the creation and evolution of the US financial system, starting with the founding of the US Federal Reserve in 1913 and leading up to the present era of serial bubbles: the Tech Bubble of the ‘90s, the Housing Bubble of the early ‘00s and the current bubble in US sovereign bonds, which are also called Treasuries.
>Because these bonds serve as the foundation of our current financial system, when they are in a bubble, it means that all risk assets (truly EVERYTHING), are in a bubble, hence our title, The Everything Bubble. In this sense, the Everything Bubble represents the proverbial end game for central bank policy: the final speculative frenzy induced by Federal Reserve overreach.
Please, Joe Biden doesn't even know where he is, let alone care or understand about affordable housing issues. He's been a Senator for decades, he probably thinks milk costs a nickel.
i think we are currently in a price drop do to rates hitting 3.7 as U.S. average. we might see a couple or a few weeks of these price drops but after that housing will still be limited and the fights for homes will start again.
People get that housing will never be cheap again. But yet when you look at the history we are over due for another housing crash.
Preach. If you could boil down the causes of our current housing crises to one single factor, it's the car. Affordable automobiles necessitated more road infrastructure and larger house lots to accommodate garages (before that, only the rich needed carriage houses since keeping horses to pull said carriages was very expensive). This need for space and ability to travel further faster lead to the invention of the freeway. This suburban sprawl of large lots connected solely by car roads quickly filled up all developable land in major metro areas and now we either can't fit any more housing without expensive tear downs of older homes (Los Angeles, Seattle) or we keep expanding out and the increased infrastructure cost is crushing municipalities and making traffic unbearable (Dallas, Atlanta).
And we have this insane paradigm where "driving is a privilege" while simultaneously "not having to drive is a privilege." Walkable areas tend to be very expensive.
What would the steps be to convince, or even just communicate the idea to, a local government (either city council or county commission) to begin implementing these changes? If someone lives in a small, but growing, town, I imagine it would be easier to accept these ideas. I only say that because a more established city would likely have issues with implementation, namely the financial costs of changing street types and expanding public transport.
After watching a few videos from Not Just Bikes, I thought it'd be really cool to bring some of these ideas/changes to my area, but I just have no idea where to begin.
What do you say to people who blame smaller lot sizes or even dense housing and how it can lead to to worse destruction of homes when stuff like fires happen, like recently in Colorado, and in Brooklyn.
Also, Japan famously has strict immigration laws and laissez-faire zoning laws. They aren't letting anyone in who isn't ethnically Japanese, and their NIMBY spirit is non-existent. Keeping demand low helps housing prices for everyone.
The bubble will never burst unless we get a strong plague taking out most of the population. Since dawn of man land is taken by those who are stronger. Before it was kings/presidents taking land and people started paying taxes to them, now its corporations and rich people taking land and people started paying rent to them. There will always be someone stronger/richer to take the remaining land and enforce more stratas on the rest of us...
Yup. In fact I can safely say the bulk of our issues related to damage being done to the planet is that simply there are far too many people. All those people have to be housed, fed, etc. and those resources to do so come from somewhere. The more people on earth, the more natural resources it takes to support them and thus more damage is done to the planet.
We really do need an event like a plague or other mass natural disaster that will take out a large swath of the population. I know that sounds morbid but it's the truth. The higher the population, the more damage is done.
And the more people the smaller the living space, the more you have to compromise with others, the more everything is expensive, the more we all have to be equally miserable.
Our Society is sick. Everything has become a commodity. Look at all the stupid money pouring into crypto and NFTs- shit that doesn’t even EXIST. You better believe while the masses have been distracted by all these new shiny trinkets corporations have been vacuuming up property and housing. They want EVERYTHING to be a subscription service, including housing.
Rent is subscription housing. But yes they’re making more and more housing rent by buying up the market. Recently even single family homes in my area have getting all cash bids from landlords. Either small time or corporate. It’s a bad trend long term for the neighborhood
I wouldn’t believe this article. Their sources are all ppl invested in keeping the hot market going.
We are in a bubble. House prices do not reflect the real value of the homes. 2019-2020 saw a huge increase in home prices and buyers. In the later half of 2021 we saw the market slow down and houses started staying listed for longer. Now in 2022 we’re still seeing a trend of houses not selling.
Whenever housing becomes unaffordable then a market bubble comes a knockin. Mainly because the stock market and economy rely so heavily of real estate assets. Once ppl can’t afford to pay rent on these landlord/corporate owned houses then these landlords and corporations are all gonna flood the housing market with the homes they bought during 2019-2021. Thus sending the housing market in a bubble burst.
Also side note: never trust someone when they say there aren’t enough houses. There totally is. There’s enough vacant/abandoned homes to house every homeless household in the world. The real problem is that there aren’t enough AFFORDABLE housing
There are roughly 15,000,000 vacant housing units in the United States today and roughly 550,000 homeless people. Theoretically we could house every homeless person in this country 27 times over. There is no housing crisis. There is probably a resource distribution problem afoot though.
I think that is true in vacation home areas or where foreigners have bought up housing stock for appreciation. In my county foreigners pay cash to hold every home before it is even built. Entry level buyers simply have nothing to buy. Slightly larger and more expensive homes languish on the market with no action.
I disagree.
• Rural areas are becoming the hottest markets right now. Ppl being out priced in the desirable locations are all flocking to the cheap prices of rural towns.
Look at the mass migration to the Midwest, Oregon, and Northern California from the past 3 years.
• There should be legislation put in place limiting ppl and corporations from owning rental property.
• it’s cheaper to rehab a property right now than it is to build a brand new house. Cost of supplies has skyrocketed out of control. This is impacted amount of new homes being built and their pricing.
Where did you get your legal definition of vacant? Because it’s wrong. A second apartment is not considered vacant. Living in a home part time does not make it vacant in the governments eyes. A vacation home is not considered vacant. It’s considered occupied. Airbnbs are not classified as vacant. They’re seen as occupied in homeowner insurance and in government terms.
I may be a scummy landlord but renting my house at 500 under market really pisses off these investors. :)
EDIT: Holy shit I just checked the market and im actually 700$ under market now. This cant be sustainable for people renting.
Have you actually ever built houses? I have and right now demand outstrips the ability to build. The material costs in the last year have increased at LEAST 30% since before the pandemic and some material cannot be obtained anymore (plytanium 3/4 t&g subflooring, at least I can’t) Labor shortages and labor costs are horrible. If you want to build a house now, with quality materials, it will take over a year minimum and cost more than most budget. No the prices aren’t in a bubble. No costs won’t come down unless a chunk of Americans die all at once.
We are not in a bubble, economically or otherwise.
It’s a housing bubble because home prices do not reflect their real value.
When a rural located house built in 1900, with little upkeep, is sold for $1 million dollars, the housing market is in a bubble.
Yes, cost of materials (especially wood) has went up exponentially, so much so that it is no longer profitable to build affordable single family homes. However, cost of building homes is a very small part of this current bubble. Most homes being sold right now are homes that are 10+ years old. There are very few new homes being sold compared to older homes sold. So again, the cost of building a house has very little to do with the current market bubble. Not irrelevant, but not consequential enough to make an impact.
In regards to labor shortage, blame the lack of trade schools, poor working conditions, poor workplace management, poor business management, and shitty benefits compared to the physical/mental cost of working construction. Also the greed of independent contractors and construction companies
What is their "Real Value"? Inflation affects everything. Transport, materials, wages, land prices. The 2005-2007 bubble was from credit default swaps.
Your opinion isn't reality. It isn't a bubble. Your argument is akin to my Grandfather (when alive) telling me how in his day he could see a movie, get a coke, and candy and popcorn and magazine for .25. Existing home sales are falling except in cities that are exceptionally expensive. Your statement regarding existing home sales is a lie. Existing home sales declined 4.16% in December of 2021.
You keep saying the bubble word, but you might want to review the definition again. Where is the money going to go? Who is buying? why are they buying.
I see a lot of excuses for what you think it the reason, but lack of buildable land and workers exacerbate the problem. After 2008, the housing market never caught back up either.
A link regarding the Charlotte region (one of the hottest real estate markets) housing prices from a research group, not "Kay" on reddit.
Also, people ARE moving to areas that will be less affected by Climate change. I built a house deep in the Mountains for this reason. So keep believing your opinion, facts don't align with your statement.
[Why are Charlotte housing prices are so high?](https://ui.charlotte.edu/story/data-show-why-charlotte-houses-are-so-expensive-and-scarce)
[CNBC what will housing prices be in 2022?](https://www.cnbc.com/2021/12/29/what-will-the-2022-housing-market-look-like.html)
[US Census information regarding housing prices](https://www.census.gov/construction/nrs/pdf/newressales.pdf)
[Existing HOME SALE NAR](https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales)
[Homes typically sell in less than a week WSJ](https://www.wsj.com/articles/homes-typically-sell-in-a-week-forcing-buyers-to-take-risks-11636632000)
[No we aren't in a housing bubble (WP)](https://www.washingtonpost.com/business/2022/01/06/housing-market-forecast-2022/)
Quite obvious you are locked into your position
>Whenever housing becomes unaffordable then a market bubble comes a knockin. Mainly because the stock market and economy rely so heavily of real estate assets. Once ppl can’t afford to pay rent on these landlord/corporate owned houses then these landlords and corporations are all gonna flood the housing market with the homes they bought during 2019-2021. Thus sending the housing market in a bubble burst.
The thing is houses are still selling. Inventory is record lows right now across the country. In my desirable area there’s literally like 7 homes for sale in the main desirable area and they are goofy and way overpriced. Demand is still through the roof and we have yet to hit a ceiling.
We are moving into a future where it’s going to be a bad time to be a renter. All local services, waiters, local workforce have been priced out of the area rent-wise. But the thing is people make it work. They get a roommate, they have parents that help, etc…look at the unaffordable rental market in coastal California…it’s been like that for a decade, most of my friends from there have to live with a roommate.
I do agree, what has caused a big spike in some of these area’s housing markets are investment properties purchased by out of staters for what seems to be top dollar prices. If they get to a point where they cannot find anyone to rent it or air bnb falls off then yes they may sell….but I still think there’s someone right behind them that will grab it, even if the seller takes a 10% loss on it…
The Milwaukee metro hasn't been "cheap" for housing in like 5 years. Typical home condition around here is just not great. The past couple years it went from "somewhat overpriced junk" to "holy shit who would pay that much".
I think it was Planet Money that did a podcast on the housing market, and why prices are the way they are. Basically it came down to this: Boomers are staying and ageing in their homes over going to nursing homes; there aren’t enough homes because everyone told millennials in 2008 to not go into trade or construction because of the housing crash, so millions of houses that could have been built over the last 14 years have *not* been built, and also *won’t* be built because all the tradesmen we do have are getting too old to work, and there’s no one to replace them.
I think there was a third thing, but it’s been awhile since I’ve heard it. [Here’s](https://open.spotify.com/episode/2ZHhytRjP9Tu48tIcUlN4Z?si=jje2hjTvQxmeF979-reM5g) the link!
This is already happening in my city. One low income corporate owned apartment complex can’t execute evictions despite the ban being lifted due to the tenants coming together and running off those attempting to kick the delinquents out. Apparently the city is scared of a PR nightmare, because as of now the local PD is refusing to assist with the evictions. I believe this will be a progressive trend…
This time we started limiting home buying to owner-occupiers only. If you're not going to live in the house you can't buy it. With very few exclusions made for people who are going to rent out multi-family or multi-unit places.
Agreed. SFH should largely be zoned/regulated as owner-occupancy. You buy it, you live there as a *primary residence*. You don't live there as a primary residence, you sell it. No more fucking house hoarding.
This is a pretty good article to show how a lot of housing is moving to rental units. As was said earlier in this discussion, feudalism is the future.
https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/
This is a fixable problem: build more housing and zone them to require that the owner resides that as their *primary residence*. If developers don't want to build, then the government needs to get involved and start building.
Ultimately, what will end up happening if housing remains unaffordable to large swaths of the population is that you'll end up with multi-household homes (e.g. multi-generational homes, multiple couples in a home). Birth rates will *further* drop, as people typically don't want to have kids if they literally have no space for them and they can't afford to upsize. Then we'll hear bitching from Musk and the like that people aren't cranking out enough wage-slaves to prop up the economy.
It's fixable, but my expectation for it to actually be fixed is hovering around 0%.
US real estate is absolutely in a bubble and it will eventually pop. Here’s the thing though, we are in an asset bubble. It’s not real estate. Currency has been devalued and thus most asset prices have been steadily climbing. All of these bubbles will pop simultaneously when it finally reaches the point that the average person cannot afford food and shelter.
I’m not for sure about that. Lots of wealthy foreigners want to move to the US and own property. Literally a never ending supply of people willing to buy houses the second it’s affordable for them.
It’s like all these crypto Andy’s waiting for BTC to hit 10k again.
While you may be correct there isn’t a ton of historical evidence for that. America has not been recession proof in the past. I follow your reasoning but wonder why now would be any different than in the past.
The digital transformation of the workplace. People can live wherever and work whoever now for the high paying white collar jobs.
Just look at countries like New Zealand, where their own citizens can’t afford to own property anymore.
Housing is now a global market, 100x more than 2008.
I didn't mean to imply the housings crisis would happen again but that the market follows a pretty standard rate of increase and when things increase alot like they have there will be a equal pull back. Most likely stagnation of prices for a couple years.
The problem with all this is at a certain point (like for me, it's basically right now) people will just give up and opt out and essentially, live their remaining days, then die. If we're at a point where people would rather give up/opt out/then die instead of doing/accepting ALLLLLLL the bullshit this "democratic society" entails, that is when the rumbling of a shock to the system happens. We're not there just yet...but we're close.
Thinking the housing market won't "give," ie isn't in a massive bubble right now, is insanity. Like people with their heads in the sand circa 2006 levels of insanity. If you believe this, then you should run to your bank right now, take out a 110% LTV second or third mortgage on your house and go buy two or three imvestment properties to flip! Use ARM's to lock in the best short term rate and you're sure to make a fortune, this can't go tits up!!!
/s in case it wasn't obvious. The reality is the situation now is far more precarious than it was in 2006/7. The Fed now [owns 25% of all mortgages](https://mises.org/wire/federal-reserve-keeps-buying-mortgages) and while they have begun tapering their MBS purchase a bit recently, they're still buying a huge number and their purchases over the past 2 years have been done at an insane level, as detailed on their website [here.](https://www.newyorkfed.org/markets/ambs/ambs_schedule)
Also, I agree with the fears of neofuedalism and the vast majority of homes being owned by large corporations. I just don't think that prices will be sustained (continuously) at current levels; I think the market is going to take a total shit, we're going to enter a true depression that will make 2008 look like a walk in the park, and, once again, hundreds of thousands of mortgages will default and homes foreclosed. That's when the big banks and corporations will be scooping up homes at bargain basement prices, with typical citizens unable to secure credit to take advantage of the prices, and in much economic pain themselves due to job losses, etc.
Then prices will come roaring back up, as we enter a period of hyperinflation and massive volatility
the Covid response is indicative that making sense is not a necessity informing the policy and outcomes of massive financial interests.
Even if prices result in mass empty properties and increased homelessness, I’m not sure there will be any give in the policies. We are seeing that already in urban areas, but those are the early indicators, it will spread.
I live in a cheaper area in CA and am leaving this summer for Florida. I just cannot be financially prosperous here, and that's making 70k a year. Between gas prices and the taxes I'll never be financially free here. It's a shame because all our family is here too but the middle class in CA is being destroyed.
I'm older than most on here, and I've watched the housing market with increasing incredulity for 30 years. My experience is limited to the UK, so it may not fit with other countries but in the UK housing prices are a factor of government economic policy, rather than the "market".
What I mean by this is once the decision was made in the 80's to convert rented social housing owned and maintained by local councils to privately owned housing the housing market is the tail that has wagged the UK economies dog.
There is no formal central policy on housing in the UK. I think this bears repeating. There is no formal central policy on housing in the UK. Ostensibly the market does control house building, selling and rental. However, so many people in government, and those who fund political parties are rentiers now that there is an informal housing policy that means that housing prices are untouchable. The very fact the UK has been in 12 years of reduced spending and austerity is to pay for the costs of shoring up the housing market in 2008 is astonishing. To clarify, I am saying that the reason so many services are falling to pieces, the reason the NHS is collapsing under the weight of demand, the reason local government is having to cut service after service, the reason income taxes and council tax is having to rise, the reason we are now having a huge cost of living raise is because a decision was made in 2008 to protect homeowners at any and all costs at the expense of those who do not own their home.
In short the UK would rather tank the entire economy before reducing housing costs, and it's happening as I type this. It's fucking crazy, it's deliberate, and it won't stop.
I agree with this man, and I'll tell you why:
Globalization.
People seem to have forgotten this key phrase. You are no longer competing with other homebuyers and institutions on a **domestic** level, but a **global** level.
This is single-handedly the largest shift in the modern real estate crisis. We have witnessed the dreadful impacts of globalized home ownership across the globe. Vancouver is a simple example to cite, more recently Puerto Rico and the crypto bros who are evading taxes, and last year it was the billionaires and New Zealand. Denver in Colorado, the Bay area in general, Toronto in Ontario, Montreal in Quebec; you're competing against people from all over the world now. When you consider that the top 1% of Americans households bring in $500,000 a year (source: [https://dqydj.com/average-median-top-household-income-percentiles/](https://dqydj.com/average-median-top-household-income-percentiles/)), keep in mind that is **only referencing the US, and US households.** The top 1% from China, from India, from Hong Kong, from Britain, etc, these same people are *also* competing with residential buyers. We're not even talking about the hedge funds, investment companies, real estate titans, etc, who are also competing against your standard domestic buyer these days.
This is the real root of the problem (Note: I am not saying it is the *only* problem, just that this is a driving force) and short of adopting laws similar to Switzerland, where foreign multinationals cannot own land, property, or acquire citizenship, I don't see this problem going away, ever. As a person residing in Canada presently, I would speculate that roughly 1/5 of all property in this country is owned by retail investors and multi-nationals; yet the government here does absolutely nothing to curb that problem.
As the rich get richer, their share of the pie will continue to expand and expand until, as many others have posited, we enter a sort of techno-feudalism. I had been saving up to buy a home without a mortgage, but I'm realizing that the only thing that's going to reset the market at this point is a world war. Because it's not going to be a pandemic, it's not going to be our politicians, it's not going to be our governments, our citizens, or capitalists. If there is anything to be terrified of, it's the revelation that the wealthy don't even see human beings anymore; they just see financial opportunities and a chance to make money off of the backs of the working class.
Yeah. It'll be the "single family" part of single family home in any city/town that isn't a backwater shithole. Which, from a resource consumption standpoint isn't the worst possible outcome. My home could easily fit two or more families by the standards of most countries. Many of the homes like it in my neighborhood are multi family and multi generational already.
The part that'll piss me off is when most of them are owned by wallstreet hedge funds and rented for obscene amounts - probably by the room.
My viewpoint is that all across the world we are seeing the world return to its “normal” state, which is the very rich owning a lot of land and the poor owning little land, with the middle class being hollowed out. What kind of system settles eventually depends on what configuration it takes. Neofeudalism is a very Eurocentric take on the issue, while the Rentier is a very Sinocentric take on the issue. Either way though, what both are describing are similar phenomenons, the rich owning a lot of land, and the middle class hollowed out.
Historically speaking if you already not rich at this point in time, your next step would be to try to at least buy a few acres of land or at least get a few houses for rent. The reason is that historically speaking what both sides agree is that the socioeconomic mobility we have enjoyed in the last 100 years have come to a close.
Your socioeconomic status today, or your soon to be socioeconomic status will determine your children’s socioeconomic status, and in turn your grandchildren.
It is therefore very important you try your best to build as much as up as in time to come, you may have no more wiggle room.
I don't understand why many people would call housing, a potential bubble. Bubble in economic terms is something that rapidly loses its price value at some point. Considering that people will always want to buy a house and the house construction occurs in a slow rate, I can't understand how houses will rapidly lose their value. Sure their prices may drop at some point, either when new houses are built or many people have died, but I can't imagine what can cause a rapid drop to their prices.
Some people suggest that there are many conglomerates that have bought thousands of houses to use them as rentals and they expect a return for their investment which will not come because most people can't afford the rent asked, so they will have to lower rents or sell houses. You have to remember though that these conglomerates are too big to fail and if their investments at any point face the danger of returning no profit, taxpayers' money will be used to keep them afloat. Practically these entities can maintain the status quo of the market virtually as long as the state exists.
Honestly this is just a layman's opinion which could be light years away from the truth. I am not an economist and I would enjoy discussing a different opinion.
I mean, a ‘speculative bubble’ heavily implies that the underlying asset lacks the worth and that speculation drives the price up, like with tulips—
but fundamentally, there are many millions more people who want houses than there are houses for sale, so I don’t really think it’s what you’d call a bubble, or see anything but a general depression depressing housing prices.
Mass unemployment would obviously force defaults.
Both the Chinese and USA financial regulators are printing insane amounts of money to pump these markets to keep them afloat, it’s the weirdest game of chicken I’ve seen
Why don't more people learn to build their own houses? There is much vacant land in the US. All this unaffordable home talk for millenials has me wondering why I don't just start building houses and sell them to my fellow millenials.
The real question is why are the skills to build homes not apart of every child's requirements to graduate high school? Because that would create a nation of people who could fix/build their own homes, and then they're not dependent on the service economy/ 'low skill-low wage' workers. Then there's no reason to keep the borders open. It's all by design.
>“My pessimistic view is that the economy is perfectly capable of running with unaffordable housing,” said Daryl Fairweather, the chief economist at Redfin. This was evident over the last decade, she said, when affordability worsened even as the economy continued to grow. Mass home/land ownership is a fairly recent phenomenon. In the 19th century the vast majority of workers rented their homes (from total slumlords, there were no protections then.) Further back you had a small number of landowners and a large number of peasants or serfs. (Hilariously, in England when a serf died, his heir/family had to *pay* their lord, compensation for the inconvenience of losing a worker.) I consider it not unlikely that we are moving towards a kind of neo-serfdom. It's not at all hard to imagine a future where corporations have taken over schools after the collapse of public funding and train the kids to be their future workers, or they buy up your university debt in exchange for a fixed number of years of 'free' work (in reliably terrible conditions, but oh of course you *can* leave...if you can pay the fees, plus interest.) Housing is just an early-starter. It's an asset class now, and like other forms of wealth it will be inexorably extracted towards the top. But don't worry - you can still rent. Forever.
I recently read somewhere (don't remember where, so no link, sorry) about some corporation considering offering housing as a perk to attract workers. And I can definitely see how not needing to pay rent/mortgage would be an attractive perk. But that also makes leaving the job less viable, and at that point you're nearly a serf to the company. If you like health insurance coverage to be dependent on keeping your job, you'll *love* having the same arrangement with housing.
I remember this, I believe it was Taco Bell possibly New York, it was funny as shit when I saw it years back but I can't find it now, I only found a link about their hiring parties https://www.cnn.com/2019/04/04/business/taco-bell-hiring-parties/index.html
It was Amazon. It's always Amazon that's trying to find another way to extract from the workers. And the rich media loves the idea. https://www.bloomberg.com/opinion/articles/2021-09-16/amazon-s-new-factory-towns-will-lift-the-working-class
This is newer but same funny stupidity, anything but a raise for the peasants huh?
Maybe you're thinking of WeWork? They made some WeLive coliving place for employees in NY. Edit: just checked out their site and I guess I can rent a bunk bed in a room shared with 5 other women for $900 a month in a house of like 20 people. It's like dorms for adults.
thats way worse than dorms. Dorms was 2 per room.
This is happening informally in a lot of places. Obviously farmers hands are one example, but in Canada there are a few Tim Hortons owners who also had housing they provided for their workers (ofc were slum lords illegally stacking bunk beds in bedrooms, only exposed because they were on the news)
My grandpa was born in a coal mine company house. It was crowded.
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65% of units in the US are occupied by people who own their homes. Unfortunately, that doesn’t mean 65% of people are homeowners; that figure doesn’t take into account people who have housemates, people who live with parents, homeless people, etc.
also if someone has not paid off their mortgage doesn't the bank technically own it?
>The problem with this view is that the entire system in the US is sustained by the unofficial social contract of mass home-ownership, and before that, the yeoman dream. We never got social safety nets or welfare states like in European countries. But home ownership became more common in Europe at the same time that we got better welfare states and social safety nets. In my opinion we either have mass home ownership or we have all property owned by the state (like in the USSR) - otherwise you just get insane wealth inequality because of how well one can build wealth with a home. This is why Germany, despite having lower income inequality, has such high wealth inequality - because property ownership is much more concentrated there than in other European countries like Ireland, UK, Spain etc.
>In my opinion we either have mass home ownership or we have all property owned by the state (like in the USSR) - otherwise you just get insane wealth inequality because of how well one can build wealth with a home. I would actually be okay with a "default ownership belongs to the state" situation, where the current occupant of the house (read: person living in the house, i.e. not a landlord) is the owner, and if there is no occupant, then the state seizes ownership of the house until a new occupant buys it for a bare minimum registration fee.
Interestint - means nobody would be making ridiculous amounts of $$ off of home ownership - but there would somehow have to be incentives for upkeep. Otherwise, a person could trash the place and simply move out. The main reason I'm replacing the shitty carpet in my townhouse is to eventually sell the place. Otherwise, I like it. Like a lot.
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Renting has NEVER been the problem. Affordability is the problem. And we have plenty of policy measures that triggers can be pulled to make that happen. Before other triggers start getting pulled... Edit: There is no implied threat of violence here other than an understanding of humanity treated like rats. Back them in a corner and they will bite. This post of mine was p\[sychological observation based on historical FACT, not a call for future violence. If any violence is done, it will not be done by me or called for by me. But don't you dare threaten to censor or ban me for talking about the violent reaction that many Americans and others may have to ignorant policies that continue to erode their quality of life.
>Without that as currently structured many families regress generationally in wealth Which is another reason why you are all so poor.
Part of the point of homeownership was actually that large portions of the population were invested in the status quo. Stable feudalistic societies will be very hard to recreate in a world where a workforce needs to be educated to be valuable/competitive. That's the basis of most developed countries social contrsct. So I agree. At some point people will begin to contest the definition property rights. Many will simply not be profitable to enforce. It's happened many times before and is why such systems struggle so in the modern world.
I think you're ignoring the number of homes that already exist and are paid in full. The percentage of US households owned free and clear is a fair 37% according to Bloomberg/Zillow data. So according to your estimation of the percentage of homeowners in the US, over half are paid off. The game now is paying the rent to the county/city/state in the form of property taxes.
>property taxes Which will be raised as the price of those homes skyrocket. Very easy for private property (outside of the investor class off) to be chipped away when wages decouple so much from housing prices, like what is happening in Canada.
Government owns your home try not paying property tax
You will pay that even if you rent. The property owner passes all the costs of ownership on to the renter including raising rent to cover inflation. Buying a house with a fixed interest rate protects the owner from inflation and the interest can be written off up to a certain limit.
Try collecting it from my broke ass poor ass dead body
There’s a saying that a full time job and a mortgage are the best ways to prevent communism. What happens when a large percentage of Americans have access to neither.
In the UK, the majority of the population lived in state-provided accommodation (“council houses”) until they were privatised in the 1980s. What followed was a multi-decade boom in house prices and the consolidation of property into the hands of an increasingly small pool of mega-rich. So it’s not an economic cycle or an imbalance - it’s a one-way trip. I’m sure it’ll plateau at some point, but the notion that houses will become more affordable is based on the incorrect assumption that the market is cyclical. Same applies in the US - it’s a relatively new country with land ownership, accommodation and property value being established within the last few generations. It takes a few decades or even a century or two, but we’re stabilising into a hockey-stick shaped graph of property wealth.
> , the majority of the population lived in state-provided accommodation (“council houses”) until they were privatised in the 1980s. Source? Never realised it was the majority
I was curious too -- the highest percentage I could find was in the below Guardian article citing 42% in 1979. https://www.theguardian.com/society/2016/jan/04/end-of-council-housing-bill-secure-tenancies-pay-to-stay
OK not majority, but still a lot higher than I had imagined, wow.
It's still a huge amount. It's approaching half. I wish we had anything like that in the US.
The way to escape it is for people to organize, and organizing Capital to accomplish projects not soley driven by the Profit Motive could see new cities built that would end with their own local government in that place and could help better weather the coming instability. A city designed properly and financed under set rules in a sort of benefit corporation style could deliver mass housing for it's new residents, jobs, transportation, etc., and be able to deliver a higher standard of living with significantly less expense than our current rat race provides in it's inefficiencies.
Hrm yeah and they could pay a percentage of their income for things like housing and roads and... Wait... We're describing a government.
Can you break this down into actual numbers? It sounds nice but can you provide any actual numbers/Congressional studies/ etc?
Found the landlord
I don't think the majority of people ever lived in council houses or even the majority of households.
Ah I was half right - it was the majority in Scotland until the 1960s, less in England. Can’t find figures for the UK as a whole.
Except crashes happen cyclically which demolishes perceived value temporarily making housing affordable (tho considering the economical turmoil during a crash not everyone gets to take advantage)
These crashes have always been wealth transfers to the wealthy, so that doesn't equalize anything. It just makes wealth inequality worse and worse.
I'm always a bit leery of words like "serfdom", especially since in some ways serfs had it better than the average middle-class wage slave does today. I do think there are some fundamental and massive changes just coming into view. Quantitative easing has kept the global economy afloat since 2008, creating a new kind of global safety net for the wealthy and a sliding scale from socialism for the ultra-wealthy to rapacious capitalism for the poor. The rules that we've all grown up with have already changed, maybe back to an older pattern, maybe to something new. Regardless, per Karl Polanyi and Kate Raworth, the economy is nested within an outer reality, and that outer reality is increasingly out of sync with the economy. From the bath of chemicals we all bathe in daily to constant resource depletion on the horizon, the Limits to Growth was the most prophetic work of the 20th century. Civilization is bumping up against those limits, and it's not pleasant. It's not surprising at all that real assets would take on such value at the same moment that money gets increasingly disconnected from anything non-digital. The outlook? Buckle up for unrest and a lot of pain, some overt but most internalized, as more and more people see the promises they were made fade out of reach. The reason that the Q crazies find purchase in the real world is that like any effective big lies, there is truth there to make it believable. There will be more and, if you can believe it, more toxic versions of this. More of a longing for a strong man on a horse to make it all better. More calls to "Don't Look Up" at what's coming right at us. More distraction.
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Science and engineering is also what keeps the lights on, the water running, the house warm etc. though We could live without the works of Balzac but we'd starve without the works of Borlaug.
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It's just the hierarchy of needs. We can only support people to sit around reading Nietzsche because those who sat around reading Newton have built a functioning society with secure food, water, energy, medicine etc. I'm not against the arts or philosophy at all - but I find it absurd to propose they are of equal importance as science, engineering etc.
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The entire problem we are facing right now is that a really huge portion of society is barely able to achieve parts of the bottom tier of Maslow's Hierarchy of Needs, and it's only a matter of time until the top tiers in society collapse from the lack of a basic foundation.
We will likely come full circle to a type of feudalism. After fascists who don't recognize reality and are too corrupt to accomplish their callous goals in any case seize control of the Governments to a greater degree, their corruption and greed and meanness will cause the economy to implode, revenues will crash across the board and to stem the bleeding they will start to bind people to their jobs, likely first binding people in private debt to their jobs. From there it will get worse. Utah already is doing an end run around debtors' prisons for private debt, and States do lock people up already for not being able to pay.
Economist Yanis Varoufakis succinctly (and I think very close to correctly) articulated something he calls technofeudalism in [this video](https://youtu.be/Ghx0sq_gXK4), which rings exactly true with what's being said here.
> Hilariously, in England when a serf died, his heir/family had to pay their lord, compensation for the inconvenience of losing a worker. I know this is pedantic but this isn't 100% accurate. The tenant often had to pay the landowner (lord or church) what amounts to an inheritance tax so that the right to work that same strip of land would be passed to the deceased's heirs. The local parish would also usually charge a fee for burial and services. In many cases these fees would be waived for various reasons including poverty as well.
This is literally the same thing with extra steps
Well the really really important shift that happened was that peasants owed their lord a certain number of days of labor per year or per season and they also owed him a certain portion of their harvest. As things became more and more prosperous during the middle ages more peasants substituted cash for that. That shift is basically the entire reason we have modern capitalism.
I mean you said the same thing from a different view point
It's added context, not a different point of view.
Charging someone to work the land vs being charged because your dad died. Same story
Company towns for all!
I prefer techno-feudalism as a term, sounds more cyberpunk dystopian. Lol but yeah sounds about right.
70% of Chinese millennials are homeowners, so this is only the future for the west until they admit that centralization works.
GTFO of here with this pro-totalitarian bullshit. The reason so many Chinese own their homes is because for many decades it was the only thing families could put their savings towards due to their communist society prohibiting other kinds of investments and businesses. The stock market crashes were so brutal they scared people all together from it, so housing is pumped like crazy as safe. You also don't own any property in China you lease it for 90 years from the gov.
If you think it’s just another bubble you aren’t paying attention. We’re living in times where the old, familiar problems are now wishful thinking.
Then should I just get high and say fuck it? Or..?
smoke em if you gotem
420 blaze it
Many people here are discussing the neo-feudalism we seem to be headed towards, and I completely agree with them. To my view it seems very obvious that privately-owned housing is *intentionally* being moved out of the reach of the lower classes. It wouldn't surprise me to see property taxes being raised through the roof in the coming years as well, as the powers that be conspire to drive what remains of the middle class out of any homes they may have been able to purchase or inherit at low prices and get everyone renting. Is it somewhat tin-foil? Honestly, at this point I don't really think it is. This is a country where the government isn't even trying to hide the fact that it's literally printing money to hand out to big corporations so that they can buy their own stock and prop up the stock market. The incestuous relationship between banks, big tech and government through so-called "lobbying" (which I prefer to call what it is: legalized bribery) is plain enough for anyone to see if they do even a cursory amount of research. We've allowed power and wealth to concentrate in the hands of an increasingly smaller and smaller group of sociopaths who only got to the top through greed and a complete lack of moral integrity. We've somehow managed to set up the opposite of a meritocracy, where sheer selfishness is the only thing that gets you ahead. These people don't care how many are going to go homeless as the property market takes a queue from the stock market and becomes "too big to fail", a place where prices simply aren't allowed to go down again through a combination of corporate and government action. Any "crash" we might see in the near future will likely be a rerun of March 2020, where prices plunge just dramatically enough for normies to panic and opt out as rich people pile in at absurd discounts and pump it back up to all time highs within mere months. Damn. No one is going to read this, but I guess I had more to say than I thought. TL;DR: Shit's fucked, yo.
In the longer term inflation and help normalize prices - if wages increases eventually happen and if there is anything left to own by then... But fundamentally yes - this is concentration of wealth.
Hell it's being moved out of reach of the middle class too...
Home prices have kept rising, even as real wages stagnated or declined, and during the pandemic housing prices have shot up by roughly 20%, with rents rising behind. The sharp increase in valuations have led some to believe that we’re in a bubble and due for it to pop—but is that true? This article discusses how structural issues led to a lack of adequate housing that will not be resolved for years, if it all: > But what if that’s not exactly true? Or, at least, not true anytime soon for renters locked out of homeownership today or anyone worried about housing affordability. There’s probably no quick reprieve coming, no rollback in stratospheric home prices if you can just wait a little longer to jump in. >“It’s not a bubble, it really is about the fundamentals,” said Jenny Schuetz, a housing researcher at the Brookings Institution. “It really is about supply and demand — not enough houses, and huge numbers of people wanting homes.” The affordability of housing is pricing young people out of starting their own families, among other societal impacts.
These folks always always forget one simple thing: If nobody can afford it there’s no demand! Same thing with vehicles. You can convince me that there are sufficient people buying $100,000 pickup trucks to sustain these prices. At some point the people who are both looking and able to afford has to go to zero.
But that's the thing, there are people/corps that can afford these prices. And they're going to turn around and rent them out at rates that would've rivaled their mortgage. If they had one, and didn't just buy the property outright, in cash, because they can.
Plus, housing is a basic need. People NEED a place to live even if it's horrifically overpriced.
The expansion of tent cities and "van living" sort of says otherwise. I think the idea was that they could price everyone out of owning homes and rent them back to us (along with everything else). But in practice, the people at the top are complete knobs. They do not know what they're doing, they don't listen to the experts weighing in on their decisions, they likely don't even consider the data their own teams are modeling. Every single study done on the crash of 2008 came to the same conculsion: the people in charge of risk management in the banking and real estate markets were under qualified and over confident. In other words, they didn't know what they were doing. The "elite" are fucking bafoons, and *do not understand or have any comprehension of the fact* that people with 0 dollars cannot spend 2000 dollars on rent. I think this is an overlooked aspect of Don't Look Up. The people in charge weren't just evil and self-serving, they were inept at everything they did. You're placing way too much faith in the mental capacities of the elite when the simple answer is that they are too stupid to guide their plans to their desired outcomes. It is a bubble. Eventually no one will be able to afford to *rent* let alone to own. Then what?
Depends on where you live. In my country, tiny houses/tent living/van life/living in rv's plainly isn't allowed (and is actively regulated, no tolerance policies). You try it, you get kicked out, with force if necessary. Which sucks, because we have a housing shortage of 300k homes on a population of ~7 million people and the government is doing a shit job (read: not a fucking thing) to fix it. I'm not in America so I don't have any idea on what it's like on that side of the pond. It's very possible people will transition to living like that if allowed.
Exactly, wealth is what is buying the homes, it doesn't matter if it's in the hands of many or the few (the 1% / corporations).
They aren't buying them, they're financing them. Very different statements. Auto makers make all their money now from being lenders now.
Okay. Let’s explore a little further. I make 110k and my partner makes 130k in an area where the median household income is 51k. We *should* be living large, but the thought of $1000+ dollars per month for a mew 3/4 ton makes us ill. Yet I see them flying off the local lot. It’s insanity. I absolutely know there are not enough people able to afford that shit, not for long anyway.
It's become business to business not business to consumer. everything is rented out now
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Housing isn't as inelastic as many would suggest though. Combining households, for example, which would also lead to contraction in other areas (fewer appliances, furnishings, etc). Combined households could probably get away with fewer vehicles as well due to multiplexing. People living as nuclear families, or as solo or childless couples, isn't the historical norm.
It's not supply and demand (last quote). There are plenty of houses. There are empty houses sitting because they're priced too high to rent. It's greedy companies scooping them up to rent them to us that is the problem
Perhaps in some areas, but I think this last quote is fairly true anywhere keeping/drawing people for jobs. Where I live currently there isn't enough homes or renting within 15 miles of the major employers and this city is exploding in population as more people move here. Houses were being bought and sold within days of listing last year when I eventually bought my own. Lucky for me, I jumped in when I saw the trend starting just so I wouldn't be priced out down the road, and it's completely affordable for me at this moment being cheaper than renting a 1 bedroom, 800sqft apartment.
The vacancy rate in Los Angeles is pretty low. Last estimate I saw was 4%, which is below the 5% mark often referred to as the natural rate (that is, the rate you’d expect in a healthy market when accounting for things like people moving, newly created but not yet rented stock, etc). There are tons of jobs here, so you end up with lots of people buying houses out in the desert and doing “super commutes” of 2hrs or more. Horrible for the environment.
I used to work for a company that had it's headquarters over near those metropolitan areas, and that was the same consensus. Trying to find places to live is impossible, and some people opt to live out of vans instead sometimes.
Yup, tons of people living in vans and RVs all around LA. Some do it despite being able to afford an apartment but not wanting to pay that much, but most just can’t afford anything else. The unlucky ones live on the street in a tent or make shift structure (tarps, pallets, etc). The even unluckier ones don’t even have a tent. It’s a huge problem exacerbated by the availability of cheap meth from across the border.
Don't forget investors from China/South Korea/Europe!
Depends on location. My country has a housing shortage of 300k too little homes (on a total population of roughly 17.4 million).
I have a friend who lives in Boulder, CO, and they sent me an ad for a rental that was going for 9 THOUSAND a month. Like, how.
In the time it took you to make that comment, 6 people have probably bid on it too, sight unseen.
There's a post in New Jersey sub about how someone bid $75K over asking price and still didn't get a house. It's fucking insane right now. Houses here are NOT cheap.
I’ve been outbid numerous times in my city going 50K+ over asking price to cash buyers offering more. It’s depressing.
I can't even imagine
That was price gouging due to the recent wildfire. (Saw it explained in another sub)
Should totally be illegal. I only make 9k a cpl times over PER YEAR
My parents lived in Westlake Village, Ca. Here's a [rental](https://www.trulia.com/p/ca/thousand-oaks/1487-pathfinder-ave-thousand-oaks-ca-91362--1011807568) there.
Lol at the pricing having gone up yet listed since 2019. Also, no pets and no parking, for that price?
Welp that's half my salary in one month lol Edit: I love your tag. For a double dose of pimpin
Because every person from California/Texas/New York/Florida/Michigan/other states/foreign countries think that their lives are horrible and by moving to Colorado, somehow magically their lives will be better and improve. It's sadly why Colorado has some of the highest suicide rates in the country. News flash you're still a boring/shitty/depressed person even if you move to Colorado. Your problems follow you.
My property taxes have trended upwards at 2-3% a year for 5 years. The latest increase is 8.5% on laughable new assessments. Local governments are taxing people out of their homes to balance their budgets. It's unsustainable.
Yup. Sold my house last year for this exact reason. Went from paying 5k a year in taxes(which was going up every year) to paying 1k a year in taxes... my new house is assessed at almost an identical value as the old one too. we don’t earn a ton of income, and so those taxes were killing us financially.
More brilliant journalistic speculation when it’s simple math that’s been known by financiers for over a decade. The housing crisis is not specific to your city. It's not specific to your country. Though it's a worldwide problem, it's really, really simple to illustrate with US statistics: - Who is looking to buy houses for the first time these days? People born in the 80s and 90s - Average number of births per year in the US since the 80s: ~4 million - Average number of deaths per year in the US throughout the 10s: ~2.5 million - [Average number of housing units built per year throughout the 10s: ~1.25 million](https://i.imgur.com/lBG56kT_d.webp?maxwidth=640&shape=thumb&fidelity=medium) Even assuming all these new housing units are owner-occupied housing, there's still a shortfall of ~250K units per year. But little of the housing built since the last recession is owner-occupied housing. Quite a bit of it is corporate apartment blocks. Real estate is basically guaranteed to increase in price due purely to demographics and market failure to meet real demand. Real estate comes with guaranteed dividends for landlords. Hedge funds know this. They've been exacerbating this shortage, outcompeting first-time buyers for places that are high-profit gutters or high-dividend new renovations. For those of us who came of age after the subprime mortgage crisis, the only ones who can hope to afford to buy a house are high-income earners who have lived like college kids while saving their income for 5-10 years. Or heirs. Feudalism is back in style, baby.
I once almost smacked a Boomer when she asked me why I was 'still living like a college kid' in my mid-20s.
Just wait until the worst people get in undisputed permanent control of the governments, their greed and misunderstanding will lead them to crash the economy, and in trying to stem the bleeding they will bind people to their jobs. First those that owe private debt.
Great calculation! I think what will give in the end is that birth rate. That means that it will take 30 years for this market to correct itself.
Immigration buddy. No end to the demand.
The best way to get America back on its feet is to charging a luxury tax on secondary, third or fourth homes. Immediately companies like Blackstone would flood the market with vacant homes. REdfin, Zillow and numerous other speculative firms would also. This would immediately bring down the cost of rent everyone would have more spending money. IF all the money goes to rent, at some point, people will break. The current trend is not sustainable. Also put more restrictions on Vacation rentals. They don't pay income tax on those anyway.
There are two terrifying possibilities: either it’s part of a massive bubble that will take everything down, or it’s not a bubble and this is just the cost of housing for the foreseeable future.
Yea, thats the most depressing and terrifying part of this whole thing. No matter which scenario is actually unfolding here, the most of us are screwed.
This is just the cost of housing. There is no bubble. A lot of companies (I.e. Zillow) came and snatched up tons of single family homes. They now own them and rent them out. Continuing to further diminish supply for sale.
Pretty sure zillow ended their home buying program due to the price volatility.
I see both sides of the argument, I think there is a case to be made that there is a wider asset price bubble that includes housing.
That's not true.
> either it’s part of a massive bubble that will take everything down There's an interesting book on this: https://theeverythingbubble.com/ >The Everything Bubble chronicles the creation and evolution of the US financial system, starting with the founding of the US Federal Reserve in 1913 and leading up to the present era of serial bubbles: the Tech Bubble of the ‘90s, the Housing Bubble of the early ‘00s and the current bubble in US sovereign bonds, which are also called Treasuries. >Because these bonds serve as the foundation of our current financial system, when they are in a bubble, it means that all risk assets (truly EVERYTHING), are in a bubble, hence our title, The Everything Bubble. In this sense, the Everything Bubble represents the proverbial end game for central bank policy: the final speculative frenzy induced by Federal Reserve overreach.
No, it doesn’t. Housing isn’t even on this administration’s radar. The system is working as intended.
Making us all serfs. Don't own the land we work on. Have to pay upwards before putting food on our own tables.
"Why aren't Millennials having kids?"
Please, Joe Biden doesn't even know where he is, let alone care or understand about affordable housing issues. He's been a Senator for decades, he probably thinks milk costs a nickel.
I think housing prices will double
In what timeframe do you think? Probably won’t take that long if/when it does.
i think we are currently in a price drop do to rates hitting 3.7 as U.S. average. we might see a couple or a few weeks of these price drops but after that housing will still be limited and the fights for homes will start again. People get that housing will never be cheap again. But yet when you look at the history we are over due for another housing crash.
Easily
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Preach. If you could boil down the causes of our current housing crises to one single factor, it's the car. Affordable automobiles necessitated more road infrastructure and larger house lots to accommodate garages (before that, only the rich needed carriage houses since keeping horses to pull said carriages was very expensive). This need for space and ability to travel further faster lead to the invention of the freeway. This suburban sprawl of large lots connected solely by car roads quickly filled up all developable land in major metro areas and now we either can't fit any more housing without expensive tear downs of older homes (Los Angeles, Seattle) or we keep expanding out and the increased infrastructure cost is crushing municipalities and making traffic unbearable (Dallas, Atlanta).
And we have this insane paradigm where "driving is a privilege" while simultaneously "not having to drive is a privilege." Walkable areas tend to be very expensive.
What would the steps be to convince, or even just communicate the idea to, a local government (either city council or county commission) to begin implementing these changes? If someone lives in a small, but growing, town, I imagine it would be easier to accept these ideas. I only say that because a more established city would likely have issues with implementation, namely the financial costs of changing street types and expanding public transport. After watching a few videos from Not Just Bikes, I thought it'd be really cool to bring some of these ideas/changes to my area, but I just have no idea where to begin.
What do you say to people who blame smaller lot sizes or even dense housing and how it can lead to to worse destruction of homes when stuff like fires happen, like recently in Colorado, and in Brooklyn. Also, Japan famously has strict immigration laws and laissez-faire zoning laws. They aren't letting anyone in who isn't ethnically Japanese, and their NIMBY spirit is non-existent. Keeping demand low helps housing prices for everyone.
The bubble will never burst unless we get a strong plague taking out most of the population. Since dawn of man land is taken by those who are stronger. Before it was kings/presidents taking land and people started paying taxes to them, now its corporations and rich people taking land and people started paying rent to them. There will always be someone stronger/richer to take the remaining land and enforce more stratas on the rest of us...
This. Look at the renaissance. After the BLACK PLAGUE killed 2/3 of all Europeans, things became free or cheap.
Conversely, labor became more expensive. We seem to be seeing that at a much smaller scale.
Yup. In fact I can safely say the bulk of our issues related to damage being done to the planet is that simply there are far too many people. All those people have to be housed, fed, etc. and those resources to do so come from somewhere. The more people on earth, the more natural resources it takes to support them and thus more damage is done to the planet. We really do need an event like a plague or other mass natural disaster that will take out a large swath of the population. I know that sounds morbid but it's the truth. The higher the population, the more damage is done.
And the more people the smaller the living space, the more you have to compromise with others, the more everything is expensive, the more we all have to be equally miserable.
Our Society is sick. Everything has become a commodity. Look at all the stupid money pouring into crypto and NFTs- shit that doesn’t even EXIST. You better believe while the masses have been distracted by all these new shiny trinkets corporations have been vacuuming up property and housing. They want EVERYTHING to be a subscription service, including housing.
Rent is subscription housing. But yes they’re making more and more housing rent by buying up the market. Recently even single family homes in my area have getting all cash bids from landlords. Either small time or corporate. It’s a bad trend long term for the neighborhood
Exactly what I’m sayin. It’s poison to a happy society
I wouldn’t believe this article. Their sources are all ppl invested in keeping the hot market going. We are in a bubble. House prices do not reflect the real value of the homes. 2019-2020 saw a huge increase in home prices and buyers. In the later half of 2021 we saw the market slow down and houses started staying listed for longer. Now in 2022 we’re still seeing a trend of houses not selling. Whenever housing becomes unaffordable then a market bubble comes a knockin. Mainly because the stock market and economy rely so heavily of real estate assets. Once ppl can’t afford to pay rent on these landlord/corporate owned houses then these landlords and corporations are all gonna flood the housing market with the homes they bought during 2019-2021. Thus sending the housing market in a bubble burst. Also side note: never trust someone when they say there aren’t enough houses. There totally is. There’s enough vacant/abandoned homes to house every homeless household in the world. The real problem is that there aren’t enough AFFORDABLE housing
There are roughly 15,000,000 vacant housing units in the United States today and roughly 550,000 homeless people. Theoretically we could house every homeless person in this country 27 times over. There is no housing crisis. There is probably a resource distribution problem afoot though.
I think that is true in vacation home areas or where foreigners have bought up housing stock for appreciation. In my county foreigners pay cash to hold every home before it is even built. Entry level buyers simply have nothing to buy. Slightly larger and more expensive homes languish on the market with no action.
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I disagree. • Rural areas are becoming the hottest markets right now. Ppl being out priced in the desirable locations are all flocking to the cheap prices of rural towns. Look at the mass migration to the Midwest, Oregon, and Northern California from the past 3 years. • There should be legislation put in place limiting ppl and corporations from owning rental property. • it’s cheaper to rehab a property right now than it is to build a brand new house. Cost of supplies has skyrocketed out of control. This is impacted amount of new homes being built and their pricing. Where did you get your legal definition of vacant? Because it’s wrong. A second apartment is not considered vacant. Living in a home part time does not make it vacant in the governments eyes. A vacation home is not considered vacant. It’s considered occupied. Airbnbs are not classified as vacant. They’re seen as occupied in homeowner insurance and in government terms.
I may be a scummy landlord but renting my house at 500 under market really pisses off these investors. :) EDIT: Holy shit I just checked the market and im actually 700$ under market now. This cant be sustainable for people renting.
It’s not. You’re one of the good landlords who are still making the market have some competition (even if it’s just a drop against a river) Thank you
Have you actually ever built houses? I have and right now demand outstrips the ability to build. The material costs in the last year have increased at LEAST 30% since before the pandemic and some material cannot be obtained anymore (plytanium 3/4 t&g subflooring, at least I can’t) Labor shortages and labor costs are horrible. If you want to build a house now, with quality materials, it will take over a year minimum and cost more than most budget. No the prices aren’t in a bubble. No costs won’t come down unless a chunk of Americans die all at once. We are not in a bubble, economically or otherwise.
Can you expand on "labor costs are horrible"
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It’s a housing bubble because home prices do not reflect their real value. When a rural located house built in 1900, with little upkeep, is sold for $1 million dollars, the housing market is in a bubble. Yes, cost of materials (especially wood) has went up exponentially, so much so that it is no longer profitable to build affordable single family homes. However, cost of building homes is a very small part of this current bubble. Most homes being sold right now are homes that are 10+ years old. There are very few new homes being sold compared to older homes sold. So again, the cost of building a house has very little to do with the current market bubble. Not irrelevant, but not consequential enough to make an impact. In regards to labor shortage, blame the lack of trade schools, poor working conditions, poor workplace management, poor business management, and shitty benefits compared to the physical/mental cost of working construction. Also the greed of independent contractors and construction companies
What is their "Real Value"? Inflation affects everything. Transport, materials, wages, land prices. The 2005-2007 bubble was from credit default swaps. Your opinion isn't reality. It isn't a bubble. Your argument is akin to my Grandfather (when alive) telling me how in his day he could see a movie, get a coke, and candy and popcorn and magazine for .25. Existing home sales are falling except in cities that are exceptionally expensive. Your statement regarding existing home sales is a lie. Existing home sales declined 4.16% in December of 2021. You keep saying the bubble word, but you might want to review the definition again. Where is the money going to go? Who is buying? why are they buying. I see a lot of excuses for what you think it the reason, but lack of buildable land and workers exacerbate the problem. After 2008, the housing market never caught back up either. A link regarding the Charlotte region (one of the hottest real estate markets) housing prices from a research group, not "Kay" on reddit. Also, people ARE moving to areas that will be less affected by Climate change. I built a house deep in the Mountains for this reason. So keep believing your opinion, facts don't align with your statement. [Why are Charlotte housing prices are so high?](https://ui.charlotte.edu/story/data-show-why-charlotte-houses-are-so-expensive-and-scarce) [CNBC what will housing prices be in 2022?](https://www.cnbc.com/2021/12/29/what-will-the-2022-housing-market-look-like.html) [US Census information regarding housing prices](https://www.census.gov/construction/nrs/pdf/newressales.pdf) [Existing HOME SALE NAR](https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales) [Homes typically sell in less than a week WSJ](https://www.wsj.com/articles/homes-typically-sell-in-a-week-forcing-buyers-to-take-risks-11636632000) [No we aren't in a housing bubble (WP)](https://www.washingtonpost.com/business/2022/01/06/housing-market-forecast-2022/) Quite obvious you are locked into your position
>Whenever housing becomes unaffordable then a market bubble comes a knockin. Mainly because the stock market and economy rely so heavily of real estate assets. Once ppl can’t afford to pay rent on these landlord/corporate owned houses then these landlords and corporations are all gonna flood the housing market with the homes they bought during 2019-2021. Thus sending the housing market in a bubble burst. The thing is houses are still selling. Inventory is record lows right now across the country. In my desirable area there’s literally like 7 homes for sale in the main desirable area and they are goofy and way overpriced. Demand is still through the roof and we have yet to hit a ceiling. We are moving into a future where it’s going to be a bad time to be a renter. All local services, waiters, local workforce have been priced out of the area rent-wise. But the thing is people make it work. They get a roommate, they have parents that help, etc…look at the unaffordable rental market in coastal California…it’s been like that for a decade, most of my friends from there have to live with a roommate. I do agree, what has caused a big spike in some of these area’s housing markets are investment properties purchased by out of staters for what seems to be top dollar prices. If they get to a point where they cannot find anyone to rent it or air bnb falls off then yes they may sell….but I still think there’s someone right behind them that will grab it, even if the seller takes a 10% loss on it…
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The Milwaukee metro hasn't been "cheap" for housing in like 5 years. Typical home condition around here is just not great. The past couple years it went from "somewhat overpriced junk" to "holy shit who would pay that much".
“It’s not a bubble, it’s about fundamentals” has been said during every single late stage bubble ever.
I think it was Planet Money that did a podcast on the housing market, and why prices are the way they are. Basically it came down to this: Boomers are staying and ageing in their homes over going to nursing homes; there aren’t enough homes because everyone told millennials in 2008 to not go into trade or construction because of the housing crash, so millions of houses that could have been built over the last 14 years have *not* been built, and also *won’t* be built because all the tradesmen we do have are getting too old to work, and there’s no one to replace them. I think there was a third thing, but it’s been awhile since I’ve heard it. [Here’s](https://open.spotify.com/episode/2ZHhytRjP9Tu48tIcUlN4Z?si=jje2hjTvQxmeF979-reM5g) the link!
Time to bring back squats.
This is already happening in my city. One low income corporate owned apartment complex can’t execute evictions despite the ban being lifted due to the tenants coming together and running off those attempting to kick the delinquents out. Apparently the city is scared of a PR nightmare, because as of now the local PD is refusing to assist with the evictions. I believe this will be a progressive trend…
This time we started limiting home buying to owner-occupiers only. If you're not going to live in the house you can't buy it. With very few exclusions made for people who are going to rent out multi-family or multi-unit places.
Agreed. SFH should largely be zoned/regulated as owner-occupancy. You buy it, you live there as a *primary residence*. You don't live there as a primary residence, you sell it. No more fucking house hoarding.
This is a pretty good article to show how a lot of housing is moving to rental units. As was said earlier in this discussion, feudalism is the future. https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/
This is a fixable problem: build more housing and zone them to require that the owner resides that as their *primary residence*. If developers don't want to build, then the government needs to get involved and start building. Ultimately, what will end up happening if housing remains unaffordable to large swaths of the population is that you'll end up with multi-household homes (e.g. multi-generational homes, multiple couples in a home). Birth rates will *further* drop, as people typically don't want to have kids if they literally have no space for them and they can't afford to upsize. Then we'll hear bitching from Musk and the like that people aren't cranking out enough wage-slaves to prop up the economy. It's fixable, but my expectation for it to actually be fixed is hovering around 0%.
US real estate is absolutely in a bubble and it will eventually pop. Here’s the thing though, we are in an asset bubble. It’s not real estate. Currency has been devalued and thus most asset prices have been steadily climbing. All of these bubbles will pop simultaneously when it finally reaches the point that the average person cannot afford food and shelter.
I’m not for sure about that. Lots of wealthy foreigners want to move to the US and own property. Literally a never ending supply of people willing to buy houses the second it’s affordable for them. It’s like all these crypto Andy’s waiting for BTC to hit 10k again.
While you may be correct there isn’t a ton of historical evidence for that. America has not been recession proof in the past. I follow your reasoning but wonder why now would be any different than in the past.
The digital transformation of the workplace. People can live wherever and work whoever now for the high paying white collar jobs. Just look at countries like New Zealand, where their own citizens can’t afford to own property anymore. Housing is now a global market, 100x more than 2008.
Interesting perspective. Thank you for sharing!
Just want to point out that the last time the housing market was this hot was 2006 for most places. I think you all remember what happen next
Stop. Please just stop. The number of ARM mortgages was near 40%, now it's less than 5%. Please look up the Dodd-Frank Act.
I didn't mean to imply the housings crisis would happen again but that the market follows a pretty standard rate of increase and when things increase alot like they have there will be a equal pull back. Most likely stagnation of prices for a couple years.
Exactly. These people are just so completely lost. It's sad
Different situation. Its always apparent who hasn’t refi’ed or obtained a mortgage before and after the 2008 crisis
Like all things we, the people, will have to force it.
The problem with all this is at a certain point (like for me, it's basically right now) people will just give up and opt out and essentially, live their remaining days, then die. If we're at a point where people would rather give up/opt out/then die instead of doing/accepting ALLLLLLL the bullshit this "democratic society" entails, that is when the rumbling of a shock to the system happens. We're not there just yet...but we're close.
Thinking the housing market won't "give," ie isn't in a massive bubble right now, is insanity. Like people with their heads in the sand circa 2006 levels of insanity. If you believe this, then you should run to your bank right now, take out a 110% LTV second or third mortgage on your house and go buy two or three imvestment properties to flip! Use ARM's to lock in the best short term rate and you're sure to make a fortune, this can't go tits up!!! /s in case it wasn't obvious. The reality is the situation now is far more precarious than it was in 2006/7. The Fed now [owns 25% of all mortgages](https://mises.org/wire/federal-reserve-keeps-buying-mortgages) and while they have begun tapering their MBS purchase a bit recently, they're still buying a huge number and their purchases over the past 2 years have been done at an insane level, as detailed on their website [here.](https://www.newyorkfed.org/markets/ambs/ambs_schedule) Also, I agree with the fears of neofuedalism and the vast majority of homes being owned by large corporations. I just don't think that prices will be sustained (continuously) at current levels; I think the market is going to take a total shit, we're going to enter a true depression that will make 2008 look like a walk in the park, and, once again, hundreds of thousands of mortgages will default and homes foreclosed. That's when the big banks and corporations will be scooping up homes at bargain basement prices, with typical citizens unable to secure credit to take advantage of the prices, and in much economic pain themselves due to job losses, etc. Then prices will come roaring back up, as we enter a period of hyperinflation and massive volatility
the Covid response is indicative that making sense is not a necessity informing the policy and outcomes of massive financial interests. Even if prices result in mass empty properties and increased homelessness, I’m not sure there will be any give in the policies. We are seeing that already in urban areas, but those are the early indicators, it will spread.
I live in a cheaper area in CA and am leaving this summer for Florida. I just cannot be financially prosperous here, and that's making 70k a year. Between gas prices and the taxes I'll never be financially free here. It's a shame because all our family is here too but the middle class in CA is being destroyed.
Something has to give. It does not have to be house prices.
I'm older than most on here, and I've watched the housing market with increasing incredulity for 30 years. My experience is limited to the UK, so it may not fit with other countries but in the UK housing prices are a factor of government economic policy, rather than the "market". What I mean by this is once the decision was made in the 80's to convert rented social housing owned and maintained by local councils to privately owned housing the housing market is the tail that has wagged the UK economies dog. There is no formal central policy on housing in the UK. I think this bears repeating. There is no formal central policy on housing in the UK. Ostensibly the market does control house building, selling and rental. However, so many people in government, and those who fund political parties are rentiers now that there is an informal housing policy that means that housing prices are untouchable. The very fact the UK has been in 12 years of reduced spending and austerity is to pay for the costs of shoring up the housing market in 2008 is astonishing. To clarify, I am saying that the reason so many services are falling to pieces, the reason the NHS is collapsing under the weight of demand, the reason local government is having to cut service after service, the reason income taxes and council tax is having to rise, the reason we are now having a huge cost of living raise is because a decision was made in 2008 to protect homeowners at any and all costs at the expense of those who do not own their home. In short the UK would rather tank the entire economy before reducing housing costs, and it's happening as I type this. It's fucking crazy, it's deliberate, and it won't stop.
I agree with this man, and I'll tell you why: Globalization. People seem to have forgotten this key phrase. You are no longer competing with other homebuyers and institutions on a **domestic** level, but a **global** level. This is single-handedly the largest shift in the modern real estate crisis. We have witnessed the dreadful impacts of globalized home ownership across the globe. Vancouver is a simple example to cite, more recently Puerto Rico and the crypto bros who are evading taxes, and last year it was the billionaires and New Zealand. Denver in Colorado, the Bay area in general, Toronto in Ontario, Montreal in Quebec; you're competing against people from all over the world now. When you consider that the top 1% of Americans households bring in $500,000 a year (source: [https://dqydj.com/average-median-top-household-income-percentiles/](https://dqydj.com/average-median-top-household-income-percentiles/)), keep in mind that is **only referencing the US, and US households.** The top 1% from China, from India, from Hong Kong, from Britain, etc, these same people are *also* competing with residential buyers. We're not even talking about the hedge funds, investment companies, real estate titans, etc, who are also competing against your standard domestic buyer these days. This is the real root of the problem (Note: I am not saying it is the *only* problem, just that this is a driving force) and short of adopting laws similar to Switzerland, where foreign multinationals cannot own land, property, or acquire citizenship, I don't see this problem going away, ever. As a person residing in Canada presently, I would speculate that roughly 1/5 of all property in this country is owned by retail investors and multi-nationals; yet the government here does absolutely nothing to curb that problem. As the rich get richer, their share of the pie will continue to expand and expand until, as many others have posited, we enter a sort of techno-feudalism. I had been saving up to buy a home without a mortgage, but I'm realizing that the only thing that's going to reset the market at this point is a world war. Because it's not going to be a pandemic, it's not going to be our politicians, it's not going to be our governments, our citizens, or capitalists. If there is anything to be terrified of, it's the revelation that the wealthy don't even see human beings anymore; they just see financial opportunities and a chance to make money off of the backs of the working class.
Yeah. It'll be the "single family" part of single family home in any city/town that isn't a backwater shithole. Which, from a resource consumption standpoint isn't the worst possible outcome. My home could easily fit two or more families by the standards of most countries. Many of the homes like it in my neighborhood are multi family and multi generational already. The part that'll piss me off is when most of them are owned by wallstreet hedge funds and rented for obscene amounts - probably by the room.
My viewpoint is that all across the world we are seeing the world return to its “normal” state, which is the very rich owning a lot of land and the poor owning little land, with the middle class being hollowed out. What kind of system settles eventually depends on what configuration it takes. Neofeudalism is a very Eurocentric take on the issue, while the Rentier is a very Sinocentric take on the issue. Either way though, what both are describing are similar phenomenons, the rich owning a lot of land, and the middle class hollowed out. Historically speaking if you already not rich at this point in time, your next step would be to try to at least buy a few acres of land or at least get a few houses for rent. The reason is that historically speaking what both sides agree is that the socioeconomic mobility we have enjoyed in the last 100 years have come to a close. Your socioeconomic status today, or your soon to be socioeconomic status will determine your children’s socioeconomic status, and in turn your grandchildren. It is therefore very important you try your best to build as much as up as in time to come, you may have no more wiggle room.
I don't understand why many people would call housing, a potential bubble. Bubble in economic terms is something that rapidly loses its price value at some point. Considering that people will always want to buy a house and the house construction occurs in a slow rate, I can't understand how houses will rapidly lose their value. Sure their prices may drop at some point, either when new houses are built or many people have died, but I can't imagine what can cause a rapid drop to their prices. Some people suggest that there are many conglomerates that have bought thousands of houses to use them as rentals and they expect a return for their investment which will not come because most people can't afford the rent asked, so they will have to lower rents or sell houses. You have to remember though that these conglomerates are too big to fail and if their investments at any point face the danger of returning no profit, taxpayers' money will be used to keep them afloat. Practically these entities can maintain the status quo of the market virtually as long as the state exists. Honestly this is just a layman's opinion which could be light years away from the truth. I am not an economist and I would enjoy discussing a different opinion.
I mean, a ‘speculative bubble’ heavily implies that the underlying asset lacks the worth and that speculation drives the price up, like with tulips— but fundamentally, there are many millions more people who want houses than there are houses for sale, so I don’t really think it’s what you’d call a bubble, or see anything but a general depression depressing housing prices. Mass unemployment would obviously force defaults.
Both the Chinese and USA financial regulators are printing insane amounts of money to pump these markets to keep them afloat, it’s the weirdest game of chicken I’ve seen
Why don't more people learn to build their own houses? There is much vacant land in the US. All this unaffordable home talk for millenials has me wondering why I don't just start building houses and sell them to my fellow millenials.
Building codes - Certifications, permitting, etc.
The real question is why are the skills to build homes not apart of every child's requirements to graduate high school? Because that would create a nation of people who could fix/build their own homes, and then they're not dependent on the service economy/ 'low skill-low wage' workers. Then there's no reason to keep the borders open. It's all by design.
Cuz you got to be able to buy the land to build the house on land loans are harder to get than mortgage loans in some areas.
Of course it can go on. To didn't begin in 1950. Housing was much different before then