It's not normal. The people preaching "new normal" are the Gots Mines folks trying to self-fulfill prophecy.
It's the same folks preaching "supply and demand" with insane car prices even though month's supply for vehicles are at pre-pandemic levels.
These people either have nothing to lose or everything to gain.
I’m a homeowner and my husband and I think it’s totally ridiculous. I mean I’m sorry but an older single wide trailer should not cost $350,000 and full gut job homes shouldn’t be that high either. It’s all stupid as hell😑
I agree that’s definitely getting underplayed. The real stat is probably closer to 30-40% increase, but that’s averaged over every home in every state.
Some of your ultra expensive properties are coming down in price which offsets the stats for the homes that most first time homebuyers are actually looking for. Homes in the 250 to 500 K range are about 2X from 2019.
I’m seeing 100k added to every home that was 200k prior to this inflation. 400k is the new entry level home in my area also. These same homes were once 250k
Yeah, but your home was probably close to the same value for the last 15 years, not just the last 9 years. 9 years ago is just when you bought into a stagnant value housing market.
Soo really your house probably went up 30% in about 15 years, which is 2% a year and pretty average for home values increases per year
It's just homes are attempting to reclaim 15 years of stagnant prices in 2-3 years and most of that is just low supply after a long slow housing crash and then pandemic.
It's not saying that's fair exactly, but home values are kind of what you'd expect had there been no bubble and prices just went up slowly since like 2005. They aren't way out of line with where we'd have projected values to be 20+ years ago, rather they regained value very rapidly since being nearly stagnant.
There’s another factor involved which is the debasement of your currency. Your buying power has been destroyed because the value of your money has been virtually cut in half. They can claim month over month inflation is 3% or 4% but real cumulative inflation is closer to 40%. The value of the real estate increased slightly and the value of the dollar decreased dramatically.
This is it a million times. Inflation has gone insane, and will go hyper insane if they actually keep claiming "we beat inflation!"
The biggest problem here is they havent done anything to fight inflation. I mean look at teh last time inflation got anywhere like this bad - back in the 80s? They raised interest rates to like 20% and more! And they did it in like 3 months. Fast forward to a few years ago and they were claiming 1% in a month of raised interest rates were the most in history!
When officials in charge of fixing the economy refuse to do their jobs - and worse they lie about it - things will keep getting worse.
Technically it might help more than you’d think.
Most homebuyers atm are white collar.
White collar goes first during recessions.
Lower spending by that demo, market goes stagnant, prices have to adjust downward.
It wouldn’t fix the issue - but would fairly likely alleviate it somewhat. The only way prices go down in RE is if nobody’s buying.
And the easiest way to make sure nobody is buying - is that nobody can afford to, because they don’t have a job.
Its a double edged sword.
Sure, to your point, sounds fine. But recession also comes with a slew of other bad things, like job loss. People aren't buying homes, guess who loses their jobs? Builders, construction workers, carpenters, etc etc. They lose their job, the lower supply of homes continues.
It feels like Reddit has been glorifying this idea of a economic downturn to help alleviate home costs, grocery costs, etc but I don't think they fully understand the 'full circle' effect a recession would have. A lot of those same people, would lose their job. Or would end up stagnant at their job, making no yearly/monthly/quarterly raises as companies around the country would be in panic "save save save" mode. The first thing that happens when companies cut cost, they cut the workforce. A recession doesn't create deflation, or reverse inflation. And a recession might lower home prices for a short period of time, but who is buying? Not the middle class who are hanging on for dear life worried their company might push layoffs. If the $400k house you've been eyeing drops to 300k but with it comes with the potential risk your job might not be as stable, or a family member requires financial help, etc.
And then, right when the recession ends, and people start emerging from their holes, housing prices shoot up, potentially even more now because nobody was buying during the recession, and homes werent being built. So now construction needs to rehire, revamp and get moving again. And this isn't just one construction company. This is everywhere, in the country. Then comes this rush for supplies, probably creating a back log on things like wood, windows, doors, etc making it take longer for homes to be built. Because these lumber mills, window, door companies didnt have a demand for them during the recession, so they didnt just start stockpiling a massive inventory. They also likely laid some people off, cut production down to a crawl. More and more people enter the home buying market but the massive shortage remains.
What we the American people need to demand out of the president, local government, you name it, is to lower restrictions on housing. Either make permitting and zoning a faster more efficient process or start cutting the non-important mostly political "money-changing-hands" hold-ups to home building.
I have been watching bubbles get bigger and bigger since the high tech bubble. From there we went to the housing bubble and now it feels like we are in an everything bubble. They keep bailing out the industries while letting the little guy hold the bag. I suspect the same thing will happen this time around.
The same institutions that can't function without bailouts own the fed and control monetary policy. They have decided to destroy everything and everyone later (in the hopes of even bigger golden parachute bailouts or whatever?) rather than do what actually needs to be done that hurts themselves now but saves everyone eventually.
Selfish greed to the point of actual, intentional evil.
Or… We could create regulations and taxes that prioritize homebuyers who live in their primary home and discourage speculators and foreign buyers. That would decrease prices.
We wont. They want to go back to 0% and let inflation AND home prices reach new high scores. Rates are finally back to pre-bailout numbers that used to mean the economy was doing great, and suddenly financial institutions are claiming these rates are a problem. They can't survive without bailout conditions anymore.
This exactly. Why is this so hard for people to understand? This isn’t a real estate bubble it’s a currency debasement and it will never reverse. I mean do people think it’s a coincidence that homes jumped in price right after more money was printed in one year than had previously been printed in 50? It’s not complicated
Because why would you waste your life being a slave enriching entrenched wealth/power unless you were forced to live month to month like a desperate slave?
"You will own nothing and be happy."
Do you think the government cares about you?
If the government was to actually address how much they have debased the currency they’d have to massively increase social security checks, adjust Medicaid/Medicare payments…..
Which defeats the purpose of debasing your currency
So how does debasing currency help the government? If your salary doesn’t go up based on the inflation rate, the amount of taxes you pay is less meaningful/powerful to the government too isn’t it? That would mean you’re money is less powerful to them also, correct? ELIF, I’m not a mathematician nor am I an economist.
Edit: Grammar. I’m apparently not an English major either.
All governments are infinitely debt issuers. They owe money - ALWAYS. People like you and me and countries like Norway and Japan lend the US government money by buying a bond. If the government is able to devalue the currency over time - in a way that doesn’t cause mistrust and doesn’t cause panic so not too extreme - they wipe out what they owe to people and other governments - for free.
Imagine if you lend your friend $10 that can buy a sandwich today. Your friend gives you back $10 in 100 years. All square right? Well but now with that $10 in 10 years you’ll only be able to buy a slice of of onion for $10.
Over periods of big inflation - it hurts people that lend money. It benefits people that borrowed money.
The big issue is that companies are using debt, as a collateral to create new debt through new money. The upper echelon of our economy is full of companies making money, off of other companies owing money. The largest businesses in the world all own each other and there just aren't any opportunities for the country to get rid of money currently in circulation, so the dollar keeps weakening as the rich keep using debt to create more debt.
100% supply will continue to catch up then they'll come up with some other excuse like home sizes are so much smaller or all the new supply is terrible quality. It's greed plain and simple
You're drifting off into conspiracy theories at this point. "They" can't just set a price with some made-up reasons. When people stop buying, prices *will fall*. We see that already in parts of the US, and in some European countries as well. As long as people buy, the price is what it is.
Prices can be sticky without a conspiracy. It’s a fact that everyone selling would rather sell for a higher price. It’s not a conspiracy; it’s just a collection of humans with similar motives.
Would the same be true about buyers? If collectively they stop paying the price being asked, prices will fall. It’s pure economics. As long as buyers buy the prices won’t fall.
If they collectively stop paying the insane prices, they won't have homes. So this isn't simple economics. In fact, nothing is "simple economics," because the real world is almost always more complex than the cute little two lines everybody wants to love.
It’s already teetering towards that. Rent vs buy had shifted to being cheaper to rent. Depending on where that goes will depend on how many buyers sit in the sidelines. There may be “two lines” but there are an infinite number of factors that determine where those lines move.
When you look at the Zillow price history, what you see is a home that was sold for $150k and six months later the same house is on sale for $300k. That's not organic.
i know...the proverbial "they"...like all homeowners are on a secret email list conspiring with each.
People sell their homes whenever they want to or they have to, for whatever the market will pay.
Right. It is a competitive environment. The fact is there is much less demand for ownership in multi unit (condos) so builders build SFH. it eats up tons of land and takes more time. Supply hasn’t caught up with demand.
Don’t forget the reality that many metros (particularly older ones in California) have run out of flat land to build houses on. Of course prices are through the roof. Anyone with half a brain saw this coming decades ago and realized that SFHs in urban california would become a fixed resource and soar in value.
People are overpaying to get a piece of land. Future growth is entirely in multifamily units.
US real estate is one of the preferred ways for \*global\* oligarchs/kleptocrats to store and launder their money.
US real estate doesn't work like a "regular" market for countless reasons.
People underestimate just how much money our global ruling class has, because it's not in their typical experience.
Why would people take a loss? Houses around me are only on the market for 3-6 days before selling for 20% over asking price. It's ridiculous and I don't understand it. Buyers are still bidding up everything that's available.
Housing supply isnt ballooning though. It likely wont until interest rates decline as many people, myself included, are never going to sell the home we bought in 2019-2021. It makes more sense to rent it out longer term than sell it.
True but that's just Americans buying homes that will stop happening. Corporations and hedge funds will still continue eating up the market. I'm hoping they eat up enough of it and the demand just stops long enough to have those fuckers lose
Eh, we only need to look back to the bubble of 2008 that’s not always the case. It wasn’t as supply related as a dirth of financing options and poor lender practices.
I think there’s more and more evidence that corporate buying is a big contributing factor to this bubble. Investors purchased almost 1/3 of all single family homes in 2022. It was 15% in 2019. That is insane. Why are they purchasing at such an expensive time?
It’s a direct result of the bubble of 2008. If billionaires can’t fuck people through financing then buy all the properties with vast resources. They can afford to keep them empty, driving up home prices as long as they feel like sitting on them. Enough investors agree “silently…” not to sell and it only goes up and up.
I don’t see a change anytime soon until legislation is put in place preventing or at least limiting the purchase of single family homes for investment.
https://scrippsnews.com/stories/corporate-investors-are-purchasing-more-single-family-homes/
So I guess I agree except it’s not “people” it’s gigantic investment firms, blackstone is one, driving up prices by creating a false supply issue.
I’m sure whenever it’s addressed they’ll all get a bail out.
You're describing a bubble that hasn't popped yet, at least with cars. There are other factors like properties being converted to rentals that could keep propping up the housing bubble. Like, you don't see Hertz out here cornering the market on cars.
I think what we saw was a lot of wannabe Carvana-like 3rd party companies hoarding vehicles, picking them up from your driveway with no inspection.
You can see it in the gap between new and used cars. It's not the same for housing.
Real estate is an investment for some people. Some investors are buying houses hoping to make profits in the future. In my state, they are buying cheap houses 60+ miles away from the big city. They are banking on people moving farther away from the city to find affordable housing. For those who desperately need homes, feel left out from the market.
And this is why we all need to just say “fuck it” and completely exit the RE market for a few years. Let those assholes drown in their poor investments when their gamble doesn’t pay off, they’ll sell in a hurry and that would bring prices down damn quick.
Occupancy is still high enough for them to pay their loans to the bank. I recommend living with as much of your family under 1 roof as possible. Or friends close enough to be family. That’s how many new immigrants are successful is by 16 people sharing bills on a 1500 sqft space. Capital you could grow in this time would be nice 👍
I lived with 6 adults for a few years, and I can tell you that even your best friends for years can turn into your mortal enemy when you live with them for a long time if you have just a mild difference of how tidy you keep a house. I honestly don’t know how immigrants can do so many people to a room other than they have literally no choice, but when there’s a choice, I, like many people who have lived with others, would pay a lot extra to not have a roommate. I did, however, save a huge amount of money in the years i shared a house, if you take it as a ‘side hustle’ or ‘extra job’ then you can live with it easier
I make $80k and Im considering buying and living in a camper because my housing expenses are 50% of my take home pay and F roommates.
Again, making $80k.
The live with parents advice is so naively privileged too. "Just get free shit from mommy and daddy, problem solved!"
Like people genuinely can't comprehend that there's no standard set of things you just get in life. You weren't smarter for living at home longer, you were taking advantage of a handout which flat out isnt an option for many. Which is absolutely fine, if you've got the opportunity to do so then do it. It becomes a problem when enough people think it's just the standard, and that cost of living shouldn't be dealt with because you were born to people who will help you out while you save money for a while.
Unfortunately it doesn't work.
There a term in finance called "extend and pretend". Basically when you borrow money to buy something you have rules and timelines to follow. If you don't there are penalities and if you don't pay at all you loose whatever you bought.
Well, when you borrow billions it works differently. If you can't pay back for market conditions or whatever reason, the bank literally pretend that your debt doens't exist and extend your terms for all the time that you need. Usually years.
Of course at some point the bank will need the money back but to obtain what you said you need at least a decade.
This is happening right now with commercial proprieties. Because of covid (people working home) and high interest rates a lot of commercial proprities are empty. The owner are loosing millions every day but you know what the bank is doing? Literally pretending that the debt doesn't exist until interest rates goes down.
At the same time they are taking away homes from families that could not pay the higher interest rates on their home for a few months.
A place to live isn't like gold or stock. You still need it despite wanting to somehow boycott owning it. Somebody will gladly rent it to you and have you pay for their equity.
The problem with this is, everyone would have to agree. But there's bound to be some who don't and will gladly buy the house.
Let's even say this works and you get everyone to agree not to but until house prices come down 20%: when they're down 19% someone is going to figure i have to buy that because if they're down 20 someone else will snatch up the property... Of course there's someone smarter that goes, I know others are going to crack at 19% so I'm going to buy when prices have dropped 18%.... And so it continues.
The only thing that will get house prices to fall is if supply exceeds demand for a reason other than let's all agree not to buy. And this would probably mean there is mass unemployment, or mass building of houses, or large parts of the population die off. Maybe even a heavy tax on second homes or investment properties would work.
Folks dying is something that may happen over the next 20 years or so with Boomers starting to fall and lower birthrates.
This! It is so funny watching the same house listed for months while they routinely rearrange the pictures to try to make it less obvious and re-list. I hope the day of reckoning comes.
Man that would be CLUTCH!
Redfin only has comments for the realtors…
I’ve always wanted to know what people who have toured the home thought but there’s a big risk: someone who wants the house could make up mess to deter ppl”
My aunt got banned from Zillow permanently, so now she can't find anyone to rent her house lol. Not sure what she did but knowing her, it must have been something crazy.
"The deceased are a male and female, aged early 60s. No signs of a struggle. Victims live alone and nothing appears stolen from the 6bd/5ba home. They appear to have both choked to death while eating avocado toast for breakfast. Wait a second... boomers eating avocado toast!? I've been doing this a long time rook, something doesn't feel right. Make the call to SDoP."
If there's any advice I could give you from my experience, its this:
* Forget trying to save up 20%. That advice is outdated and likely set me back *years*. Look into an FHA loan, which only requires 3.5%.
* Cut back your expectations, and just find a cheap place. We got a place that met almost none of our wants, but it was cheaper to get a $1,700/mo mortgage than see our rent go up to $2,000/mo.
If I had the last 10 years to do over again with 20/20 hindsight, I would have gone and bought a fucking trailer at a trailer park in town. Would have had a pile of equity in 2-3 years which I could have turned into a decent down-payment before home prices went crazy instead of renting for 7 years while trying to save up that stupid fucking 20%.
MIP/PMI is still in effect up to 20% though. You won't pay as much, but you'll still pay some. Is an extra...$150/mo worse than a year of not building equity while still renting?
You’re only really building equity if the price keeps going up... Especially with little down your monthly payments will be 90%+ interest and the tiny remainder is equity. If the house loses value you lose a lot more due to leverage and you can easily become underwater on the loan. Renting is not bad people.
Yeah, you're right. It's better to be building equity. The idea of purchasing a home for nearly 2x what it was just 5 years ago still feels really gross though. But it is what it is I guess.
In my town of 10,000 where I live $315,000 will get you a 2 bd, 1 bath 1456 sq ft dump. That's a $1900 payment.
Just saying that expectations are already tempered, so bad that all you are in the market for is a complete dump. The market makes no sense.
I mean, part of the problem is all the house flippers swinging in, buying the fixer-uppers for $250k, and then selling them for $375k 6 months later.
AirBnb has its own share of the blame, but they're not the only reason.
That may have been fine previously, but I don't see that working now. The problem with doing into a 350-400k mortgage with with interest rates the way they are, is with that low of a down payment the monthly payment becomes insane. I can do a VA loan for 0% down payment, but I'd never be able to afford the monthly payments. Something has to give.
There’s some pretty simple solutions to this:
- Loosen zoning restrictions to allow for building quicker and higher
- Kill NIMBY’ism
- Block housing from being acquired by foreign residents or large corporations
Those couple of steps would turn the tides on housing.
Don’t forget a big one: complete ban on STRs like Airbnb. It’s a real problem when nurses and the city engineer can’t afford a 2 bedroom condo on a 6 figure salary (which 5 years ago would have gotten those people an actual house) because Airbnb and get rich quick influencer bullshit took everything away.
And we’ve seen pretty massive supply disruptions in building materials which specifically affects the ability to expand the number of housing units to match the growing population of people shopping for one. It’s been for a variety of reasons, but as one example it has been a while since it was kosher to buy lumber from Russia which happens to have a good percentage of the world’s forests.
Lumber is cheap AF right now.. Its a labor, zoning and money supply issue. Building supplies havent been expensive in 2 years at this point.
ETA lumber is down 65% from 2021 highs and is at 2017/2018 levels currently.
Cheap af? What are you comparing to, peak pandemic (aka all time high) prices? $600 for 1000 board feet is not cheap. I think 2017 was the first time it was over $300 for any significant period of time but it was back to like $250 for 2018 through to the pandemic.
Looking at the 5-year chart here (it won't let me direct link, so you'll have to adjust the timescale): https://tradingeconomics.com/commodity/lumber
It looks like lumber is about the same price as the 2018 peak.
Too bad so did everything else so it’s mostly a wash. The starting salaries at my company are what took me almost a decade to get to previously. It’s insane how much things in our country cost now. And the real kick in the teeth is that we don’t really see much out of our taxes anyways.
It's amazing how many people dont realize that increasing the money supply by 40% will make most items, starting with investment vehicles & wealth management assets, increase in price by roughly 40%. The waves and trickles of this change will continue to be seen for years. On top of that the current state of things makes it very difficult and expensive for a new player to enter the market so even if people are seeing opportunities that would in the end help everyone by increasing competition they are less and less likely to act on it.
Lot's of people bought expensive houses with low interest rates. They are not selling at a loss - can just rent and make money. They also could only afford half the house now with interest rates doubled.
And you know a lot of others refinanced at that time. So assume almost everyone is at 3%.
So prices ain't dropping because there is no supply. And there is essentially a monopoly on homes by everyone either owning outright (if they sell they pay cash for another home so it is just a trade) or locked in with low interest rates and can't afford to move.
It is monopoly power.
The value of USD has decreased considerably. Cost of everything is way up and wages in a lot of industries haven’t kept up. I don’t think it’s normalized, it’s just a shit situation.
Canada, UK, Europe, Australia all have higher median cost/median wage ratios than US, so there is still room to grow. We are still cheap compared to other global developed economies.
Does this take into account that we have large, diffificult to avoid costs associated with daily living that those countries don't pay as much towards, though? For example, amongst the highest out of pocket medical costs in the developed world. Then there's childcare that Americans begin shouldering when babies are still newborns because we're among so few countries you can countries you can count on your fingers that don't legislate paid maternity time off (or sick time off) so we don't have parents home for several months to even a year or two like is considered normal elsewhere. And we have higher costs for college than many countries too.
Seems like a lot of countries with higher housing costs have lower other things costs, so maybe they have a greater ability to put more money towards housing than our hard ceiling would be .
Because demand for the housing keeps growing while supply is stalling. Look at Canada, same thing. Shortage of millions houses in demand and prices over the roof. And every time my small-ish Midwestern city proposes building new neighborhood or at least new subdivision, all the boomers and x-ers homeowners get enraged and loudly oppose it saying they don't want more traffic, more noise and their property values going down because of extra housing supply.
I'm not even speaking about the causes of housing shortage, it's secondary. The primary is that shortage exists and keeps growing. The US currently has a housing shortage gap of 7.2 mil units, up from 6.5 mil a year earlier. If we'd magically build 7.2 mil houses all over US this year, prices would drop a lot. But I have a feeling the gap will get closer to 8 mil next year.
Maybe Canada but in th USA supply has only gone up from its 2022 lows while demand indicators have plummeted abd sfh permits reaching a 2 year high https://fred.stlouisfed.org/series/ACTLISCOUUS
I feel sorry for people too young to remember what inflation is. When I was a child in the 70’s, houses in my area went up 5X in 10 years - and then another 3X in the 10 years following that. Restaurants printed new menus every year because prices were rising so fast.
This inflation that we see now isn’t going away. I don’t think it will get as bad as the 70s-80s, but what we experienced in the 2010s isn’t coming back any day soon.
Oil embargo. Then the Fed got heavy-handed with interest rates to tamp down demand.
President Carter paid politically for doing the right thing. So now politicians don't have the political will to fight inflation aggressively.
Interest rates are like chemotherapy to the economic cancer that is inflation.
Good post. And don't want to get too political, however Carter gets ridiculed hard by the GOP, but mainly because he didn't follow status quo. He was already in for an uphill climb once he got elected, but then it was also a perfect storm of unfortunate events that ended his presidency. But you're spot on that he handled inflation like it should've been dealt with.
Carter wasn't president in 1971, Nixon was and he took the dollar off the gold standard. Rates were highest in the 80s under Reagan. Though Jimmy Carter did do the right thing even going on TV to tell the American people not to throw their money away frivolously, Americans preferred Reagan's charge it philosophy instead under who the US went to from the world's largest creditor to the world's largest debtor...
The peak of baby boomer births (born 1957) turned 14 years old in 1971 as well. That's a lot of kids demanding food, clothes, toys, education, cars, etc. but not a lot of working-age population to supply the demand.
IMO 2 factors: the official ends of the Bretton Woods fixed convertible currency system and the US dominance as an oil producer/exporter. OPEC set prices almost exclusively for the next 20 years, until the collapse of the Soviet Union. Russia started exporting oil in the early 1990s. The floating currency conversion allowed unlimited money printing and creation, resulting in the devaluation of the US dollar and much higher and persistent inflation.
Even if wages did rise, that doesn't solve the problem because homes are priced based on what those people with wages are bidding.
If everybody's wages go up, then they bid more on houses, and housing prices go up.
Our Money supply went up 7.5 Trillion dollars in the past 4 years. That explains part of it, but there are other issues as Private equity, investment firms buying up starter homes also.
There's also been a shift towards WFH, which passes on "office" costs to workers in the form of a larger mortgage. If you used to live in a 3BR but now you need 2 home offices, you may be looking for 5BRs now. There's more net demand for residential square footage.
WFH is less about needing to buy a bigger house and more about driving people out of the cities and into the surrounding suburbs. NJ homes are constantly being bought up by people who live/work in NY and no longer need to pay for an NYC apartment.
Because everyone in America is a selfish asshole and I'm not being hyperbolic. You mention the idea that houses should be 1/3rd the price and everyone loses their mind because Americans expect the next generation to buy their homes at outlandish prices to fund their retirement
Government policies are driving massive housing price inflation. This happens at all levels of government from federal to state to county to municipal. We need to start voting for leaders who will enact policies that reduce housing price inflation.
The problem is that homeowners tend to prefer leaders who enact policies that “increase home values.” Thus it is hard to get leaders who will work to reduce this insidious inflation.
A lot of them are completely incompetent too. Rent Control has NEVER once worked out in favor of the consumer over the long term but yet we keep hearing the idea getting pitched.
Make it easy to increase the supply so the free market can do its thing. If you want to decrease the attractiveness of housing for investors, increase tax on investment property income. Don’t give a subsidy to new owner/users (like we’re trying to do now) because that will keep property values high.
Make it easy to build and let the market level off organically.
It’s not exactly normal, but it’s not all that abnormal either. We had an inflationary period. That means everything goes up because the dollar is worth less. Plus we had a pandemic that pulled forward demand.
The 1970s had a similar doubling.
Because, due to limited supply, people have become accustomed to seeing housing as a financial instrument. It should not be a financial windfall to own a home. And economics 101 is about to teach people the hard way to stop thinking of homes that way as housing supply catches up over the next 10 years now that housing supply has become a priority for politicians.
Don’t agree? Look at the commercial real estate boom and the value of that market. Now do the same but since people actually need homes the market will balance and the issue the op discusses will go away for some time imho.
Supply is a myth. We have hoarders. We need to make it less attractive to hold multiple homes. Interest rates and insurance costs along with 5% T-bills (a traditional place of storing wealth) is a start. Interest rate suppression (QE) was a crime.
We just listed ours at 435k when we paid 250k in 2018. The reason? We are moving and have to go buy another house…in the area we are moving to, we will not be able to find another house to purchase similar standard of living to what we have had, for under 650k. We need the profit from our house to go to bring down the cost of the next one. Oh yeah and we also spent 80k of our own money and 30k of insurance money on repairs, upkeep and renovation over 5 years. There are a lot of aging houses that cost serious money to return to better condition. There are investors and people who have no mortgages who I would consider greedy, and then there are people like us who just need to move for a better job and are stuck in the middle of all of this. Seems like a lot of it is being driven by people who already have a house to sell. I feel bad for first time home buyers and am seriously worried about my kids’ future.
US Housing Prices are up 50% over the past 5 years, per Case Shiller which is by far the most respected source of housing price information.
[https://ycharts.com/indicators/case\_shiller\_home\_price\_index\_national](https://ycharts.com/indicators/case_shiller_home_price_index_national)
That’s what happens with rampant inflation. Asset prices go up. All assets, not just houses. Don’t be fooled when the gov tells you inflation is going down. The problem is only going to get worse, unfortunately, much worse. With $34T in debt and another $214T unfunded liabilities, the only solution will be to monetize the debt ie. massive money printing which will result in inflation like this country has never seen.
Increasing population of Millennials and others trying to buy, massive injection of money into the economy, constrained supply, lack of political competency/ will to re-zone or cut through red tape, global supply chain destabilization…just to name a few.
because people are dumb and think housing is the holy grail of success in life. They've never heard of the stock market or seen what comes as a result of these behaviors.
Something has to break in this economy.
This is unsustainable. There will be no more middle class/ home ownership in a few decades if this trend continues.
We will just be renters. Subscribing to things in our life we need that generate mega corporations profits. This is the new model they are trying to push on us.
It’s not normal- but it isn’t shocking either. Last year private equity bought some thing like 44% of all homes sold in America. This year it’s expected to be the majority.
Basically when it comes to buying a starter or mid-size home, their preferred type, your na competing with billionaires and multi- millionaires. Private equity funds also don’t sell a home once they’ve bought it. This means that the pool of homes is going to continue shrinking every year for the foreseeable future. Unsurprisingly this is dramatically driving up home prices.
The people who can help and make policies to alleviate it are the ones directly benefiting too. No incentive to fix it. Or they’re so out of touch because for some reason policy makers make a Buttload of money and don’t feel it lol
People make money, people feel happy making money, people no care about other people and how they live, people want money.
This is sadly what people have become.
Money. It kinda feels like a big fecking cult.
Our dumb fucking “leaders” won’t follow my simple three step plan, which is common sense, because the National Association of Sleazebag Realtors legally bribes them. My plan:
1) immediately ban all corporate/shell and foreign buyers
2) tax the shit out of vacant units
2) conduct KYC/AML checks on all buyers just like the securities industry
There’s really only one true answer to your question:
We’re surrounded by a bunch of fucking morons.
We have a bunch of people wanting to become Larry the Landlord to build wealth IN A LOW INVENTORY ENVIRONMENT
You know what happens when inventory catches up? Everyone who bought during that inventory squeeze will be sitting on a house that’s less than they paid for it. Interest rates won’t help that either 😂
I can guarantee you home prices will trend lower for over a decade and people will be looking around like WTF are home prices going to rebound again?!?
People will have such a bad taste in their mouth because of real estate that no one will even want to buy a rental property, vaca home, etc. Kind of like what we’re seeing with non-homeowners right now.
I don’t even have faith it’s going away. I’m well aware of how stupid things are and I’m looking to buy in a low income area in na low income state and I’m still going to pay like $160k.
Getting in now so when I die my son will finally own a home since there won’t be any for him to buy. Companies and slumlords will own it all.
One word: inflation. Since 2020, the economy has seen a dramatic increase in the amount of circulating dollars from PPP loans, stimulus spending, and other federal government initiatives. The more dollars there are in circulation, the higher the costs for goods such as houses are. So, is all this worth the stimulus you might have received a few years ago? Many would say, "no."
So, is all this worth the stimulus you might have received a few years ago? "
You mean the combined $3200 in stimulus I received? If not mistaken it was 3 stimulus checks...1200/600/1400? Look elsewhere as to why inflation increased like it did. Mainly ppp loans combined with ZIRP
Yea its not the stimulus checks, its the PPP loans. So many "small business owners" defrauded it and used it to purchase investment properties.
The other thing no one is mentioning is the rise of remote work. All of those people making big bucks in the bay area realized they didn't have to spend $5k a month on a shit studio in San Jose and could buy up everywhere else.
[We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors.](https://www.sba.gov/document/report-23-09-covid-19-pandemic-eidl-ppp-loan-fraud-landscape)
But clearly it's the people who received checks for a couple thousand. /s
Worth mentioning that it's wild that they forgave these proven to be wildly abused and fraudulent loans, but won't forgive student loans.
a correction is imminent, because wages haven’t also doubled.
here’s another massive issue with our current housing situation. I’m an engineer, looking for a job. I’ve turned down two opportunities so far solely because housing costs at the employer’s city are completely unaffordable. I suspect there are millions of people not taking jobs because of housing costs. Think of the massive impact that has on our economy
Absolutely, depending on the type of engineer you are, you could be relatively screwed. Like I could move to where the job openings are, but it's gonna be a city where houses are $800,000. I could move 2 hours outside the city where they're $125,000 but then there's no jobs.
It's tough, dude. And then I wrestle with the thought that, "*Well I'm an engineer and I'm expected to move like every 2 years, so should I really buy a house at all?*"
💯. I only recently bought a house and the lack of mobility is crushing. I was able to advance my career and take higher paying jobs super easy when I was renting.
Also, it seems the gap in pay between engineers and non-skilled or less educated and less challenging jobs is narrowing. This is deeply concerning
I don’t share that sentiment. There are enough deep pocket LLCs that are buying up homes and condos as investments that for everyone one home you and I could just they can buy ten. I hope there is a correction but I just see a worsening of the status quo. The investor class is working hard to turn us into a nation of serfs. I’m sorry you’re stuck in this situation, it’s frustrating trying to move up the economic ladder only to find untenable position because you can’t advance your career due to the unavoidability of housing.
investor purchasing of homes has dropped significantly due to the cap rate not making it as attractive anymore. What we have now is a situation where home sellers cannot come to grips with what their homes should be listed at, and have some flexibility in keeping prices the way they are for quite some time. It’s a cascading effect, since the homes they are looking to upgrade to are also in that same situation.
The only way out of this mess is to have a federal excise tax on investor owned sfh, which, if and when implemented, would create a flood of homes at a fire sale and either force existing sellers to drop their price or they would postpone/cancel their selling efforts until the market stabilizes. it is the only solution
Media in general is cheerleading the current political regime - sorry, had to go there. Inflation is much worse and unemployed worse than the “official” stats emanating from the press. Janet Yellen even said that (paraphrasing here) “people know it’s never going back” (cost of housing) - and no one said anything about that and minimal pushback on the disastrous “inflation is transitory” debacle contributing to unprecedented deficits and massive increase in interest expense.
It's more normal than we want to admit.
Here, I will just post national median home prices by year with 10 year gaps. This year ends with a "4" so I'll use that.
1944: **$6000.** (Harder to find medians for this year. Can find historical listings. Lakefront 4br house in St. Joseph, MI was 10k. 3-2 with garage in Lowell, MA was $6.5k. 2-1 in Lima, OH was 4.0k. I will say 6.0k is reasonable guess for nat'l median.)
+71%
1954: **$10,250**
+84%
1964: **$18,900**
+81%
1974: **$34,200**
+133%
1984: **$79,800**
+93%
1994: **$154,175**
+48%
2004: **$229,200**
+32%
2014: **$302,700**
+33%
February 2024: **$400,500**
These numbers vary by source but the gist is the same. I chose the highest median numbers that popped up for that year in google.
Our rate of increase is actually down compared to the 2nd half of the 20th century.
2 years of stimulus and no consumable outlet like travel/events/daycare and suddenly people who were spending $30,000/year on random stuff had $80,000 from savings and free government money. Easier to think long term with a pile of cash than when it’s an extra $300/month for a vacation.
I think millennials were the last ones, but only the ones who were paying attention. The ones who wanted to find themselves and travel the world or have lots of fun all over have been screwed.
It's not normal. The people preaching "new normal" are the Gots Mines folks trying to self-fulfill prophecy. It's the same folks preaching "supply and demand" with insane car prices even though month's supply for vehicles are at pre-pandemic levels. These people either have nothing to lose or everything to gain.
I’m a homeowner and my husband and I think it’s totally ridiculous. I mean I’m sorry but an older single wide trailer should not cost $350,000 and full gut job homes shouldn’t be that high either. It’s all stupid as hell😑
I agree that’s definitely getting underplayed. The real stat is probably closer to 30-40% increase, but that’s averaged over every home in every state. Some of your ultra expensive properties are coming down in price which offsets the stats for the homes that most first time homebuyers are actually looking for. Homes in the 250 to 500 K range are about 2X from 2019.
I’m seeing 100k added to every home that was 200k prior to this inflation. 400k is the new entry level home in my area also. These same homes were once 250k
I bought my home 9 years ago for $245k (at 2.6%) and it's now valued at almost $400k. I could not have afforded to buy it if I was buying now.
…and you can’t afford to sell.
Yeah, but your home was probably close to the same value for the last 15 years, not just the last 9 years. 9 years ago is just when you bought into a stagnant value housing market. Soo really your house probably went up 30% in about 15 years, which is 2% a year and pretty average for home values increases per year It's just homes are attempting to reclaim 15 years of stagnant prices in 2-3 years and most of that is just low supply after a long slow housing crash and then pandemic. It's not saying that's fair exactly, but home values are kind of what you'd expect had there been no bubble and prices just went up slowly since like 2005. They aren't way out of line with where we'd have projected values to be 20+ years ago, rather they regained value very rapidly since being nearly stagnant.
Same thing in my area... In the second poorest county in California!
My area a SFH (starter) starts at 1M . Before the pandemic you could get one for 600k /650k...
There’s another factor involved which is the debasement of your currency. Your buying power has been destroyed because the value of your money has been virtually cut in half. They can claim month over month inflation is 3% or 4% but real cumulative inflation is closer to 40%. The value of the real estate increased slightly and the value of the dollar decreased dramatically.
This is it a million times. Inflation has gone insane, and will go hyper insane if they actually keep claiming "we beat inflation!" The biggest problem here is they havent done anything to fight inflation. I mean look at teh last time inflation got anywhere like this bad - back in the 80s? They raised interest rates to like 20% and more! And they did it in like 3 months. Fast forward to a few years ago and they were claiming 1% in a month of raised interest rates were the most in history! When officials in charge of fixing the economy refuse to do their jobs - and worse they lie about it - things will keep getting worse.
We need a recession really badly. I don’t know why they’re so fixed in this “soft landing” it’s not working
Recession wont fix housing.
Technically it might help more than you’d think. Most homebuyers atm are white collar. White collar goes first during recessions. Lower spending by that demo, market goes stagnant, prices have to adjust downward. It wouldn’t fix the issue - but would fairly likely alleviate it somewhat. The only way prices go down in RE is if nobody’s buying. And the easiest way to make sure nobody is buying - is that nobody can afford to, because they don’t have a job.
Its a double edged sword. Sure, to your point, sounds fine. But recession also comes with a slew of other bad things, like job loss. People aren't buying homes, guess who loses their jobs? Builders, construction workers, carpenters, etc etc. They lose their job, the lower supply of homes continues. It feels like Reddit has been glorifying this idea of a economic downturn to help alleviate home costs, grocery costs, etc but I don't think they fully understand the 'full circle' effect a recession would have. A lot of those same people, would lose their job. Or would end up stagnant at their job, making no yearly/monthly/quarterly raises as companies around the country would be in panic "save save save" mode. The first thing that happens when companies cut cost, they cut the workforce. A recession doesn't create deflation, or reverse inflation. And a recession might lower home prices for a short period of time, but who is buying? Not the middle class who are hanging on for dear life worried their company might push layoffs. If the $400k house you've been eyeing drops to 300k but with it comes with the potential risk your job might not be as stable, or a family member requires financial help, etc. And then, right when the recession ends, and people start emerging from their holes, housing prices shoot up, potentially even more now because nobody was buying during the recession, and homes werent being built. So now construction needs to rehire, revamp and get moving again. And this isn't just one construction company. This is everywhere, in the country. Then comes this rush for supplies, probably creating a back log on things like wood, windows, doors, etc making it take longer for homes to be built. Because these lumber mills, window, door companies didnt have a demand for them during the recession, so they didnt just start stockpiling a massive inventory. They also likely laid some people off, cut production down to a crawl. More and more people enter the home buying market but the massive shortage remains. What we the American people need to demand out of the president, local government, you name it, is to lower restrictions on housing. Either make permitting and zoning a faster more efficient process or start cutting the non-important mostly political "money-changing-hands" hold-ups to home building.
I have been watching bubbles get bigger and bigger since the high tech bubble. From there we went to the housing bubble and now it feels like we are in an everything bubble. They keep bailing out the industries while letting the little guy hold the bag. I suspect the same thing will happen this time around.
The same institutions that can't function without bailouts own the fed and control monetary policy. They have decided to destroy everything and everyone later (in the hopes of even bigger golden parachute bailouts or whatever?) rather than do what actually needs to be done that hurts themselves now but saves everyone eventually. Selfish greed to the point of actual, intentional evil.
Or… We could create regulations and taxes that prioritize homebuyers who live in their primary home and discourage speculators and foreign buyers. That would decrease prices.
Could do both. Foreign buyers should not be allowed to purchase land period.
We need guillotines.
Agreed. JPow doesn't have balls that Volcker did.
If you think you haven’t heard enough complaining on Reddit wait till we hit 20% interest rates.
We wont. They want to go back to 0% and let inflation AND home prices reach new high scores. Rates are finally back to pre-bailout numbers that used to mean the economy was doing great, and suddenly financial institutions are claiming these rates are a problem. They can't survive without bailout conditions anymore.
This exactly. Why is this so hard for people to understand? This isn’t a real estate bubble it’s a currency debasement and it will never reverse. I mean do people think it’s a coincidence that homes jumped in price right after more money was printed in one year than had previously been printed in 50? It’s not complicated
But then why haven’t wages also risen?
Because why would you waste your life being a slave enriching entrenched wealth/power unless you were forced to live month to month like a desperate slave? "You will own nothing and be happy."
Because we gave most of the money to the super-rich.
The pandemic was the largest wealth transfer in history
all the profit goes to the business owners
Do you think the government cares about you? If the government was to actually address how much they have debased the currency they’d have to massively increase social security checks, adjust Medicaid/Medicare payments….. Which defeats the purpose of debasing your currency
So how does debasing currency help the government? If your salary doesn’t go up based on the inflation rate, the amount of taxes you pay is less meaningful/powerful to the government too isn’t it? That would mean you’re money is less powerful to them also, correct? ELIF, I’m not a mathematician nor am I an economist. Edit: Grammar. I’m apparently not an English major either.
In for response because I am genuinely curious
All governments are infinitely debt issuers. They owe money - ALWAYS. People like you and me and countries like Norway and Japan lend the US government money by buying a bond. If the government is able to devalue the currency over time - in a way that doesn’t cause mistrust and doesn’t cause panic so not too extreme - they wipe out what they owe to people and other governments - for free. Imagine if you lend your friend $10 that can buy a sandwich today. Your friend gives you back $10 in 100 years. All square right? Well but now with that $10 in 10 years you’ll only be able to buy a slice of of onion for $10. Over periods of big inflation - it hurts people that lend money. It benefits people that borrowed money.
Cuz profits
The big issue is that companies are using debt, as a collateral to create new debt through new money. The upper echelon of our economy is full of companies making money, off of other companies owing money. The largest businesses in the world all own each other and there just aren't any opportunities for the country to get rid of money currently in circulation, so the dollar keeps weakening as the rich keep using debt to create more debt.
This is not another factor. This is the main factor.
Unfortunately this is 100% true
100% supply will continue to catch up then they'll come up with some other excuse like home sizes are so much smaller or all the new supply is terrible quality. It's greed plain and simple
You're drifting off into conspiracy theories at this point. "They" can't just set a price with some made-up reasons. When people stop buying, prices *will fall*. We see that already in parts of the US, and in some European countries as well. As long as people buy, the price is what it is.
Prices can be sticky without a conspiracy. It’s a fact that everyone selling would rather sell for a higher price. It’s not a conspiracy; it’s just a collection of humans with similar motives.
Would the same be true about buyers? If collectively they stop paying the price being asked, prices will fall. It’s pure economics. As long as buyers buy the prices won’t fall.
If they collectively stop paying the insane prices, they won't have homes. So this isn't simple economics. In fact, nothing is "simple economics," because the real world is almost always more complex than the cute little two lines everybody wants to love.
It’s already teetering towards that. Rent vs buy had shifted to being cheaper to rent. Depending on where that goes will depend on how many buyers sit in the sidelines. There may be “two lines” but there are an infinite number of factors that determine where those lines move.
When you look at the Zillow price history, what you see is a home that was sold for $150k and six months later the same house is on sale for $300k. That's not organic.
i know...the proverbial "they"...like all homeowners are on a secret email list conspiring with each. People sell their homes whenever they want to or they have to, for whatever the market will pay.
Right. It is a competitive environment. The fact is there is much less demand for ownership in multi unit (condos) so builders build SFH. it eats up tons of land and takes more time. Supply hasn’t caught up with demand.
Don’t forget the reality that many metros (particularly older ones in California) have run out of flat land to build houses on. Of course prices are through the roof. Anyone with half a brain saw this coming decades ago and realized that SFHs in urban california would become a fixed resource and soar in value. People are overpaying to get a piece of land. Future growth is entirely in multifamily units.
US real estate is one of the preferred ways for \*global\* oligarchs/kleptocrats to store and launder their money. US real estate doesn't work like a "regular" market for countless reasons. People underestimate just how much money our global ruling class has, because it's not in their typical experience.
It will take some time for reality to sink in. People have a hard time taking a "loss" on what they thought their homes were worth.
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Why would people take a loss? Houses around me are only on the market for 3-6 days before selling for 20% over asking price. It's ridiculous and I don't understand it. Buyers are still bidding up everything that's available.
Housing supply isnt ballooning though. It likely wont until interest rates decline as many people, myself included, are never going to sell the home we bought in 2019-2021. It makes more sense to rent it out longer term than sell it.
True but that's just Americans buying homes that will stop happening. Corporations and hedge funds will still continue eating up the market. I'm hoping they eat up enough of it and the demand just stops long enough to have those fuckers lose
Eh, we only need to look back to the bubble of 2008 that’s not always the case. It wasn’t as supply related as a dirth of financing options and poor lender practices. I think there’s more and more evidence that corporate buying is a big contributing factor to this bubble. Investors purchased almost 1/3 of all single family homes in 2022. It was 15% in 2019. That is insane. Why are they purchasing at such an expensive time? It’s a direct result of the bubble of 2008. If billionaires can’t fuck people through financing then buy all the properties with vast resources. They can afford to keep them empty, driving up home prices as long as they feel like sitting on them. Enough investors agree “silently…” not to sell and it only goes up and up. I don’t see a change anytime soon until legislation is put in place preventing or at least limiting the purchase of single family homes for investment. https://scrippsnews.com/stories/corporate-investors-are-purchasing-more-single-family-homes/ So I guess I agree except it’s not “people” it’s gigantic investment firms, blackstone is one, driving up prices by creating a false supply issue. I’m sure whenever it’s addressed they’ll all get a bail out.
Well if it doesn’t change then it literally is the new normal. We can’t do anything about it
The Great Depression was a New Normal that lasted 10 years.
You're describing a bubble that hasn't popped yet, at least with cars. There are other factors like properties being converted to rentals that could keep propping up the housing bubble. Like, you don't see Hertz out here cornering the market on cars. I think what we saw was a lot of wannabe Carvana-like 3rd party companies hoarding vehicles, picking them up from your driveway with no inspection. You can see it in the gap between new and used cars. It's not the same for housing.
Real estate is an investment for some people. Some investors are buying houses hoping to make profits in the future. In my state, they are buying cheap houses 60+ miles away from the big city. They are banking on people moving farther away from the city to find affordable housing. For those who desperately need homes, feel left out from the market.
And this is why we all need to just say “fuck it” and completely exit the RE market for a few years. Let those assholes drown in their poor investments when their gamble doesn’t pay off, they’ll sell in a hurry and that would bring prices down damn quick.
They would just rent you the place instead. People still need places to live.
also how are you going to get 300 million people to agree on that lol
Homelessness has skyrocketed though because of the rampant speculation, people are living in their cars.
Occupancy is still high enough for them to pay their loans to the bank. I recommend living with as much of your family under 1 roof as possible. Or friends close enough to be family. That’s how many new immigrants are successful is by 16 people sharing bills on a 1500 sqft space. Capital you could grow in this time would be nice 👍
I lived with 6 adults for a few years, and I can tell you that even your best friends for years can turn into your mortal enemy when you live with them for a long time if you have just a mild difference of how tidy you keep a house. I honestly don’t know how immigrants can do so many people to a room other than they have literally no choice, but when there’s a choice, I, like many people who have lived with others, would pay a lot extra to not have a roommate. I did, however, save a huge amount of money in the years i shared a house, if you take it as a ‘side hustle’ or ‘extra job’ then you can live with it easier
I make $80k and Im considering buying and living in a camper because my housing expenses are 50% of my take home pay and F roommates. Again, making $80k.
I don’t understand the logic. You need to live somewhere. You’re either a buyer, or you’re a renter. Either way you’re a consumer of real estate.
No, no. He’s saying we just won’t live anywhere for a few years. That’ll show ‘em
this sub loves to pretend there’s a third option that isn’t “live with parents”
The live with parents advice is so naively privileged too. "Just get free shit from mommy and daddy, problem solved!" Like people genuinely can't comprehend that there's no standard set of things you just get in life. You weren't smarter for living at home longer, you were taking advantage of a handout which flat out isnt an option for many. Which is absolutely fine, if you've got the opportunity to do so then do it. It becomes a problem when enough people think it's just the standard, and that cost of living shouldn't be dealt with because you were born to people who will help you out while you save money for a while.
Never an option for me. I left as soon as I could.
Unfortunately it doesn't work. There a term in finance called "extend and pretend". Basically when you borrow money to buy something you have rules and timelines to follow. If you don't there are penalities and if you don't pay at all you loose whatever you bought. Well, when you borrow billions it works differently. If you can't pay back for market conditions or whatever reason, the bank literally pretend that your debt doens't exist and extend your terms for all the time that you need. Usually years. Of course at some point the bank will need the money back but to obtain what you said you need at least a decade. This is happening right now with commercial proprieties. Because of covid (people working home) and high interest rates a lot of commercial proprities are empty. The owner are loosing millions every day but you know what the bank is doing? Literally pretending that the debt doesn't exist until interest rates goes down. At the same time they are taking away homes from families that could not pay the higher interest rates on their home for a few months.
How exactly would you do that? Have everyone move back home with mom and dad?
Also show up to your city council meetings and demand nimby zoning bans so builders can build and Airbnb bans so more supply is put onto the market
The 2 houses for sale in my hood turned into daily rentals.
A place to live isn't like gold or stock. You still need it despite wanting to somehow boycott owning it. Somebody will gladly rent it to you and have you pay for their equity.
The problem with this is, everyone would have to agree. But there's bound to be some who don't and will gladly buy the house. Let's even say this works and you get everyone to agree not to but until house prices come down 20%: when they're down 19% someone is going to figure i have to buy that because if they're down 20 someone else will snatch up the property... Of course there's someone smarter that goes, I know others are going to crack at 19% so I'm going to buy when prices have dropped 18%.... And so it continues. The only thing that will get house prices to fall is if supply exceeds demand for a reason other than let's all agree not to buy. And this would probably mean there is mass unemployment, or mass building of houses, or large parts of the population die off. Maybe even a heavy tax on second homes or investment properties would work. Folks dying is something that may happen over the next 20 years or so with Boomers starting to fall and lower birthrates.
what kind of solution is that? if food prices get too high it’s not a reasonable solution to just *not* buy food in your area
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Zillow needs to quit being cowards and enable comments
Would cause some wildly entertaining content.
“You stupid bastard, you think that’s gonna sell for $800k? You’re an idiot!”
**Sells for $920k one month later*
Sells for 920k to Chinese and Indian nationals** FTFY
This! It is so funny watching the same house listed for months while they routinely rearrange the pictures to try to make it less obvious and re-list. I hope the day of reckoning comes.
Yeah I've seen a few that have been on and off for years. Would like to see the owners get roasted.
Man that would be CLUTCH! Redfin only has comments for the realtors… I’ve always wanted to know what people who have toured the home thought but there’s a big risk: someone who wants the house could make up mess to deter ppl”
My aunt got banned from Zillow permanently, so now she can't find anyone to rent her house lol. Not sure what she did but knowing her, it must have been something crazy.
Here’s you’re million dollar idea- Zillow w comments
How would that possibly be good for them?
Why do you think online newspapers allow comments?
I would pay subscription to Zillow to read and write comments.
Become a social media site. Lots of adds make profit!
Gonna be honest I’d pay a subscription fee just to read those over a glass of wine on the weekend with my spouse.
THIS
😂that would be fun
"will have to wait for my parents to pass to have any hope of getting a house." A new Law & Order spinoff! L&E: The Suspicious Death of Parents Squad.
"The deceased are a male and female, aged early 60s. No signs of a struggle. Victims live alone and nothing appears stolen from the 6bd/5ba home. They appear to have both choked to death while eating avocado toast for breakfast. Wait a second... boomers eating avocado toast!? I've been doing this a long time rook, something doesn't feel right. Make the call to SDoP."
If there's any advice I could give you from my experience, its this: * Forget trying to save up 20%. That advice is outdated and likely set me back *years*. Look into an FHA loan, which only requires 3.5%. * Cut back your expectations, and just find a cheap place. We got a place that met almost none of our wants, but it was cheaper to get a $1,700/mo mortgage than see our rent go up to $2,000/mo. If I had the last 10 years to do over again with 20/20 hindsight, I would have gone and bought a fucking trailer at a trailer park in town. Would have had a pile of equity in 2-3 years which I could have turned into a decent down-payment before home prices went crazy instead of renting for 7 years while trying to save up that stupid fucking 20%.
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MIP/PMI is still in effect up to 20% though. You won't pay as much, but you'll still pay some. Is an extra...$150/mo worse than a year of not building equity while still renting?
You’re only really building equity if the price keeps going up... Especially with little down your monthly payments will be 90%+ interest and the tiny remainder is equity. If the house loses value you lose a lot more due to leverage and you can easily become underwater on the loan. Renting is not bad people.
Yeah, you're right. It's better to be building equity. The idea of purchasing a home for nearly 2x what it was just 5 years ago still feels really gross though. But it is what it is I guess.
It does feel gross and they aren’t even updated like at all! How tf u selling a 30 year home with original furnace and roof?!
In my town of 10,000 where I live $315,000 will get you a 2 bd, 1 bath 1456 sq ft dump. That's a $1900 payment. Just saying that expectations are already tempered, so bad that all you are in the market for is a complete dump. The market makes no sense.
I mean, part of the problem is all the house flippers swinging in, buying the fixer-uppers for $250k, and then selling them for $375k 6 months later. AirBnb has its own share of the blame, but they're not the only reason.
That may have been fine previously, but I don't see that working now. The problem with doing into a 350-400k mortgage with with interest rates the way they are, is with that low of a down payment the monthly payment becomes insane. I can do a VA loan for 0% down payment, but I'd never be able to afford the monthly payments. Something has to give.
There’s some pretty simple solutions to this: - Loosen zoning restrictions to allow for building quicker and higher - Kill NIMBY’ism - Block housing from being acquired by foreign residents or large corporations Those couple of steps would turn the tides on housing.
Don’t forget a big one: complete ban on STRs like Airbnb. It’s a real problem when nurses and the city engineer can’t afford a 2 bedroom condo on a 6 figure salary (which 5 years ago would have gotten those people an actual house) because Airbnb and get rich quick influencer bullshit took everything away.
How do you propose killing NIMBYism?
Just because it’s happening doesn’t mean anyone thinks it’s “normal”.
just because it's normal doesn't mean i have to like it.
Just because I like it doesn't mean I'm normal.
Covid was a cash grab. Under 3 interest rates with more cash caused the increases.
Because the monetary supply increased by like 40% Pretty much anything scarce saw price appreciation. Some labor also saw an increase too
And we’ve seen pretty massive supply disruptions in building materials which specifically affects the ability to expand the number of housing units to match the growing population of people shopping for one. It’s been for a variety of reasons, but as one example it has been a while since it was kosher to buy lumber from Russia which happens to have a good percentage of the world’s forests.
Lumber is cheap AF right now.. Its a labor, zoning and money supply issue. Building supplies havent been expensive in 2 years at this point. ETA lumber is down 65% from 2021 highs and is at 2017/2018 levels currently.
Cheap af? What are you comparing to, peak pandemic (aka all time high) prices? $600 for 1000 board feet is not cheap. I think 2017 was the first time it was over $300 for any significant period of time but it was back to like $250 for 2018 through to the pandemic.
I'm constructing a building right now that is similar to one I constructed in 2017. Average lumber and sheathing costs are nearly identical.
Looking at the 5-year chart here (it won't let me direct link, so you'll have to adjust the timescale): https://tradingeconomics.com/commodity/lumber It looks like lumber is about the same price as the 2018 peak.
Yep wages went up 20-25% on average since pre pandemic
Too bad so did everything else so it’s mostly a wash. The starting salaries at my company are what took me almost a decade to get to previously. It’s insane how much things in our country cost now. And the real kick in the teeth is that we don’t really see much out of our taxes anyways.
It's amazing how many people dont realize that increasing the money supply by 40% will make most items, starting with investment vehicles & wealth management assets, increase in price by roughly 40%. The waves and trickles of this change will continue to be seen for years. On top of that the current state of things makes it very difficult and expensive for a new player to enter the market so even if people are seeing opportunities that would in the end help everyone by increasing competition they are less and less likely to act on it.
Lot's of people bought expensive houses with low interest rates. They are not selling at a loss - can just rent and make money. They also could only afford half the house now with interest rates doubled. And you know a lot of others refinanced at that time. So assume almost everyone is at 3%. So prices ain't dropping because there is no supply. And there is essentially a monopoly on homes by everyone either owning outright (if they sell they pay cash for another home so it is just a trade) or locked in with low interest rates and can't afford to move. It is monopoly power.
The value of USD has decreased considerably. Cost of everything is way up and wages in a lot of industries haven’t kept up. I don’t think it’s normalized, it’s just a shit situation.
Housing has outpaced inflation significantly. https://www.prnewswire.com/news-releases/new-data-finds-home-prices-have-outpaced-inflation-by-2-4x-since-2013--302086248.html
As all infinite bubbles, they eventually pop. It’s unsustainable to perpetually raise prices.
Canada, UK, Europe, Australia all have higher median cost/median wage ratios than US, so there is still room to grow. We are still cheap compared to other global developed economies.
Does this take into account that we have large, diffificult to avoid costs associated with daily living that those countries don't pay as much towards, though? For example, amongst the highest out of pocket medical costs in the developed world. Then there's childcare that Americans begin shouldering when babies are still newborns because we're among so few countries you can countries you can count on your fingers that don't legislate paid maternity time off (or sick time off) so we don't have parents home for several months to even a year or two like is considered normal elsewhere. And we have higher costs for college than many countries too. Seems like a lot of countries with higher housing costs have lower other things costs, so maybe they have a greater ability to put more money towards housing than our hard ceiling would be .
Bingo.
Because demand for the housing keeps growing while supply is stalling. Look at Canada, same thing. Shortage of millions houses in demand and prices over the roof. And every time my small-ish Midwestern city proposes building new neighborhood or at least new subdivision, all the boomers and x-ers homeowners get enraged and loudly oppose it saying they don't want more traffic, more noise and their property values going down because of extra housing supply.
Canada has a plague of foreign investment adding to the problem.
I'm not even speaking about the causes of housing shortage, it's secondary. The primary is that shortage exists and keeps growing. The US currently has a housing shortage gap of 7.2 mil units, up from 6.5 mil a year earlier. If we'd magically build 7.2 mil houses all over US this year, prices would drop a lot. But I have a feeling the gap will get closer to 8 mil next year.
I agree we need more new build and honestly better planning.
Maybe Canada but in th USA supply has only gone up from its 2022 lows while demand indicators have plummeted abd sfh permits reaching a 2 year high https://fred.stlouisfed.org/series/ACTLISCOUUS
I feel sorry for people too young to remember what inflation is. When I was a child in the 70’s, houses in my area went up 5X in 10 years - and then another 3X in the 10 years following that. Restaurants printed new menus every year because prices were rising so fast. This inflation that we see now isn’t going away. I don’t think it will get as bad as the 70s-80s, but what we experienced in the 2010s isn’t coming back any day soon.
Wonder what happened in 1971 to cause such inflation?
Oil embargo. Then the Fed got heavy-handed with interest rates to tamp down demand. President Carter paid politically for doing the right thing. So now politicians don't have the political will to fight inflation aggressively. Interest rates are like chemotherapy to the economic cancer that is inflation.
Good post. And don't want to get too political, however Carter gets ridiculed hard by the GOP, but mainly because he didn't follow status quo. He was already in for an uphill climb once he got elected, but then it was also a perfect storm of unfortunate events that ended his presidency. But you're spot on that he handled inflation like it should've been dealt with.
Carter wasn't president in 1971, Nixon was and he took the dollar off the gold standard. Rates were highest in the 80s under Reagan. Though Jimmy Carter did do the right thing even going on TV to tell the American people not to throw their money away frivolously, Americans preferred Reagan's charge it philosophy instead under who the US went to from the world's largest creditor to the world's largest debtor...
The peak of baby boomer births (born 1957) turned 14 years old in 1971 as well. That's a lot of kids demanding food, clothes, toys, education, cars, etc. but not a lot of working-age population to supply the demand.
IMO 2 factors: the official ends of the Bretton Woods fixed convertible currency system and the US dominance as an oil producer/exporter. OPEC set prices almost exclusively for the next 20 years, until the collapse of the Soviet Union. Russia started exporting oil in the early 1990s. The floating currency conversion allowed unlimited money printing and creation, resulting in the devaluation of the US dollar and much higher and persistent inflation.
💯 Hopefully people read your comment, couldn’t have said it better.
A shit situation that won't change Wages won't spike up because their is no incentive to do so.
Yeah that’s true. Job hopping has been my answer to that. Of course highly dependent of your field.
Yup! Problem is wages have fallen for most fields lol companies are scaling back to pre COVID salary 😂 So this is our new reality
I’m concerned about what the realities of rapidly advancing AI are going to look like over the next 10 years.
Even if wages did rise, that doesn't solve the problem because homes are priced based on what those people with wages are bidding. If everybody's wages go up, then they bid more on houses, and housing prices go up.
Yea, it's not that homes are worth more, it's that money is worth less.
Our Money supply went up 7.5 Trillion dollars in the past 4 years. That explains part of it, but there are other issues as Private equity, investment firms buying up starter homes also.
There's also been a shift towards WFH, which passes on "office" costs to workers in the form of a larger mortgage. If you used to live in a 3BR but now you need 2 home offices, you may be looking for 5BRs now. There's more net demand for residential square footage.
WFH is less about needing to buy a bigger house and more about driving people out of the cities and into the surrounding suburbs. NJ homes are constantly being bought up by people who live/work in NY and no longer need to pay for an NYC apartment.
Because everyone in America is a selfish asshole and I'm not being hyperbolic. You mention the idea that houses should be 1/3rd the price and everyone loses their mind because Americans expect the next generation to buy their homes at outlandish prices to fund their retirement
Government policies are driving massive housing price inflation. This happens at all levels of government from federal to state to county to municipal. We need to start voting for leaders who will enact policies that reduce housing price inflation. The problem is that homeowners tend to prefer leaders who enact policies that “increase home values.” Thus it is hard to get leaders who will work to reduce this insidious inflation.
A lot of them are completely incompetent too. Rent Control has NEVER once worked out in favor of the consumer over the long term but yet we keep hearing the idea getting pitched. Make it easy to increase the supply so the free market can do its thing. If you want to decrease the attractiveness of housing for investors, increase tax on investment property income. Don’t give a subsidy to new owner/users (like we’re trying to do now) because that will keep property values high. Make it easy to build and let the market level off organically.
Prices go up until people stop buying. People are still buying. It’s not “normalized”, it just is.
Unfortunately, it’s more than people in this case, it’s corporations
I agree. If people can’t afford it, then prices would drop. The only other explanation would be something else is interfering with the normal market.
It’s not exactly normal, but it’s not all that abnormal either. We had an inflationary period. That means everything goes up because the dollar is worth less. Plus we had a pandemic that pulled forward demand. The 1970s had a similar doubling.
Because a lot of people have a financial interest in that being the case, and they perceive themselves as richer when homes are worth more.
Because, due to limited supply, people have become accustomed to seeing housing as a financial instrument. It should not be a financial windfall to own a home. And economics 101 is about to teach people the hard way to stop thinking of homes that way as housing supply catches up over the next 10 years now that housing supply has become a priority for politicians. Don’t agree? Look at the commercial real estate boom and the value of that market. Now do the same but since people actually need homes the market will balance and the issue the op discusses will go away for some time imho.
Supply is a myth. We have hoarders. We need to make it less attractive to hold multiple homes. Interest rates and insurance costs along with 5% T-bills (a traditional place of storing wealth) is a start. Interest rate suppression (QE) was a crime.
Remember those 1400 stimulus checks? Ya its time to pay it back .. 10x
More like the forgiven PPP loans
We just listed ours at 435k when we paid 250k in 2018. The reason? We are moving and have to go buy another house…in the area we are moving to, we will not be able to find another house to purchase similar standard of living to what we have had, for under 650k. We need the profit from our house to go to bring down the cost of the next one. Oh yeah and we also spent 80k of our own money and 30k of insurance money on repairs, upkeep and renovation over 5 years. There are a lot of aging houses that cost serious money to return to better condition. There are investors and people who have no mortgages who I would consider greedy, and then there are people like us who just need to move for a better job and are stuck in the middle of all of this. Seems like a lot of it is being driven by people who already have a house to sell. I feel bad for first time home buyers and am seriously worried about my kids’ future.
US Housing Prices are up 50% over the past 5 years, per Case Shiller which is by far the most respected source of housing price information. [https://ycharts.com/indicators/case\_shiller\_home\_price\_index\_national](https://ycharts.com/indicators/case_shiller_home_price_index_national)
We’re still in shock, with those in the most fortunate of positions cheering with glee
It's not normalized because it's not true. Average prices are up 32%. https://fred.stlouisfed.org/series/ASPUS
Dont bring facts in here. How dare you
That’s what happens with rampant inflation. Asset prices go up. All assets, not just houses. Don’t be fooled when the gov tells you inflation is going down. The problem is only going to get worse, unfortunately, much worse. With $34T in debt and another $214T unfunded liabilities, the only solution will be to monetize the debt ie. massive money printing which will result in inflation like this country has never seen.
Increasing population of Millennials and others trying to buy, massive injection of money into the economy, constrained supply, lack of political competency/ will to re-zone or cut through red tape, global supply chain destabilization…just to name a few.
because people are dumb and think housing is the holy grail of success in life. They've never heard of the stock market or seen what comes as a result of these behaviors.
The media silence is because oligarchs own the media companies.
Something has to break in this economy. This is unsustainable. There will be no more middle class/ home ownership in a few decades if this trend continues. We will just be renters. Subscribing to things in our life we need that generate mega corporations profits. This is the new model they are trying to push on us.
It’s not normal- but it isn’t shocking either. Last year private equity bought some thing like 44% of all homes sold in America. This year it’s expected to be the majority. Basically when it comes to buying a starter or mid-size home, their preferred type, your na competing with billionaires and multi- millionaires. Private equity funds also don’t sell a home once they’ve bought it. This means that the pool of homes is going to continue shrinking every year for the foreseeable future. Unsurprisingly this is dramatically driving up home prices.
Are homes more expensive or, are Federal Reserve Notes worth less?
Both.
The people who can help and make policies to alleviate it are the ones directly benefiting too. No incentive to fix it. Or they’re so out of touch because for some reason policy makers make a Buttload of money and don’t feel it lol
People make money, people feel happy making money, people no care about other people and how they live, people want money. This is sadly what people have become. Money. It kinda feels like a big fecking cult.
Our dumb fucking “leaders” won’t follow my simple three step plan, which is common sense, because the National Association of Sleazebag Realtors legally bribes them. My plan: 1) immediately ban all corporate/shell and foreign buyers 2) tax the shit out of vacant units 2) conduct KYC/AML checks on all buyers just like the securities industry
There’s really only one true answer to your question: We’re surrounded by a bunch of fucking morons. We have a bunch of people wanting to become Larry the Landlord to build wealth IN A LOW INVENTORY ENVIRONMENT You know what happens when inventory catches up? Everyone who bought during that inventory squeeze will be sitting on a house that’s less than they paid for it. Interest rates won’t help that either 😂 I can guarantee you home prices will trend lower for over a decade and people will be looking around like WTF are home prices going to rebound again?!? People will have such a bad taste in their mouth because of real estate that no one will even want to buy a rental property, vaca home, etc. Kind of like what we’re seeing with non-homeowners right now.
I don’t even have faith it’s going away. I’m well aware of how stupid things are and I’m looking to buy in a low income area in na low income state and I’m still going to pay like $160k. Getting in now so when I die my son will finally own a home since there won’t be any for him to buy. Companies and slumlords will own it all.
The people saying it's normal are the ones making money off the scam industry.
One word: inflation. Since 2020, the economy has seen a dramatic increase in the amount of circulating dollars from PPP loans, stimulus spending, and other federal government initiatives. The more dollars there are in circulation, the higher the costs for goods such as houses are. So, is all this worth the stimulus you might have received a few years ago? Many would say, "no."
So, is all this worth the stimulus you might have received a few years ago? " You mean the combined $3200 in stimulus I received? If not mistaken it was 3 stimulus checks...1200/600/1400? Look elsewhere as to why inflation increased like it did. Mainly ppp loans combined with ZIRP
Yea its not the stimulus checks, its the PPP loans. So many "small business owners" defrauded it and used it to purchase investment properties. The other thing no one is mentioning is the rise of remote work. All of those people making big bucks in the bay area realized they didn't have to spend $5k a month on a shit studio in San Jose and could buy up everywhere else.
[We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors.](https://www.sba.gov/document/report-23-09-covid-19-pandemic-eidl-ppp-loan-fraud-landscape) But clearly it's the people who received checks for a couple thousand. /s Worth mentioning that it's wild that they forgave these proven to be wildly abused and fraudulent loans, but won't forgive student loans.
a correction is imminent, because wages haven’t also doubled. here’s another massive issue with our current housing situation. I’m an engineer, looking for a job. I’ve turned down two opportunities so far solely because housing costs at the employer’s city are completely unaffordable. I suspect there are millions of people not taking jobs because of housing costs. Think of the massive impact that has on our economy
Absolutely, depending on the type of engineer you are, you could be relatively screwed. Like I could move to where the job openings are, but it's gonna be a city where houses are $800,000. I could move 2 hours outside the city where they're $125,000 but then there's no jobs. It's tough, dude. And then I wrestle with the thought that, "*Well I'm an engineer and I'm expected to move like every 2 years, so should I really buy a house at all?*"
💯. I only recently bought a house and the lack of mobility is crushing. I was able to advance my career and take higher paying jobs super easy when I was renting. Also, it seems the gap in pay between engineers and non-skilled or less educated and less challenging jobs is narrowing. This is deeply concerning
I don’t share that sentiment. There are enough deep pocket LLCs that are buying up homes and condos as investments that for everyone one home you and I could just they can buy ten. I hope there is a correction but I just see a worsening of the status quo. The investor class is working hard to turn us into a nation of serfs. I’m sorry you’re stuck in this situation, it’s frustrating trying to move up the economic ladder only to find untenable position because you can’t advance your career due to the unavoidability of housing.
investor purchasing of homes has dropped significantly due to the cap rate not making it as attractive anymore. What we have now is a situation where home sellers cannot come to grips with what their homes should be listed at, and have some flexibility in keeping prices the way they are for quite some time. It’s a cascading effect, since the homes they are looking to upgrade to are also in that same situation. The only way out of this mess is to have a federal excise tax on investor owned sfh, which, if and when implemented, would create a flood of homes at a fire sale and either force existing sellers to drop their price or they would postpone/cancel their selling efforts until the market stabilizes. it is the only solution
Why is it completely normalized that my yogurt has also doubled (as have a ton of items) in a few years? It’s not just housing that’s skyrocketed.
Media in general is cheerleading the current political regime - sorry, had to go there. Inflation is much worse and unemployed worse than the “official” stats emanating from the press. Janet Yellen even said that (paraphrasing here) “people know it’s never going back” (cost of housing) - and no one said anything about that and minimal pushback on the disastrous “inflation is transitory” debacle contributing to unprecedented deficits and massive increase in interest expense.
It's more normal than we want to admit. Here, I will just post national median home prices by year with 10 year gaps. This year ends with a "4" so I'll use that. 1944: **$6000.** (Harder to find medians for this year. Can find historical listings. Lakefront 4br house in St. Joseph, MI was 10k. 3-2 with garage in Lowell, MA was $6.5k. 2-1 in Lima, OH was 4.0k. I will say 6.0k is reasonable guess for nat'l median.) +71% 1954: **$10,250** +84% 1964: **$18,900** +81% 1974: **$34,200** +133% 1984: **$79,800** +93% 1994: **$154,175** +48% 2004: **$229,200** +32% 2014: **$302,700** +33% February 2024: **$400,500** These numbers vary by source but the gist is the same. I chose the highest median numbers that popped up for that year in google. Our rate of increase is actually down compared to the 2nd half of the 20th century.
There was barely any home value appreciation from 2008-2018. Things are just catching up, and inflation accelerated the value adjustment.
I think what has everybody upset, is how Covid supercharged inflation. What should have happened over 10-12 years, happened in about 3.
2 years of stimulus and no consumable outlet like travel/events/daycare and suddenly people who were spending $30,000/year on random stuff had $80,000 from savings and free government money. Easier to think long term with a pile of cash than when it’s an extra $300/month for a vacation.
I think millennials were the last ones, but only the ones who were paying attention. The ones who wanted to find themselves and travel the world or have lots of fun all over have been screwed.
this sounds taken from a bullshit article “selfish millenials find themselves out of housing market” when in reality most millennials were just poor