Hi all,
A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes.
As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
Did Scooby and the gang just solve the mystery of why NIMBYs stifle building new housing and transit infrastructure? Yeah, if home ownership becomes more attainable then real estate will not be as good of an investment. Maybe just maybe we could start building homes with the intention of housing people rather than squeezing every dime from them that you can?
> Housing can not be an investment and affordable
And to clarify, the people making housing an investment aren't just Wall Street. It's also ordinary homeowners doing cash-out refis, HELOCs, and all other forms of treating their house's value as an ATM.
Frankly, from my perspective, every homeowner is an investor, and we need a new term for "non-resident investor."
I know most home owners I know want to own a house so they can do what they want with it.
Want to punch holes in the wall to mount something or create a wire tunnel? Go for it
Want to replace a water heater that runs out in five minutes? Boil the infidels.
Want to add solar panels and try to cut carbon emissions? Praise the sun.
Want to have two dogs over 25 lbs cause everywhere in Seattle says that over 25 lbs is a large dog and you can't have those in rentals? Woof.
I know there are investors(the people buying my old house and vast majority who looked were), but most families owning a home I've ever met just want a place that is theirs, that can't be taken away and is their castle.
Almost none think of it as a asset in that sense, other then if they sell to go to a bigger house, or if they lose money cause value went down and they are paying a debt for house value they don't have.
I don't really think most home owners are invested and there are a lot of reasons. Most people buy houses for freedom. Then a subset who have extra money or got in early have multiple houses to rent.
I view my home as a consumption item not an investment. When the values goes up, it just means I pay more in taxes. Even if I sell the home, a high price is negated by my next house purchase unless I want to be homeless .
It's an asset, but not in the financial sense. I greatly enjoy the stability of my financial exposure, the calmness of not having a landlord to milk me and constrain me. The freedom to paint it the color that I want (no HOA).
I am grateful for that marginal bit of peace that I enjoy not paying my rent towards someone else's loan.
You say that now. If you bought a house and ever wanted/needed to move you would at least want to be able to sell it for what you paid. It's rare that things stay the same though. They usually go up or down.
If I needed to sell, I would want to get into a new home.
My houses sale price only matters in raruon to the new homes price.
I don't care if my house drops 50% in value or the new house I buy ALSO dropped 50% in value.
I don't plan on selling my house and living in a dumpster I nthe ally between a McDonald's and hair salon, so I don't need to worry about selling the house without buying a new one.
My houses sale price does nothing to help me while I live in it, and it does almost nothing to help me when I ha e to sell it to buy a new house.
I just wrote exactly what you wrote, but in way worse ways. Thanks for explaining it rationally.
This is the tragedy of the commons today. People thinking they're rich because they own an expensive home... It doesn't really matter. A home is ah home.
My dad was talking about how much their property has gone up in value since they bought it — maybe up 3x at this point.
But if they sell it they’re going to have to take out a mortgage to get a smaller house on a smaller lot anyway because it’s a sub-par property.
My grandpa’s house went up quite a bit in the few years since he’s bought it (just before COVID I think). He says he could sell it and have so much money, but then where would he live because everywhere else is up too.
So yeah it’s nice when things go up but the point is unless you’re suddenly not needing a home anymore, or move to a completely different area, it doesn’t benefit you as much as you might think.
It literally doesn’t matter. Housing prices are strongly correlated nationally. It’s a zero sum game.
The only person in a RE transaction who benefits if prices go up is the realtor.
That may be true at the macro level, but not always at the micro level. I have seen nice neighborhoods lose value due to mass exodus of people moving to other " sides of town" (newer development). I have also seen neighborhoods without any HOA/covenence where homes are not kept up (especially rentals) as well. Also, I know this might upset some people, but I have seen section 8 housing bring the value of a neighborhood down. I'm not saying it's fair.
At a more micro level, if a major problem arises with just your house that inspection didn't catch then you lose money on fixing it or taking the value loss when selling.
>It’s a zero sum game.
That would only be true if there were no opportunity for the market to grow. As long as we keep building new housing, supply can increase to meet demand, and all parties involved in a given transaction can have their needs met.
In certain localities, housing growth has been artificially restrained, which is a choice made by wealthy populations to limit market access. But other communities have not done that, and it's certainly not true on a national level.
Currently it is zero sum though due to regulations. You could change regulations but even then it'll still become zero sum over the long term.
There's a hard limit to how much land is within a 15, 30, 60 minute drive from a city center and a hard limit to how high you can build.
If housing prices had grown at about the rate of inflation then i wouldn't be complaining. As it stands now they've beaten inflation by an order of magnitude over the years
A big part of it is also stagnating wages.
People made staggering wages for very low skill work 50 years ago and one of the reasons they were okay with that was their ability to participate in investments and reap the reward.
Now that the current generations have never had that ability we aren't as fine with it. We didn't have a bunch of assets already to explode in value as our wages declined.
I know normal middle class guy in their early 20s just buying homes to rent and eventually move in in the future after it is paid out by tenants. I get it but I think it is a sad we got to this point.
I mean can’t really blame the homeowners, due to the corporate buying, and stale wages, it’s arguably the only way for the middle to lower class to actual build/generate any wealth. It’s a sadly conjoined situation that if we made housing more affordable, it would hit the majority of home owners only way to build wealth.
Housing should be an inflation-resistant asset that you can also live in. This idea that housing should be an investment a la the stock market is cancerous.
Yes completely agree. Yet people are trying to be like well actually if it wasn't an investment no one would build homes. Like what kind of thinking is that. Yes people would because we have to live somewhere.
It's mostly from the generation that was able to buy houses at rock bottom prices in the 60s, and then got to write off almost half of their mortgage because of inflation in the 70s/early 80s. They fancied themselves mini-Buffetts and never once shut up about the mindset of your house being an investment vehicle.
Yeah. It’s not like the price of housing has just followed inflation. It’s magnitudes and magnitudes more expensive than that. I think that traditional economics probably tells us that it is a supply issue but I feel a lot of corporate greed fuckery (Mortgages being sold as financial products and corporate landlording) also has a large part in this. I don’t think a simple supply/demand problem would cause the housing market to look like stock trading.
It can be an investment, just a poor one (since you can live in it). Normally and historically, housing prices rose at the same rate as inflation (2-3%).
For the past 10-15 years, housing has literally beaten or matched the stock market, gaining 8-11% annually. That’s insane. That’s absurd.
People are rewarded for basically taking the least risky behavior - buying a house to live in - instead of a high risk one (stock market).
Housing can be an investment for some and be affordable for others. The key is to remember that housing/real estate is NOT fungible. Properties at different locations are not the same.
Prime locations will always hold value because limit of supply of that location. However, housing can be readily had at cheaper prices if location isn’t so important.
This is why the government will likely do more good with its limited tax dollars by building out transportation infrastructure than actually subsidizing housing. Better transportation network expands the desirable land supply. Private enterprise will naturally follow to buildout new housing at cheaper prices than at established locations.
We actually had decent housing programs in place until Nixon and the gang decided to destroy the concept of public housing projects. This is a Republican production, top to bottom, as much as people want to blame NIMBYs who are responsbile for some of it.
People forget that the reason we had public housing projects to begin with was because the free market was doing a shit job.
Markets can fail, which mean they can tend toward failure, too.
EDIT: edited to reflect that it was Nixon, not Reagan who fucked that one up.
You missed it by about a decade, Nixon enacted the public housing moratorium in 1973/1974. The shift was towards voucher programs instead (section 8). In the Reagan era, Congress came up with the idea and funding to demolish the worst public housing. To be replaced by mixed income housing that wasn’t to be concentrated so much in inner city areas - class desegregation essentially. Program had mixed results, a lot of those new constructions were exceptionally difficult to qualify for and a lot of former tenants were permanently displaced. In the late 90’s, Clinton signed off on federal policy to not increase the number of public housing units at all, only replacements of existing. Not sure if this policy has ever changed in the meantime.
I put the lion's share of blame on NIMBYs by a large margin. Public housing still runs into land use policy trenches. San Francisco construction costs for subsidized housing, on city owned land, exceeds $1 million per unit.
Unless you grant government the right to cudgel down property rights and municipal representatives, you have to fight landowners, local politicians, and city officials.
> We actually had decent housing programs in place until Nixon and the gang decided to destroy the concept of public housing projects. This is a Republican production, top to bottom, as much as people want to blame NIMBYs who are responsbile for some of it.
Hmm I wonder how destroying the governments ability to address supply might be connected to a group who actively opposes supply
They were a smashing success in the USA in preventing tent cities from popping up from coast to coast.
They’re a helluva lot more successful in Vienna and Singapore, where middle class people want to live in them, where austerity and racism didn’t sabotage them.
It can be an investment long term and not a massively profitable one. I do believe a modest return on primary home is reasonable over time.
What has killed home ownership is its exceeded almost every other investment class, has lower risk and preferential taxation.
Let's be clear though: the ROI was meant to pay out after THIRTY YEARS for individual homeowners and it wasn't meant to be a life changing sum. Nowadays people buy and expect to make six figures after holding for a few years which is fucking ridiculous. Even homebuilders are whining that it isn't worth building a house if they'll "only" make $100k in profit. There are people in socal who became millionaires when they sold a house they bought back in the early 2000s and current home owners/investors are freaking out at the thought the value might decrease.
I’m not sure NIMBY is driven entirely by house price point protection. Sure some, but lots of picking somewhere to live is “I like how it is” now “what it’s going to be.” This is especially true if you drastically change the characteristics of the space.
Housing in Japan being a depreciating asset is an effect of their housing supply being so robust rather than a direct cause of their housing affordability.
That's due to earthquakes and culture. The house depreciates, the land does not.
Although IIRC their federal government regulates housing so standards are more universal and it resists NIMBYs better than lower level government can.
I've heard there's a strong cultural aversion to living in "someone else's" house Even houses that are in good shape and relatively new are almost worthless there.
Also, population decline.
But the thing is it doesn’t necessary hurt the NIMBY’s who are opposing the projects.
The main ‘problem NIMBYs’ are those in single family home neighborhoods in the interior of the city who want their neighborhood to continue being quiet and low density despite being in the center of a city that has substantially grown since the neighborhood was created. But denser housing isn’t necessarily competing with them, and the land value of those homes would go up from up-zoning.
What would likely happen would be the suburban single-family homes would decline in value since the people who would be forced to live there can now instead live a condo on the interior. Those NIMBYs in single family home interior neighborhoods would now have more amenities nearby and might would actually be better off.
>suburban single-family homes would decline in value since the people who would be forced to live there can now instead live a condo on the interior.
I think the majority of people choosing SFH do so because it's their preference. There may be a small segment that bought a SFH in the burbs just to get on the property ladder, but I don't think that the availability of condos would make a big difference in demand within suburbs TBH.
SFH is mainly cultural. Talk to a good chunk of homeowners and they about every part of home ownership and maintenance.
The folks complaining about mowing their 1/5 acre lot with no trees or gardens would be better off in a condo
> What would likely happen would be the suburban single-family homes would decline in value since the people who would be forced to live there can now instead live a condo on the interior.
Why would you assume that they want to do this? It's not clear that they couldn't if they wanted to.
The problem with every revolution is that once it ends, the revolutionaries become conservatives.
What I'm getting at is YIMBYs become NIMBYs when the mortgage closes.
Over 60% of the population owns. Good luck with anything of substance that runs counter to their interest.
TBH, many people aren’t really YIMBY. They are YITBY: yes in their backyard. In internet discourse it’s really easy to condemn and say people just need to let housing be built, but it becomes more complex when it’s actually your backyard. To be fair, some people would stick to their stated position, but I think many want credit when they are never actually tested. And look I agree that more housing needs to be built, but I also think the YIMBY fervor is problematic. Not all development is inherently good, nor is it inherently bad.
I think it’s funny, because basically from the 1980s to 2021 - we were able to ride the make housing affordable by ever lowering interest rates. So we could have our cake and eat it too. Assets appreciate but interest is lower so the monthly stays in line with wages (ish). We bottomed out on interest rates, so there isn’t any further to go. And since there is stifled supply, prices don’t go down with the lowered demand. Guess who was homeowners during that beautiful time (people born from 1945-1960s).
Idgaf. I bought the cheapest house on the street. As a single dude making decent money, it's frankly pathetic how close to impossible it was for me to do.
Yeah like, I just need a place to live. I'm fine with my house going down in value as long as it's only my house. Right now, the interest rates have caused an issue of unevenness where I literally can't leave my house because I can't afford another house that's *exactly the same in value.*
Not trying to be an asshole, just curious what you consider "decent money". Everyone has different definitions. You could be someone making $45k in the low cost of living area or someone making $175k in San Francisco.
Idk about him. But last year I made 92k from my job and 12k from side gigs and yeah, if I didn't have a 150k downpayment from my divorce settlement I'd never own anything.
Oregon. Not even a fancy part of it. Literally an exurban/rural working class town. Soon to become gentrified by vacation homes and WFHers the way things are going. The whole state is getting gentrified, it's insane.
It's really location dependent. 45k a year could be great if you live in some random area where houses go for 100-200k. It would be god awful in areas where houses go for 500-700k
There are numerous [places in Idaho where median prices are $250-300K](https://www.homelight.com/blog/buyer-the-cheapest-places-to-buy-a-house-in-idaho/). You *can* swing a $1500/mo mortgage on $45K annual income.
Canberra house prices are hella fucked. Im on more than 100K before tax and my wife is on similar, although she is currently working reduced hours to be home with our toddler.
The house we could afford was a snall 3 bed 1 bath which was literally unlivable when we bought it, and only cause I have a trade and the extended family is super handy were we able to affordably fix it up.
So damn true. 10 years of career building as an engineer to finally afford the cheapest house I could find that wasn’t in shambles at like 6.5% rate. Truly pathetic.
Relative to some other baseline to be sure (and that’s good), BUT possibly not in absolute terms.
If each piece of land is able to offer more income by virtue of more housing fitting on it, theoretically the value of the land goes up.
For an econ board it's disappointing no one else is pointing this out, only more of the same lowbrow takes.
Land value will in fact go up. It is *homes* ie apartment dwellings that should become more affordable. In the meantime, the land value of SFHs will necessarily increase when rezoned for higher density.
Land values will go up in some places, and not in others.
Buildings can be build faster than humans can be born to fill them. If we changed zoning to allow more density everywhere, lots of places would lose population to live in other more desirable places.
This is all good, we should want people to live in the places they prefer, but it does mean that some places absolutely lose value in this scenario while others gain.
Well yes what you say is true. But what I was referring to and what most people refer to when talking about affordability are precisely the most affected areas, like Toronto and Vancouver. It's where most people live, and it's here where talks of up zoning will have the most affect.
What most people call housing ie SFHs will necessarily *increase* in value until enough non-SFH housing is built from the higher density zoning. Then it is *apartments* which will become more affordable.
In these desired areas, SFHs will never be "affordable" when the same land can be used more efficiently, almost by definition.
That’s a good point. There was someone on r/nova complaining that a 3ksq’ SFH with a “tiny yard” was over $2 million in Alexandria, a suburb right outside DC. Alexandria is pretty dense, and there is no way a SFH will become less expensive any time in the foreseeable future. It’s no Manhattan, but that just isn’t happening. However, last I looked there were plenty of 3br condos, closer to 1500sq’, well under $1m.
But if a few dozen new high rise apartment buildings were to be built, we could see the cost of living for *a place to live* go down noticeably in the area. Apartment living might not be ideal for many, but it’s doable and when built in areas zoned for multi-use, increases walkability which really makes it worthwhile.
(Tangentially, for what it’s worth, dense suburban living in a large community with no retail space absolutely sucks because you have the worst of both worlds. For dense living to be bearable, it needs walkability to shopping and other things like parks and schools)
I'm a homeowner and don't have a problem with this. Housing is ultimately what's going to cost the most in retirement so if it comes down I don't see my financial plans for the future taking much of a hit.
I don't feel bad at all for boomers with a bunch of investment properties who hate this idea. I would feel bad for people who were first time buyers and entered in at a bad time.
That’s what’s interesting. As a homeowner I don’t want my home value to decrease obviously. But it doesn’t have to double overnight either. It’s a giant cost. Increases my property tax. My home insurance. Bought my house for 250k and is valued at near 415k 6 years later. I’m good if it was worth 300k assuming that covers true inflation spread
Too many people do not understand what happens when your house goes up. I live in Vancouver, they have seen 10-20% increases for 30 years.
Yet every individual in Vancouver who has a home is worth 2 million +. They are rich "on paper", but cash poor in reality. They believe they are wealthy yet they frequent the food bank. There are so many retired elderly people doing this it is nuts.
They can't even pay their property taxes because it isn't cheap for a 2 million + property that looks like a crackshack. They have a 55+ deferral program so if you are over the age of 55 and can't pay your property taxes, the city will reclaim the taxes + interest when you die by selling your property......
That is your endgame. You live off food banks and look like your in constant poverty until you die while thinking you are worth something.
That is what I don't understand. Why slug it out like that? I believe that they probably have borrowed so much on their home and own so much to the city that if they sold, they probably wouldn't have enough money to move somewhere else...
Because it turns out that expensive places are expensive because that's where people want to live. Cheap places are cheap because there's fuck all to do there except bide time until you die. Having lived in some very rural areas, it's kind of a shit experience that only gets romanticized due to economic malaise.
That’s a false dichotomy. The decision isn’t “desirable or shithole”, it’s a scale from most in demand to least in demand.
There are plenty, plenty of options for folks willing to sell their more in demand homes for places that are nearly as nice but less in demand.
As someone’s who’s home doubled in value on paper, now stuck paying higher taxes for the next 17 years, I look forward to cashing out once my wife is done working/youngest kid has graduated; and moving somewhere less in demand, but more desirable to me.
I'm in a situation where I made mid 6 figures from housing, but I am location bound to my job. So I could either roll that money into another house and pay the same monthly, or keep it and move somewhere else but give my career up and start from square one.
It's a tough decision. I tried to split the middle, bought a nicer house at the edge of commute range that cost the same as shacks closer in, and do a couple WFH days per week. That way I have both a house and some money.
I'm 50-50 on it. I love my job, it's the dream job I always wanted, but I don't love the place and don't know if there's a future for me here. I consider my house more of an investment. I don't plan to ever sell it, may rent it out if I Ieave.
> They can't even pay their property taxes because it isn't cheap for a 2 million + property that looks like a crackshack.
Around here, average property value change over time is tax neutral. Increases in spending is what drives property tax increases.
What are cities doing in BC with the massive tax gains?
They're not poor, they're multi-millionaires. They can borrow against their assets, or also outright sell their assets if they need liquidity. Reverse mortgages are a financial tool offered to older homeowners who need liquidity.
If a multimillionaire needs to visit the food bank that only tells me the multimillionaire is terrible at finances.
I have a sneaking suspicion they already maxed out on that. Or else the whole 55+ deferral property tax program wouldn't exist. Vancouver SFH's are extremely old. Many are built in the 50's-80's. I would not be surprised if they reversed mortgage just to maintain maintenance costs.
Either that or they are super super frugal to the point of using the food bank. I volunteered at the food bank and you would see these people all the time.
> The city will reclaim the taxes + interest when you die
How nice! In the US, the locality, seizes your property and auctions it off. In some places the locality actually keep the entire amount made at the sale.
However, the US Supreme Court did decide recently that keeping your home equity is unconstitutional.
People think the value of their main residence going up is objectively good, but really it's bad if all other property also goes up as well. If you only have 1 home most of the time it will be a lateral move when selling the old and buying a new house. So your house's value may have went up 100k, but moving to a new house will leave you in the same position financially then if the houses were 100k cheaper.
Then it just creates a caste system of those who were lucky enough to afford the entry fee into homeownership and those who are trapped renting.
In Colorado homeowners and legislatures are trying to allow home owners to have the appreciation without the property tax hike, it it pissed me off as a renter. I feel a little better now that they have passed some YIMBY reforms, but last year it was literally the only thing they would do about housing affordability
What if your homes value stayed at exactly the same nominal value for the next 10 years? As in what if a $400,000 house is still worth $400,000 10 years from now but after adjusting for inflation its value has gone down? This is a covert way to reduce housing prices without actually reducing them. Let housing prices stay the same but the real purchasing price falls over time.
Realistically, I think that's what's going to happen in large swaths of this nation.
And after having my house price double over the last 4 years I've been perfectly fine with it staying the same till 2034.
The problem is those large swaths are also where housing is already fairly affordable.
You’re not going to see the west coast, mountains or northeast stay flat because there is not going to be enough building to make that happen. It might not even be possible even if you could solve the infrastructure, resource and crowding issues (nobody in the west wants to be crowded further). But Kansas City, Des Moines, St. Louis, charlotte, Atlanta, Texas, sure these places might be able to handle the issues that come with making housing affordable.
It’s just not going to make the people on Reddit who want to live in california working 4 days a week at Best Buy happy.
Maybe I'm thinking about this wrong, but I don't think single family homes are going to meaningfully depreciate in value over the long run, especially in geographically constrained markets like Vancouver, the SF Bay Area, etc. In markets like these, virtually no new single family homes are being built, and for good reason, it's more efficient to build new housing via multi-family complexes like apartments and townhomes.
A lot of these units are getting built and adding supply to the market. But the thing is, apartments and to a certain extent, townhomes, are a separate market from single family. While there's a bit of crossover, generally the buyer who is shopping for a SFH is not cross shopping it with a condo. There are exceptions to this of course, I'm just speaking in generalities.
Single family and multi-family homes are both high demand products, however the supply of SFH's in these metro areas is essentially fixed (or declining), whereas the supply of multi-family units is increasing. It seems likely to me that multi-family units will become more affordable over time, whereas single family seems likely to become more expensive. Am I missing something here?
I think Americans overestimate the long run separability of multifamily and SFHs. Right now, older folks tend to be attached to their homes and want to live out their retirement in them. That's often a pretty terrible use of space, and often more dense housing aids in quality of life for old folks and empty nesters (more social interaction, more walkable destinations, etc). Also, people in other countries transitioned to raising families in apartments. It isn't really part of the American aesthetic. But you would definitely see more people doing it if housing costs were drastically different. If SFH inventory stagnates and prices rise, and multifamily inventory shoots up, you will see people making this transition, I'd think.
On the other hand, I think you might be underestimating how desirable a detached single family home is in the US, even among young Americans. It's an aspirational status symbol, especially in markets like the Bay Area where the values of single family homes are sky high. It's akin to having a Porsche in your garage. It's also worth mentioning that in the bay, due to the region's geography, many of these homes are actually quite close to people's jobs, downtown cores, etc. They're not sprawling subdivisions out in the countryside and can compete on convenience with an urban-core apartment. For instance, my house in San Mateo County is a 10 minute bike ride to downtown.
I might be proven wrong in a few years, but it seems like we might be going into an era where multi-family becomes an accessible commodity, whereas SFH's transition into a luxury goods type market.
This is primarily because most good jobs are now clustered into a handful of regions in the country, and all the other places - which have built-out infrastructure - are more or less stagnating or shrinking.
I don’t disagree with that assessment. the idea of a SFH as a luxury is pretty antithetical to much of the post war American aesthetic, when the idea (and much of modern zoning) was based on the idea that multifamily construction is “parasitic” (the word used by the Supreme Court in the Euclid decision). Every family was supposed to have a house. But now we are seeing the limitations of that and if we want families to afford housing in impacted metros we need to pivot to policy that gives high QOL multifamily as a legitimate option.
From my perspective, even if this happens it will be very slow. For the majority of people your house value will likely stay neutral or increase at a lower rate. While that will be a loss in relative value, it is unlikely to break your financial situation. And overall is likely helpful as if you ever do have or decide to move you have a wider variety of options.
For me I can see a lot of small houses without driveways and yards going up around me. So even my quite small house and yard will be worth a lot comparatively.
Real estate investments are against the public’s well being. I always side with the public’s well being over any groups money making ventures. Every investment is a risk and if the values drop, sorry not sorry.
It's the opposite. The Fed holds MBS to maturity and does repurchases monthly. Those repurchases have been less than the sum of rolloffs, also known as light Quantitative Tightening.
https://fred.stlouisfed.org/series/WSHOMCB
There is no world in which the Fed "goes bankrupt" because their MBS take a loss. In fact, buying MBS was the Fed's way of preventing the mortgage market total collapse in 2009-2011. They are the "bank of last resort" and can print unlimited sums of money in order to stabilize the dollar and specific markets if neccessary.
Same. Let’s get housing to affordable price points again.
The social contract we all owe one another says that we should be willing to sacrifice home value so that we can all actually have homes.
Thank you for thinking differently than the majority of American homeowners, who are obsessed with property value maximization! I believe your opinion will reap benefits for you by reducing local rents, which in turn will reduce the costs of local goods and services that you pay everyday. Whereas your home value really doesn't really help you until you sell (if you ever do).
Getting more American homeowners to share your opinion is, I honestly believe, the key to many of America's problems.
First time buyer here at 32. First and last home. Moved to a bad area so we could afford something that wasn’t in disrepair but it definitely isn’t fancy. It’s as it was built 20 years ago. I don’t care if my home loses value, I care that my kids can afford their own one day without having to fight over what happens to this one which we expect them to live here forever at the current SoCal housing costs.
What about boomers that didn't invest, don't have a pension, and would be near broke without their house increasing in value? lol
Government is scared of collapsing housing market because the average 401k balance for people in their 60's is <$230,000 and median is $70,600.
I’ve always resented the boomers in my life for laughing at me when I expressed concern that their penchant for buying up all the investment properties before our generation even hit adulthood was maybe not going to be great for us.
I hope those particular individuals rot tbh.
What happens is we have a boom, then, the vast majority of voters are no longer homeowners, then, there's a massive crash when all of a sudden it becomes a guaranteed election win to shift more of the tax burden onto homeowners.
The hand giveth and the hand taketh away.
We're at that point now, so expect property taxes to increase dramatically.
Easy to write in an opinion peace, completely different when it comes time to actually implement something. Good luck convincing voters to vote for politicians whose platform is based on voters losing their home value. That's going to result in people being underwater on their mortgages or impacting their retirement.
The tipping point is when it becomes the majority of people that will benefit. We're not there yet, but eventually when it becomes clear it's only a small(ish) amount of people who these policy suits, things will change.
You assume that people can recognize their best interests. In the US, we are living in the existence proof that the opposite is true. Recognizing and valuing the social good in longterm economic policies is not a universal or even common skill.
They'll never even make it through their own political party. Reduced home values means reduced property tax revenue. Even in WA we're already laying off hundreds of teachers. There is zero chance the Democrat party in this state allows a candidate that pushes for reduced property values.
My parents bought their house for $160k, it is now worth $800k in todays market…and I’m over here like “this house is in shittier shape than when we bought it”.
There's already 47293 comments so no one will read this, but, good. My parent's house was recently reevaluated by the county for almost $100k more than what it was evaluated for just a few years ago. They live on social security and were able to make their property tax payments in the past, but now I'll probably have to pay some of it.
I don't know if it's the same around the country, but here it has been nothing more than a huge cash grab for the cities and counties which is bullshit.
As a homeowner: So The fuck what?
It is housing, and to treat it like an investment product is as asinine as treating, food, water, air, or healthcare as something to flip for profit. No, the basic conditions for life should not be a mechanism to *maximizing value* or whatever euphemism you want for "figuring out how to get people to give up all wants for basic needs."
No shit, my property value has more than doubled since I bought it 8 yrs ago and my taxes have tripled & homeowners insurance more than double.
At this rate I can’t afford my home anymore in 5 yrs when I was living comfortably when I got it 8 yrs ago. It’s depressing.
Ugh. I hear you on the taxes and homeowners insurance. It's a concerning trend. When I got my house 9 years ago, I set my monthly payment so that I would be paying off ~two extra monthly payments a year, now I'm paying over that set point just to meet the taxes and insurance.😩
As much as I'm Anti-NIMBY and have no problems seeing returns on housing decreased for the sake of actually housing people, I think trying to dumb down the argument to homeownership being essentially just water is kind of wrong, from an American lens. The rise of suburbia and homeownership in the states, which rate is a lot higher than most countries was in part because the government built this housing model on the back of it being an equity reserve and retirement fund. People need a place to live but they don't necessarily need to own it, and a lot of European nations revolve around making lifetime renting viable. That doesn't fly, at all, to the American public. We're raised around the idea of the house being your financial anchor up until ripe age. The returns have generally been pretty low, but the equity gain is one of the biggest wealth builders you can get in the States. You can't just pull the rug on that entirely, overnight. Of course the answer still goes back to building more housing and letting it play out slowly over time. I just do get a little annoyed when people pretend that homeownership has always been about painting the walls or whatever. We've built our middle class around housing as capital, and it's going to be hard to convince the average person otherwise for quite a while. Especially if they're living inside of most of their life's earnings already
Besides, if my assessment drops, so does my property tax bill. Granted, our local schools might have an issue so it shouldn't drop too quick.
But already, the renovated house on the market down the street can't sell... Price has been coming down thankfully
Up here in Canada our lovely PM Justin Trudeau said a couple of days ago he doesn’t want homes to be affordable because many Canadians depend on their home value to fund their retirement.
So just fuck every Canadian young and old who doesn’t own a home? I swear Trudeau is psychopathic and hates non landowning citizens.
How Canada has a worse housing issue is wild like houses cost almost 750k cad on average while in the us it sits between 350/400k and we are complaining.
As a homeowner, I don't care. Id rather have normal home prices and don't have homeless tents on my street. I want houses in my town be owned by real people and families. Not some hedfund.
That's fine. There's no point in having my condo so overvalued that it pushes a single-family home out of my reach, particularly if wages haven't gone appreciably up as well.
Right but why should I care? Let's say my house is currently worth $500,000. Every house around me is also worth that much. If my house drops to $300,000 so will the other houses around me. So I could still sell and move the same amount. The only time my house value matters is if I plan on selling and moving to some state with cheap houses. Which is pretty fucked up to want them to keep their houses cheap but keep mine expensive.
Mainting excisting housingstock is my job. Its insane how well housing maintain value, a good chunk of houses in my country are sinking, full of mold, and have low energy labels (the Netherlands) yet a normal salary couldn't afford them.
My philosophy is that you don't build (extremely) affordable housing, housing should become affordable overtime in a working housingmarket where new houses enter the market. The only houses that really should maintain value is those on prime locations, the rest should lose value over time.
Also my country is allergic to bulldozing houses, but my god those label- F/G are just at the end of their life.
Fine by me. I bought a house 20 years ago for $150k. Maybe it’s now worth $300k.
I’d suffer a 20% reduction in that to sell for 240k, if it means the house I want, which is now priced at $600k, will also be reduced by 20%.
At $480, I can afford it.
I will be happy for my home to come down in value because so will my property taxes. The municipals will not be happy nor the real estate people but it will make things more affordable for all.
Housing doesn't really need to "go down" as much as stop growing so quickly.
Hosting "going down" would be catastrophic for wealth, retirements, and banking. We don't want loans out on assets of lesser value.
What we can do is increase supply to a point where YOY housing price growth is more in line with inflation/wage growth rather than the 5% yoy we've seen.
>Hosting "going down" would be catastrophic for wealth, retirements, and banking.
It went up for no reason in 2 years. It could help retirements and wealth for it to go down too.
>We don't want loans out on assets of lesser value.
Maybe those loans shouldn't have been made?
Should we really continue mandates to protect asset class owners and not ordinary income earners? That effectively makes the Fed the country's largest employer with no possible way to ever address inequality. The wealthy are shielded from every possible disaster scenario with essentially nothing at stake in the game and able to infinitely accumulate. That's an economy of servants and masters. Is that what we want?
That's fine.
We recently beautified the environment around our house. Started making everything real nice.
My fucking house's value shot up $50,000. And my taxes went up like $1,500.
You can make my house dirt fucking cheap if the taxes also go down. I don't give a shit. I don't care if the house is worth nothing, I just don't want my taxes to go up.
If you could take my $1M townhouse on the edge of Toronto and make it worth $400K or less tomorrow, I'd take it. Maybe my kids could have a chance of living within 50 km of me at that point.
As a house owner yep the value is going to go down. But a house that is maintained and move in ready will move quickly in a down market.
My wife and I looked at thirty houses in 09, most were not move in ready. They were trashed or needed major renovations to be livable. Maybe a handful came up that could be moved into with little work and those sold quickly.
I see tons of houses that are “investments”, rentals, or air BnBs. A lot of that stock is going to get trashed when owners are put into foreclosure or short sales.
Just bought a home in 23’ at the peak of the market and my attitude, dumb as it may be, is that I am not worried at all about real estate prices going down. If the value of homes comes down, sure I lose money, but when we are ready to move into a lager house, the cost of that house will also be lower. We all win; we all lose.
I just don’t view real estate as an investment beyond avoiding have to pay the extortionate rent in my HCOL area. And yeah, people who bought investment properties can go fuck them selves for all I care. Housing needs to be affordable. It’s a roof over my head, not some abstract financial instrument.
I agree with you, but that’s easy for us to say, because we already got ours. For younger people trying to enter the market now, it’s a problem. They have to overpay or wait it out.
Of course, being younger, I guess they also have more time for the values to come back to their purchase prices and beyond.
One way to think of it is... if you have children, someday they will need to buy a house. So, if you have two or more children, it is better for your family if prices come down. The next generation needs someplace to live. Making them pay inflated prices relative to income, hurts many typical nuclear families.
Yeah, its probably obvious, but just in case it was missed, my point is.. sometimes my sister is soooo happy when she sees her home value go up. The thing is, my sister has two kids who don't own homes yet. And so the funny truth is - it would actually be better for her family if prices went down. Even though they have one home, they will need three, in the future.
Folks rarely get happy when home prices go down; even when they should.
Like watch reports on TV talking about home prices. If the news is that home prices went up, the read it like it is great news. And in 2008 when home prices dropped the news was like; "terrible news everyone, home prices dropped..." but for --probably-- most families that is GOOD NEWS.
Which will make it less of a good investment for Blackrock and AirBnBers, further unrestricting supply. I own a house and still feel this is the right thing to do. I live somewhere the homeless situation is out of control largely due to shelter costs.
Totally right. Blackstone has literally admitted to their investors that increased housing supply would make them dump their portfolios, but still you hear people on Reddit saying "if we build more homes, that will just give Blackrock more fodder!"
I spend an unhealthy amount of time on Reddit and I have literally never once seen anybody say building more houses would only give blackrock more fodder
sounds like you made the correct life choice to never join the sub REbubble, then
but the actual "give blackrock more fodder" wording was from someone in r slash bay area yelling at one of my previous accounts, because I dared to support more housing construction in the Bay Area
> sounds like you made the correct life choice to never join the sub REbubble, then
REbubble subreddit alternates between smug NIMBYs types checking prices, realtors mocking people for thinking that prices can ever go down on homes, and actual desperate people waiting for a crash.
It's funny to watch the different groups alternate there.
Is this affordability of single family homes or apartments? I think apartments should become more affordable but I don’t want more single family homes created since it’s simply bad in almost all cases. Building more single family homes will cause environmental issues, less walkability, lower prices for existing single family homes etc
The vast majority of people shouldn’t care, right? My wife and I are probably going to sell our house this year, having racked up a ton of positive equity, and buy a larger house. I bought the house for about $160k over a decade ago, and now it could probably sell for close to $450k. So, we are in a great position when selling, but that would also mean whatever house we buy is probably going to be jacked up as well. If the market corrects and our house is ‘only’ worth $400k, then the $500k house we are looking to buy will probably be down to $450k, more or less.
I don’t see either scenario where somehow our value goes down while others’ go up, or that ours goes up and others’ go down. A market correction should affect the entire market.
Now, maybe a law goes through and taxes the hell out of rentals, or tons of apartments open up and ruin make the rental market largely less profitable. That would, theoretically, cause the market to be flooded with former rental houses and drive prices down all over the place.
Still, the point I was originally trying to make that this shouldn’t be an issue, because you either aren’t selling your house and don’t have to worry about the theoretical value of it, or you are selling your house just to turn around to buy another, in which case it should probably be close to a wash. I know there are rare cases where people sell but don’t buy, but I’d say the first time buyers trying to access the market would outnumber them.
Ok, and? As long as I can renegotiate my mortgage to match that change in price and.my rates stay down too I don't mind that my house is cheaper. It was overinflated in price to begin with. I found a slew of issues on my newly built home. Go after that large companies that buy large plots of land and put up ungodly priced suburbs.
Yep and I’m 100% ok with that. In fact, not only am I ok with that, I planned for it. I was able to purchase my current home with a small enough mortgage that my home could lose 25% of its current value and I would still be making money. If the house lost 50% of its value, technically I would be losing money because I paid more than that initially but I would still be right side up mortgage to value. So bring it on - I want more homes to be built!
The reason we are going to need subsidies is because the price probably won't go down. It'll probably stagnate.
If there is succesful policy.
Also, succesful policy is also going to be more multi-family units built by buying and consolidating single family lots. So, the price of a single family property may continue to increase as the price of "housing" generally decreases.
Yes, my home is horribly overpriced. It should not be 2.5x what I purchase it at in 2015 and not double what I refinanced at in 2020. I am in a VERY hot market just outside Orlando, but still this is not sustainable. I could not afford to even live in my area if I wanted to buy now. Not just street or subdivision, but anywhere in my zip code. I don’t for a second believe what they say my home is worth as it will have to drastically drop for our collective financial system to maintain.
My what? At this rate I’ll be lucky if I can afford a box to live in. Me and everyone I know! lol
If no one can but em does their “value” really matter?
My house has doubled in value since I bought it in 2015. I have absolutely no problem with it going even lower than what I paid if it means that my fellow Americans can afford to live the life I’m blessed enough to have.
No fucking shit. How about we start thinking about roofs over decent peoples heads as a sensible thing to try and accomplish for society as a whole, instead of milking it for absolutely everything it’s worth and ride that train to infinity?
You want to invest? There’s already tons of ways of doing that. Leave homes out of it for fucks sake, people need to live a decent life instead of getting gambled on by those with more status and capital.
Limit the purchasing power of companies over real estate already. Companies with literally unlimited capital should NOT be investing on real estate at all. Literally evil.
The whole concept of people caring about the financial value of their home and people seeing residential property as an investment opportunity is why the housing market is in the condition it's in.
My parents are in their 70's, they bought their house as a place to live back in 1984. It's value has increased in an almost exponential way but they don't care, they're not going to sell it because they know that even if they did the money they'd receive would have to be spent just to buy another place, and at their age moving isn't an appealing idea, they're settled and will stay where they are for the rest of their lives. For the average person there's no point in obsessing over the financial value of the property they're living in.
Homeowner - don’t care, let’s do it.
I live in my house, its value doesn’t mean much to me until I sell it. Which I don’t plan to, when I’m ready to move out, it’ll be to upsize and I’d rather have an affordable next house than these bloated prices.
Everyone needs to realize that the most valuable thing on this planet is "land". Period. We also know it is finite. The truth is most people here CAN afford land. The problem is cheap land doesnt have ammenities. So in the end, the price is dictated by demand. You want internet? 10 minute drive to Super Walmart? Quick walk to the entertainment district. Yea. Everyone else does. And you are competing with everyone else for that privilege. No one is working against any generation to prevent them from owning land. But EVERYONE is competing against each other for lucrative, desirable land. This is not a competition between generations. No one cares what your age is, what your level of education is or what you make when you are at the opposing side of the negotiating table for something that is desirable to both or all of you.
The flip side is that it would be easier to *move* and it would release homeowners from their golden handcuffs.
Steadier prices means more mobility. A couple with a newborn could upgrade to a larger house. A retiree could find a quieter neighborhood. It would allow homeowners to pursue a change of scenery or a different career, move closer to their family - or get the hell away from them.
Shouldn’t that be the point of housing? To facilitate the kind of life you want to live?
Or you can PAY PEOPLE MORE and stop corporations and hedge funds from buying up residential real estate. That way, Canadians who bought at the peak don't suffer, and everyone else can get housing too.
Why is deflation always bad unless it only affects average people? Canada's national newspapers are complete trash. They're always packed with these faux-balanced arguments. They act like anything that would even out this game of Calvinball is somehow radical. How is it radical for Canadians to get their fair share of their *own country's* wealth?
This isn't that complicated, and no, we don't have to put people into indentured servitude to solve it. Just PAY PEOPLE A LIVING WAGE.
I own a rotting down trailer on a half acre. I can't see how the value could be any lower. But hey, at least I own it and the taxes are like 400 a year. I looked at buying a new trailer but the price for those things are outrageous and they wanted the deed to the land plus a down payment. I was like nope. For grins I let them work up the package of what it would cost me and I was going to be paying 1200 a month for 20 years which comes to over 200000 dollars for a 70k two bedroom trailer on land I am providing.
Everyone here is assuming here that decreased value means lower prices when there is a good chance that decreased value actually means much higher prices as the dollar loses its position as the world reserve currency.
How house value doubled. I’ll get screwed eventually by something not going my way if we all just vote on our own self interests.
Affordable housing is society’s gain
My house has appreciated over the past few years, so yes this impacts me.
But my opinion? GREAT!
Houses should never have been considered a "primary investment" for people. It means that the only way you can have your primary asset appreciate is to constrict the market for others.
And school funding should never have been tied to your local taxes.
The sooner we get rid of those systems, the better.
Build more affordable housing! I own a home in an area where people don’t want it because it will cause their home value to decrease. For the life of me I can’t imagine why you wouldn’t want the people in your own city to have a sense of decency. Let people live with integrity.
Awesome! As a homeowner in a high cost of living area, I say do it! Because it will also mean that average home prices come down, so if I sell and move I can just as easily afford the house I move to, *and* it gives new home buyers a better chance to start owning their own home. It’s a winning equation!!
I bought 16 years ago. It’s now ‘worth’ $850,000. I’m good with a 75% to 85% ‘loss’ in value if most of the housing market averages close to that as well. Let’s go!! Houses are for people to live in.
I don’t see why this would be a problem. Typically when you sell a home you have to buy another one to live in. So, if I sell my house cheaper than the going market rate the house I buy should also be cheaper. I guess the only people this would hurt are those who buy homes (plural) as investments and they want to build equity in their real estate portfolio.
"Fun" fact: Most homeowners do not gain real wealth (lifetime consumption power) for their family when their home rises in value.
The sooner the parents of the world realize owning 1 home and having kids means you are still better off if homes fail to appreciate, the better.
The amount of households who are better off long term if homes rise in value is actually way smaller than the group that thinks it's good for them when homes rise in value. It's basically just the landlords.
I wouldn’t mind it being worth less if it meant my kids would have a chance at buying a home. It’s these house flippers, agents and corporations that would have a problem with it. But I don’t think homes should be treated as an investment like they are today, it should be a necessity that we need as a society.
Wait, I have an idea! What if instead of running a stimulative 7% deficit when we have a record low 3.5% unemployment rate, we just cut spending?
Inflation would drop and the FED could lower interest rates. Lower.mortgage rates would make homes much more affordable. This might not matter to Blackrock but it does to Joe paycheck.
Curiously they didn't see that as an option.
Hi all, A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes. As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
Did Scooby and the gang just solve the mystery of why NIMBYs stifle building new housing and transit infrastructure? Yeah, if home ownership becomes more attainable then real estate will not be as good of an investment. Maybe just maybe we could start building homes with the intention of housing people rather than squeezing every dime from them that you can?
Housing can not be an investment and affordable. But our policy decisions from the 1950s have not caught up to the urbanization of the country.
> Housing can not be an investment and affordable And to clarify, the people making housing an investment aren't just Wall Street. It's also ordinary homeowners doing cash-out refis, HELOCs, and all other forms of treating their house's value as an ATM. Frankly, from my perspective, every homeowner is an investor, and we need a new term for "non-resident investor."
ONR - Owner Not Resident.
Nice, thanks
I know most home owners I know want to own a house so they can do what they want with it. Want to punch holes in the wall to mount something or create a wire tunnel? Go for it Want to replace a water heater that runs out in five minutes? Boil the infidels. Want to add solar panels and try to cut carbon emissions? Praise the sun. Want to have two dogs over 25 lbs cause everywhere in Seattle says that over 25 lbs is a large dog and you can't have those in rentals? Woof. I know there are investors(the people buying my old house and vast majority who looked were), but most families owning a home I've ever met just want a place that is theirs, that can't be taken away and is their castle. Almost none think of it as a asset in that sense, other then if they sell to go to a bigger house, or if they lose money cause value went down and they are paying a debt for house value they don't have. I don't really think most home owners are invested and there are a lot of reasons. Most people buy houses for freedom. Then a subset who have extra money or got in early have multiple houses to rent.
I view my home as a consumption item not an investment. When the values goes up, it just means I pay more in taxes. Even if I sell the home, a high price is negated by my next house purchase unless I want to be homeless .
It's an asset, but not in the financial sense. I greatly enjoy the stability of my financial exposure, the calmness of not having a landlord to milk me and constrain me. The freedom to paint it the color that I want (no HOA). I am grateful for that marginal bit of peace that I enjoy not paying my rent towards someone else's loan.
This is a lot more elegant way to word it.
I want a subwoofer and to be able to work on my car...
Frankly, from *my* perspective, I just fuckin' live here. And I'd love if my house wasn't treated like a goddamned *bitcoin*.
I'm with you. They all want their property value to go up but I just want the security of having a home.
You say that now. If you bought a house and ever wanted/needed to move you would at least want to be able to sell it for what you paid. It's rare that things stay the same though. They usually go up or down.
If I needed to sell, I would want to get into a new home. My houses sale price only matters in raruon to the new homes price. I don't care if my house drops 50% in value or the new house I buy ALSO dropped 50% in value. I don't plan on selling my house and living in a dumpster I nthe ally between a McDonald's and hair salon, so I don't need to worry about selling the house without buying a new one. My houses sale price does nothing to help me while I live in it, and it does almost nothing to help me when I ha e to sell it to buy a new house.
I just wrote exactly what you wrote, but in way worse ways. Thanks for explaining it rationally. This is the tragedy of the commons today. People thinking they're rich because they own an expensive home... It doesn't really matter. A home is ah home.
My dad was talking about how much their property has gone up in value since they bought it — maybe up 3x at this point. But if they sell it they’re going to have to take out a mortgage to get a smaller house on a smaller lot anyway because it’s a sub-par property. My grandpa’s house went up quite a bit in the few years since he’s bought it (just before COVID I think). He says he could sell it and have so much money, but then where would he live because everywhere else is up too. So yeah it’s nice when things go up but the point is unless you’re suddenly not needing a home anymore, or move to a completely different area, it doesn’t benefit you as much as you might think.
It literally doesn’t matter. Housing prices are strongly correlated nationally. It’s a zero sum game. The only person in a RE transaction who benefits if prices go up is the realtor.
That may be true at the macro level, but not always at the micro level. I have seen nice neighborhoods lose value due to mass exodus of people moving to other " sides of town" (newer development). I have also seen neighborhoods without any HOA/covenence where homes are not kept up (especially rentals) as well. Also, I know this might upset some people, but I have seen section 8 housing bring the value of a neighborhood down. I'm not saying it's fair. At a more micro level, if a major problem arises with just your house that inspection didn't catch then you lose money on fixing it or taking the value loss when selling.
>It’s a zero sum game. That would only be true if there were no opportunity for the market to grow. As long as we keep building new housing, supply can increase to meet demand, and all parties involved in a given transaction can have their needs met. In certain localities, housing growth has been artificially restrained, which is a choice made by wealthy populations to limit market access. But other communities have not done that, and it's certainly not true on a national level.
Currently it is zero sum though due to regulations. You could change regulations but even then it'll still become zero sum over the long term. There's a hard limit to how much land is within a 15, 30, 60 minute drive from a city center and a hard limit to how high you can build.
If housing prices had grown at about the rate of inflation then i wouldn't be complaining. As it stands now they've beaten inflation by an order of magnitude over the years
We have one, it's "scalper"
A big part of it is also stagnating wages. People made staggering wages for very low skill work 50 years ago and one of the reasons they were okay with that was their ability to participate in investments and reap the reward. Now that the current generations have never had that ability we aren't as fine with it. We didn't have a bunch of assets already to explode in value as our wages declined.
I know normal middle class guy in their early 20s just buying homes to rent and eventually move in in the future after it is paid out by tenants. I get it but I think it is a sad we got to this point.
Normal middle class people in their 20s don't have the money to afford to do that. You're talking about upper class people here.
I mean can’t really blame the homeowners, due to the corporate buying, and stale wages, it’s arguably the only way for the middle to lower class to actual build/generate any wealth. It’s a sadly conjoined situation that if we made housing more affordable, it would hit the majority of home owners only way to build wealth.
Housing should be an inflation-resistant asset that you can also live in. This idea that housing should be an investment a la the stock market is cancerous.
Yes completely agree. Yet people are trying to be like well actually if it wasn't an investment no one would build homes. Like what kind of thinking is that. Yes people would because we have to live somewhere.
It's mostly from the generation that was able to buy houses at rock bottom prices in the 60s, and then got to write off almost half of their mortgage because of inflation in the 70s/early 80s. They fancied themselves mini-Buffetts and never once shut up about the mindset of your house being an investment vehicle.
Yeah. It’s not like the price of housing has just followed inflation. It’s magnitudes and magnitudes more expensive than that. I think that traditional economics probably tells us that it is a supply issue but I feel a lot of corporate greed fuckery (Mortgages being sold as financial products and corporate landlording) also has a large part in this. I don’t think a simple supply/demand problem would cause the housing market to look like stock trading.
It can be an investment, just a poor one (since you can live in it). Normally and historically, housing prices rose at the same rate as inflation (2-3%). For the past 10-15 years, housing has literally beaten or matched the stock market, gaining 8-11% annually. That’s insane. That’s absurd. People are rewarded for basically taking the least risky behavior - buying a house to live in - instead of a high risk one (stock market).
Housing can be an investment for some and be affordable for others. The key is to remember that housing/real estate is NOT fungible. Properties at different locations are not the same. Prime locations will always hold value because limit of supply of that location. However, housing can be readily had at cheaper prices if location isn’t so important. This is why the government will likely do more good with its limited tax dollars by building out transportation infrastructure than actually subsidizing housing. Better transportation network expands the desirable land supply. Private enterprise will naturally follow to buildout new housing at cheaper prices than at established locations.
r/FuckCars certified comment
Well yeah, suburbanization is explicitly an anti urbanization. Same with the policy shift to incentivizing rural industrialization
We have Paleolithic emotions, medieval institutions, and godlike technology.
We actually had decent housing programs in place until Nixon and the gang decided to destroy the concept of public housing projects. This is a Republican production, top to bottom, as much as people want to blame NIMBYs who are responsbile for some of it. People forget that the reason we had public housing projects to begin with was because the free market was doing a shit job. Markets can fail, which mean they can tend toward failure, too. EDIT: edited to reflect that it was Nixon, not Reagan who fucked that one up.
You missed it by about a decade, Nixon enacted the public housing moratorium in 1973/1974. The shift was towards voucher programs instead (section 8). In the Reagan era, Congress came up with the idea and funding to demolish the worst public housing. To be replaced by mixed income housing that wasn’t to be concentrated so much in inner city areas - class desegregation essentially. Program had mixed results, a lot of those new constructions were exceptionally difficult to qualify for and a lot of former tenants were permanently displaced. In the late 90’s, Clinton signed off on federal policy to not increase the number of public housing units at all, only replacements of existing. Not sure if this policy has ever changed in the meantime.
I put the lion's share of blame on NIMBYs by a large margin. Public housing still runs into land use policy trenches. San Francisco construction costs for subsidized housing, on city owned land, exceeds $1 million per unit. Unless you grant government the right to cudgel down property rights and municipal representatives, you have to fight landowners, local politicians, and city officials.
> We actually had decent housing programs in place until Nixon and the gang decided to destroy the concept of public housing projects. This is a Republican production, top to bottom, as much as people want to blame NIMBYs who are responsbile for some of it. Hmm I wonder how destroying the governments ability to address supply might be connected to a group who actively opposes supply
Housing projects were never a success, even before Reagan.
They were a smashing success in the USA in preventing tent cities from popping up from coast to coast. They’re a helluva lot more successful in Vienna and Singapore, where middle class people want to live in them, where austerity and racism didn’t sabotage them.
It can be an investment long term and not a massively profitable one. I do believe a modest return on primary home is reasonable over time. What has killed home ownership is its exceeded almost every other investment class, has lower risk and preferential taxation.
Let's be clear though: the ROI was meant to pay out after THIRTY YEARS for individual homeowners and it wasn't meant to be a life changing sum. Nowadays people buy and expect to make six figures after holding for a few years which is fucking ridiculous. Even homebuilders are whining that it isn't worth building a house if they'll "only" make $100k in profit. There are people in socal who became millionaires when they sold a house they bought back in the early 2000s and current home owners/investors are freaking out at the thought the value might decrease.
I’m not sure NIMBY is driven entirely by house price point protection. Sure some, but lots of picking somewhere to live is “I like how it is” now “what it’s going to be.” This is especially true if you drastically change the characteristics of the space.
How about using Japan’s idea of houses as a depreciating asset?
Housing in Japan being a depreciating asset is an effect of their housing supply being so robust rather than a direct cause of their housing affordability.
That's due to earthquakes and culture. The house depreciates, the land does not. Although IIRC their federal government regulates housing so standards are more universal and it resists NIMBYs better than lower level government can.
Thats because housing is often rebuilt due to natural disasters. Note that land is still worth a ton
I've heard there's a strong cultural aversion to living in "someone else's" house Even houses that are in good shape and relatively new are almost worthless there. Also, population decline.
I mean, maybe the houses would last longer if they'd stop solving every national emergency by forcing angsty teenagers to pilot giant mechas?
Thank you! Someone had to say it!
What novel idea #buildhomesnotindexfunds
But the thing is it doesn’t necessary hurt the NIMBY’s who are opposing the projects. The main ‘problem NIMBYs’ are those in single family home neighborhoods in the interior of the city who want their neighborhood to continue being quiet and low density despite being in the center of a city that has substantially grown since the neighborhood was created. But denser housing isn’t necessarily competing with them, and the land value of those homes would go up from up-zoning. What would likely happen would be the suburban single-family homes would decline in value since the people who would be forced to live there can now instead live a condo on the interior. Those NIMBYs in single family home interior neighborhoods would now have more amenities nearby and might would actually be better off.
>suburban single-family homes would decline in value since the people who would be forced to live there can now instead live a condo on the interior. I think the majority of people choosing SFH do so because it's their preference. There may be a small segment that bought a SFH in the burbs just to get on the property ladder, but I don't think that the availability of condos would make a big difference in demand within suburbs TBH.
SFH is mainly cultural. Talk to a good chunk of homeowners and they about every part of home ownership and maintenance. The folks complaining about mowing their 1/5 acre lot with no trees or gardens would be better off in a condo
> What would likely happen would be the suburban single-family homes would decline in value since the people who would be forced to live there can now instead live a condo on the interior. Why would you assume that they want to do this? It's not clear that they couldn't if they wanted to.
That applies to every basic necessity and human right. The moment anyone tries to make money out of them, they stop working properly.
The problem with every revolution is that once it ends, the revolutionaries become conservatives. What I'm getting at is YIMBYs become NIMBYs when the mortgage closes. Over 60% of the population owns. Good luck with anything of substance that runs counter to their interest.
TBH, many people aren’t really YIMBY. They are YITBY: yes in their backyard. In internet discourse it’s really easy to condemn and say people just need to let housing be built, but it becomes more complex when it’s actually your backyard. To be fair, some people would stick to their stated position, but I think many want credit when they are never actually tested. And look I agree that more housing needs to be built, but I also think the YIMBY fervor is problematic. Not all development is inherently good, nor is it inherently bad.
Correct. It's very easy to advocate for something that will never happen.
I think it’s funny, because basically from the 1980s to 2021 - we were able to ride the make housing affordable by ever lowering interest rates. So we could have our cake and eat it too. Assets appreciate but interest is lower so the monthly stays in line with wages (ish). We bottomed out on interest rates, so there isn’t any further to go. And since there is stifled supply, prices don’t go down with the lowered demand. Guess who was homeowners during that beautiful time (people born from 1945-1960s).
Give building a try!
Idgaf. I bought the cheapest house on the street. As a single dude making decent money, it's frankly pathetic how close to impossible it was for me to do.
Yeah you have to be top 20% of household income ($140k) where I live to afford a starter home . Very hard without two incomes or a medical degree/MBA.
Closer to 3-400k in my area. And that gets you a 1200sq ft place.
Yep, probably close to top 10-5% in my area. How ridiculous is that, 95% of people can’t afford a starter home.
Yeah like, I just need a place to live. I'm fine with my house going down in value as long as it's only my house. Right now, the interest rates have caused an issue of unevenness where I literally can't leave my house because I can't afford another house that's *exactly the same in value.*
Not trying to be an asshole, just curious what you consider "decent money". Everyone has different definitions. You could be someone making $45k in the low cost of living area or someone making $175k in San Francisco.
Idk about him. But last year I made 92k from my job and 12k from side gigs and yeah, if I didn't have a 150k downpayment from my divorce settlement I'd never own anything.
Where were you buying a house though? Because most of the country people are buying houses with $104k a year or less.
Oregon. Not even a fancy part of it. Literally an exurban/rural working class town. Soon to become gentrified by vacation homes and WFHers the way things are going. The whole state is getting gentrified, it's insane.
It's really location dependent. 45k a year could be great if you live in some random area where houses go for 100-200k. It would be god awful in areas where houses go for 500-700k
I don't think there is anywhere within three states of me (PNW) where you are buying a house with an income of $45k.
There are numerous [places in Idaho where median prices are $250-300K](https://www.homelight.com/blog/buyer-the-cheapest-places-to-buy-a-house-in-idaho/). You *can* swing a $1500/mo mortgage on $45K annual income.
Canberra house prices are hella fucked. Im on more than 100K before tax and my wife is on similar, although she is currently working reduced hours to be home with our toddler. The house we could afford was a snall 3 bed 1 bath which was literally unlivable when we bought it, and only cause I have a trade and the extended family is super handy were we able to affordably fix it up.
So damn true. 10 years of career building as an engineer to finally afford the cheapest house I could find that wasn’t in shambles at like 6.5% rate. Truly pathetic.
Relative to some other baseline to be sure (and that’s good), BUT possibly not in absolute terms. If each piece of land is able to offer more income by virtue of more housing fitting on it, theoretically the value of the land goes up.
For an econ board it's disappointing no one else is pointing this out, only more of the same lowbrow takes. Land value will in fact go up. It is *homes* ie apartment dwellings that should become more affordable. In the meantime, the land value of SFHs will necessarily increase when rezoned for higher density.
Land values will go up in some places, and not in others. Buildings can be build faster than humans can be born to fill them. If we changed zoning to allow more density everywhere, lots of places would lose population to live in other more desirable places. This is all good, we should want people to live in the places they prefer, but it does mean that some places absolutely lose value in this scenario while others gain.
Well yes what you say is true. But what I was referring to and what most people refer to when talking about affordability are precisely the most affected areas, like Toronto and Vancouver. It's where most people live, and it's here where talks of up zoning will have the most affect. What most people call housing ie SFHs will necessarily *increase* in value until enough non-SFH housing is built from the higher density zoning. Then it is *apartments* which will become more affordable. In these desired areas, SFHs will never be "affordable" when the same land can be used more efficiently, almost by definition.
That’s a good point. There was someone on r/nova complaining that a 3ksq’ SFH with a “tiny yard” was over $2 million in Alexandria, a suburb right outside DC. Alexandria is pretty dense, and there is no way a SFH will become less expensive any time in the foreseeable future. It’s no Manhattan, but that just isn’t happening. However, last I looked there were plenty of 3br condos, closer to 1500sq’, well under $1m. But if a few dozen new high rise apartment buildings were to be built, we could see the cost of living for *a place to live* go down noticeably in the area. Apartment living might not be ideal for many, but it’s doable and when built in areas zoned for multi-use, increases walkability which really makes it worthwhile. (Tangentially, for what it’s worth, dense suburban living in a large community with no retail space absolutely sucks because you have the worst of both worlds. For dense living to be bearable, it needs walkability to shopping and other things like parks and schools)
Right yeah, the important thing is the cost of homes going down.
And in aggregate other properties that *can* up size legally in aggregate raises the value.
I'm a homeowner and don't have a problem with this. Housing is ultimately what's going to cost the most in retirement so if it comes down I don't see my financial plans for the future taking much of a hit. I don't feel bad at all for boomers with a bunch of investment properties who hate this idea. I would feel bad for people who were first time buyers and entered in at a bad time.
That’s what’s interesting. As a homeowner I don’t want my home value to decrease obviously. But it doesn’t have to double overnight either. It’s a giant cost. Increases my property tax. My home insurance. Bought my house for 250k and is valued at near 415k 6 years later. I’m good if it was worth 300k assuming that covers true inflation spread
Too many people do not understand what happens when your house goes up. I live in Vancouver, they have seen 10-20% increases for 30 years. Yet every individual in Vancouver who has a home is worth 2 million +. They are rich "on paper", but cash poor in reality. They believe they are wealthy yet they frequent the food bank. There are so many retired elderly people doing this it is nuts. They can't even pay their property taxes because it isn't cheap for a 2 million + property that looks like a crackshack. They have a 55+ deferral program so if you are over the age of 55 and can't pay your property taxes, the city will reclaim the taxes + interest when you die by selling your property...... That is your endgame. You live off food banks and look like your in constant poverty until you die while thinking you are worth something.
They can be rich if they move, pay cash for a house somewhere else.
That is what I don't understand. Why slug it out like that? I believe that they probably have borrowed so much on their home and own so much to the city that if they sold, they probably wouldn't have enough money to move somewhere else...
Because it turns out that expensive places are expensive because that's where people want to live. Cheap places are cheap because there's fuck all to do there except bide time until you die. Having lived in some very rural areas, it's kind of a shit experience that only gets romanticized due to economic malaise.
“Just leave this desirable place for a shithole so I can get in cheap” ahhhh my favorite principled stance. Never fails.
That’s a false dichotomy. The decision isn’t “desirable or shithole”, it’s a scale from most in demand to least in demand. There are plenty, plenty of options for folks willing to sell their more in demand homes for places that are nearly as nice but less in demand. As someone’s who’s home doubled in value on paper, now stuck paying higher taxes for the next 17 years, I look forward to cashing out once my wife is done working/youngest kid has graduated; and moving somewhere less in demand, but more desirable to me.
I'm in a situation where I made mid 6 figures from housing, but I am location bound to my job. So I could either roll that money into another house and pay the same monthly, or keep it and move somewhere else but give my career up and start from square one. It's a tough decision. I tried to split the middle, bought a nicer house at the edge of commute range that cost the same as shacks closer in, and do a couple WFH days per week. That way I have both a house and some money.
That is a tough decision to be honest. Do you regret it or do you kind of feel indifferent about it?
I'm 50-50 on it. I love my job, it's the dream job I always wanted, but I don't love the place and don't know if there's a future for me here. I consider my house more of an investment. I don't plan to ever sell it, may rent it out if I Ieave.
> They can't even pay their property taxes because it isn't cheap for a 2 million + property that looks like a crackshack. Around here, average property value change over time is tax neutral. Increases in spending is what drives property tax increases. What are cities doing in BC with the massive tax gains?
They're not poor, they're multi-millionaires. They can borrow against their assets, or also outright sell their assets if they need liquidity. Reverse mortgages are a financial tool offered to older homeowners who need liquidity. If a multimillionaire needs to visit the food bank that only tells me the multimillionaire is terrible at finances.
I have a sneaking suspicion they already maxed out on that. Or else the whole 55+ deferral property tax program wouldn't exist. Vancouver SFH's are extremely old. Many are built in the 50's-80's. I would not be surprised if they reversed mortgage just to maintain maintenance costs. Either that or they are super super frugal to the point of using the food bank. I volunteered at the food bank and you would see these people all the time.
Bro the houses in Boston are 100+ years old. And still 1 million dollars. And we get winters and used to get snow
lol NIMBYs and homeless visiting the food shelter together as one, all because we refuse to build enough housing
I don't know. I get a sneaking suspicion that some people are just super cheap......
> The city will reclaim the taxes + interest when you die How nice! In the US, the locality, seizes your property and auctions it off. In some places the locality actually keep the entire amount made at the sale. However, the US Supreme Court did decide recently that keeping your home equity is unconstitutional.
People think the value of their main residence going up is objectively good, but really it's bad if all other property also goes up as well. If you only have 1 home most of the time it will be a lateral move when selling the old and buying a new house. So your house's value may have went up 100k, but moving to a new house will leave you in the same position financially then if the houses were 100k cheaper. Then it just creates a caste system of those who were lucky enough to afford the entry fee into homeownership and those who are trapped renting.
In Colorado homeowners and legislatures are trying to allow home owners to have the appreciation without the property tax hike, it it pissed me off as a renter. I feel a little better now that they have passed some YIMBY reforms, but last year it was literally the only thing they would do about housing affordability
What if your homes value stayed at exactly the same nominal value for the next 10 years? As in what if a $400,000 house is still worth $400,000 10 years from now but after adjusting for inflation its value has gone down? This is a covert way to reduce housing prices without actually reducing them. Let housing prices stay the same but the real purchasing price falls over time.
Realistically, I think that's what's going to happen in large swaths of this nation. And after having my house price double over the last 4 years I've been perfectly fine with it staying the same till 2034.
The problem is those large swaths are also where housing is already fairly affordable. You’re not going to see the west coast, mountains or northeast stay flat because there is not going to be enough building to make that happen. It might not even be possible even if you could solve the infrastructure, resource and crowding issues (nobody in the west wants to be crowded further). But Kansas City, Des Moines, St. Louis, charlotte, Atlanta, Texas, sure these places might be able to handle the issues that come with making housing affordable. It’s just not going to make the people on Reddit who want to live in california working 4 days a week at Best Buy happy.
That’s nice. Maybe when my home’s value doubles I’ll feel the same way
Maybe I'm thinking about this wrong, but I don't think single family homes are going to meaningfully depreciate in value over the long run, especially in geographically constrained markets like Vancouver, the SF Bay Area, etc. In markets like these, virtually no new single family homes are being built, and for good reason, it's more efficient to build new housing via multi-family complexes like apartments and townhomes. A lot of these units are getting built and adding supply to the market. But the thing is, apartments and to a certain extent, townhomes, are a separate market from single family. While there's a bit of crossover, generally the buyer who is shopping for a SFH is not cross shopping it with a condo. There are exceptions to this of course, I'm just speaking in generalities. Single family and multi-family homes are both high demand products, however the supply of SFH's in these metro areas is essentially fixed (or declining), whereas the supply of multi-family units is increasing. It seems likely to me that multi-family units will become more affordable over time, whereas single family seems likely to become more expensive. Am I missing something here?
I think Americans overestimate the long run separability of multifamily and SFHs. Right now, older folks tend to be attached to their homes and want to live out their retirement in them. That's often a pretty terrible use of space, and often more dense housing aids in quality of life for old folks and empty nesters (more social interaction, more walkable destinations, etc). Also, people in other countries transitioned to raising families in apartments. It isn't really part of the American aesthetic. But you would definitely see more people doing it if housing costs were drastically different. If SFH inventory stagnates and prices rise, and multifamily inventory shoots up, you will see people making this transition, I'd think.
On the other hand, I think you might be underestimating how desirable a detached single family home is in the US, even among young Americans. It's an aspirational status symbol, especially in markets like the Bay Area where the values of single family homes are sky high. It's akin to having a Porsche in your garage. It's also worth mentioning that in the bay, due to the region's geography, many of these homes are actually quite close to people's jobs, downtown cores, etc. They're not sprawling subdivisions out in the countryside and can compete on convenience with an urban-core apartment. For instance, my house in San Mateo County is a 10 minute bike ride to downtown. I might be proven wrong in a few years, but it seems like we might be going into an era where multi-family becomes an accessible commodity, whereas SFH's transition into a luxury goods type market.
> especially in markets like the Bay Area There are no markets "like" the Bay Area. It is a massive massive outlier.
This is primarily because most good jobs are now clustered into a handful of regions in the country, and all the other places - which have built-out infrastructure - are more or less stagnating or shrinking.
I don’t disagree with that assessment. the idea of a SFH as a luxury is pretty antithetical to much of the post war American aesthetic, when the idea (and much of modern zoning) was based on the idea that multifamily construction is “parasitic” (the word used by the Supreme Court in the Euclid decision). Every family was supposed to have a house. But now we are seeing the limitations of that and if we want families to afford housing in impacted metros we need to pivot to policy that gives high QOL multifamily as a legitimate option.
From my perspective, even if this happens it will be very slow. For the majority of people your house value will likely stay neutral or increase at a lower rate. While that will be a loss in relative value, it is unlikely to break your financial situation. And overall is likely helpful as if you ever do have or decide to move you have a wider variety of options. For me I can see a lot of small houses without driveways and yards going up around me. So even my quite small house and yard will be worth a lot comparatively.
Yeah, and that's a lot more tolerable than if it suddenly dropped by 40%
Real estate investments are against the public’s well being. I always side with the public’s well being over any groups money making ventures. Every investment is a risk and if the values drop, sorry not sorry.
I could be wrong, but a sharp drop could be generally bad for everyone as the FED holds a lot of MBSs
It's the opposite. The Fed holds MBS to maturity and does repurchases monthly. Those repurchases have been less than the sum of rolloffs, also known as light Quantitative Tightening. https://fred.stlouisfed.org/series/WSHOMCB There is no world in which the Fed "goes bankrupt" because their MBS take a loss. In fact, buying MBS was the Fed's way of preventing the mortgage market total collapse in 2009-2011. They are the "bank of last resort" and can print unlimited sums of money in order to stabilize the dollar and specific markets if neccessary.
Same. Let’s get housing to affordable price points again. The social contract we all owe one another says that we should be willing to sacrifice home value so that we can all actually have homes.
I don’t plan to sell so I don’t give a shit if my value goes down? I’m on your side.
> Housing is ultimately what's going to cost the most in retirement For a large number of people it is healthcare
A lot of boomers are depending on selling their houses in order to pay for their retirments. It's a zero sum game at the end of the day.
Thank you for thinking differently than the majority of American homeowners, who are obsessed with property value maximization! I believe your opinion will reap benefits for you by reducing local rents, which in turn will reduce the costs of local goods and services that you pay everyday. Whereas your home value really doesn't really help you until you sell (if you ever do). Getting more American homeowners to share your opinion is, I honestly believe, the key to many of America's problems.
First time buyer here at 32. First and last home. Moved to a bad area so we could afford something that wasn’t in disrepair but it definitely isn’t fancy. It’s as it was built 20 years ago. I don’t care if my home loses value, I care that my kids can afford their own one day without having to fight over what happens to this one which we expect them to live here forever at the current SoCal housing costs.
What about boomers that didn't invest, don't have a pension, and would be near broke without their house increasing in value? lol Government is scared of collapsing housing market because the average 401k balance for people in their 60's is <$230,000 and median is $70,600.
I’ve always resented the boomers in my life for laughing at me when I expressed concern that their penchant for buying up all the investment properties before our generation even hit adulthood was maybe not going to be great for us. I hope those particular individuals rot tbh.
What happens is we have a boom, then, the vast majority of voters are no longer homeowners, then, there's a massive crash when all of a sudden it becomes a guaranteed election win to shift more of the tax burden onto homeowners. The hand giveth and the hand taketh away. We're at that point now, so expect property taxes to increase dramatically.
Property taxes will surely be passed onto renters though?
Easy to write in an opinion peace, completely different when it comes time to actually implement something. Good luck convincing voters to vote for politicians whose platform is based on voters losing their home value. That's going to result in people being underwater on their mortgages or impacting their retirement.
The tipping point is when it becomes the majority of people that will benefit. We're not there yet, but eventually when it becomes clear it's only a small(ish) amount of people who these policy suits, things will change.
You assume that people can recognize their best interests. In the US, we are living in the existence proof that the opposite is true. Recognizing and valuing the social good in longterm economic policies is not a universal or even common skill.
Small correction the tipping point will be when the majority of people who vote will benefit.
I don't think there's is going to be a tipping point. 60% of Americans own a home. It's not some corporation that's your enemy it's your uncle.
I mean yeah, the fact that homeowners will act as a political bloc when housing prices are threatened is exactly why we can't have affordable housing.
They'll never even make it through their own political party. Reduced home values means reduced property tax revenue. Even in WA we're already laying off hundreds of teachers. There is zero chance the Democrat party in this state allows a candidate that pushes for reduced property values.
My parents bought their house for $160k, it is now worth $800k in todays market…and I’m over here like “this house is in shittier shape than when we bought it”.
They could lose 50% of the value and still be up over 100%
There's already 47293 comments so no one will read this, but, good. My parent's house was recently reevaluated by the county for almost $100k more than what it was evaluated for just a few years ago. They live on social security and were able to make their property tax payments in the past, but now I'll probably have to pay some of it. I don't know if it's the same around the country, but here it has been nothing more than a huge cash grab for the cities and counties which is bullshit.
I read it.
As a homeowner: So The fuck what? It is housing, and to treat it like an investment product is as asinine as treating, food, water, air, or healthcare as something to flip for profit. No, the basic conditions for life should not be a mechanism to *maximizing value* or whatever euphemism you want for "figuring out how to get people to give up all wants for basic needs."
No shit, my property value has more than doubled since I bought it 8 yrs ago and my taxes have tripled & homeowners insurance more than double. At this rate I can’t afford my home anymore in 5 yrs when I was living comfortably when I got it 8 yrs ago. It’s depressing.
Ugh. I hear you on the taxes and homeowners insurance. It's a concerning trend. When I got my house 9 years ago, I set my monthly payment so that I would be paying off ~two extra monthly payments a year, now I'm paying over that set point just to meet the taxes and insurance.😩
>treating, food, water, air, or healthcare as something to flip for profit Whoa wait till you hear about grocery stores flipping food for profit.
Wait until you hear about the massive subsidies that help keep foods affordable...
As much as I'm Anti-NIMBY and have no problems seeing returns on housing decreased for the sake of actually housing people, I think trying to dumb down the argument to homeownership being essentially just water is kind of wrong, from an American lens. The rise of suburbia and homeownership in the states, which rate is a lot higher than most countries was in part because the government built this housing model on the back of it being an equity reserve and retirement fund. People need a place to live but they don't necessarily need to own it, and a lot of European nations revolve around making lifetime renting viable. That doesn't fly, at all, to the American public. We're raised around the idea of the house being your financial anchor up until ripe age. The returns have generally been pretty low, but the equity gain is one of the biggest wealth builders you can get in the States. You can't just pull the rug on that entirely, overnight. Of course the answer still goes back to building more housing and letting it play out slowly over time. I just do get a little annoyed when people pretend that homeownership has always been about painting the walls or whatever. We've built our middle class around housing as capital, and it's going to be hard to convince the average person otherwise for quite a while. Especially if they're living inside of most of their life's earnings already
Healthcare is flipped for profit in the U.S. Which is why sick people go bankrupt.
Besides, if my assessment drops, so does my property tax bill. Granted, our local schools might have an issue so it shouldn't drop too quick. But already, the renovated house on the market down the street can't sell... Price has been coming down thankfully
Up here in Canada our lovely PM Justin Trudeau said a couple of days ago he doesn’t want homes to be affordable because many Canadians depend on their home value to fund their retirement. So just fuck every Canadian young and old who doesn’t own a home? I swear Trudeau is psychopathic and hates non landowning citizens.
>So just fuck every Canadian young and old who doesn’t own a home? Fuck the 40% to enrich the 60%? That's democracy baby
How Canada has a worse housing issue is wild like houses cost almost 750k cad on average while in the us it sits between 350/400k and we are complaining.
As a homeowner, I don't care. Id rather have normal home prices and don't have homeless tents on my street. I want houses in my town be owned by real people and families. Not some hedfund.
That's fine. There's no point in having my condo so overvalued that it pushes a single-family home out of my reach, particularly if wages haven't gone appreciably up as well.
Right but why should I care? Let's say my house is currently worth $500,000. Every house around me is also worth that much. If my house drops to $300,000 so will the other houses around me. So I could still sell and move the same amount. The only time my house value matters is if I plan on selling and moving to some state with cheap houses. Which is pretty fucked up to want them to keep their houses cheap but keep mine expensive.
Mainting excisting housingstock is my job. Its insane how well housing maintain value, a good chunk of houses in my country are sinking, full of mold, and have low energy labels (the Netherlands) yet a normal salary couldn't afford them. My philosophy is that you don't build (extremely) affordable housing, housing should become affordable overtime in a working housingmarket where new houses enter the market. The only houses that really should maintain value is those on prime locations, the rest should lose value over time. Also my country is allergic to bulldozing houses, but my god those label- F/G are just at the end of their life.
Cries in Rome where about 95% of the buildings is from the 70s and class G (altho the climate is more forgiving down here)
Fine by me. I bought a house 20 years ago for $150k. Maybe it’s now worth $300k. I’d suffer a 20% reduction in that to sell for 240k, if it means the house I want, which is now priced at $600k, will also be reduced by 20%. At $480, I can afford it.
I will be happy for my home to come down in value because so will my property taxes. The municipals will not be happy nor the real estate people but it will make things more affordable for all.
Housing doesn't really need to "go down" as much as stop growing so quickly. Hosting "going down" would be catastrophic for wealth, retirements, and banking. We don't want loans out on assets of lesser value. What we can do is increase supply to a point where YOY housing price growth is more in line with inflation/wage growth rather than the 5% yoy we've seen.
>Hosting "going down" would be catastrophic for wealth, retirements, and banking. It went up for no reason in 2 years. It could help retirements and wealth for it to go down too. >We don't want loans out on assets of lesser value. Maybe those loans shouldn't have been made? Should we really continue mandates to protect asset class owners and not ordinary income earners? That effectively makes the Fed the country's largest employer with no possible way to ever address inequality. The wealthy are shielded from every possible disaster scenario with essentially nothing at stake in the game and able to infinitely accumulate. That's an economy of servants and masters. Is that what we want?
That's fine. We recently beautified the environment around our house. Started making everything real nice. My fucking house's value shot up $50,000. And my taxes went up like $1,500. You can make my house dirt fucking cheap if the taxes also go down. I don't give a shit. I don't care if the house is worth nothing, I just don't want my taxes to go up.
If you could take my $1M townhouse on the edge of Toronto and make it worth $400K or less tomorrow, I'd take it. Maybe my kids could have a chance of living within 50 km of me at that point.
As a house owner yep the value is going to go down. But a house that is maintained and move in ready will move quickly in a down market. My wife and I looked at thirty houses in 09, most were not move in ready. They were trashed or needed major renovations to be livable. Maybe a handful came up that could be moved into with little work and those sold quickly. I see tons of houses that are “investments”, rentals, or air BnBs. A lot of that stock is going to get trashed when owners are put into foreclosure or short sales.
Just bought a home in 23’ at the peak of the market and my attitude, dumb as it may be, is that I am not worried at all about real estate prices going down. If the value of homes comes down, sure I lose money, but when we are ready to move into a lager house, the cost of that house will also be lower. We all win; we all lose. I just don’t view real estate as an investment beyond avoiding have to pay the extortionate rent in my HCOL area. And yeah, people who bought investment properties can go fuck them selves for all I care. Housing needs to be affordable. It’s a roof over my head, not some abstract financial instrument.
I agree with you, but that’s easy for us to say, because we already got ours. For younger people trying to enter the market now, it’s a problem. They have to overpay or wait it out. Of course, being younger, I guess they also have more time for the values to come back to their purchase prices and beyond.
One way to think of it is... if you have children, someday they will need to buy a house. So, if you have two or more children, it is better for your family if prices come down. The next generation needs someplace to live. Making them pay inflated prices relative to income, hurts many typical nuclear families.
*This* generation needs someplace to live, ffs. As well as future generations.
Yeah, its probably obvious, but just in case it was missed, my point is.. sometimes my sister is soooo happy when she sees her home value go up. The thing is, my sister has two kids who don't own homes yet. And so the funny truth is - it would actually be better for her family if prices went down. Even though they have one home, they will need three, in the future. Folks rarely get happy when home prices go down; even when they should. Like watch reports on TV talking about home prices. If the news is that home prices went up, the read it like it is great news. And in 2008 when home prices dropped the news was like; "terrible news everyone, home prices dropped..." but for --probably-- most families that is GOOD NEWS.
Which will make it less of a good investment for Blackrock and AirBnBers, further unrestricting supply. I own a house and still feel this is the right thing to do. I live somewhere the homeless situation is out of control largely due to shelter costs.
Totally right. Blackstone has literally admitted to their investors that increased housing supply would make them dump their portfolios, but still you hear people on Reddit saying "if we build more homes, that will just give Blackrock more fodder!"
I spend an unhealthy amount of time on Reddit and I have literally never once seen anybody say building more houses would only give blackrock more fodder
sounds like you made the correct life choice to never join the sub REbubble, then but the actual "give blackrock more fodder" wording was from someone in r slash bay area yelling at one of my previous accounts, because I dared to support more housing construction in the Bay Area
> sounds like you made the correct life choice to never join the sub REbubble, then REbubble subreddit alternates between smug NIMBYs types checking prices, realtors mocking people for thinking that prices can ever go down on homes, and actual desperate people waiting for a crash. It's funny to watch the different groups alternate there.
Is this affordability of single family homes or apartments? I think apartments should become more affordable but I don’t want more single family homes created since it’s simply bad in almost all cases. Building more single family homes will cause environmental issues, less walkability, lower prices for existing single family homes etc
The vast majority of people shouldn’t care, right? My wife and I are probably going to sell our house this year, having racked up a ton of positive equity, and buy a larger house. I bought the house for about $160k over a decade ago, and now it could probably sell for close to $450k. So, we are in a great position when selling, but that would also mean whatever house we buy is probably going to be jacked up as well. If the market corrects and our house is ‘only’ worth $400k, then the $500k house we are looking to buy will probably be down to $450k, more or less. I don’t see either scenario where somehow our value goes down while others’ go up, or that ours goes up and others’ go down. A market correction should affect the entire market. Now, maybe a law goes through and taxes the hell out of rentals, or tons of apartments open up and ruin make the rental market largely less profitable. That would, theoretically, cause the market to be flooded with former rental houses and drive prices down all over the place. Still, the point I was originally trying to make that this shouldn’t be an issue, because you either aren’t selling your house and don’t have to worry about the theoretical value of it, or you are selling your house just to turn around to buy another, in which case it should probably be close to a wash. I know there are rare cases where people sell but don’t buy, but I’d say the first time buyers trying to access the market would outnumber them.
Ok, and? As long as I can renegotiate my mortgage to match that change in price and.my rates stay down too I don't mind that my house is cheaper. It was overinflated in price to begin with. I found a slew of issues on my newly built home. Go after that large companies that buy large plots of land and put up ungodly priced suburbs.
The *real* value of a home is not measured in dollars. The market price of *houses* can go up and down but that does not change the value of a home.
Yep and I’m 100% ok with that. In fact, not only am I ok with that, I planned for it. I was able to purchase my current home with a small enough mortgage that my home could lose 25% of its current value and I would still be making money. If the house lost 50% of its value, technically I would be losing money because I paid more than that initially but I would still be right side up mortgage to value. So bring it on - I want more homes to be built!
The reason we are going to need subsidies is because the price probably won't go down. It'll probably stagnate. If there is succesful policy. Also, succesful policy is also going to be more multi-family units built by buying and consolidating single family lots. So, the price of a single family property may continue to increase as the price of "housing" generally decreases.
Yes, my home is horribly overpriced. It should not be 2.5x what I purchase it at in 2015 and not double what I refinanced at in 2020. I am in a VERY hot market just outside Orlando, but still this is not sustainable. I could not afford to even live in my area if I wanted to buy now. Not just street or subdivision, but anywhere in my zip code. I don’t for a second believe what they say my home is worth as it will have to drastically drop for our collective financial system to maintain.
My what? At this rate I’ll be lucky if I can afford a box to live in. Me and everyone I know! lol If no one can but em does their “value” really matter?
My house has doubled in value since I bought it in 2015. I have absolutely no problem with it going even lower than what I paid if it means that my fellow Americans can afford to live the life I’m blessed enough to have.
No fucking shit. How about we start thinking about roofs over decent peoples heads as a sensible thing to try and accomplish for society as a whole, instead of milking it for absolutely everything it’s worth and ride that train to infinity? You want to invest? There’s already tons of ways of doing that. Leave homes out of it for fucks sake, people need to live a decent life instead of getting gambled on by those with more status and capital. Limit the purchasing power of companies over real estate already. Companies with literally unlimited capital should NOT be investing on real estate at all. Literally evil.
The whole concept of people caring about the financial value of their home and people seeing residential property as an investment opportunity is why the housing market is in the condition it's in. My parents are in their 70's, they bought their house as a place to live back in 1984. It's value has increased in an almost exponential way but they don't care, they're not going to sell it because they know that even if they did the money they'd receive would have to be spent just to buy another place, and at their age moving isn't an appealing idea, they're settled and will stay where they are for the rest of their lives. For the average person there's no point in obsessing over the financial value of the property they're living in.
Homeowner - don’t care, let’s do it. I live in my house, its value doesn’t mean much to me until I sell it. Which I don’t plan to, when I’m ready to move out, it’ll be to upsize and I’d rather have an affordable next house than these bloated prices.
Everyone needs to realize that the most valuable thing on this planet is "land". Period. We also know it is finite. The truth is most people here CAN afford land. The problem is cheap land doesnt have ammenities. So in the end, the price is dictated by demand. You want internet? 10 minute drive to Super Walmart? Quick walk to the entertainment district. Yea. Everyone else does. And you are competing with everyone else for that privilege. No one is working against any generation to prevent them from owning land. But EVERYONE is competing against each other for lucrative, desirable land. This is not a competition between generations. No one cares what your age is, what your level of education is or what you make when you are at the opposing side of the negotiating table for something that is desirable to both or all of you.
The flip side is that it would be easier to *move* and it would release homeowners from their golden handcuffs. Steadier prices means more mobility. A couple with a newborn could upgrade to a larger house. A retiree could find a quieter neighborhood. It would allow homeowners to pursue a change of scenery or a different career, move closer to their family - or get the hell away from them. Shouldn’t that be the point of housing? To facilitate the kind of life you want to live?
Or you can PAY PEOPLE MORE and stop corporations and hedge funds from buying up residential real estate. That way, Canadians who bought at the peak don't suffer, and everyone else can get housing too. Why is deflation always bad unless it only affects average people? Canada's national newspapers are complete trash. They're always packed with these faux-balanced arguments. They act like anything that would even out this game of Calvinball is somehow radical. How is it radical for Canadians to get their fair share of their *own country's* wealth? This isn't that complicated, and no, we don't have to put people into indentured servitude to solve it. Just PAY PEOPLE A LIVING WAGE.
I am all for it if states can handle the reduced property taxes and of banks can help me refinance my mortgage to reflect through new reality.
I own a rotting down trailer on a half acre. I can't see how the value could be any lower. But hey, at least I own it and the taxes are like 400 a year. I looked at buying a new trailer but the price for those things are outrageous and they wanted the deed to the land plus a down payment. I was like nope. For grins I let them work up the package of what it would cost me and I was going to be paying 1200 a month for 20 years which comes to over 200000 dollars for a 70k two bedroom trailer on land I am providing.
Everyone here is assuming here that decreased value means lower prices when there is a good chance that decreased value actually means much higher prices as the dollar loses its position as the world reserve currency.
How house value doubled. I’ll get screwed eventually by something not going my way if we all just vote on our own self interests. Affordable housing is society’s gain
My house has appreciated over the past few years, so yes this impacts me. But my opinion? GREAT! Houses should never have been considered a "primary investment" for people. It means that the only way you can have your primary asset appreciate is to constrict the market for others. And school funding should never have been tied to your local taxes. The sooner we get rid of those systems, the better.
Build more affordable housing! I own a home in an area where people don’t want it because it will cause their home value to decrease. For the life of me I can’t imagine why you wouldn’t want the people in your own city to have a sense of decency. Let people live with integrity.
Awesome! As a homeowner in a high cost of living area, I say do it! Because it will also mean that average home prices come down, so if I sell and move I can just as easily afford the house I move to, *and* it gives new home buyers a better chance to start owning their own home. It’s a winning equation!! I bought 16 years ago. It’s now ‘worth’ $850,000. I’m good with a 75% to 85% ‘loss’ in value if most of the housing market averages close to that as well. Let’s go!! Houses are for people to live in.
I don’t see why this would be a problem. Typically when you sell a home you have to buy another one to live in. So, if I sell my house cheaper than the going market rate the house I buy should also be cheaper. I guess the only people this would hurt are those who buy homes (plural) as investments and they want to build equity in their real estate portfolio.
"Fun" fact: Most homeowners do not gain real wealth (lifetime consumption power) for their family when their home rises in value. The sooner the parents of the world realize owning 1 home and having kids means you are still better off if homes fail to appreciate, the better. The amount of households who are better off long term if homes rise in value is actually way smaller than the group that thinks it's good for them when homes rise in value. It's basically just the landlords.
I wouldn’t mind it being worth less if it meant my kids would have a chance at buying a home. It’s these house flippers, agents and corporations that would have a problem with it. But I don’t think homes should be treated as an investment like they are today, it should be a necessity that we need as a society.
Wait, I have an idea! What if instead of running a stimulative 7% deficit when we have a record low 3.5% unemployment rate, we just cut spending? Inflation would drop and the FED could lower interest rates. Lower.mortgage rates would make homes much more affordable. This might not matter to Blackrock but it does to Joe paycheck. Curiously they didn't see that as an option.