Greeaat time to buy a house
May 25, 2021 1:26 PM Subscribe
"It has been hard to convey, through anecdotes or data, how bizarre the U.S. housing market has become. For example, a Bethesda, Maryland homebuyer working with @Redfin included in her written offer a pledge to name her first-born child after the seller. She lost."
Redfin's CEO weighs in on the current housing shitshow market. [SLTT]
To be fair, if I received an offer including a pledge to name the buyer's first-born child after me, I would probably consider the buyer to be sufficiently "out there" as to be a potential risk to closing of the property sale.
That said, agree with the intent of the article. Home ownership is becoming increasingly closed to large sections of the population. Further, another large section of the population has no reasonable way to move, as they would not be able to buy an equivalent property at the same price and/or may not be able to afford property taxes in a new locale at an elevated property valuation.
posted by saeculorum at 1:41 PM on May 25, 2021 [18 favorites]
That said, agree with the intent of the article. Home ownership is becoming increasingly closed to large sections of the population. Further, another large section of the population has no reasonable way to move, as they would not be able to buy an equivalent property at the same price and/or may not be able to afford property taxes in a new locale at an elevated property valuation.
posted by saeculorum at 1:41 PM on May 25, 2021 [18 favorites]
For example, a Bethesda, Maryland homebuyer working with @Redfin included in her written offer a pledge to name her first-born child after the seller.
What kind of fairytale logic is this?? I don't feel like the average seller would find this appealing. Maybe if the home in question's in the desirable Seelie Court area (great schools!)
posted by Emily's Fist at 1:42 PM on May 25, 2021 [56 favorites]
What kind of fairytale logic is this?? I don't feel like the average seller would find this appealing. Maybe if the home in question's in the desirable Seelie Court area (great schools!)
posted by Emily's Fist at 1:42 PM on May 25, 2021 [56 favorites]
And what happens to people who buy now, when the inevitable reset shows them to be deeply underwater? Are we up for more real estate-related bankruptcies?
There's a house that stood unfinished, up the road from me, for most of ten years. It was hastily completed last fall, and it sold immediately. I wonder how much they paid, and whether it will go back to being empty if their loan blows up in their face.
posted by wenestvedt at 1:46 PM on May 25, 2021 [5 favorites]
There's a house that stood unfinished, up the road from me, for most of ten years. It was hastily completed last fall, and it sold immediately. I wonder how much they paid, and whether it will go back to being empty if their loan blows up in their face.
posted by wenestvedt at 1:46 PM on May 25, 2021 [5 favorites]
(Also, the linked thread is super short, but includes some interesting observations. Very worth reading!)
posted by wenestvedt at 1:48 PM on May 25, 2021 [1 favorite]
posted by wenestvedt at 1:48 PM on May 25, 2021 [1 favorite]
And what happens to people who buy now, when the inevitable reset shows them to be deeply underwater? Are we up for more real estate-related bankruptcies?
It actually doesn't matter if the loan is underwater as long as you can still service the loan (i.e., still have your income). The big problem is when a shock takes out both home prices and a big swath of middle-class-and-above jobs. Hopefully we have a few years before the next one of those.
Honestly, the more I think about it, the more I think residential real estate is a sucker's game, a dangerous chimera for those not financially secure. All the energy we're pouring into expanding homeownership ought to be spent building out public rental housing and expanding protections for renters.
posted by praemunire at 1:51 PM on May 25, 2021 [42 favorites]
It actually doesn't matter if the loan is underwater as long as you can still service the loan (i.e., still have your income). The big problem is when a shock takes out both home prices and a big swath of middle-class-and-above jobs. Hopefully we have a few years before the next one of those.
Honestly, the more I think about it, the more I think residential real estate is a sucker's game, a dangerous chimera for those not financially secure. All the energy we're pouring into expanding homeownership ought to be spent building out public rental housing and expanding protections for renters.
posted by praemunire at 1:51 PM on May 25, 2021 [42 favorites]
One of the biggest issues is that the people who buy homes now are not always individuals, and when they are, it is often those looking to become landlords.
posted by constantinescharity at 1:52 PM on May 25, 2021 [63 favorites]
posted by constantinescharity at 1:52 PM on May 25, 2021 [63 favorites]
(Contrary to the thread, though, NYC prices are not up overall. But there are probably some Brooklyn submarkets that are.)
posted by praemunire at 1:52 PM on May 25, 2021
posted by praemunire at 1:52 PM on May 25, 2021
And I thought Bethesda was crazy overpriced in 2003! Every split-level rambler in my neighborhood was being torn down, replaced by McMansions with postage-stamp yards. Now it looks as though some of those ramblers survived and are being converted into 1 bedroom apartments with rent almost as high as what I paid for an entire SFH back then.
posted by RobotVoodooPower at 1:53 PM on May 25, 2021 [1 favorite]
posted by RobotVoodooPower at 1:53 PM on May 25, 2021 [1 favorite]
In 2020, new-construction permits were *down* 13% in DC and New York, 40% in LA, 48% in Chicago, 50% in Seattle, 79% in San Francisco.
But in two of America’s largest cities, inventory has increased, in New York by 28%, in San Francisco by 77%. San Francisco hasn’t had an inventory increase this large since 2008. And still in both markets, prices are increasing.
This should be an 'and' not a 'but'. A generic statement says nothing about the quality of the inventory nor the various price ranges that inventory is available in, considering that SF is among the most expensive cities in the US.
For low-tax states, 4 people move in for every 1 who leaves. For Texas, this ratio is 5:1; for Florida, 7:1. Cites & states have no leverage to raise taxes, after many promised new money for social justice; the federal government will have to fund long-term investments.
What? If 4 people move in for every 1 out, how do cities and states have no leverage? Those states have a lot of leverage. Maybe he means that high tax states have no leverage, but CA just posted a $75billion budget surplus, so they seem to be doing fine with relatively poorer people leaving, which is no surprise for states that fund themselves via property tax and income tax.
posted by The_Vegetables at 1:53 PM on May 25, 2021 [5 favorites]
But in two of America’s largest cities, inventory has increased, in New York by 28%, in San Francisco by 77%. San Francisco hasn’t had an inventory increase this large since 2008. And still in both markets, prices are increasing.
This should be an 'and' not a 'but'. A generic statement says nothing about the quality of the inventory nor the various price ranges that inventory is available in, considering that SF is among the most expensive cities in the US.
For low-tax states, 4 people move in for every 1 who leaves. For Texas, this ratio is 5:1; for Florida, 7:1. Cites & states have no leverage to raise taxes, after many promised new money for social justice; the federal government will have to fund long-term investments.
What? If 4 people move in for every 1 out, how do cities and states have no leverage? Those states have a lot of leverage. Maybe he means that high tax states have no leverage, but CA just posted a $75billion budget surplus, so they seem to be doing fine with relatively poorer people leaving, which is no surprise for states that fund themselves via property tax and income tax.
posted by The_Vegetables at 1:53 PM on May 25, 2021 [5 favorites]
I haven't seen anything going into why inventory is so low. Obviously new build starts are a part of it, but there has to be a ton of people deciding that now is just not the time to sell, and I'm curious about that part.
posted by Jobst at 1:56 PM on May 25, 2021 [2 favorites]
posted by Jobst at 1:56 PM on May 25, 2021 [2 favorites]
The disruption is far-reaching and very sad to see. Our friends started a big remodel and supply prices shot up right after they finished knocking out all the walls and floors. Now their budget is in dire straits and it's looking like they'll need to leave part of the house unfinished before moving in.
Our neighbors were planning to do an expansion on their house and move out this weekend to temporary housing, but construction costs have gone up so much that the construction loan is possibly not big enough anymore. They might sell instead and move out to the burbs to get the space they need.
It's really unfortunate because I don't think anyone expects lumber prices to be tripled forever. It's clearly a temporary supply/demand blip, so only the people who unexpectedly found themselves in this situation are getting screwed over. Those who have the privilege to wait are doing so.
posted by 0xFCAF at 1:58 PM on May 25, 2021 [7 favorites]
Our neighbors were planning to do an expansion on their house and move out this weekend to temporary housing, but construction costs have gone up so much that the construction loan is possibly not big enough anymore. They might sell instead and move out to the burbs to get the space they need.
It's really unfortunate because I don't think anyone expects lumber prices to be tripled forever. It's clearly a temporary supply/demand blip, so only the people who unexpectedly found themselves in this situation are getting screwed over. Those who have the privilege to wait are doing so.
posted by 0xFCAF at 1:58 PM on May 25, 2021 [7 favorites]
I bought my first home in January 2020. I paid (slightly) under market value, that was still a bit of a stretch for me because where I live is famously kind of expensive within the greater metro, but doable. Then Covid happened. Then the real estate boom happened. Then both Google and Apple announced that they were moving to town. The current Zestimate on my house is over 100K more than paid for it fourteen months ago. Which is kind of cool but mostly terrifying because what's happened to my house is happening not just in my little town but all over the greater metro and if I ever have to leave this house I don't know if I'll be able to afford anything else without leaving the area entirely.
posted by thivaia at 2:02 PM on May 25, 2021 [19 favorites]
posted by thivaia at 2:02 PM on May 25, 2021 [19 favorites]
In 2020, new-construction permits were *down* 13% in DC and New York, 40% in LA, 48% in Chicago, 50% in Seattle, 79% in San Francisco.
Chicago at least has a shit ton of extremely affordable quality homes (mansions even). Many vacant too. They are just in less desirable neighborhoods with problems with blight, crime, segregation and disinvestment. There really isn't a need to build to solve Chicago's housing problems. There is a need to care and invest in those neighborhoods and to create jobs for people so they can afford them. Also right now Chicago is in the midst of a pretty big luxury condo tower construction boom. Do skyscraper condos count as 1 new construction permit even when it includes 800+ units?
posted by srboisvert at 2:07 PM on May 25, 2021 [35 favorites]
Chicago at least has a shit ton of extremely affordable quality homes (mansions even). Many vacant too. They are just in less desirable neighborhoods with problems with blight, crime, segregation and disinvestment. There really isn't a need to build to solve Chicago's housing problems. There is a need to care and invest in those neighborhoods and to create jobs for people so they can afford them. Also right now Chicago is in the midst of a pretty big luxury condo tower construction boom. Do skyscraper condos count as 1 new construction permit even when it includes 800+ units?
posted by srboisvert at 2:07 PM on May 25, 2021 [35 favorites]
We started house-hunting in Seattle in July 2019 and didn't land a house until February 2020. Prices were insane. Five offers fell short. Everyone was bidding super fast, waiving finance protection, waiving inspections (jfc who does that!?), all of it. Even we wound up offering a no-fault inspection in the end; I forget the term, but basically saying we wanted to inspect but we didn't expect the seller to fix things, just give us the chance for an informed decision.
The worst was the home my wife loved the most. The agent said, "The sellers are less concerned about the money and more about who moves into the home because gosh, they love this home so much." She and the sellers required offers to be presented in person, making seven different agents do basically a freakin' job interview with a whole song and dance... and then went with the highest bidder, obviously.
As awful as that whole experience was, it kills me to see things have only gotten worse.
There are other demographic groups who don't have the option of just living anywhere in the US. Lots of places are just outright dangerous for people of color, queer people, non-christians, immigrants from non-European countries, etc etc
Quoting because it's worth repeating.
posted by scaryblackdeath at 2:07 PM on May 25, 2021 [17 favorites]
The worst was the home my wife loved the most. The agent said, "The sellers are less concerned about the money and more about who moves into the home because gosh, they love this home so much." She and the sellers required offers to be presented in person, making seven different agents do basically a freakin' job interview with a whole song and dance... and then went with the highest bidder, obviously.
As awful as that whole experience was, it kills me to see things have only gotten worse.
There are other demographic groups who don't have the option of just living anywhere in the US. Lots of places are just outright dangerous for people of color, queer people, non-christians, immigrants from non-European countries, etc etc
Quoting because it's worth repeating.
posted by scaryblackdeath at 2:07 PM on May 25, 2021 [17 favorites]
The current Zestimate on my home (free and clear) is just over 3x what I bought it for 15 years ago. I get texts, calls, and snail mail daily from folks who really, really want to buy my home for CASH! There is no way that I could afford something comparable in town now. But I still engage with some of these callers. I mean, I'm not super attached to this home, and someone makes the right offer, I'll take it. $1M cash for my house, absolutely I'd take it and move to a rural location. (No one has taken me up on that. Yet.)
posted by xedrik at 2:09 PM on May 25, 2021 [6 favorites]
posted by xedrik at 2:09 PM on May 25, 2021 [6 favorites]
Utah has the knock on effect of inward migration and a large population of children that are rapidly aging into home buying ages and want to stay right where they grew up. Prices here are insane and I guess on paper our house is too, but it's not like I can sell it off and move even further away from where I work. I don't envy those in the market right now. It's bonkers. We're at the point where we have more licensed agents than we do houses to sell.
posted by msbutah at 2:11 PM on May 25, 2021 [5 favorites]
posted by msbutah at 2:11 PM on May 25, 2021 [5 favorites]
Also, a thing that kept jumping out at me while we searched in & around Seattle: so, so many homes had recent renovations, and brand new paint, and then within a few minutes you realize that smell isn't paint. It's mold. They renovated and painted over mold instead of, y'know, fixing the mold. And those houses still moved like everything else.
posted by scaryblackdeath at 2:19 PM on May 25, 2021 [26 favorites]
posted by scaryblackdeath at 2:19 PM on May 25, 2021 [26 favorites]
Ugh, I have two friends who want to buy homes right now and I just want to say "RENT, already." One of them wants to buy a home because she has two handicapped/dying relatives she does caregiving for, in a small house where the only bathroom is on the second floor. That situation is very bad and god knows she can't physically pick either relative up or move them up and down the stairs. But she just wants somewhere nice for them to die in, and has said that outright. I know better than to argue with her on that last topic, but I can't help but think if their lifespans are likely to be short--probably within the next two years--hell, you might not even be done buying a house (much less finding the exact right house with 3 bedrooms and first floor only in the Bay Area...oy) by the time that happens. And then you're stuck paying for a house you don't need that much house for. Did I mention she's unemployed/unable to work since she's doing all this caregiving? I don't know shit about housebuying, but even I think this sounds like a long shot on a lot of levels. Something clearly must be done about the toilet situation (I asked, remodeling/installing one is even more unfeasible than house buying due to blah blah circumstances), but this house hunt has been going on for a few years now and it seems like just finding a large apartment on a first floor or a rental might be easier or less excruciating.
But then again, I'm a brat with no family who doesn't want a house of her very own and I know I don't understand the urge to "nest" (as the other friend says she wants). It seems to me like if you absolutely MUST have YOUR OWN HOUSE, it limits a lot of your options for locations as well, since you probably have to live hours away from your job in order to afford the house at all. It just seems like an overwhelming pain in the ass and I'm not even sure if having your own "nest" is worth all of this?
posted by jenfullmoon at 2:21 PM on May 25, 2021 [2 favorites]
But then again, I'm a brat with no family who doesn't want a house of her very own and I know I don't understand the urge to "nest" (as the other friend says she wants). It seems to me like if you absolutely MUST have YOUR OWN HOUSE, it limits a lot of your options for locations as well, since you probably have to live hours away from your job in order to afford the house at all. It just seems like an overwhelming pain in the ass and I'm not even sure if having your own "nest" is worth all of this?
posted by jenfullmoon at 2:21 PM on May 25, 2021 [2 favorites]
There really isn't a need to build to solve Chicago's housing problems. There is a need to care and invest in those neighborhoods and to create jobs for people so they can afford them. Also right now Chicago is in the midst of a pretty big luxury condo tower construction boom. Do skyscraper condos count as 1 new construction permit even when it includes 800+ units?
Isn't it kind of facist to force people to live where they don't want to do so? I mean, yes, in some generalized way, existing property in decent locations should be repaired/improved so that they can be lived in and government funding is a good way to pay for costs that it makes little sense for the private sector to carry, like asbestos, lead, and outdated water, sewage, and electrical systems. But people are have to be free to move where they wish, and pointing out that blighted neighborhoods exist in X location isn't real helpful. Not everyone wants to fix a busted old mansion, and contrary to popular belief, old homes are generally less safe and built more poorly than newer ones.
And to your question, the permits are based on units, so it would be 800 permits.
posted by The_Vegetables at 2:21 PM on May 25, 2021 [6 favorites]
Isn't it kind of facist to force people to live where they don't want to do so? I mean, yes, in some generalized way, existing property in decent locations should be repaired/improved so that they can be lived in and government funding is a good way to pay for costs that it makes little sense for the private sector to carry, like asbestos, lead, and outdated water, sewage, and electrical systems. But people are have to be free to move where they wish, and pointing out that blighted neighborhoods exist in X location isn't real helpful. Not everyone wants to fix a busted old mansion, and contrary to popular belief, old homes are generally less safe and built more poorly than newer ones.
And to your question, the permits are based on units, so it would be 800 permits.
posted by The_Vegetables at 2:21 PM on May 25, 2021 [6 favorites]
If 4 people move in for every 1 out, how do cities and states have no leverage?
Maybe the claim is that low-tax states have no leverage to raise taxes because their new population is selected for low-tax preference?
Seems likely that there are both low and high tax stable strategies. Stable for a couple decades, anyway.
posted by clew at 2:25 PM on May 25, 2021 [1 favorite]
Maybe the claim is that low-tax states have no leverage to raise taxes because their new population is selected for low-tax preference?
Seems likely that there are both low and high tax stable strategies. Stable for a couple decades, anyway.
posted by clew at 2:25 PM on May 25, 2021 [1 favorite]
Isn’t one root of the problem everywhere (I live in Toronto, where residential real estate has basically become the golden idol people worship) that is undergoing these massive price increases that wealth-generation paths of the past (pensions, investments, etc.) have become increasingly closed off to the middle classes, so residential homes have become to be thought of as retirement/inheritance nest eggs/jackpots rather than a place to live in and perhaps sell for a modest profit someday?
posted by The Card Cheat at 2:25 PM on May 25, 2021 [16 favorites]
posted by The Card Cheat at 2:25 PM on May 25, 2021 [16 favorites]
All the energy we're pouring into expanding homeownership ought to be spent building out public rental housing and expanding protections for renters.
Yes, more inexpensive rental housing is needed in the coastal US, and has been all my life. But there's no profit in building it, so doesn't happen. Changing zoning laws to allow more mixed-use would help, but that'll never happen.
posted by Rash at 2:26 PM on May 25, 2021 [4 favorites]
Yes, more inexpensive rental housing is needed in the coastal US, and has been all my life. But there's no profit in building it, so doesn't happen. Changing zoning laws to allow more mixed-use would help, but that'll never happen.
posted by Rash at 2:26 PM on May 25, 2021 [4 favorites]
you realize that smell isn't paint. It's mold. They renovated and painted over mold instead of, y'know, fixing the mold. And those houses still moved like everything else.
posted by scaryblackdeath at 5:19 PM on May 25 [+] [!]
Eponysterical?
posted by any portmanteau in a storm at 2:28 PM on May 25, 2021 [42 favorites]
posted by scaryblackdeath at 5:19 PM on May 25 [+] [!]
Eponysterical?
posted by any portmanteau in a storm at 2:28 PM on May 25, 2021 [42 favorites]
From the thread:"For low-tax states, 4 people move in for every 1 who leaves. For Texas, this ratio is 5:1; for Florida, 7:1. Cites & states have no leverage to raise taxes"
Yes, taxes matter, but the whole freakin' thread is about people moving to places with low-cost housing. And taxes also pay for stuff that people like: People consider the costs (which includes taxes they pay) but also the benefits of the area (such as schools, parks, and other public services, which are supported by those taxes.)
In general, they tend to move to places where the entire package - taxes paid and public goods provided - matches their preferences. I wouldn't be surprised if those people moving to low-tax states look around and decide that they would like a newer school and are willing to pay for it, especially since they are saving so much on housing.
posted by Mr.Know-it-some at 2:37 PM on May 25, 2021 [2 favorites]
Yes, taxes matter, but the whole freakin' thread is about people moving to places with low-cost housing. And taxes also pay for stuff that people like: People consider the costs (which includes taxes they pay) but also the benefits of the area (such as schools, parks, and other public services, which are supported by those taxes.)
In general, they tend to move to places where the entire package - taxes paid and public goods provided - matches their preferences. I wouldn't be surprised if those people moving to low-tax states look around and decide that they would like a newer school and are willing to pay for it, especially since they are saving so much on housing.
posted by Mr.Know-it-some at 2:37 PM on May 25, 2021 [2 favorites]
residential homes have become to be thought of as retirement/inheritance nest eggs/jackpots
Ding ding ding. Almost 1 in 5 Toronto homeowners own more than one home. Have and have nots.
I almost bought a second home a few years back but I hate being a landlord with the fire of 10,000 dying suns so I didn't. Said townhouse was listed at $229k, now worth $700k. Now I am slightly sad although not really. But the only reason I could have was the equity in my current home, which I won on the Gen-X Lotto plan. I have no idea how my kids will afford houses in Toronto.
posted by warriorqueen at 2:39 PM on May 25, 2021 [13 favorites]
Ding ding ding. Almost 1 in 5 Toronto homeowners own more than one home. Have and have nots.
I almost bought a second home a few years back but I hate being a landlord with the fire of 10,000 dying suns so I didn't. Said townhouse was listed at $229k, now worth $700k. Now I am slightly sad although not really. But the only reason I could have was the equity in my current home, which I won on the Gen-X Lotto plan. I have no idea how my kids will afford houses in Toronto.
posted by warriorqueen at 2:39 PM on May 25, 2021 [13 favorites]
Ugh, I have two friends who want to buy homes right now and I just want to say "RENT, already."
There's very little renter protection from what I've experienced. Nothing to stop a landlord from raising rents more or less arbitrarily, to continually neglect maintenance. No incentive for them to improve the home, when they will always find someone else willing to deal with it for more than you're currently paying. Theoretically there are legal avenues to deal with some of these things, but that requires that you have the knowhow, connections, and mental energy and time in the day to chase it down, and then you've got a bitter, vengeful landlord at the end that you want to get away from anyway.
Home ownership is often seen as security, both physical and financial. I could easily afford mortgage payments for what I'm paying in rent, but I don't know if or when I'll ever have enough capital to get a house somewhere I actually want to live.
If I could rent long-term at a reasonable rate and feel pretty sure my landlord wasn't out to screw me over at the first opportunity, I might do that, but that is not a common reality.
posted by curious nu at 2:42 PM on May 25, 2021 [41 favorites]
There's very little renter protection from what I've experienced. Nothing to stop a landlord from raising rents more or less arbitrarily, to continually neglect maintenance. No incentive for them to improve the home, when they will always find someone else willing to deal with it for more than you're currently paying. Theoretically there are legal avenues to deal with some of these things, but that requires that you have the knowhow, connections, and mental energy and time in the day to chase it down, and then you've got a bitter, vengeful landlord at the end that you want to get away from anyway.
Home ownership is often seen as security, both physical and financial. I could easily afford mortgage payments for what I'm paying in rent, but I don't know if or when I'll ever have enough capital to get a house somewhere I actually want to live.
If I could rent long-term at a reasonable rate and feel pretty sure my landlord wasn't out to screw me over at the first opportunity, I might do that, but that is not a common reality.
posted by curious nu at 2:42 PM on May 25, 2021 [41 favorites]
undergoing these massive price increases that wealth-generation paths of the past (pensions, investments, etc.) have become increasingly closed off to the middle classes, so residential homes have become to be thought of as retirement/inheritance nest eggs/jackpots rather than a place to live in and perhaps sell for a modest profit someday?
The interesting thing is that you could have done quite well in the market with the same money. My income has jumped up and down the scale a lot, but I've never had quite enough to pull the trigger on anywhere it would be convenient for me to live in the city. So...those savings (which, note, were made out of a budget including rent) have sat in a simple Vanguard Target Retirement fund all these years (a little futzing on the edges, but that's basically it). Since 2006, my annual net return's been around 10%. Probably if I'd bought in Manhattan I'd have started coming out ahead net of fees about five years ago. But 10% is nothing to sneeze at, especially considering how liquid (and not much more volatile) it is compared to a house. I don't feel bad about this decision at all. Really it's more people already owning houses desperate to keep values up rather than people without homes needing them to "build wealth."
posted by praemunire at 2:45 PM on May 25, 2021 [1 favorite]
The interesting thing is that you could have done quite well in the market with the same money. My income has jumped up and down the scale a lot, but I've never had quite enough to pull the trigger on anywhere it would be convenient for me to live in the city. So...those savings (which, note, were made out of a budget including rent) have sat in a simple Vanguard Target Retirement fund all these years (a little futzing on the edges, but that's basically it). Since 2006, my annual net return's been around 10%. Probably if I'd bought in Manhattan I'd have started coming out ahead net of fees about five years ago. But 10% is nothing to sneeze at, especially considering how liquid (and not much more volatile) it is compared to a house. I don't feel bad about this decision at all. Really it's more people already owning houses desperate to keep values up rather than people without homes needing them to "build wealth."
posted by praemunire at 2:45 PM on May 25, 2021 [1 favorite]
Oh, and here's a new wrinkle for housing: teleworking. Younger people especially have been pushed to smaller and smaller footprints for years, and that was.. kind of tolerable, we tended to want to be out doing things anyway. Now we're all juggling extended - perhaps perpetual - telework, and extra square footage is more valuable than ever. That's just not "well, it'd be nice to have bigger parties" space, that's "I need to separate where I live from where I work in any way possible to stop from completely breaking down" space.
posted by curious nu at 2:46 PM on May 25, 2021 [40 favorites]
posted by curious nu at 2:46 PM on May 25, 2021 [40 favorites]
They renovated and painted over mold instead of, y'know, fixing the mold.
We were lucky and bought in Seattle in 2010. It's interesting of the places that we looked at, a few had black mold and yet were still priced on the high end.
And they could do it because of location. There was a lot of flipping and redevelopment going on, even at the very bottom of the post-crash market.
The house next to what we ended up getting was foreclosed in 2011. Within the year, the lot was razed and turned into two quick-and-shoddy houses of the lego-brick style now seen everywhere (example).
A lot of money is being made — the foreclosure next to us was about $300k, and the two houses ended up selling and reselling for $900k and $1.1M apiece. It's absolutely insane.
posted by They sucked his brains out! at 2:53 PM on May 25, 2021 [2 favorites]
We were lucky and bought in Seattle in 2010. It's interesting of the places that we looked at, a few had black mold and yet were still priced on the high end.
And they could do it because of location. There was a lot of flipping and redevelopment going on, even at the very bottom of the post-crash market.
The house next to what we ended up getting was foreclosed in 2011. Within the year, the lot was razed and turned into two quick-and-shoddy houses of the lego-brick style now seen everywhere (example).
A lot of money is being made — the foreclosure next to us was about $300k, and the two houses ended up selling and reselling for $900k and $1.1M apiece. It's absolutely insane.
posted by They sucked his brains out! at 2:53 PM on May 25, 2021 [2 favorites]
It actually doesn't matter if the loan is underwater as long as you can still service the loan (i.e., still have your income).
It does matter as in states with non-recourse mortgages you can simply walk away from the loan with no penalty. That happened fairly often in California during the '08 downturn. Banks aren't so happy about that.
posted by GuyZero at 2:54 PM on May 25, 2021
It does matter as in states with non-recourse mortgages you can simply walk away from the loan with no penalty. That happened fairly often in California during the '08 downturn. Banks aren't so happy about that.
posted by GuyZero at 2:54 PM on May 25, 2021
Someone I know is in the process of selling their house in order to then buy a new house. They are basically terrified that they won't be able to find a new place within a reasonable budget or timeframe, and although I am pretty sure things will work out for them (two incomes, lots of equity in the current house, etc.) I can understand their stress given the crazy market right now.
posted by Dip Flash at 2:55 PM on May 25, 2021
posted by Dip Flash at 2:55 PM on May 25, 2021
10 of 15: For low-tax states, 4 people move in for every 1 who leaves. For Texas, this ratio is 5:1; for Florida, 7:1. Cites & states have no leverage to raise taxes, after many promised new money for social justice; the federal government will have to fund long-term investments.Hmm. Can anybody figure out what this means? 'cause none of it seems to make any sense as written.
posted by eotvos at 2:56 PM on May 25, 2021 [3 favorites]
For low-tax states, 4 people move in for every 1 who leaves. For Texas, this ratio is 5:1; for Florida, 7:1. Cites & states have no leverage to raise taxes
Interesting that the author calls Texas a low-tax state. A few of its cities have the highest property taxes in the country, and the state of Texas as a whole is one of the top five most expensive places to own a home. I wonder what numbers he is looking at.
posted by They sucked his brains out! at 2:58 PM on May 25, 2021 [4 favorites]
Interesting that the author calls Texas a low-tax state. A few of its cities have the highest property taxes in the country, and the state of Texas as a whole is one of the top five most expensive places to own a home. I wonder what numbers he is looking at.
posted by They sucked his brains out! at 2:58 PM on May 25, 2021 [4 favorites]
I think by "low tax state" it generally means "low state income tax" but as you say, property and sales taxes can make a difference.
If you're sitting on a million dollars of stock options, low state taxes are a big deal. Low state income taxes tend to only benefit high income earners.
posted by GuyZero at 3:00 PM on May 25, 2021 [3 favorites]
If you're sitting on a million dollars of stock options, low state taxes are a big deal. Low state income taxes tend to only benefit high income earners.
posted by GuyZero at 3:00 PM on May 25, 2021 [3 favorites]
There's very little renter protection from what I've experienced. Nothing to stop a landlord from raising rents more or less arbitrarily, to continually neglect maintenance. No incentive for them to improve the home, when they will always find someone else willing to deal with it for more than you're currently paying. Theoretically there are legal avenues to deal with some of these things, but that requires that you have the knowhow, connections, and mental energy and time in the day to chase it down, and then you've got a bitter, vengeful landlord at the end that you want to get away from anyway.
Don't forget ending up on a tenant blacklist so that finding a decent apartment in that same city becomes basically impossible forever more!
To me it seems fundamental that you can't have housing be both a good investment and affordable for most people. On top of this you have cities that add 9 jobs per 1 new unit of housing built -- and many of these jobs are very remunerative. But I really don't see how we get out of this pit we've dug ourselves into because so many people have all their eggs in the residential property values basket.
posted by threementholsandafuneral at 3:02 PM on May 25, 2021 [7 favorites]
I live in a rural area and pay well below market-rate rent because I have an elderly landlady who is okay with this arrangement and I am useful around the place. I keep an eye on the real estate market because you never really know, so I know how it's been up and down over the past decade. I live pretty far from most places (an hour+ from Burlington VT, 2.5 hours from Boston or Montreal) and always thought my town of 4500 people wouldn't gentrify because who would move here? And, under COVID, when we were one of the safer places to live in the US, the answer was A LOT OF PEOPLE. Two MeFite couples moved to within about ten miles of me, from the NY/NJ area. Real estate listings are down to nearly zero. I talked to a realtor pal and he said in the 29 years he's been in real estate he's never not had a listing until the last six months. Now it's one at a time, if that. Broadband isn't great out here but it does exist and a lot of people have decided that the rural life + telework is a good deal. Which, hey, it has been working for me decently. My main concerns are just making sure the new folks understand the amount of community investment that goes into making this town run decently. And, of course, where I'd move if I had to.
posted by jessamyn at 3:06 PM on May 25, 2021 [14 favorites]
posted by jessamyn at 3:06 PM on May 25, 2021 [14 favorites]
I’ve been looking for introductory demographic articles about the post-Boomer transition and found this. TLDR is that it won’t be done until the 2060s(!) and will be patchy until then.
posted by clew at 3:06 PM on May 25, 2021 [2 favorites]
posted by clew at 3:06 PM on May 25, 2021 [2 favorites]
there has to be a ton of people deciding that now is just not the time to sell, and I'm curious about that part.
Low housing inventory is a self-reinforcing problem. I've been wanting to sell my house ever since the divorce, but ended up taking it off the market because there's literally nowhere in the area suitable to move to.
posted by ook at 3:06 PM on May 25, 2021 [4 favorites]
Low housing inventory is a self-reinforcing problem. I've been wanting to sell my house ever since the divorce, but ended up taking it off the market because there's literally nowhere in the area suitable to move to.
posted by ook at 3:06 PM on May 25, 2021 [4 favorites]
It won't stop until middle income public housing happens, like in Singapore, Japan, and Vienna.
The prior art is clear, intervene to take housing out of private markets or it's always a shitshow.
posted by wuwei at 3:09 PM on May 25, 2021 [30 favorites]
The prior art is clear, intervene to take housing out of private markets or it's always a shitshow.
posted by wuwei at 3:09 PM on May 25, 2021 [30 favorites]
One thing that wasn’t mentioned but has been affecting friends of mine attempting to buy houses is that the crazy inflation of value is not reflected by the banks appraisal of the property meaning hey, the bank doesn’t want to lend you asking price for the house. Don’t get me started on appraisals and comps and all that BS. Also it’s now getting common for people to purchase with no contingencies or even inspections. It’s serious crazy times.
posted by misterpatrick at 3:19 PM on May 25, 2021 [7 favorites]
posted by misterpatrick at 3:19 PM on May 25, 2021 [7 favorites]
Interesting that the author calls Texas a low-tax state. A few of its cities have the highest property taxes in the country, and the state of Texas as a whole is one of the top five most expensive places to own a home. I wonder what numbers he is looking at.
I lived in Texas for a long time. I rented. The advantages for people from California coming to Texas are: the houses are way cheaper, and there is no state income tax.
But how, you say, can Texas survive without state income tax? Are they sucking from the teat of the federal government? No. Not at all. In fact, Texas is one of the few states in the south that provides more funds toward the federal coffers than it takes. No dear reader, the answer is: property tax. Property tax that is one of the highest in the nation.
My family has a lot of friends who own houses in Texas. Every year, every single year, it's the same thing: the new year rolls in, the IRS provides these homeowners an estimate of their property taxes, and it's considerably higher than last year. I literally pay less in rent annually than they do, when you figure in property tax.
One Austin suburb in which I used to live just had one of their 30-year-old, half-ass homes sell for A MEELION DOLLARS. Those new owners can expect an estimated 20 grand in property taxes next year. Plus, this just raised the value of every other home in the neighborhood.
That neighborhood, btw, is the same one that had that enormous sinkhole/cave open up under them just a couple of years ago. Imagine paying a million bucks for a house, plus 20k every year in property taxes, for a 30-year-old house that sits on a half-inch of limestone over a giant cave? Absolutely nuts.
posted by nushustu at 3:21 PM on May 25, 2021 [15 favorites]
I lived in Texas for a long time. I rented. The advantages for people from California coming to Texas are: the houses are way cheaper, and there is no state income tax.
But how, you say, can Texas survive without state income tax? Are they sucking from the teat of the federal government? No. Not at all. In fact, Texas is one of the few states in the south that provides more funds toward the federal coffers than it takes. No dear reader, the answer is: property tax. Property tax that is one of the highest in the nation.
My family has a lot of friends who own houses in Texas. Every year, every single year, it's the same thing: the new year rolls in, the IRS provides these homeowners an estimate of their property taxes, and it's considerably higher than last year. I literally pay less in rent annually than they do, when you figure in property tax.
One Austin suburb in which I used to live just had one of their 30-year-old, half-ass homes sell for A MEELION DOLLARS. Those new owners can expect an estimated 20 grand in property taxes next year. Plus, this just raised the value of every other home in the neighborhood.
That neighborhood, btw, is the same one that had that enormous sinkhole/cave open up under them just a couple of years ago. Imagine paying a million bucks for a house, plus 20k every year in property taxes, for a 30-year-old house that sits on a half-inch of limestone over a giant cave? Absolutely nuts.
posted by nushustu at 3:21 PM on May 25, 2021 [15 favorites]
Imagine paying a million bucks for a house, plus 20k every year in property taxes
As a California resident, sure, not that big a shock.
At least they don't have neighbours paying $800 a year in property taxes for the same house.
posted by GuyZero at 3:24 PM on May 25, 2021 [14 favorites]
As a California resident, sure, not that big a shock.
At least they don't have neighbours paying $800 a year in property taxes for the same house.
posted by GuyZero at 3:24 PM on May 25, 2021 [14 favorites]
constantinescharity: One of the biggest issues is that the people who buy homes now are not always individuals, and when they are, it is often those looking to become landlords.
Which reminds me that it wasn't subprime borrowers who defaulted in large numbers after 2008. It was prime borrowers who had taken out second mortgages to buy investment properties.
posted by clawsoon at 3:24 PM on May 25, 2021 [16 favorites]
Which reminds me that it wasn't subprime borrowers who defaulted in large numbers after 2008. It was prime borrowers who had taken out second mortgages to buy investment properties.
posted by clawsoon at 3:24 PM on May 25, 2021 [16 favorites]
One of the biggest issues is that the people who buy homes now are not always individuals, and when they are, it is often those looking to become landlords.
I inadvertently became a landlord in 2012. I had just been offered my new teaching job on the other side of Phoenix, a little over an hour away from my home. Loathing the daily commute, and not interested in spending an hour or more each way in traffic, I decided to sell my house and then rent close to the new job for a few years, and then buy a new house.
At the same time, a colleague at my old job and I were talking and he said his landlord was selling the house they were renting, so they were looking for a new place. They couldn’t afford to buy a place, though, so they were looking to rent. Long story short, my house was perfect for their needs in eleven different ways, so I rented it to them at something like 20% less than the market rate. Basically, enough to cover the mortgage, tax, and maintenance/repairs at the time.
I always respond immediately to any repair call and have made a number of upgrades to the place for their benefit. I’ve never raised the rent, and after they lived there a few years, I even dropped the rent, because they were keeping the house in such good condition, and fixing little things that popped up, that it wasn’t costing me as much as projected.
Zillow now tells me I could rent it out for double what they’re paying, but things are going so smoothly that I have zero interest in doing that. They are renting for half the going rate, and I’m building equity. But over time, they’re situation is getting more and more untenable if they want to buy their own house, because the prices are increasing so much.
Anyway, this year, they have qualified for a program that will help them buy a new place. I’m happy for them, but it will mean figuring out what to do with the house if they do decide to move. I hate to even think about the hassle, but my stepsister has agreed to manage the sale for me.
And that’s my story as an accidental landlord.
posted by darkstar at 3:29 PM on May 25, 2021 [14 favorites]
I inadvertently became a landlord in 2012. I had just been offered my new teaching job on the other side of Phoenix, a little over an hour away from my home. Loathing the daily commute, and not interested in spending an hour or more each way in traffic, I decided to sell my house and then rent close to the new job for a few years, and then buy a new house.
At the same time, a colleague at my old job and I were talking and he said his landlord was selling the house they were renting, so they were looking for a new place. They couldn’t afford to buy a place, though, so they were looking to rent. Long story short, my house was perfect for their needs in eleven different ways, so I rented it to them at something like 20% less than the market rate. Basically, enough to cover the mortgage, tax, and maintenance/repairs at the time.
I always respond immediately to any repair call and have made a number of upgrades to the place for their benefit. I’ve never raised the rent, and after they lived there a few years, I even dropped the rent, because they were keeping the house in such good condition, and fixing little things that popped up, that it wasn’t costing me as much as projected.
Zillow now tells me I could rent it out for double what they’re paying, but things are going so smoothly that I have zero interest in doing that. They are renting for half the going rate, and I’m building equity. But over time, they’re situation is getting more and more untenable if they want to buy their own house, because the prices are increasing so much.
Anyway, this year, they have qualified for a program that will help them buy a new place. I’m happy for them, but it will mean figuring out what to do with the house if they do decide to move. I hate to even think about the hassle, but my stepsister has agreed to manage the sale for me.
And that’s my story as an accidental landlord.
posted by darkstar at 3:29 PM on May 25, 2021 [14 favorites]
nushustu: Interesting that the author calls Texas a low-tax state.
Texas has lower taxes for the rich than California, but higher taxes for middle-income people.
posted by clawsoon at 3:29 PM on May 25, 2021 [15 favorites]
Texas has lower taxes for the rich than California, but higher taxes for middle-income people.
posted by clawsoon at 3:29 PM on May 25, 2021 [15 favorites]
It does matter as in states with non-recourse mortgages you can simply walk away from the loan with no penalty.
That only improves the owner's position.
posted by praemunire at 3:29 PM on May 25, 2021
That only improves the owner's position.
posted by praemunire at 3:29 PM on May 25, 2021
Could an enterprising local government make it illegal to waive inspections during a home purchase?
Buyers putting themselves at risk by offering increasingly desperate perks to the sellers is a collective action problem which could be solved by regulation. But I haven't heard anyone talking about that, so I don't know if it would run afoul of some legal issue or another.
posted by vibratory manner of working at 3:39 PM on May 25, 2021 [8 favorites]
Buyers putting themselves at risk by offering increasingly desperate perks to the sellers is a collective action problem which could be solved by regulation. But I haven't heard anyone talking about that, so I don't know if it would run afoul of some legal issue or another.
posted by vibratory manner of working at 3:39 PM on May 25, 2021 [8 favorites]
It's nuts - and holy fuck do I feel for anyone caught up on the wrong end of this mess. Mrs Inflatablekiwi and I managed to buy our first home about 2 months before Covid was a thing (timing!) after 16 or so years of renting. But rental costs now - christ. I just looked and there was no rentals (outside of single room rentals in a sharing situation) less then $1600 a month in my zipcode (and even those are 1 bedroom basements or small 1 bedroom apartments) and that's now during the "off season" for the ski fields. Granted we are in a nice mountainous part of Utah....but in an area that relies on large numbers of younger, lower waged tourism workers for the ski industry - not sure how that works when they get pushed down to SLC - which is also gone nuts in terms of pricing - and can't get to work because they have to travel an extra 20 miles up a steep canyon in a blizzard.
Off topic side-note: There is probably a front page post to be made at some point about the ski industry and their wages and conditions and the monopoly of Vail and Alterra, as well as the successful recent unionization efforts of the ski patrollers (yay ski patrol, you dynamite waving, avalanche preventing, good bastards!).
posted by inflatablekiwi at 3:42 PM on May 25, 2021 [9 favorites]
Off topic side-note: There is probably a front page post to be made at some point about the ski industry and their wages and conditions and the monopoly of Vail and Alterra, as well as the successful recent unionization efforts of the ski patrollers (yay ski patrol, you dynamite waving, avalanche preventing, good bastards!).
posted by inflatablekiwi at 3:42 PM on May 25, 2021 [9 favorites]
300% price increase in lumber? Does that mean that more forest should be open to logging, or is this the opportunity for alternative building materials?
Let's pretend a linear relationship and 5x population gain means a 5x increase in utilization (cost) of services. Additionally, if this is the driving reason bringing people to your doorstep, then neither the existing inhabitants nor the new transplants are willing to accept the offset in costs. Sales tax is generally insufficient to cover the gap, which puts an increase disproportionate on property tax, which results in the landed looking to cut / diminish services in order to fix their costs. So its a mess.
As far as 2nd mortgages go - yeah. The default rate on second mortgages is an amazing identifying feature of the 2007/08 recession, with the precipice coinciding with the total October collapse (incidentally when one of my kids was born - so technically I missed reading up on the crash as it occurred because of sleep deprivation).
Looking now at the housing stock, it is rotten - not bad, but hollowed out. Boomers downsizing are looking to buy smaller homes before they get put in one are buying against the same stock as new home buyers, which means smaller homes are going way up, and inventory of the mcmansion is increasing, although concealed through the 2nd mortgage process or for homeowners having completed their first mortgage and just getting a new one. Total number of mortgages doesn't factor in whether a customer has purchased a home previously, and new stock is lower than it should be, and is now so geared towards extracting every ounce of wealth from the boomers and transferring to bank shareholders instead of building a sustainable stock of homeowners.
We're in the last days of Rome folks, get your fair share of lead from the drinking water so it feels a little more palatable.
posted by Nanukthedog at 3:50 PM on May 25, 2021 [8 favorites]
Let's pretend a linear relationship and 5x population gain means a 5x increase in utilization (cost) of services. Additionally, if this is the driving reason bringing people to your doorstep, then neither the existing inhabitants nor the new transplants are willing to accept the offset in costs. Sales tax is generally insufficient to cover the gap, which puts an increase disproportionate on property tax, which results in the landed looking to cut / diminish services in order to fix their costs. So its a mess.
As far as 2nd mortgages go - yeah. The default rate on second mortgages is an amazing identifying feature of the 2007/08 recession, with the precipice coinciding with the total October collapse (incidentally when one of my kids was born - so technically I missed reading up on the crash as it occurred because of sleep deprivation).
Looking now at the housing stock, it is rotten - not bad, but hollowed out. Boomers downsizing are looking to buy smaller homes before they get put in one are buying against the same stock as new home buyers, which means smaller homes are going way up, and inventory of the mcmansion is increasing, although concealed through the 2nd mortgage process or for homeowners having completed their first mortgage and just getting a new one. Total number of mortgages doesn't factor in whether a customer has purchased a home previously, and new stock is lower than it should be, and is now so geared towards extracting every ounce of wealth from the boomers and transferring to bank shareholders instead of building a sustainable stock of homeowners.
We're in the last days of Rome folks, get your fair share of lead from the drinking water so it feels a little more palatable.
posted by Nanukthedog at 3:50 PM on May 25, 2021 [8 favorites]
I just want to chime in again (I think I did in the last real estate thread) and say that my rent in downtown St. Paul is going down with my renewal starting next month. St. Paul isn't a boom town, but it's not exactly desolate either. It's a good apartment in a building on the National Register of Historic Buildings.
I don't know what the hell is going on, but I'm happy for now.
posted by paper chromatographologist at 4:00 PM on May 25, 2021 [3 favorites]
I don't know what the hell is going on, but I'm happy for now.
posted by paper chromatographologist at 4:00 PM on May 25, 2021 [3 favorites]
300% price increase in lumber?
I was watching something recently which talked about mills being the choke point. Owners don't want to invest tens or hundreds of millions in equipment in response to what is probably a temporary blip, since they'll paying it off over the next 30 years, not the next 3 years.
posted by clawsoon at 4:02 PM on May 25, 2021 [12 favorites]
I was watching something recently which talked about mills being the choke point. Owners don't want to invest tens or hundreds of millions in equipment in response to what is probably a temporary blip, since they'll paying it off over the next 30 years, not the next 3 years.
posted by clawsoon at 4:02 PM on May 25, 2021 [12 favorites]
I bought a cheap condo in the higher crime area of Gaithersburg (Montgomery Village, near the mall) last Feb. Crime appears to be half the national average and double or triple the richer suburbs. High enough to scare richer people who are looking, low enough that its a solid blue collar neighborhood (sadly not as walkable as it could be).
The condo is half as expensive as something even just a halfmile up the road.
You can find good deals in the less shiny parts of town, just know what you're getting into. Advice not applicable to families with children or planning on them as the schools tend to be not great.
posted by Slackermagee at 4:08 PM on May 25, 2021 [3 favorites]
The condo is half as expensive as something even just a halfmile up the road.
You can find good deals in the less shiny parts of town, just know what you're getting into. Advice not applicable to families with children or planning on them as the schools tend to be not great.
posted by Slackermagee at 4:08 PM on May 25, 2021 [3 favorites]
About two months ago, when demand for Coid vaccine far outstripped supply, a real estate gent friend said he was offered the vaccine by a prospective buyer if he, the agent, would persuade the seller to choose him. The agent did not, by the way.
posted by etaoin at 4:13 PM on May 25, 2021 [3 favorites]
posted by etaoin at 4:13 PM on May 25, 2021 [3 favorites]
We were kinda sorta talking about selling our house and getting something cheaper and smaller maybe a little farther out in the sticks, but after going through the listings, we couldn't find anything we could afford out there. Which is a bit crazy.
posted by freakazoid at 4:20 PM on May 25, 2021 [2 favorites]
posted by freakazoid at 4:20 PM on May 25, 2021 [2 favorites]
And this is the time during which my brother is finishing up his training to start working as a realtor.
posted by EmpressCallipygos at 4:33 PM on May 25, 2021 [1 favorite]
posted by EmpressCallipygos at 4:33 PM on May 25, 2021 [1 favorite]
Real Estate in Canada's hot markets like GTA & GVA are way more insane than in Maryland. Much of Canada's economy is now based upon a rent-seeker hungry-ghost gobbling up the future.
posted by ovvl at 4:41 PM on May 25, 2021 [5 favorites]
posted by ovvl at 4:41 PM on May 25, 2021 [5 favorites]
Yes, property tax in Texas is high, and I’d much rather we had low property taxes and make up the difference with income tax. My income isn’t likely to make a big leap, and if it does, I’ll obviously have more money to pay taxes with. But if my house value goes up, my taxes increase while my income might have stayed the same or dropped. Here I am, same house, same middle-class job, getting squeezed more and more on property taxes while my lifestyle stays the same or diminishes. Quite a system. Sure, it’s nice to see my equity increase, but that’s all theoretical until I sell (not till it’s time for assisted living) whereas that tax bill is very real.
I read once that if you look at the actual numbers, most states have pretty similar tax burdens. If they don’t get you with income tax, they’ll get you with property tax. I know which I prefer.
Renting isn’t much of a solution though. I bought a house last year and in the four years I rented prior to that, my rent increased 17% while my income increased .05%. So…ugh. That’s hard to sustain.
Ah, the American middle class squeeze.
posted by Pater Aletheias at 4:47 PM on May 25, 2021 [14 favorites]
I read once that if you look at the actual numbers, most states have pretty similar tax burdens. If they don’t get you with income tax, they’ll get you with property tax. I know which I prefer.
Renting isn’t much of a solution though. I bought a house last year and in the four years I rented prior to that, my rent increased 17% while my income increased .05%. So…ugh. That’s hard to sustain.
Ah, the American middle class squeeze.
posted by Pater Aletheias at 4:47 PM on May 25, 2021 [14 favorites]
In a lot of areas outside major cities, there just aren't any rentals on the market if you want a house -- just apartments and the occasional tract home located way beyond the interstate. People are excited to buy a house because it means they can actually live in a house.
posted by RobotVoodooPower at 4:56 PM on May 25, 2021 [5 favorites]
posted by RobotVoodooPower at 4:56 PM on May 25, 2021 [5 favorites]
I haven't seen anything going into why inventory is so low. Obviously new build starts are a part of it, but there has to be a ton of people deciding that now is just not the time to sell, and I'm curious about that part.
Probably the uncertainty caused by the pandemic and potential relocations is a big part of it. The Econ 101 answer is that transactions are reduced when uncertainty is high. If you're not sure what, in a year, your income or the price of a house will be, you may be less likely to do anything right now. And even if *you* are confident, then to find a fair deal it's harder to find someone on the other side of the transaction who thinks you are offering a "fair" deal.
posted by mark k at 5:15 PM on May 25, 2021 [1 favorite]
Probably the uncertainty caused by the pandemic and potential relocations is a big part of it. The Econ 101 answer is that transactions are reduced when uncertainty is high. If you're not sure what, in a year, your income or the price of a house will be, you may be less likely to do anything right now. And even if *you* are confident, then to find a fair deal it's harder to find someone on the other side of the transaction who thinks you are offering a "fair" deal.
posted by mark k at 5:15 PM on May 25, 2021 [1 favorite]
Side note: With the increase in remote work, locations that were "safe" from the invading hordes of remote workers due to a lack of high speed / reliable internet now have Starlink from SpaceX as an option.
100+ Mbps from anywhere with an open view of the northern sky. Suddenly that off the grid cabin can be used as a full time remote working location. The list of folks eyeing up those locations just went way up as people no longer have to choose between a good job and living close to the office.
(Yes, it is in beta. Yes, it works better at northern elevations. But even in Colorado which is further south than many realize, we have a few co-workers using it as their primary connection for daily zoom/teams meetings and the stability is much improved over the past 3 months.)
posted by SegFaultCoreDump at 5:27 PM on May 25, 2021 [5 favorites]
100+ Mbps from anywhere with an open view of the northern sky. Suddenly that off the grid cabin can be used as a full time remote working location. The list of folks eyeing up those locations just went way up as people no longer have to choose between a good job and living close to the office.
(Yes, it is in beta. Yes, it works better at northern elevations. But even in Colorado which is further south than many realize, we have a few co-workers using it as their primary connection for daily zoom/teams meetings and the stability is much improved over the past 3 months.)
posted by SegFaultCoreDump at 5:27 PM on May 25, 2021 [5 favorites]
the home-ownership, uh, ship has sailed for me. bad divorce and 2008. anymore I'd just settle for:
- a mortgage interest deduction equivalent for rent.
- all rent payments legally required to count for credit reporting.
i have 15 years of on time monthly rental payments that don't do shit for my mediocre credit score.
posted by j_curiouser at 5:55 PM on May 25, 2021 [35 favorites]
- a mortgage interest deduction equivalent for rent.
- all rent payments legally required to count for credit reporting.
i have 15 years of on time monthly rental payments that don't do shit for my mediocre credit score.
posted by j_curiouser at 5:55 PM on May 25, 2021 [35 favorites]
On the low inventory: I did sell and move last year, but did not think that was a brilliant thing to be doing during a pandemic. If my housing situation had felt stable and sustainable, no interest rate would have tempted me to do it. (I'd have stayed put and renovated the most annoying feature, which I gather a lot of people are doing.) Most people I know who've participated in the housing market lately also had living situations that were untenable somehow.
I've also had several neighbors over the last year who combined households, and rented out their old home rather than selling it. Not what I think of as evil landlords, but those are homes that didn't end up on the market.
posted by mersen at 6:06 PM on May 25, 2021 [1 favorite]
I've also had several neighbors over the last year who combined households, and rented out their old home rather than selling it. Not what I think of as evil landlords, but those are homes that didn't end up on the market.
posted by mersen at 6:06 PM on May 25, 2021 [1 favorite]
The big problem is when a shock takes out both home prices and a big swath of middle-class-and-above jobs. Hopefully we have a few years before the next one of those.
According to historical trends, we have eight to twelve years before the next crisis.
posted by jabah at 6:18 PM on May 25, 2021
According to historical trends, we have eight to twelve years before the next crisis.
posted by jabah at 6:18 PM on May 25, 2021
At some point last year when I realized I was on track to get out of debt and start saving money, I started thinking "well, maybe I could buy a place ..." I am out of debt now and have about $20K in savings but ... yeah, while I plan to move out of the basement I'm renting into something else, I have realized I'm not in any position to buy yet. And I don't think I'm ready or want to anyway (nevermind I can't afford anything around me at this point with the money I have saved and my current salary).
I have seen houses sell so fast lately (and my friend sold his house before it was even officially listed). I think that will even out in the next several months, honestly. I still don't think I'm going to be able to afford anything anytime soon.
(I know there are a lot of landlords that are bad but I don't hate renting in principle. Having a place to live has inherent value and I think that's too often ignored. To be fair, that's too often exploited, but I do find the "renting is throwing money away" narrative tiresome.)
posted by edencosmic at 6:23 PM on May 25, 2021 [2 favorites]
I have seen houses sell so fast lately (and my friend sold his house before it was even officially listed). I think that will even out in the next several months, honestly. I still don't think I'm going to be able to afford anything anytime soon.
(I know there are a lot of landlords that are bad but I don't hate renting in principle. Having a place to live has inherent value and I think that's too often ignored. To be fair, that's too often exploited, but I do find the "renting is throwing money away" narrative tiresome.)
posted by edencosmic at 6:23 PM on May 25, 2021 [2 favorites]
One thing that's unclear from the thread is how much of the housing is grabbed by investors trying to ride the wave. Instead of going through all the bother of putting equity in the house and flipping it, just buy it and do nothing, and appreciate higher than anything else since interest rates are cheap cheap cheap.
Every once in a while it gets mentioned that there are more vacant homes than people who need them, so somebody is sitting on that property. Tax the crap out of multiple homes, something to reduce the inequality. I've seen too many young couples just give up trying to buy a house in this market because they're outgunned by people who can afford tens of thousands in cash over asking price.
posted by fifteen schnitzengruben is my limit at 6:26 PM on May 25, 2021 [17 favorites]
Every once in a while it gets mentioned that there are more vacant homes than people who need them, so somebody is sitting on that property. Tax the crap out of multiple homes, something to reduce the inequality. I've seen too many young couples just give up trying to buy a house in this market because they're outgunned by people who can afford tens of thousands in cash over asking price.
posted by fifteen schnitzengruben is my limit at 6:26 PM on May 25, 2021 [17 favorites]
One thing that's unclear from the thread is how much of the housing is grabbed by investors trying to ride the wave.
This so much. When we moved to Greater Boston we held on to our condo back in CA (Norcal) and rented it out because the plan is to eventually head back there. Without holding on to it we didn't know how the hell we were going to bootstrap back in to the CA property market without having some exposure to it. Our CA condo is three times the price per square foot compared to out here.
And we're a six figure income household. Even with everyone supposedly leaving the Norcal property market is fucking bananas.
posted by Your Childhood Pet Rock at 6:35 PM on May 25, 2021 [2 favorites]
This so much. When we moved to Greater Boston we held on to our condo back in CA (Norcal) and rented it out because the plan is to eventually head back there. Without holding on to it we didn't know how the hell we were going to bootstrap back in to the CA property market without having some exposure to it. Our CA condo is three times the price per square foot compared to out here.
And we're a six figure income household. Even with everyone supposedly leaving the Norcal property market is fucking bananas.
posted by Your Childhood Pet Rock at 6:35 PM on May 25, 2021 [2 favorites]
Laughs from Aotearoa New Zealand, where median house prices in Auckland have gone from three times the average wage in 2001 to eleven times in 2021.
posted by happyinmotion at 6:45 PM on May 25, 2021 [12 favorites]
posted by happyinmotion at 6:45 PM on May 25, 2021 [12 favorites]
People are excited to buy a house because it means they can actually live in a house.
People way overvalue living in a house as opposed to an apartment.
posted by praemunire at 7:01 PM on May 25, 2021 [11 favorites]
People way overvalue living in a house as opposed to an apartment.
posted by praemunire at 7:01 PM on May 25, 2021 [11 favorites]
People way overvalue living in a house as opposed to an apartment.
This. I've had apartments bigger than my house, and we didn't have to fucking mow the apartment. Plus I didn't appreciate that having neighbors on all sides effectively means we had the world's best insulation - our floors are COLD in winter and it's too expensive to heat to a really comfortable level. And I just hate, hate, hate DIY. Every creak and weird sound sends me into an anxiety spiral about what might be broken this time. We wanted a town house or similar, because having a front door is convenient, but the stock was REALLY limited and was unaffordable for the compromises we were willing to make on commute length and proximity to transit. We bought solely to stabilize housing cost over time, and I am glad that we squeaked in right before COVID. But yeah, houses are so, so overrated.
posted by bowtiesarecool at 7:41 PM on May 25, 2021 [5 favorites]
This. I've had apartments bigger than my house, and we didn't have to fucking mow the apartment. Plus I didn't appreciate that having neighbors on all sides effectively means we had the world's best insulation - our floors are COLD in winter and it's too expensive to heat to a really comfortable level. And I just hate, hate, hate DIY. Every creak and weird sound sends me into an anxiety spiral about what might be broken this time. We wanted a town house or similar, because having a front door is convenient, but the stock was REALLY limited and was unaffordable for the compromises we were willing to make on commute length and proximity to transit. We bought solely to stabilize housing cost over time, and I am glad that we squeaked in right before COVID. But yeah, houses are so, so overrated.
posted by bowtiesarecool at 7:41 PM on May 25, 2021 [5 favorites]
Unless you want pets - dogs, especially.
posted by Rash at 7:50 PM on May 25, 2021 [22 favorites]
posted by Rash at 7:50 PM on May 25, 2021 [22 favorites]
I just bought a starter home in Dallas, closed in February. Divorced mom, single income. In a nutshell: my long-term rental (which I absolutely adored) fell apart when a neighbor from hell moved in beneath me in August. I decided I needed a single-family home with outdoor space for the sake of my kid. Thankfully my landlord was beyond accommodating and let us move to a diifferent home he owned on a month-to-month basis while we looked.
I offered on three houses and ended up getting the third one. I’m beyond grateful and stunned that I got the small but generally amazing house that I did. I found a marginal neighborhood that’s currently way beneath the market value of identical setups less than a mile away.
I generally agree with much that’s been said above, the market is scary and something needs to give.
A couple of completely unrelated thoughts:
* I constantly see posts on social media to the tune of “I’m moving to your area, who can recommend neighborhoods within x miles of my office that have good schools?”, which inevitably lead to a laundry list of the usual suburbs or currently overpriced pockets of the city. This really bugs me as Dallas has a very solid public school choice system set up, as does neighboring Arlington. I’m a Chicago expat and found the same to be true there. If we could get away from the idea that we have to choose location to line up with desired schools, things could settle down in a small way, I’d think. (My kiddo goes to a very good lottery school, and we commute an extra 20 minutes each morning after the move).
* I wonder how the covid mortgage moratoriums are influencing supply and demand, and what’s going to happen when they let up more fully. I don’t wish ill will on anyone in this situation, at all—to the contrary—but I don’t see it talked about much in these kinds of threads and do wonder about the coming fallout.
posted by macrowave at 7:53 PM on May 25, 2021 [4 favorites]
I offered on three houses and ended up getting the third one. I’m beyond grateful and stunned that I got the small but generally amazing house that I did. I found a marginal neighborhood that’s currently way beneath the market value of identical setups less than a mile away.
I generally agree with much that’s been said above, the market is scary and something needs to give.
A couple of completely unrelated thoughts:
* I constantly see posts on social media to the tune of “I’m moving to your area, who can recommend neighborhoods within x miles of my office that have good schools?”, which inevitably lead to a laundry list of the usual suburbs or currently overpriced pockets of the city. This really bugs me as Dallas has a very solid public school choice system set up, as does neighboring Arlington. I’m a Chicago expat and found the same to be true there. If we could get away from the idea that we have to choose location to line up with desired schools, things could settle down in a small way, I’d think. (My kiddo goes to a very good lottery school, and we commute an extra 20 minutes each morning after the move).
* I wonder how the covid mortgage moratoriums are influencing supply and demand, and what’s going to happen when they let up more fully. I don’t wish ill will on anyone in this situation, at all—to the contrary—but I don’t see it talked about much in these kinds of threads and do wonder about the coming fallout.
posted by macrowave at 7:53 PM on May 25, 2021 [4 favorites]
Personally, based on past experiences, one of the main appeals of living in a house is minimizing the number of people you share a wall with.
posted by The Card Cheat at 7:54 PM on May 25, 2021 [40 favorites]
posted by The Card Cheat at 7:54 PM on May 25, 2021 [40 favorites]
You guys are saying that what other people value in their own personal living space is wrong?
After just one year of living in a shitty rowhouse with a shitty landlord who couldn't even get the front door lock that had been busted in before we moved in repaired, let alone the dozen other problems we discovered within the first few weeks of living there, that was enough for me. I value privacy and autonomy in my living space, and if I'm going to end up being the one who fixes anything that goes wrong in my living space anyway, I'd rather not pay someone else for the privilege. If other people have different priorities, or have found different living arrangements with better landlords, or don't mind the uncertainty of not knowing whether your landlord might choose not to renew your lease at the end of the year and force you to move, or don't mind moving all that much, or live in a city or country with better tenant protections, or whatever, that's great! Personally I mind those things very much, and I'm willing to sacrifice other things not to have to deal with them. With our society and economy structured as it is, if I have the option not to rent from a landlord, I will take it. People want to buy homes because they want the autonomy and stability that can offer. Not everyone values those things the same, and it's okay for people to have different priorities, but I think it's pretty clearly a problem that our society and economy keep repeatedly screwing everyone in the middle and poorer classes out of opportunities to exit their relationship with the landlord class if they so choose.
posted by biogeo at 8:04 PM on May 25, 2021 [46 favorites]
After just one year of living in a shitty rowhouse with a shitty landlord who couldn't even get the front door lock that had been busted in before we moved in repaired, let alone the dozen other problems we discovered within the first few weeks of living there, that was enough for me. I value privacy and autonomy in my living space, and if I'm going to end up being the one who fixes anything that goes wrong in my living space anyway, I'd rather not pay someone else for the privilege. If other people have different priorities, or have found different living arrangements with better landlords, or don't mind the uncertainty of not knowing whether your landlord might choose not to renew your lease at the end of the year and force you to move, or don't mind moving all that much, or live in a city or country with better tenant protections, or whatever, that's great! Personally I mind those things very much, and I'm willing to sacrifice other things not to have to deal with them. With our society and economy structured as it is, if I have the option not to rent from a landlord, I will take it. People want to buy homes because they want the autonomy and stability that can offer. Not everyone values those things the same, and it's okay for people to have different priorities, but I think it's pretty clearly a problem that our society and economy keep repeatedly screwing everyone in the middle and poorer classes out of opportunities to exit their relationship with the landlord class if they so choose.
posted by biogeo at 8:04 PM on May 25, 2021 [46 favorites]
Laughs from Aotearoa New Zealand
Oh I believe you. The madness is global. Mrs Inflatablekiwi who is here with me in the US was made a trustee of an estate in NZ during the pandemic and had to sell a house in Petone, and then it was agreed with the other trustees, buy a rental property in Lower Hutt to use as the trust’s investment until the beneficiary comes of age. Buying and selling property in NZ, remotely from the US, all by tender, during a pandemic - crazy fucking stressful times. And those house prices in NZ are nuts - I think the trust paid close to $900k NZD / $650k USD for a tidy but ordinary 1400sq foot house on a tiny section in an ok but not great Lower Hutt suburb (only a few moments walk to a train station, but that’s about it - I can feel the winter damp of being near the eastern Hutt hills all the way from Utah). In my head $1m USD buys you a mansion in NZ, but in reality I know it really doesn’t in a lot of the cities.
posted by inflatablekiwi at 8:25 PM on May 25, 2021 [3 favorites]
Oh I believe you. The madness is global. Mrs Inflatablekiwi who is here with me in the US was made a trustee of an estate in NZ during the pandemic and had to sell a house in Petone, and then it was agreed with the other trustees, buy a rental property in Lower Hutt to use as the trust’s investment until the beneficiary comes of age. Buying and selling property in NZ, remotely from the US, all by tender, during a pandemic - crazy fucking stressful times. And those house prices in NZ are nuts - I think the trust paid close to $900k NZD / $650k USD for a tidy but ordinary 1400sq foot house on a tiny section in an ok but not great Lower Hutt suburb (only a few moments walk to a train station, but that’s about it - I can feel the winter damp of being near the eastern Hutt hills all the way from Utah). In my head $1m USD buys you a mansion in NZ, but in reality I know it really doesn’t in a lot of the cities.
posted by inflatablekiwi at 8:25 PM on May 25, 2021 [3 favorites]
Coastal NC is an insane market for the wages. I was lucky - I bought my house in 2011. For $122k. Our HOA president just sold his house - the same model as mine - for $240k. People keep coming here, and they all somehow make a lot more money than people like I do. My freakin taxes doubled and I don’t make any more money than I did in 2011; I actually make less because I only have one job right now instead of 3. My stupid mortgage keeps going up and I want to refi for lower interest rates but I have to finish all of my renovations (I have to paint, tile the floor, and install a new vanity in the guest bath). The other stuff is aesthetic and won’t affect the assessment.
I’m struggling because I just got a new job 40 minutes away. I took a demotion/paycut to get out of a toxic environment (went from $18.54/hr to $13.79/hr) and better health insurance. I am seriously considering selling my house and buying a newly constructed townhouse <10 min from my new job (that is ~600 sqft larger than my current house) with that potential $120k down payment. My mortgage wouldn’t be much different because property taxes and fees would be so much lower in the other area, and my interest rate would be much lower, and my wind and hail coverage might be cheaper because it’s further from the water than my humble abode. But I kind of balk at the idea of a $260k townhouse in Brunswick County; that seems asinine.
I know this is totally first world problems, but no one in my family was ever really in the real estate game; we were all just fortunate enough to buy in the right places at the right time. So I don’t really have any idea what I’m doing. I’m also kind of attached to my house. I was a military kid, and the 10 years I’ve owned my house is the longest I’ve ever had one address by at least a factor of 2 (I think that math is right). I just spent the past few months working on it, getting the interior almost perfect for me.
I just know that if something happened to my house, I couldn’t afford to live anywhere around here anymore. I’d probably have to move to South Carolina and commute.
posted by sara is disenchanted at 8:28 PM on May 25, 2021 [3 favorites]
I’m struggling because I just got a new job 40 minutes away. I took a demotion/paycut to get out of a toxic environment (went from $18.54/hr to $13.79/hr) and better health insurance. I am seriously considering selling my house and buying a newly constructed townhouse <10 min from my new job (that is ~600 sqft larger than my current house) with that potential $120k down payment. My mortgage wouldn’t be much different because property taxes and fees would be so much lower in the other area, and my interest rate would be much lower, and my wind and hail coverage might be cheaper because it’s further from the water than my humble abode. But I kind of balk at the idea of a $260k townhouse in Brunswick County; that seems asinine.
I know this is totally first world problems, but no one in my family was ever really in the real estate game; we were all just fortunate enough to buy in the right places at the right time. So I don’t really have any idea what I’m doing. I’m also kind of attached to my house. I was a military kid, and the 10 years I’ve owned my house is the longest I’ve ever had one address by at least a factor of 2 (I think that math is right). I just spent the past few months working on it, getting the interior almost perfect for me.
I just know that if something happened to my house, I couldn’t afford to live anywhere around here anymore. I’d probably have to move to South Carolina and commute.
posted by sara is disenchanted at 8:28 PM on May 25, 2021 [3 favorites]
Everyone's got their different priorities. Sure, I get annoyed at neighbor noises and having to commit to a lease 9 months before the next lease starts and management can annoy me, but apartments don't seem to have the same kinds of drama that house rentals have, and I don't want to have to get any of this shit fixed for/by myself. About the only reasons I would ever want a house would be to paint the walls as I please and have whatever pets I want. which is kinda dumb since when not in pandemic, I'm only home to sleep, so I don't have pets anyway.
It's an enormous amount of money/work/time to have a house and I'm a loser single lady who doesn't want to do that work and can't ever afford that even if I wanted to, and I especially don't want to live in one of the tiny towns that barely have a grocery store, have a population of 2000 people and are several hours away from my work or anything else I want to do, just to be able to get one. As I recall, that's about the experience of my last friend's house buying: it's a nice house, but there's barely a grocery store and it's hours away from literally anything else you want to do and she can't afford to do anything but be in her house. I can count on one hand the number of times I've seen her since she got her house and it's been several years. Eff that for me, thanks. The house is nice but not THAT great for the level of pain in the assery that comes from living far away, at least to me who did not enjoy living in the boonies growing up.
Mostly I just think that people being absolutely hellbent on HOUSE HOUSE I ONLY WANNA HOUSE may not have that work out great these days, and may need to look into other options that might be less excruciating to get. However, I straight up can't say that to my friends because they'd lose their shit at me if I said anything against the sacredness of house ownership.
posted by jenfullmoon at 8:29 PM on May 25, 2021 [5 favorites]
It's an enormous amount of money/work/time to have a house and I'm a loser single lady who doesn't want to do that work and can't ever afford that even if I wanted to, and I especially don't want to live in one of the tiny towns that barely have a grocery store, have a population of 2000 people and are several hours away from my work or anything else I want to do, just to be able to get one. As I recall, that's about the experience of my last friend's house buying: it's a nice house, but there's barely a grocery store and it's hours away from literally anything else you want to do and she can't afford to do anything but be in her house. I can count on one hand the number of times I've seen her since she got her house and it's been several years. Eff that for me, thanks. The house is nice but not THAT great for the level of pain in the assery that comes from living far away, at least to me who did not enjoy living in the boonies growing up.
Mostly I just think that people being absolutely hellbent on HOUSE HOUSE I ONLY WANNA HOUSE may not have that work out great these days, and may need to look into other options that might be less excruciating to get. However, I straight up can't say that to my friends because they'd lose their shit at me if I said anything against the sacredness of house ownership.
posted by jenfullmoon at 8:29 PM on May 25, 2021 [5 favorites]
You guys are saying that what other people value in their own personal living space is wrong?
No, I'm saying people raised in the immensely wasteful, segregated, and unsustainable American suburbs in the class that regards home-ownership as some kind of basic step to attain adulthood overvalue living in a house (note that I was responding specifically to a person talking about renting a house vs. renting an apartment; rent vs. own is not a matter of apartment vs. house, and I'm not sure why you're confounding them).
Most people would be just fine living in an apartment, either owning or renting.
posted by praemunire at 8:33 PM on May 25, 2021 [11 favorites]
No, I'm saying people raised in the immensely wasteful, segregated, and unsustainable American suburbs in the class that regards home-ownership as some kind of basic step to attain adulthood overvalue living in a house (note that I was responding specifically to a person talking about renting a house vs. renting an apartment; rent vs. own is not a matter of apartment vs. house, and I'm not sure why you're confounding them).
Most people would be just fine living in an apartment, either owning or renting.
posted by praemunire at 8:33 PM on May 25, 2021 [11 favorites]
People want to buy homes because they want the autonomy and stability that can offer.
Yup. Renting is yet another marker of being part of the precariat. You're much more at the mercy of the whims of an uncaring external world. Having a house is, in a real way, the biggest and most effective "social safety net" most Americans can realistically expect to have. Sure you still have a mortgage payment to make, but if you hit financial troubles (or most other sorts of troubles, really), owning a house gives you options, in a way that renting absolutely does not. (If there's one subject that people refuse to discuss - to their detriment IMO - even more than "salaries" - it's just how many folks have mortgage-refinanced themselves out of major financial problems at one point or another. The middle class is a lot more precarious than most folks [especially boomers] think it is, but the illusion persists because they each think they're the only ones on the block who've had to refinance to get out of trouble.)
And therein lies one of the biggest problems with the US housing market. Those houses are the entire safety net for a whole generation of boomers. And it's the bulk of their retirement fund, the nest egg they stashed away to someday leave their kids (assuming they don't need a reverse mortgage to supplement that retirement)....it's all wrapped up in their home equity. If you price all those "extras" into the value of a home, those of us mere mortals who have accepted that life for Millenials-and-under means no safety net at all and are just in the market for you know, a roof over our heads, can't possibly afford a home that has all that priced into it. But housing prices also can't really come down while all those financial benefits/assets are inextricably entangled with them.
posted by mstokes650 at 8:39 PM on May 25, 2021 [33 favorites]
Yup. Renting is yet another marker of being part of the precariat. You're much more at the mercy of the whims of an uncaring external world. Having a house is, in a real way, the biggest and most effective "social safety net" most Americans can realistically expect to have. Sure you still have a mortgage payment to make, but if you hit financial troubles (or most other sorts of troubles, really), owning a house gives you options, in a way that renting absolutely does not. (If there's one subject that people refuse to discuss - to their detriment IMO - even more than "salaries" - it's just how many folks have mortgage-refinanced themselves out of major financial problems at one point or another. The middle class is a lot more precarious than most folks [especially boomers] think it is, but the illusion persists because they each think they're the only ones on the block who've had to refinance to get out of trouble.)
And therein lies one of the biggest problems with the US housing market. Those houses are the entire safety net for a whole generation of boomers. And it's the bulk of their retirement fund, the nest egg they stashed away to someday leave their kids (assuming they don't need a reverse mortgage to supplement that retirement)....it's all wrapped up in their home equity. If you price all those "extras" into the value of a home, those of us mere mortals who have accepted that life for Millenials-and-under means no safety net at all and are just in the market for you know, a roof over our heads, can't possibly afford a home that has all that priced into it. But housing prices also can't really come down while all those financial benefits/assets are inextricably entangled with them.
posted by mstokes650 at 8:39 PM on May 25, 2021 [33 favorites]
I’ve been looking for introductory demographic articles about the post-Boomer transition and found this. TLDR is that it won’t be done until the 2060s(!) and will be patchy until then.
And it doesn't seem to factor in sea-level rise.
posted by paper chromatographologist at 8:40 PM on May 25, 2021 [4 favorites]
And it doesn't seem to factor in sea-level rise.
posted by paper chromatographologist at 8:40 PM on May 25, 2021 [4 favorites]
A huge advantage of buying (even if it's a townhouse or condo) is that it locks in what you pay for housing (other than tax/insurance/etc. increases) as long as you don't get an ARM. In the years before I bought my house, rent in apartments was routinely increasing ~10%/year. The two bedroom apartment I rented in 2012 for $950/month is now $1800/month. And it was a modestly nice apartment in a relatively good neighborhood, not a luxury unit or location. Even when I lived there, it was apparent that the county imported most of the working class people because they couldn't afford to live there. The grocery store nearby paid $8/hour with no benefits.
I bought in a nearby but less expensive area in 2014. My total monthly cost has gone up a total of ~$100/month since then (to just over $1100/month), entirely due to insurance rates going up. The two bedroom small apartments I looked at near my current home as a comparison point have gone from $1600/month to $2200/month during that time.
The 2-3% cost of living adjustments that people get (if they're lucky) don't cover rent alone jumping $100/month every year. So if you can afford to do so (mostly contingent on the ability to make the down payment), it makes sense to lock in a rate, unless you're convinced the bubble is going to pop or you plan on moving relatively soon.
And with the current market, even if you plan on moving fairly soon, it still makes sense. A buddy bought a place just under two years ago a few miles from me and unexpectedly had to relocate for a new job. He sold it for a $60K (~30%) profit. Even after all the costs of buying and selling and the taxes on the profit, it probably means that he effectively lived there for free for two years (or made a small profit) compared to renting something smaller for $24K/year.
posted by Candleman at 9:13 PM on May 25, 2021 [21 favorites]
I bought in a nearby but less expensive area in 2014. My total monthly cost has gone up a total of ~$100/month since then (to just over $1100/month), entirely due to insurance rates going up. The two bedroom small apartments I looked at near my current home as a comparison point have gone from $1600/month to $2200/month during that time.
The 2-3% cost of living adjustments that people get (if they're lucky) don't cover rent alone jumping $100/month every year. So if you can afford to do so (mostly contingent on the ability to make the down payment), it makes sense to lock in a rate, unless you're convinced the bubble is going to pop or you plan on moving relatively soon.
And with the current market, even if you plan on moving fairly soon, it still makes sense. A buddy bought a place just under two years ago a few miles from me and unexpectedly had to relocate for a new job. He sold it for a $60K (~30%) profit. Even after all the costs of buying and selling and the taxes on the profit, it probably means that he effectively lived there for free for two years (or made a small profit) compared to renting something smaller for $24K/year.
posted by Candleman at 9:13 PM on May 25, 2021 [21 favorites]
I haven't seen anything going into why inventory is so low. Obviously new build starts are a part of it, but there has to be a ton of people deciding that now is just not the time to sell, and I'm curious about that part.
Foreclosures are way, way down due to a variety of Covid supports, but those will be sunsetting soon.
posted by notyou at 9:31 PM on May 25, 2021 [2 favorites]
Foreclosures are way, way down due to a variety of Covid supports, but those will be sunsetting soon.
posted by notyou at 9:31 PM on May 25, 2021 [2 favorites]
For certain personality types, owning and maintaining a home are deeply satisfying, and the value put on that isn't blown out of proportion to it's utility. Owning a home has been a very serious net-positive thing for my mental health, given my particular stripe of mental illness and personality type.
Like, replacing massive swaths of plumbing, redoing somewhat complicated wiring, finishing a garage, building an objectively dope-ass-deck and maintaining a garden are things that I've done to my house, and they all make me feel really, really good about myself when I think about them (which is saying something, because I mostly don't feel good about myself, or anything most of the time). Owning a home and knowing how to fix all the things and keep the house-machine running is a deep point of pride. There is a level of self reliance, knowledge and skill that you don't have to cultivate if you own a home, but it makes it a lot cheaper to own a home if you can manage to do complex repair tasks yourself...like, a lot cheaper. There would be no way my wife and I could afford a house if we had to hire out all the labor to maintain it, let alone the labor to improve upon it.
Those skills have also translated into some very serious lovely community connections that I value. I've helped fix neighbors shit for free, lend out weird tools all the time, swap seeds for our gardens. While I had some connections with neighbors while renting, it wasn't until cultivating the skills associated with owning a home that I was able to make really solid connections with my neighbors, some of whom are wildly different from me and I would never connect with socially except that they knew I was the guy who knew something about plumbing and they felt comfortable to ask for help.
And that feels really good. More people should have access to that feeling if they want it. And rent should be cheaper, yes, and renters should have much more security, if you don't.
While a huge part of the housing crisis is clearly policy, I can't shake that part is just lack of creativity. I think about half-a-house as a way to provide cheaper starting housing alot. I also think about what could make tiny-home communities viable. Tiny homes themselves never seem that appealing, but would I like living in a tiny home if I didn't need a kitchen because the community had a nice, clean, maintained food/meeting-hall attached to it? One thing that Always strikes me when I watch a documentary about a cult-with-a-compound is how fucking dope the compound is just as a functional way of life. Multi-family housing (sometimes multi-generational, but not necessarily) housing should be made easier! We should be more creative about this!
posted by furnace.heart at 9:51 PM on May 25, 2021 [29 favorites]
Like, replacing massive swaths of plumbing, redoing somewhat complicated wiring, finishing a garage, building an objectively dope-ass-deck and maintaining a garden are things that I've done to my house, and they all make me feel really, really good about myself when I think about them (which is saying something, because I mostly don't feel good about myself, or anything most of the time). Owning a home and knowing how to fix all the things and keep the house-machine running is a deep point of pride. There is a level of self reliance, knowledge and skill that you don't have to cultivate if you own a home, but it makes it a lot cheaper to own a home if you can manage to do complex repair tasks yourself...like, a lot cheaper. There would be no way my wife and I could afford a house if we had to hire out all the labor to maintain it, let alone the labor to improve upon it.
Those skills have also translated into some very serious lovely community connections that I value. I've helped fix neighbors shit for free, lend out weird tools all the time, swap seeds for our gardens. While I had some connections with neighbors while renting, it wasn't until cultivating the skills associated with owning a home that I was able to make really solid connections with my neighbors, some of whom are wildly different from me and I would never connect with socially except that they knew I was the guy who knew something about plumbing and they felt comfortable to ask for help.
And that feels really good. More people should have access to that feeling if they want it. And rent should be cheaper, yes, and renters should have much more security, if you don't.
While a huge part of the housing crisis is clearly policy, I can't shake that part is just lack of creativity. I think about half-a-house as a way to provide cheaper starting housing alot. I also think about what could make tiny-home communities viable. Tiny homes themselves never seem that appealing, but would I like living in a tiny home if I didn't need a kitchen because the community had a nice, clean, maintained food/meeting-hall attached to it? One thing that Always strikes me when I watch a documentary about a cult-with-a-compound is how fucking dope the compound is just as a functional way of life. Multi-family housing (sometimes multi-generational, but not necessarily) housing should be made easier! We should be more creative about this!
posted by furnace.heart at 9:51 PM on May 25, 2021 [29 favorites]
In the years before I bought my house, rent in apartments was routinely increasing ~10%/year.
Yeah, this is what's had me itchy to try to find a townhouse or something (naturally right as the market explodes even further).
9.5% yearly increases (because at 10% they'd have to give you more notice, naturally) across a decade with only a pandemic showing the mildest of speedbumps adds up pretty quick, y'know?
I'm not *extremely* set on ownership, but I'd like to not have to make the yearly calculation of "Ok, with the cost of moving being X, how much further out would I need to move, and at some point that means adding a car to the mix at Y, and I don't want to do that, but..."
posted by CrystalDave at 10:20 PM on May 25, 2021 [4 favorites]
Yeah, this is what's had me itchy to try to find a townhouse or something (naturally right as the market explodes even further).
9.5% yearly increases (because at 10% they'd have to give you more notice, naturally) across a decade with only a pandemic showing the mildest of speedbumps adds up pretty quick, y'know?
I'm not *extremely* set on ownership, but I'd like to not have to make the yearly calculation of "Ok, with the cost of moving being X, how much further out would I need to move, and at some point that means adding a car to the mix at Y, and I don't want to do that, but..."
posted by CrystalDave at 10:20 PM on May 25, 2021 [4 favorites]
In the years before I bought my house, rent in apartments was routinely increasing ~10%/year.
Right; the place I live in now, as a stably-employed and decently-paid worker with savings, is no nicer (and indeed, rather worse in some regards) than the studio I lived in right out of college, and costs fully $400 more per month. I have to keep moving to the apartments I can afford, which means my housing gets worse and worse with each passing move, as my income does not generally increase by 10% per year. I'd like to buy a place before I have to live in a fucking refrigerator box for $1400 a month please.
posted by We put our faith in Blast Hardcheese at 10:27 PM on May 25, 2021 [12 favorites]
Right; the place I live in now, as a stably-employed and decently-paid worker with savings, is no nicer (and indeed, rather worse in some regards) than the studio I lived in right out of college, and costs fully $400 more per month. I have to keep moving to the apartments I can afford, which means my housing gets worse and worse with each passing move, as my income does not generally increase by 10% per year. I'd like to buy a place before I have to live in a fucking refrigerator box for $1400 a month please.
posted by We put our faith in Blast Hardcheese at 10:27 PM on May 25, 2021 [12 favorites]
I've been saving for a down payment for the last few years and finally started looking for places right when COVID hit, so I stopped and figured I'd wait it out a few months. Didn't expect things to last for over a year. Finally started looking anyways and the market in SoCal went completely insane. I made an offer on a condo in December that sold to someone else for $20k over asking. Another condo with the same floor plan that's actually a little crappier than the one I missed out on just listed for $70k more than the December sale and will probably sell within a week. How is this sustainable? Who the hell can afford all of this? I'm in a duel income family with only 1-kid. We both make good money, and it all seems so completely out of reach. If there's not a correction soon I guess I'll just make peace with renting forever and hope my landlord doesn't screw me on the lease renewal.
posted by Arbac at 10:28 PM on May 25, 2021 [2 favorites]
posted by Arbac at 10:28 PM on May 25, 2021 [2 favorites]
We should be more creative about this!
If you haven't already, look into Intentional Communities. There's a variety of models that integrate various levels of communal living with private property.
posted by Candleman at 10:30 PM on May 25, 2021 [1 favorite]
If you haven't already, look into Intentional Communities. There's a variety of models that integrate various levels of communal living with private property.
posted by Candleman at 10:30 PM on May 25, 2021 [1 favorite]
And for what it's worth, rents in my area have actually been fairly depressed during the pandemic--possibly because people fled for the burbs or snapped up condos before the explosion, or possibly because remote work and universities meant people didn't actually have to move here at all. So I know people who are managing to expand their rental space or up their quality of life when they previously could not; however, next year or the year after, when things bounce back--they are likely to be kicked out and back to square one. Most are just crossing their fingers and counting on that rent increase cap...
posted by We put our faith in Blast Hardcheese at 11:07 PM on May 25, 2021
posted by We put our faith in Blast Hardcheese at 11:07 PM on May 25, 2021
People way overvalue living in a house as opposed to an apartment.
This. I've had apartments bigger than my house, and we didn't have to fucking mow the apartment.
Or take out a loan to have the dishwasher replaced or deal with leaky roof stuff. (I know that I would not be good at doing "home maintenance" stuff on my own).
There are times I wish I'd bought a house back when housing prices were way down between dotcom bubbles, but then I hear a House Horror Story from one of my friends and realize that I'm okay with renting for now. (Having a fairly responsive landlord and actually having a good deal on rent from living here for so long helps as well).
posted by gtrwolf at 12:14 AM on May 26, 2021 [4 favorites]
This. I've had apartments bigger than my house, and we didn't have to fucking mow the apartment.
Or take out a loan to have the dishwasher replaced or deal with leaky roof stuff. (I know that I would not be good at doing "home maintenance" stuff on my own).
There are times I wish I'd bought a house back when housing prices were way down between dotcom bubbles, but then I hear a House Horror Story from one of my friends and realize that I'm okay with renting for now. (Having a fairly responsive landlord and actually having a good deal on rent from living here for so long helps as well).
posted by gtrwolf at 12:14 AM on May 26, 2021 [4 favorites]
“I’m moving to your area, who can recommend neighborhoods within x miles of my office that have good schools?”, which inevitably lead to a laundry list of the usual suburbs or currently overpriced pockets of the city. This really bugs me as Dallas has a very solid public school choice system set up, as does neighboring Arlington.
Maybe, but for it's size (400k in population, only 12 state capitols are larger), Arlington TX is one of the worst cities in the US, so it's no surprise that people who can afford other places don't want to live there. Largest city in the US with no public transportation? Yes. All the city tax money (tax rate also higher than the surrounding communities) goes for stadiums and highways to get out-of-towners to the stadiums? Yes. A surprisingly high crime rate? Yes.
posted by The_Vegetables at 2:37 AM on May 26, 2021 [1 favorite]
Maybe, but for it's size (400k in population, only 12 state capitols are larger), Arlington TX is one of the worst cities in the US, so it's no surprise that people who can afford other places don't want to live there. Largest city in the US with no public transportation? Yes. All the city tax money (tax rate also higher than the surrounding communities) goes for stadiums and highways to get out-of-towners to the stadiums? Yes. A surprisingly high crime rate? Yes.
posted by The_Vegetables at 2:37 AM on May 26, 2021 [1 favorite]
My wife and I are extraordinarily fortunate in that we'll have been renting the same Toronto townhouse for twenty years as of this June 1st, and over that time our landlord has only raised our monthly rent a grand total of $90 (or an average of $4.50 a year). We're a bit unfortunate in the sense that we live in Toronto, though, so if and when we ever have to move our housing cost of living will double or maybe even triple if we want to maintain something akin to our current standard of living, even if we continue to rent.
posted by The Card Cheat at 4:59 AM on May 26, 2021 [2 favorites]
posted by The Card Cheat at 4:59 AM on May 26, 2021 [2 favorites]
In general, they tend to move to places where the entire package - taxes paid and public goods provided - matches their preferences. I wouldn't be surprised if those people moving to low-tax states look around and decide that they would like a newer school and are willing to pay for it, especially since they are saving so much on housing.
Which is to say, they want to change the preferences (and the tax burdens) of the people who already live there. Aka Gentrification. Which has its pluses and minuses.
Rent v own. We all rent, whether from the land lord, the bank, or the government.
posted by BWA at 5:04 AM on May 26, 2021 [2 favorites]
Which is to say, they want to change the preferences (and the tax burdens) of the people who already live there. Aka Gentrification. Which has its pluses and minuses.
Rent v own. We all rent, whether from the land lord, the bank, or the government.
posted by BWA at 5:04 AM on May 26, 2021 [2 favorites]
This is not true in my experience, and I get around.
My brother tells me that the area around Portland, ME feels much more welcoming and accepting to trans and nonbinary people than the places in Florida, Georgia and Alabama he's lived. Not to say his previous locations were necessarily dangerous per se, but it's amazing how much weight can come off your shoulders when it doesn't feel like you're in hostile territory.
Anyway, I'm very glad we got a great, cheap deal on a neat little house in a quiet neighborhood in a St. Louis suburb that is not currently overrun with gun violence (although its COVID statistics currently are relatively not good).
The supposed value of our home has slowly been increasing since 2014, but it went up by $10K in the past year and another $10K in the past month. Which seems insane, because it was only $98K when we bought it. Anyway, I'm pretty sick of the unceasing stream of "we will buy your home for CA$H!" texts and calls, because even if we wanted to sell, there's not really anyplace we could go.
posted by Foosnark at 5:12 AM on May 26, 2021 [5 favorites]
My brother tells me that the area around Portland, ME feels much more welcoming and accepting to trans and nonbinary people than the places in Florida, Georgia and Alabama he's lived. Not to say his previous locations were necessarily dangerous per se, but it's amazing how much weight can come off your shoulders when it doesn't feel like you're in hostile territory.
Anyway, I'm very glad we got a great, cheap deal on a neat little house in a quiet neighborhood in a St. Louis suburb that is not currently overrun with gun violence (although its COVID statistics currently are relatively not good).
The supposed value of our home has slowly been increasing since 2014, but it went up by $10K in the past year and another $10K in the past month. Which seems insane, because it was only $98K when we bought it. Anyway, I'm pretty sick of the unceasing stream of "we will buy your home for CA$H!" texts and calls, because even if we wanted to sell, there's not really anyplace we could go.
posted by Foosnark at 5:12 AM on May 26, 2021 [5 favorites]
Mod note: One deleted; please refer to the site guidelines.
posted by taz (staff) at 5:26 AM on May 26, 2021
posted by taz (staff) at 5:26 AM on May 26, 2021
300% price increase in lumber?
My best friend decided this was the summer to finally, after ages, build the deck on the back of his house. He started the process, preparing the area, then he went to the lumber yard to price materials. He was shocked by the jump in prices, and this is a guy who is pretty regularly doing some kind of construction/remodeling in his home. Yeah, triple sounds about right. Crazy.
posted by Thorzdad at 5:28 AM on May 26, 2021
My best friend decided this was the summer to finally, after ages, build the deck on the back of his house. He started the process, preparing the area, then he went to the lumber yard to price materials. He was shocked by the jump in prices, and this is a guy who is pretty regularly doing some kind of construction/remodeling in his home. Yeah, triple sounds about right. Crazy.
posted by Thorzdad at 5:28 AM on May 26, 2021
My best friend decided this was the summer to finally, after ages, build the deck on the back of his house. He started the process, preparing the area, then he went to the lumber yard to price materials. He was shocked by the jump in prices, and this is a guy who is pretty regularly doing some kind of construction/remodeling in his home. Yeah, triple sounds about right. Crazy.
I've got a railing and bench to fix and I priced it last year...why did I NOT DO IT GRR. It really is more than triple.
posted by warriorqueen at 5:32 AM on May 26, 2021 [2 favorites]
I've got a railing and bench to fix and I priced it last year...why did I NOT DO IT GRR. It really is more than triple.
posted by warriorqueen at 5:32 AM on May 26, 2021 [2 favorites]
I live in St Petersburg and the 7-1 ratio of people moving to Florida is what concerns me. It hit me yesterday that I’ve seen more California and Washington license plates on the road than any time in my life. Our infrastructure is already at the limit. The public schools are terrible, pay is low across the board, roads and bridges are crumbling, no public transportation, etc. State republicans like our Governor DeSantis have pulled an epic bait and switch touting low taxes and no regulation.
It will take years for the newly arrived Millennials and Get Z's to realize they live in a dystopia by the sea and then there will be a reckoning. What that will look like when Florida Republicans have totally consolidated power for generations is a little scary.
posted by photoslob at 6:00 AM on May 26, 2021 [3 favorites]
It will take years for the newly arrived Millennials and Get Z's to realize they live in a dystopia by the sea and then there will be a reckoning. What that will look like when Florida Republicans have totally consolidated power for generations is a little scary.
posted by photoslob at 6:00 AM on May 26, 2021 [3 favorites]
As a 40 year old with no degree and a lifetime of chronic health problems, home ownership seems like such an utterly baffling, alien concept that I don't even include myself in any discussions about it amongst my friends. I'm pretty much at the point of, "well, I hope my parents leave me enough to survive on plus whatever crappy job I can scrape up."
Or, you know, Logan's Run or Soylent green are options.
posted by Jacen at 6:41 AM on May 26, 2021 [8 favorites]
Or, you know, Logan's Run or Soylent green are options.
posted by Jacen at 6:41 AM on May 26, 2021 [8 favorites]
300% price increase in lumber?
Here in New England, I had my siding done over the winter, and the guy came back to hang the shutters last week. He said a 2"x4" board that should cost $2.50 now costs nine dollars. He has quoted jobs to customers, but every day the distributor has new prices for the wood -- and they admit they will be charging him market rates whenever they deliver it -- "It's like buying lobster!" he yelled.
He also added that there's no problems with supply, only with price. In other words, supply and demand have become disconnected.
Someone here in town poured the slab for a small building last summer, because they had to cancel a vacation and reoriented toward enjoying their home. Now that winter has ended, they are ready to build. The cost was quoted as $30k then, and now the builder says it will be $100k. WHAT THE HELL. No heating or A/C out there, just a small bathroom at one end, lights, a couple of interior walls, and the shell.
posted by wenestvedt at 6:51 AM on May 26, 2021 [6 favorites]
Here in New England, I had my siding done over the winter, and the guy came back to hang the shutters last week. He said a 2"x4" board that should cost $2.50 now costs nine dollars. He has quoted jobs to customers, but every day the distributor has new prices for the wood -- and they admit they will be charging him market rates whenever they deliver it -- "It's like buying lobster!" he yelled.
He also added that there's no problems with supply, only with price. In other words, supply and demand have become disconnected.
Someone here in town poured the slab for a small building last summer, because they had to cancel a vacation and reoriented toward enjoying their home. Now that winter has ended, they are ready to build. The cost was quoted as $30k then, and now the builder says it will be $100k. WHAT THE HELL. No heating or A/C out there, just a small bathroom at one end, lights, a couple of interior walls, and the shell.
posted by wenestvedt at 6:51 AM on May 26, 2021 [6 favorites]
notyou: Foreclosures are way, way down due to a variety of Covid supports, but those will be sunsetting soon.
I find that absolutely chilling.
posted by wenestvedt at 6:53 AM on May 26, 2021 [5 favorites]
I find that absolutely chilling.
posted by wenestvedt at 6:53 AM on May 26, 2021 [5 favorites]
> It will take years for the newly arrived Millennials and Get Z's to realize they live in a dystopia by the sea and then there will be a reckoning. What that will look like when Florida Republicans have totally consolidated power for generations is a little scary.
Somewhere out there, P.T. Barnum chuckles and lights a cigar.
posted by The Card Cheat at 6:59 AM on May 26, 2021
Somewhere out there, P.T. Barnum chuckles and lights a cigar.
posted by The Card Cheat at 6:59 AM on May 26, 2021
We bought our house in June 2007, and declined the credit union's offer of an ARM for a quarter of a percent less on the interest rate. I was so glad we did when the housing bubble burst 6 months later. We refinanced twice to get better rates and are down to about half of the original rate anyway.
We live 80 miles away from my folks, and I have been watching the real estate market in their area (Durham, NC) for a couple of years. The prices have gone berserk over the past year. A little shoebox in a crappy neighborhood is now $350K. I guess I'll keep playing the lottery.
posted by corvikate at 7:02 AM on May 26, 2021 [2 favorites]
We live 80 miles away from my folks, and I have been watching the real estate market in their area (Durham, NC) for a couple of years. The prices have gone berserk over the past year. A little shoebox in a crappy neighborhood is now $350K. I guess I'll keep playing the lottery.
posted by corvikate at 7:02 AM on May 26, 2021 [2 favorites]
Our Lowe's here has moved to the digital update-in-real-time pricetags on their lumber to accommodate these quick price increases; this weekend it was almost $11 for an 8 foot 2x4. I see news articles saying it's on the downslide again but I'm not seeing it.
posted by AzraelBrown at 7:37 AM on May 26, 2021 [1 favorite]
posted by AzraelBrown at 7:37 AM on May 26, 2021 [1 favorite]
i feel ya jacen. my retirement plan is "somebody else's couch".
posted by j_curiouser at 7:42 AM on May 26, 2021 [5 favorites]
posted by j_curiouser at 7:42 AM on May 26, 2021 [5 favorites]
He also added that there's no problems with supply, only with price. In other words, supply and demand have become disconnected.
So that's not really how "supply" and "demand" relate. The whole point of the relationship is that rising prices mean suppliers can produce more. Not that prices should be low until shelves are empty. In economic terms this misunderstanding is the same misunderstanding as restaurant owners who say "no one wants to work", but don't want to raise wages.
An example of the disconnect would in fact be when the shelves empty out--it means you sold things much cheaper than you could have.
posted by mark k at 9:02 AM on May 26, 2021 [2 favorites]
So that's not really how "supply" and "demand" relate. The whole point of the relationship is that rising prices mean suppliers can produce more. Not that prices should be low until shelves are empty. In economic terms this misunderstanding is the same misunderstanding as restaurant owners who say "no one wants to work", but don't want to raise wages.
An example of the disconnect would in fact be when the shelves empty out--it means you sold things much cheaper than you could have.
posted by mark k at 9:02 AM on May 26, 2021 [2 favorites]
TBH, the discourse around supply and demand has gotten a little confusing lately. Is there a material difference between the lumber mills/wholesalers and the toilet-paper arbitrageurs who were so roundly vilified last spring for charging what the market would bear? Or is it just that these folks have more clout?
posted by Not A Thing at 9:33 AM on May 26, 2021 [1 favorite]
posted by Not A Thing at 9:33 AM on May 26, 2021 [1 favorite]
Somewhere out there, P.T. Barnum chuckles and lights a cigar.
It's fitting that Barnum's circus winter quarters used to be in Bradenton and the literal historical archive of Ringling is currently housed in a climate controlled warehouse in Palmetto. There's an endless supply of suckers in the sunshine state.
posted by photoslob at 9:41 AM on May 26, 2021 [2 favorites]
It's fitting that Barnum's circus winter quarters used to be in Bradenton and the literal historical archive of Ringling is currently housed in a climate controlled warehouse in Palmetto. There's an endless supply of suckers in the sunshine state.
posted by photoslob at 9:41 AM on May 26, 2021 [2 favorites]
One difference is total toilet paper usage didn't go up. Price spikes were driven by temporary/local shortages, so if you bought a bunch of TP you contributed to the problem, then profited from it. There were other factors, but all of them were types of market failures.
With lumber there's more demand. Lumber mills produce more but also charge more. This is the market working; if they charged less there'd be shortages and instead of "just" price changes. This is, again, speaking in pure Econ 101 terms, but the tradeoff would be that your construction projects would cost less in terms of raw materials but be even more impossible to complete on time because your raw material supply would be interrupted. If you were in a hurry you'd be buying lumber from the equivalent of ticket scalpers and a 300% price increase would look cheap.
posted by mark k at 9:45 AM on May 26, 2021 [1 favorite]
With lumber there's more demand. Lumber mills produce more but also charge more. This is the market working; if they charged less there'd be shortages and instead of "just" price changes. This is, again, speaking in pure Econ 101 terms, but the tradeoff would be that your construction projects would cost less in terms of raw materials but be even more impossible to complete on time because your raw material supply would be interrupted. If you were in a hurry you'd be buying lumber from the equivalent of ticket scalpers and a 300% price increase would look cheap.
posted by mark k at 9:45 AM on May 26, 2021 [1 favorite]
I've been a NYC apartment renter for most of my adult life and have at times considered buying a condo or co-op. It's still attractive to me. There is something to be said for things such as the ability to modify and maintain your living space the way you would like and the fact that your fixed-rate mortgage payments will stay the same while everyone else's rents are going up. There is also, in my observation, a perceivable difference in the overall atmosphere of a renter-occupied building and an owner-occupied building, with the latter being much more desirable. This actually seems like a good time to buy in some of the more desirable dense cities that have remained seller's markets for decades.
posted by slkinsey at 10:01 AM on May 26, 2021 [2 favorites]
posted by slkinsey at 10:01 AM on May 26, 2021 [2 favorites]
We bought our house in a smallish (although big for the state) Midwestern city five years ago. We did it through a housing program called Neighborworks, and bought in a not fantastic but not too seedy neighborhood, and paid 87,000. It's an old house and we are not good at home repair, which means that we've had to hire out some of the things that needed to happen. We need some big things, like a new bathroom, and even regular maintenance like mowing the lawn is a pain in the butt. However, I love having a dog and a and my husband loves playing his guitar loudly and not having to worry about the people above or below you, and most of all I love feeling that I can't get kicked out at random, like what happened to us when our apartment building was sold and we were booted out by the new company.
A friend, who bought a couple of years ago, has made the opposite calculation. She loathes being in a house, hates everything about yardwork and spending money on maintenance and is waiting for her very elderly beagle to die so that she can move into an apartment and leave all the (in her words) home owner bullshit behind her. She feels a bit like she's going backwards, but the depths of her loathing are too much to bear.
What I really need is the confidence to tackle home projects myself. It would make a big difference. Meanwhile, I call the place Casa Lumpy, and am trying to figure out what to do about the mice living in one of my walls.
posted by PussKillian at 10:30 AM on May 26, 2021 [4 favorites]
A friend, who bought a couple of years ago, has made the opposite calculation. She loathes being in a house, hates everything about yardwork and spending money on maintenance and is waiting for her very elderly beagle to die so that she can move into an apartment and leave all the (in her words) home owner bullshit behind her. She feels a bit like she's going backwards, but the depths of her loathing are too much to bear.
What I really need is the confidence to tackle home projects myself. It would make a big difference. Meanwhile, I call the place Casa Lumpy, and am trying to figure out what to do about the mice living in one of my walls.
posted by PussKillian at 10:30 AM on May 26, 2021 [4 favorites]
People way overvalue living in a house as opposed to an apartment.
Maybe if there were better protections for tenants but at least in my state, the laws are so biased towards landlords that I'd never want to be a renter. I've known too many people who got evicted with a month's notice because a new owner bought the building and wants to renovate.
posted by octothorpe at 10:38 AM on May 26, 2021 [4 favorites]
Maybe if there were better protections for tenants but at least in my state, the laws are so biased towards landlords that I'd never want to be a renter. I've known too many people who got evicted with a month's notice because a new owner bought the building and wants to renovate.
posted by octothorpe at 10:38 AM on May 26, 2021 [4 favorites]
My wife and I recently sold our home in a suburb of Seattle. We received multiple ESSAYS from people within 12 hours of listing.
Ten years prior when we bought it, it was a foreclosure that had been on the market for over a year and ours was the first offer on the house in six months. Also, it was the cheapest house for sale in the entire zip code.
The knowledge that there's probably no way we could ever afford to return to that community hurts, but that's the choice we made.
That said, my favorite place I ever lived was a rent controlled top-floor one bedroom in Astoria, Queens, that ruled. Somehow, that place felt more "mine" then the house we actually owned.
posted by Stonestock Relentless at 10:50 AM on May 26, 2021 [2 favorites]
Ten years prior when we bought it, it was a foreclosure that had been on the market for over a year and ours was the first offer on the house in six months. Also, it was the cheapest house for sale in the entire zip code.
The knowledge that there's probably no way we could ever afford to return to that community hurts, but that's the choice we made.
That said, my favorite place I ever lived was a rent controlled top-floor one bedroom in Astoria, Queens, that ruled. Somehow, that place felt more "mine" then the house we actually owned.
posted by Stonestock Relentless at 10:50 AM on May 26, 2021 [2 favorites]
With lumber there's more demand.
TFA states that new home starts are down.
Mind you, remodeling work might be up, but full sheets of plywood are also selling for multiples of what they did last year, and that's used way more often in construction (e.g., as sheathing) than studs are.
If demand can be easily satisfied, but prices rise anyway, that's a disconnect, isn't it? Or is it just gouging?
posted by wenestvedt at 11:59 AM on May 26, 2021
TFA states that new home starts are down.
Mind you, remodeling work might be up, but full sheets of plywood are also selling for multiples of what they did last year, and that's used way more often in construction (e.g., as sheathing) than studs are.
If demand can be easily satisfied, but prices rise anyway, that's a disconnect, isn't it? Or is it just gouging?
posted by wenestvedt at 11:59 AM on May 26, 2021
Housing Starts are up.
Would also guess a big chunk of the jump in demand comes from restocking of inventories and the lag in the supply chain. I.e. you shut down production last march, the distributors cut their orders, then people started showing up to buy lumber at a rate not as bad as expected, and then they started being up Y/Y. But your inventories were going down like crazy, so you put in big orders to fulfill demand + restock your store shelves, but the mills can't put capacity on quickly enough to smooth supply and demand so prices spike, and because everyone assumes its a one-time restocking thing no one rushes to put latent capacity back to work for just a few months of production so prices go even crazier.
posted by JPD at 12:18 PM on May 26, 2021 [2 favorites]
Would also guess a big chunk of the jump in demand comes from restocking of inventories and the lag in the supply chain. I.e. you shut down production last march, the distributors cut their orders, then people started showing up to buy lumber at a rate not as bad as expected, and then they started being up Y/Y. But your inventories were going down like crazy, so you put in big orders to fulfill demand + restock your store shelves, but the mills can't put capacity on quickly enough to smooth supply and demand so prices spike, and because everyone assumes its a one-time restocking thing no one rushes to put latent capacity back to work for just a few months of production so prices go even crazier.
posted by JPD at 12:18 PM on May 26, 2021 [2 favorites]
If demand can be easily satisfied, but prices rise anyway, that's a disconnect, isn't it? Or is it just gouging?
Man, have you all not bought anything during the pandemic? Even if prices aren't up dramatically, lead times are way up for nearly everything, because places were shut down for weeks if not months, and not producing at full capacity due to workforce issues, which could include sick employees and people not being interested in logging and lumber processing work because they could get sick.
Lumber is not special in this regard.
posted by The_Vegetables at 12:20 PM on May 26, 2021 [2 favorites]
Man, have you all not bought anything during the pandemic? Even if prices aren't up dramatically, lead times are way up for nearly everything, because places were shut down for weeks if not months, and not producing at full capacity due to workforce issues, which could include sick employees and people not being interested in logging and lumber processing work because they could get sick.
Lumber is not special in this regard.
posted by The_Vegetables at 12:20 PM on May 26, 2021 [2 favorites]
Lumber is not special in this regard.
Yeah in particular there have been a number of articles/popular twitter threads/etc. about peoples' difficulties getting furniture orders fulfilled, and prices jumping abruptly there as well.
Anecdotally, I attempted to buy shoes from a Large Online Shoe Retailer the other day. I have a pretty "average" shoe size and was looking for a pretty basic style. Normally, my search for such a thing turns up hundreds of options! The number of shoe styles available in my size last week? Seven.
The last year+ has caused disruptions at every stage of the supply chain--supply, demand, distribution, shipping-to-order, returns; it's impossible to isolate the current situation to just one aspect.
posted by We put our faith in Blast Hardcheese at 12:59 PM on May 26, 2021 [2 favorites]
Yeah in particular there have been a number of articles/popular twitter threads/etc. about peoples' difficulties getting furniture orders fulfilled, and prices jumping abruptly there as well.
Anecdotally, I attempted to buy shoes from a Large Online Shoe Retailer the other day. I have a pretty "average" shoe size and was looking for a pretty basic style. Normally, my search for such a thing turns up hundreds of options! The number of shoe styles available in my size last week? Seven.
The last year+ has caused disruptions at every stage of the supply chain--supply, demand, distribution, shipping-to-order, returns; it's impossible to isolate the current situation to just one aspect.
posted by We put our faith in Blast Hardcheese at 12:59 PM on May 26, 2021 [2 favorites]
Is it too pie in the sky to say part of the answer could be if private sellers are willing to sell at moderately profitable prices instead of the totally unrealistic boom going on? I rent a house and I am pretty much girding for the day my private landlord decides to sell, because we might be able to afford this house at like, 2019 sale prices, but there's no way we could now. My only hope is that she would like us and know us and be willing to cut us an okay deal.
posted by nakedmolerats at 12:59 PM on May 26, 2021 [2 favorites]
posted by nakedmolerats at 12:59 PM on May 26, 2021 [2 favorites]
Is it too pie in the sky to say part of the answer could be if private sellers are willing to sell at moderately profitable prices instead of the totally unrealistic boom going on?
I'm thinking of selling my condo soon, but I'm a little afraid to because I don't know if I'll be able to afford a house in the city near my children that I want to move to (currently with insane prices). For that reason, if I do sell, I want the unrealistic boom money.
So I would think a lot would depend on the goals and situation of the person selling. I'm a boomer with a cancer diagnosis facing a probably OK but maybe not retirement, and I'm really afraid of what the future holds for me financially. In other words, I'm not really well enough off to cut someone a deal. But you do hear stories of older people who really want to and are able to help younger folks out. I hope that happens for you.
posted by FencingGal at 1:07 PM on May 26, 2021 [3 favorites]
I'm thinking of selling my condo soon, but I'm a little afraid to because I don't know if I'll be able to afford a house in the city near my children that I want to move to (currently with insane prices). For that reason, if I do sell, I want the unrealistic boom money.
So I would think a lot would depend on the goals and situation of the person selling. I'm a boomer with a cancer diagnosis facing a probably OK but maybe not retirement, and I'm really afraid of what the future holds for me financially. In other words, I'm not really well enough off to cut someone a deal. But you do hear stories of older people who really want to and are able to help younger folks out. I hope that happens for you.
posted by FencingGal at 1:07 PM on May 26, 2021 [3 favorites]
The last year+ has caused disruptions at every stage of the supply chain--supply, demand, distribution, shipping-to-order, returns; it's impossible to isolate the current situation to just one aspect.
Anyone who has drive just south of Oakland along the SF Bay has seen the lineup of a dozen-ish container cargo ships lined up for the last several months. There are huge disruptions of just getting stuff off of ships in addition to making it and getting it on to ships. Everything is a mess.
posted by GuyZero at 1:26 PM on May 26, 2021 [3 favorites]
Anyone who has drive just south of Oakland along the SF Bay has seen the lineup of a dozen-ish container cargo ships lined up for the last several months. There are huge disruptions of just getting stuff off of ships in addition to making it and getting it on to ships. Everything is a mess.
posted by GuyZero at 1:26 PM on May 26, 2021 [3 favorites]
Yeah, there are inventory shortages of all kinds of things, still. For instance, there's a pill organizer with pop-out days that I like and is sold everywhere. For the past six months or so, they are available nowhere. A Walmart near me has all kinds of empty shelves.
This is a story I've been wanting to read since the Target/Walmarts of the country had their supply lines shut down, so, a little over a year. I thought this was one of the life purposes of these stores, that they have so much of the market and huge companies with huge company inventory just...broke? And didn't like Dollar General and those stores have plenty of the things big stores were out of? Different supply lines, less vertical integration?
I'm thinking the big box stores aren't actually providing much benefit that 5 smaller stores couldn't do. Sure, "like the old days," but seriously, Waffle House they ain't, and I think that's either a signal or an opportunity.
posted by rhizome at 2:06 PM on May 26, 2021
This is a story I've been wanting to read since the Target/Walmarts of the country had their supply lines shut down, so, a little over a year. I thought this was one of the life purposes of these stores, that they have so much of the market and huge companies with huge company inventory just...broke? And didn't like Dollar General and those stores have plenty of the things big stores were out of? Different supply lines, less vertical integration?
I'm thinking the big box stores aren't actually providing much benefit that 5 smaller stores couldn't do. Sure, "like the old days," but seriously, Waffle House they ain't, and I think that's either a signal or an opportunity.
posted by rhizome at 2:06 PM on May 26, 2021
The reason Walmart won is because they simultaneously sell a ton of stuff and maintain very little inventory relative to their sales levels. Just-in-time inventory.
posted by GuyZero at 2:25 PM on May 26, 2021
posted by GuyZero at 2:25 PM on May 26, 2021
There was that whole derecho in Iowa last year that is causing a lot of repair. Not new home starts, but whole roofs, siding, garages, etc needed statewide. Perhaps a drop in the bucket, but it doesn't help.
Anecdotally, if you need body work done on your car, there's a months-long waiting list.
posted by fifteen schnitzengruben is my limit at 2:52 PM on May 26, 2021
Anecdotally, if you need body work done on your car, there's a months-long waiting list.
posted by fifteen schnitzengruben is my limit at 2:52 PM on May 26, 2021
There was that whole derecho in Iowa last year that is causing a lot of repair. Not new home starts, but whole roofs, siding, garages, etc needed statewide. Perhaps a drop in the bucket, but it doesn't help.
Maybe the derecho in Iowa is one drop, but the series of wildfires in the Western U.S. and Australia (if the lumber market is international--I don't know really) is another, the Southeastern US/Midwestern tornadoes that barely got a moment's mention this year because of everything else going on is another, and peoples' pandemic home improvement projects are another handful of drops, and before you know it that bucket is really quite full.
posted by We put our faith in Blast Hardcheese at 4:17 PM on May 26, 2021 [3 favorites]
Maybe the derecho in Iowa is one drop, but the series of wildfires in the Western U.S. and Australia (if the lumber market is international--I don't know really) is another, the Southeastern US/Midwestern tornadoes that barely got a moment's mention this year because of everything else going on is another, and peoples' pandemic home improvement projects are another handful of drops, and before you know it that bucket is really quite full.
posted by We put our faith in Blast Hardcheese at 4:17 PM on May 26, 2021 [3 favorites]
(It's really all coming apart quite spectacularly actually, isn't it?)
posted by We put our faith in Blast Hardcheese at 4:18 PM on May 26, 2021 [8 favorites]
posted by We put our faith in Blast Hardcheese at 4:18 PM on May 26, 2021 [8 favorites]
Mind you, remodeling work might be up, but full sheets of plywood are also selling for multiples of what they did last year, and that's used way more often in construction (e.g., as sheathing) than studs are.
I've been trying to get some work done on my house for literally 9 months. Everyone is backed up; despite adding people and having more teams they still have long wait lists and some just don't answer their phones. All sorts of wholesale materials are backed up--lumber, plants, you name it. Obviously this is local for my area, I was assuming it was a nationwide demand surge. I could be wrong.
I know nothing more about production of wood materials than what I just read on wikipedia, but plywood seems to come from trees well suited to other uses? If there's a demand surge for timber it makes sense prices would go up across the board. No pun intended.
posted by mark k at 5:08 PM on May 26, 2021 [1 favorite]
I've been trying to get some work done on my house for literally 9 months. Everyone is backed up; despite adding people and having more teams they still have long wait lists and some just don't answer their phones. All sorts of wholesale materials are backed up--lumber, plants, you name it. Obviously this is local for my area, I was assuming it was a nationwide demand surge. I could be wrong.
I know nothing more about production of wood materials than what I just read on wikipedia, but plywood seems to come from trees well suited to other uses? If there's a demand surge for timber it makes sense prices would go up across the board. No pun intended.
posted by mark k at 5:08 PM on May 26, 2021 [1 favorite]
I hope wood prices come back to earth soon: my son is doing his Eagle Scout project, and I would hate for him to run out of money for materials because he waited too long to start. *insert pained parental expression here*
posted by wenestvedt at 5:32 PM on May 26, 2021
posted by wenestvedt at 5:32 PM on May 26, 2021
TBH, the discourse around supply and demand has gotten a little confusing lately. Is there a material difference between the lumber mills/wholesalers and the toilet-paper arbitrageurs who were so roundly vilified last spring for charging what the market would bear? Or is it just that these folks have more clout?
Well for one, the mills literally convert logs into timber. So they perform a core function for society regardless of your economic persuasion.
When Safeway runs out of TP, they can still sell you the million other SKUs they carry, and you don't write the grocer off for life due to that stockout. So they don't risk their brand by raising prices, since as you point out, society treats this response as villainy. The lumber yards, on the other hand, are more focused. Their only purpose in life is to have lumber in stock for you, near you. If they don't have lumber, they had one job and failed at it. When more people want to buy from their inventory than they can replenish from mills, they raise prices rather than turn away business. Plus you can pretty much just call around if you think a single specific yard is overcharging you.
The reason this happened is covered pretty well in an Odd Lots interview on the subject. The general gist is that after 2008, the only lumber mills and yards that survived were the ones that stayed lean. Everyone who invested in growth (ie capital equipment and inventory) during growth went under in the recession. Even when the early signals looked surprisingly good, companies didn't invest in more inventory, because it was contrary to expectations -- nobody builds houses in a recession. So clearly they forecasted wrong (not that I could do better), and the supply chains are somewhat long, so it will take some time to recover and nobody wants to be the person who invested the most when the trend reverts to the mean. There's some bonus stuff about overlogging, and diseases in west coast forests, as well as lumber mill consolidation that plays a role, so really just listen to the whole thing, it's quite good.
This supply chain shock is being felt in multiple places, in surprising ways. Auto makers cancelled their chip orders for cars expecting reduced demand, and they can't ramp up orders because other, higher margin firms jumped at the chance to take the slots they gave up. Ideally, something similar happens here: high prices indicate a constrained supply, and society as a whole prioritizes putting a roof over people's head over adding a deck to a house or fake ornamental shutters.
posted by pwnguin at 5:53 PM on May 26, 2021 [12 favorites]
Well for one, the mills literally convert logs into timber. So they perform a core function for society regardless of your economic persuasion.
When Safeway runs out of TP, they can still sell you the million other SKUs they carry, and you don't write the grocer off for life due to that stockout. So they don't risk their brand by raising prices, since as you point out, society treats this response as villainy. The lumber yards, on the other hand, are more focused. Their only purpose in life is to have lumber in stock for you, near you. If they don't have lumber, they had one job and failed at it. When more people want to buy from their inventory than they can replenish from mills, they raise prices rather than turn away business. Plus you can pretty much just call around if you think a single specific yard is overcharging you.
The reason this happened is covered pretty well in an Odd Lots interview on the subject. The general gist is that after 2008, the only lumber mills and yards that survived were the ones that stayed lean. Everyone who invested in growth (ie capital equipment and inventory) during growth went under in the recession. Even when the early signals looked surprisingly good, companies didn't invest in more inventory, because it was contrary to expectations -- nobody builds houses in a recession. So clearly they forecasted wrong (not that I could do better), and the supply chains are somewhat long, so it will take some time to recover and nobody wants to be the person who invested the most when the trend reverts to the mean. There's some bonus stuff about overlogging, and diseases in west coast forests, as well as lumber mill consolidation that plays a role, so really just listen to the whole thing, it's quite good.
This supply chain shock is being felt in multiple places, in surprising ways. Auto makers cancelled their chip orders for cars expecting reduced demand, and they can't ramp up orders because other, higher margin firms jumped at the chance to take the slots they gave up. Ideally, something similar happens here: high prices indicate a constrained supply, and society as a whole prioritizes putting a roof over people's head over adding a deck to a house or fake ornamental shutters.
posted by pwnguin at 5:53 PM on May 26, 2021 [12 favorites]
…those of us mere mortals who have accepted that life for Millenials-and-under means no safety net at all and are just in the market for you know, a roof over our heads, can't possibly afford a home that has all that priced into it.
Gen X (especially ones at the tail end) would like to buy a house too! We’ve been silently waiting our turn.
posted by Bunglegirl at 8:13 PM on May 26, 2021 [13 favorites]
Gen X (especially ones at the tail end) would like to buy a house too! We’ve been silently waiting our turn.
posted by Bunglegirl at 8:13 PM on May 26, 2021 [13 favorites]
pwnguin: Ideally, something similar happens here: high prices indicate a constrained supply, and society as a whole prioritizes putting a roof over people's head over adding a deck to a house or fake ornamental shutters.
Unfortunately that's only how it works in an economy where everyone has equal buying power. In our actual economy, fake ornamental shutters for well-off people are absolutely prioritized over putting a roof over poor people's heads, since it's the money of the ornamental shutter installers which is able to command the constrained supply.
posted by clawsoon at 8:56 PM on May 26, 2021 [1 favorite]
Unfortunately that's only how it works in an economy where everyone has equal buying power. In our actual economy, fake ornamental shutters for well-off people are absolutely prioritized over putting a roof over poor people's heads, since it's the money of the ornamental shutter installers which is able to command the constrained supply.
posted by clawsoon at 8:56 PM on May 26, 2021 [1 favorite]
since it's the money of the ornamental shutter installers which is able to command the constrained supply
At least in my location, only rich people live in houses made of wood, since you are literally a millionaire if you own one. The middle class makes do with steel beams, concrete, and rebar.
posted by pwnguin at 9:29 PM on May 26, 2021
At least in my location, only rich people live in houses made of wood, since you are literally a millionaire if you own one. The middle class makes do with steel beams, concrete, and rebar.
posted by pwnguin at 9:29 PM on May 26, 2021
...society as a whole prioritizes putting a roof over people's head over adding a deck to a house or fake ornamental shutters.
Coincidentally, that was exactly a conversation I have had with two different people lately, when it was obvious to both of us that their "want" project is not as important as someone else's "just need a roof" project, so they held off. And to hold off on the capacity and materials for that optional work puts just a little less strain on the entire system: supplies, contractors, money, dry work days, &c.
--
... fake ornamental shutters for well-off people are absolutely prioritized over putting a roof over poor people's heads...
Don't hiss at me. I don't live in a giant sprawling manse, and I am not your enemy here.
posted by wenestvedt at 5:34 AM on May 27, 2021 [2 favorites]
Coincidentally, that was exactly a conversation I have had with two different people lately, when it was obvious to both of us that their "want" project is not as important as someone else's "just need a roof" project, so they held off. And to hold off on the capacity and materials for that optional work puts just a little less strain on the entire system: supplies, contractors, money, dry work days, &c.
--
... fake ornamental shutters for well-off people are absolutely prioritized over putting a roof over poor people's heads...
Don't hiss at me. I don't live in a giant sprawling manse, and I am not your enemy here.
posted by wenestvedt at 5:34 AM on May 27, 2021 [2 favorites]
those of us mere mortals who have accepted that life for Millenials-and-under means no safety net at all and are just in the market for you know, a roof over our heads, can't possibly afford a home that has all that priced into it.
Gen X (especially ones at the tail end) would like to buy a house too! We’ve been silently waiting our turn.
Boomer here. I only own my condo thanks to a very generous greatest generation aunt (who worked as a secretary her whole life and owned multiple houses). Meanwhile my kids (one millenial, one gen x) both own homes I could never hope to afford. Generational stereotypes are a huge oversimplification. I recommend Elizabeth Warren's book The Two-Income Trap: Why Middle-Class Parents are (Still) Going Broke as a more complex look at the situation.
posted by FencingGal at 6:26 AM on May 27, 2021 [2 favorites]
Gen X (especially ones at the tail end) would like to buy a house too! We’ve been silently waiting our turn.
Boomer here. I only own my condo thanks to a very generous greatest generation aunt (who worked as a secretary her whole life and owned multiple houses). Meanwhile my kids (one millenial, one gen x) both own homes I could never hope to afford. Generational stereotypes are a huge oversimplification. I recommend Elizabeth Warren's book The Two-Income Trap: Why Middle-Class Parents are (Still) Going Broke as a more complex look at the situation.
posted by FencingGal at 6:26 AM on May 27, 2021 [2 favorites]
Lumber (and other wood products) are ultimately constrained by the number of trees available. Even here in BC where we are generally overharvesting the allowable annual cut is fixed. Prices could soar to $500 a sheet for plywood and there wouldn't be much the four plywood mills within an hour's drive could do to increase supply.
It's weird though how different products have been affected. Foam board has barely moved at all and my summer project which was originally going to use plywood is shifting to a much higher proportion of foam board because it is now relatively much cheaper. At least I have options.
posted by Mitheral at 6:47 AM on May 27, 2021
It's weird though how different products have been affected. Foam board has barely moved at all and my summer project which was originally going to use plywood is shifting to a much higher proportion of foam board because it is now relatively much cheaper. At least I have options.
posted by Mitheral at 6:47 AM on May 27, 2021
I bought a 1"x4" last winter with a sticker on it that said it was a product of Sweden. Grown and milled in Sweden -- and now in my local Lowe's!
At first I thought, "When it's economical to drag a board across the ocean, the global economy is weird -- and wasteful of fuel." But then I half-remembered that the British came to North America in part to find tall trees for masts to haul home to England, so... *elaborate shrug*
posted by wenestvedt at 6:56 AM on May 27, 2021 [2 favorites]
At first I thought, "When it's economical to drag a board across the ocean, the global economy is weird -- and wasteful of fuel." But then I half-remembered that the British came to North America in part to find tall trees for masts to haul home to England, so... *elaborate shrug*
posted by wenestvedt at 6:56 AM on May 27, 2021 [2 favorites]
Boomer here. I only own my condo thanks to a very generous greatest generation aunt (who worked as a secretary her whole life and owned multiple houses). Meanwhile my kids (one millenial, one gen x) both own homes I could never hope to afford. Generational stereotypes are a huge oversimplification. I recommend Elizabeth Warren's book The Two-Income Trap: Why Middle-Class Parents are (Still) Going Broke as a more complex look at the situation.
JFC #notallboomers is basically #notallmen with a different coat of paint.
The whole point is that:
a) Boomers own a huge amount of society's wealth and have it locked up and
b) Every generation following them owns far less a percentage of wealth compared to boomers at the same age.
This is because Boomers as a voting cohort both took advantage of generous social programs instituted to pull America out of the biggest depression in world history and then voted to either take those same programs away from or make them far less generous for everyone following them.
posted by Your Childhood Pet Rock at 7:42 AM on May 27, 2021 [24 favorites]
JFC #notallboomers is basically #notallmen with a different coat of paint.
The whole point is that:
a) Boomers own a huge amount of society's wealth and have it locked up and
b) Every generation following them owns far less a percentage of wealth compared to boomers at the same age.
This is because Boomers as a voting cohort both took advantage of generous social programs instituted to pull America out of the biggest depression in world history and then voted to either take those same programs away from or make them far less generous for everyone following them.
posted by Your Childhood Pet Rock at 7:42 AM on May 27, 2021 [24 favorites]
At first I thought, "When it's economical to drag a board across the ocean, the global economy is weird -- and wasteful of fuel."
Even with ocean freight shipping rates tripling over the past year, it is still very cheap to ship products via container.
In the example of the 1"x4" board you gave, assuming an 8' length it probably cost less than $0.50 to ship it to the US and perhaps considerably less as I used rates from China to US to calculate the cost as I am not familiar with rates from Europe to N America.
So it is possible that you used more fuel to go to Lowe's than it took to get the board across the ocean.
posted by nolnacs at 9:44 AM on May 27, 2021 [1 favorite]
Even with ocean freight shipping rates tripling over the past year, it is still very cheap to ship products via container.
In the example of the 1"x4" board you gave, assuming an 8' length it probably cost less than $0.50 to ship it to the US and perhaps considerably less as I used rates from China to US to calculate the cost as I am not familiar with rates from Europe to N America.
So it is possible that you used more fuel to go to Lowe's than it took to get the board across the ocean.
posted by nolnacs at 9:44 AM on May 27, 2021 [1 favorite]
We're hoping that in about 4 years, when we qualify as seniors, we can find a mobile home or condo to buy. We just want that small bit more security that we won't have to move again because of the landlord's decisions. We'd been window-shopping and talking about what we could afford vs what we really wanted, but it's gotten too depressing over the last year.
posted by buildmyworld at 10:31 AM on May 27, 2021
posted by buildmyworld at 10:31 AM on May 27, 2021
The wild real estate market will translate to higher rents, which will make things even harder for people.
posted by theora55 at 10:35 AM on May 27, 2021 [3 favorites]
posted by theora55 at 10:35 AM on May 27, 2021 [3 favorites]
Mobile home is risky, if you mean the kind of semi-permanent kind for mobile home parks rather than the kind you take on the road. Look very carefully at the local laws, because there are people who out there running seminars about how to buy mobile home parks and then jack the lot rents, forcing people out either for high renters or to redevelop the land.
posted by tavella at 11:34 AM on May 27, 2021 [2 favorites]
posted by tavella at 11:34 AM on May 27, 2021 [2 favorites]
The wild real estate market will translate to higher rents, which will make things even harder for people.
Not really. Or at least not typically. Rental yields usually go way down with increased property prices because riding an appreciation curve and the rental market are two different activities for two different markets and they're just so ridiculously out of sync with each other right now. Like our condo back in CA is appraised at somewhere around $800K (surrounded by a sea of $1.5-2m 4 bedroom Craftsmans, again, northern CA is fucking insane) and our tenant is (below market) $2700/mo. Our gross yield is somewhere around 4%. Compare somewhere like Detroit where you can grab 14% yields because stock is cheap and the rents are still pretty solid. Nobody is going to (rightly) pay $10,000/mo for a 1000 sqft condo no matter how much I cry "but muh decent rental yields".
posted by Your Childhood Pet Rock at 1:04 PM on May 27, 2021 [1 favorite]
Not really. Or at least not typically. Rental yields usually go way down with increased property prices because riding an appreciation curve and the rental market are two different activities for two different markets and they're just so ridiculously out of sync with each other right now. Like our condo back in CA is appraised at somewhere around $800K (surrounded by a sea of $1.5-2m 4 bedroom Craftsmans, again, northern CA is fucking insane) and our tenant is (below market) $2700/mo. Our gross yield is somewhere around 4%. Compare somewhere like Detroit where you can grab 14% yields because stock is cheap and the rents are still pretty solid. Nobody is going to (rightly) pay $10,000/mo for a 1000 sqft condo no matter how much I cry "but muh decent rental yields".
posted by Your Childhood Pet Rock at 1:04 PM on May 27, 2021 [1 favorite]
wenestvedt: Don't hiss at me. I don't live in a giant sprawling manse, and I am not your enemy here.
I hadn't read the whole discussion and didn't realize that I could be read as referring to someone here rather than the unfortunate organization of our economy as a whole. Apologies.
posted by clawsoon at 2:11 PM on May 27, 2021 [2 favorites]
I hadn't read the whole discussion and didn't realize that I could be read as referring to someone here rather than the unfortunate organization of our economy as a whole. Apologies.
posted by clawsoon at 2:11 PM on May 27, 2021 [2 favorites]
High five, clawsoon. :7) Come over to my collapsing back yard deck sometime and I will have a drink ready for you.
posted by wenestvedt at 6:35 PM on May 27, 2021 [1 favorite]
posted by wenestvedt at 6:35 PM on May 27, 2021 [1 favorite]
We just want that small bit more security that we won't have to move again because of the landlord's decisions.
A friend of mine has had to retire early and is going to move away within a few months specifically because the landlady wants to sell, they can't afford to keep moving--and you guessed it, THEY WANT A HOUSE. Nothing but house will do. Except they can't buy a house, and they can't seem to even find anywhere they can afford to rent at until death of late. Wherever she goes, it's going to be hours away from here--again, having to live in the cheapest of boonies. She was even considering the boonies of Utah, except the hospital's not even close to that location.
posted by jenfullmoon at 8:42 PM on May 27, 2021
A friend of mine has had to retire early and is going to move away within a few months specifically because the landlady wants to sell, they can't afford to keep moving--and you guessed it, THEY WANT A HOUSE. Nothing but house will do. Except they can't buy a house, and they can't seem to even find anywhere they can afford to rent at until death of late. Wherever she goes, it's going to be hours away from here--again, having to live in the cheapest of boonies. She was even considering the boonies of Utah, except the hospital's not even close to that location.
posted by jenfullmoon at 8:42 PM on May 27, 2021
This is just an idea for those of you who become incidental landords, or who are put off with the idea of being a landlord, but it is possible to be a decent landlord. Lots of people above have spoken of great arrangements they have with their landlords. You could be one of those!
I was an accidental landlord for a couple of years (bought a house then changed jobs and had to move). I charged less than market, just covering the costs (mortgage + escrow payment plus a little extra for unexpected repairs.) I ended up coming out just less than even over the period. Didn't change or raise the rent until they left and then put the house on the market (being a landlord is stressful if you actually care about making sure your tenants have a living space and I didn't want to worry about the next repair anymore).
If you find yourself in that position, you can pay it forward and provide a space for someone to live without sucking them dry.
posted by LizBoBiz at 2:53 AM on May 28, 2021 [2 favorites]
I was an accidental landlord for a couple of years (bought a house then changed jobs and had to move). I charged less than market, just covering the costs (mortgage + escrow payment plus a little extra for unexpected repairs.) I ended up coming out just less than even over the period. Didn't change or raise the rent until they left and then put the house on the market (being a landlord is stressful if you actually care about making sure your tenants have a living space and I didn't want to worry about the next repair anymore).
If you find yourself in that position, you can pay it forward and provide a space for someone to live without sucking them dry.
posted by LizBoBiz at 2:53 AM on May 28, 2021 [2 favorites]
it is possible to be a decent landlord
It was nightmare tenants that burned me out. We charged below-market rent and kept things in good order and were friendly and sent cookies downstairs from time to time. They stopped paying rent and after lowering it, then working on a payment plan, and finally just not getting rent for 6 months, when we started the eviction process they trashed the place really badly out of spite.
So it goes both ways. Intellectually I know most people are not like that. I know what kind of a landlord I would want to be and I think it would be quite decent. But if I can avoid it, not doing that to myself again.
posted by warriorqueen at 6:01 AM on May 28, 2021 [4 favorites]
It was nightmare tenants that burned me out. We charged below-market rent and kept things in good order and were friendly and sent cookies downstairs from time to time. They stopped paying rent and after lowering it, then working on a payment plan, and finally just not getting rent for 6 months, when we started the eviction process they trashed the place really badly out of spite.
So it goes both ways. Intellectually I know most people are not like that. I know what kind of a landlord I would want to be and I think it would be quite decent. But if I can avoid it, not doing that to myself again.
posted by warriorqueen at 6:01 AM on May 28, 2021 [4 favorites]
Sightline has a timely piece about housing in germany which includes a really interesting chart of housing prices over time in nine different countries
posted by vibratory manner of working at 3:09 PM on May 28, 2021
posted by vibratory manner of working at 3:09 PM on May 28, 2021
ovvl mentioned above how much worse the Canadian housing market is - the chart in that article puts that into really stark relief. Every country on there with rising prices over time has at least a little bit of an occasional downswing, except Canada. I can't imagine.
posted by vibratory manner of working at 3:13 PM on May 28, 2021
posted by vibratory manner of working at 3:13 PM on May 28, 2021
Oh, and the takeaway about Germany is that they're actually building enough housing and prices have been relatively stable for the last few decades:
From 2010 to 2019, for every hundred people added to Germany’s population, the country gave permits for construction of 97 homes. That’s right: Germany permitted almost as many new homes as it added residents. In the same period, for every 100 additional people living in the five Cascadian states (Alaska, Idaho, Montana, Oregon, and Washington), the region awarded permits for the construction of just 42 new homes: one new home for every 2.4 extra people.posted by vibratory manner of working at 3:21 PM on May 28, 2021 [1 favorite]
It's almost as though a basic need shouldn't be treated as a speculative commodity :)
posted by nikoniko at 12:20 AM on May 29, 2021 [8 favorites]
posted by nikoniko at 12:20 AM on May 29, 2021 [8 favorites]
Nowadays I like to fantasise about a tax on real estate rents. So if you're using something yourself (natural or legal person), you pay zero real estate tax, but if you're renting real estate out to someone else, you get to pay, I dunno, 60% of what you receive in rent to the state. So you can do that if you want, and for some situations there's a business case to be made, but overall it turns real estate into "not an investment vehicle".
posted by labberdasher at 1:49 PM on May 30, 2021
posted by labberdasher at 1:49 PM on May 30, 2021
> So if you're using something yourself (natural or legal person), you pay zero real estate tax, but if you're renting real estate out to someone else, you get to pay, I dunno, 60% of what you receive in rent to the state
Man, why you gotta raise my rents like that?
posted by pwnguin at 2:50 PM on May 30, 2021
Man, why you gotta raise my rents like that?
posted by pwnguin at 2:50 PM on May 30, 2021
I mean, there are places where if it's your own house that you live in you pay a lower property tax than if it isn't. Called a "homestead exemption" or similar. It's definitely possible.
posted by Huffy Puffy at 3:24 PM on May 30, 2021
posted by Huffy Puffy at 3:24 PM on May 30, 2021
Absolutely true in Vermont. If you are living in a house that you own, you pay lower property taxes. It's more of a tax on second home owners and landlords than a credit for homeowners, taxes are still decently high here. There's also a thing you can do if you have 10+ acres of agricultural land or land in "current use" (i.e. if you're growing timber or a few other approved uses) which lowers your taxes. It's one of the reasons that Vermont still has a lot of acrtive agriculture, people can somewhat afford to do it.
posted by jessamyn at 4:15 PM on May 30, 2021 [2 favorites]
posted by jessamyn at 4:15 PM on May 30, 2021 [2 favorites]
It's this way where I live in Canada. We get a homeowner's grant equal to 30-50% of our property taxes, ag land is low tax if you are actually farming (though there are ways to game that), and some provinces have tax credits for renters.
I'm skeptical this affects property values. Maybe bigger credits and higher offsetting taxes would make a difference.
posted by Mitheral at 10:21 AM on May 31, 2021
I'm skeptical this affects property values. Maybe bigger credits and higher offsetting taxes would make a difference.
posted by Mitheral at 10:21 AM on May 31, 2021
Welp, that was short-lived:
Lumber Prices Post Biggest–Ever Weekly Drop With Buyers Balking: "Lumber has has now dropped almost 40% from the record high reached on May 10."
posted by clawsoon at 8:19 PM on June 14, 2021 [3 favorites]
Lumber Prices Post Biggest–Ever Weekly Drop With Buyers Balking: "Lumber has has now dropped almost 40% from the record high reached on May 10."
posted by clawsoon at 8:19 PM on June 14, 2021 [3 favorites]
Sounds like supply and demand is working!
posted by LizBoBiz at 8:31 AM on June 15, 2021 [2 favorites]
posted by LizBoBiz at 8:31 AM on June 15, 2021 [2 favorites]
I was going to make a joke about the invisible hand of Norm Abram but then I was distracted when I saw that all episodes of New Yankee Workshop are hosted on his website, seemingly free and well-organized. Classic Norm.
posted by Think_Long at 8:37 AM on June 15, 2021 [2 favorites]
posted by Think_Long at 8:37 AM on June 15, 2021 [2 favorites]
So you can do that if you want, and for some situations there's a business case to be made, but overall it turns real estate into "not an investment vehicle".
It also penalizes the people who may need to be renters for whatever reason. Like me.
posted by EmpressCallipygos at 1:34 PM on June 15, 2021
It also penalizes the people who may need to be renters for whatever reason. Like me.
posted by EmpressCallipygos at 1:34 PM on June 15, 2021
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This thread has been archived and is closed to new comments
Also important to consider in these discussions, is that it's not only that there is an income and class divide. There are other demographic groups who don't have the option of just living anywhere in the US. Lots of places are just outright dangerous for people of color, queer people, non-christians, immigrants from non-European countries, etc etc.... We don't all have the freedom to up sticks and leave for cheaper real estate.
posted by EllaEm at 1:41 PM on May 25, 2021 [60 favorites]