Do you think we will ever have affordable housing again in our lifetime?
Considering how crazy expensive accommodations have become the last couple of years, concentrated in the hands of greedy corporations, landlords and how little politicians seem to care about this problem, do you think we will ever experience a real estate market crash that would bring those exorbitant prices back to Earth?
No, unless we separate housing from investment, it will never be affordable. I don't foresee the political will to make it happen.
This is the biggest issue right here. Houses weren't always investments and making them investments was a terrible idea that's now difficult to fix.
Real estate has become a huge part of stock market and GDP figures. People's retirement funds have become other people's mortgage and rent payments. Affordable houses for some would mean economic decline for others, and no political party wants to create economic decline.
Maybe, but really the issue is construction of new houses. Cities are much cleaner now so people want to live in them. They used to be filled with factory smoke and animal feces.
Yes, more than now. No I don't care that you saw some poop yesterday. The streets were literally caked with horse poop. You wouldn't even notice dog poop.
And most jobs used to be physical, so the average person would have some experience in carpentry. If houses were too expensive, you would find a friend or relative with some expertise and build something yourself. So houses outside the city were cheap because you could build new ones, and houses inside the city sucked (and were cheap).
You're out of your mind. You're saying no profit of any kind is possible unless we exploit people forced to rent?
I know that's not 100% what you're saying, but that's how it comes across...
Still trying to understand how everything has to be crushed under capitalism. Food. Health care. Housing. Travel. It all there to spin up cash.
Can’t wait till they figure out how to monetize air 🫠
Can’t wait till they figure out how to monetize air
Saw this at a Walgreens last week.
I'm gonna go out on a limb here and say that it isn't capitalisim that is doing this. Blaming capitalism for fucking the 99% is like blaming science for inventing nuclear weapons. Capitalism is just the process. The focus is determined by key players. Frankly, I'd blame the availability of just about every industry in the stock market for what we are seeing. Companies used to be run by industry experts, who had a vested interest in their business being a sustainable long term asset that would provide wealth to their family for generations. Now, companies are run by "Line Go Up" CEOs appointed by a board of stock holders (mostly financial bros) who just want the stock to look real good before they sell it. There is no concern for the customer, workers, or the general populace beyond government mandated standards. All that matters is making money for people who couldn't care less or know less about the industry.
Capitalism didn't ruin food or housing. Capitalists did.
Where hexbear when you need them?
Actually the stuff with the freeest (is that a word? How is that spelled??) markets tends to be the easiest to get and cheapest.
Medicine has uncontrolled price explosion because it’s an incredibly tightly constrained market. Food tends to be plentiful and cheap because it’s not very tightly constrained.
Yes, food did jump in price in the past couple of years … because of massive market interference when the governments dumped huge amounts of currency into the world, with only the upper classes having access to that new cash (it was given to corporations and to stockholders, leaving the lower class to watch their money devalue with no offset).
Housing is another tightly constrained market. You practically need positive permission from government in order to build anything, and there are tons of local constraints on what can be built.
I’m thinking of Boulder as an example where housing prices are skyrocketing, and construction is limited to a certain number of floors.
Capitalism is based on free markets. Where free markets exist goods become cheap and plentiful. But we have a lot of markets that aren’t free, for various reasons.
Investment is exactly what we need. We need more people to see building housing as a good investment, in order to get more housing.
The only other option is forcing people at gunpoint to build housing, and that only works for a couple of months then backfires.
But keeping supply low is more profitable. There isnt going to be an expansion of housing without a change in the rules of the game.
I honestly think were heading for a total societal collapse. If the people with power and resources were the sort that were inclined to use it for good, they would have done it already. Given that we haven't seen this, it's reasonable that this accumulation at the top will continue unabated and that more and more people will fall into poverty and despair.
This is a recipe for revolution, and revolution is largely incompatible with stability, especially in the near term.
I wish this wasn't the case. I suspect this century''s deaths will dwarf last century's.
Look at other countries. Huge slums / shanty towns get built and normalized long before revolution.
If you're living in a plywood shack, but still have a phone with data, some games to play, ebt / food bank to eat, you're not about to pick up arms. At least most people in that spot won't.
Maybe you're right, but it's also possible that people in those places have been living with those conditions all their lives and it creates a kind of apathy. If you take away everything from people who thought they'd have a kind of middle-class future, we don't quite know what that looks like yet. I suspect it won't be exactly the same.
No way, I think we are going to find out that circus is more important than bread, very soon. When people start needing to eat expired food and bugs, they won’t revolt as long as they have TikTok etc.
god i only hope.
Not without some real force or change, middle class has invested to much of their retirement into the housing market to allow the prices to tank. Those who have are not going to risk it for the have nots.
Imagine storing all of your nation's wealth in real estate that is actively decaying by the minute instead of into companies that make products and provide jobs. What a stupid fucking idea.
Doesn’t matter. Houses are sold for prices as if they’re still mostly new. If you are good you can beat down the price by a cost of a new roof or a new heating system. Never both. No seller will ever acknowledge that renovation doesn’t make sense and the house should be teared down, actively lowering the land value. And they don’t have to. Someone else is around the corner to buy at any price, turning it into an overpriced rental unit.
No. As the effects of climate change become worse, people will migrate to cooler places, which will only push up prices in those places. Poor people will be left to live in uninhabitable and uninsurable areas, while the rich will get to live in comfort.
Climate change is essentially a class struggle, like everything else in life. As long as the 1% don’t have to suffer, nothing will be done. To get the rich to do something about climate change, it will have to affect them directly.
I also think in addition to what you mentioned people don’t want to address that the population is a problem as well. The earth more than doubled the people living on it in 70 years from all of human history, that’s not just sustainable. You can hypothetically fit 20 people in a one bedroom but just because you can doesn’t mean you should.
I'm in a hot climate and it's far more expensive here than it is in cooler parts of the country, and it continues to be that way. Your hypothesis would be for the distant future, but that's not what's driving costs right now and in the immediate future.
Sure, but the premise of the question is if "we will ever have affordable housing again in our lifetime?" There is no reason to believe there will be affordable housing right now or in the immediate future, and this comment hypothesises why climate change will cause affordable housing to continue to be problematic in the distant future as well.
limate change is essentially a class struggle, like everything else in life. As long as the 1% don’t have to suffer, nothing will be done. To get the rich to do something about climate change, it will have to affect them directly.
Exactly this. Elysium comes to mind, altough it won't be a space station in orbit but probably a densely populated blue zone in Western Antarctica defended by turret boats or some shit.
No. Expensive housing is a genie in a bottle.
Once sufficient people have purchased a house at the high price, it would be in their interest for prices to remain high. Corporate entities that buy up houses will actively lobby to make sure housing prices stay high, and the average Joe who paid that much for a house will be happy it stays that way.
I'm not so sure. Large lobbies have greater economic power than us average people, but they aren't strong enough to defy macroeconomic trends. There are many factors that could turn and cause prices to collapse, we just don't know when or if they will occur.
I think were closer to seeing people be forced to rent every comoddity they need to live than we are to seeing full home ownership.
That's just decentralized feudalism where we work even more for less
They already allow children to inherit companies, why not just return us to surfdom.
"You'll own nothing and be happy" - World Economic Forum
They really did go mask off with that one. I don't understand anyone could've checked that out and signed off on it without going "surely people are going to see right through this?". The answer is either apathy or malice, but both are equally bad for us in the end.
The solution is simple, but will never happen. Make it illegal to own a home you don't live in.
Or at the very least make taxes paid proportionally more for each home you own past 1
What about apartments? Dorms? Would that make being homeless illegal?
Canada banned foreign ownership, and a bunch of local shell companies popped up. So it is not as simple as it sounds.
Canada didn't ban shit. The Prohibition on the Purchase of Residential Property by Non-Canadians Act is just a token gesture so that politicians can say they did something.
Since permanent residents and private corporations can still buy real-estate property, in practical terms literally nothing has changed.
This is so stupid. The fact that people upvote this makes me want to go back to reddit
I bought an apartment about 15 years ago. I finally finished paying it about 3 years ago, and recently got an offer to move to Ontario. With the current house prices and what I was offered there (about 80k), I could barely make rent for my family. I really wanted to move but had to say no because of stupid absurd rent prices. What’s weird is that if I wanted to rent the place I bought I would not be able to afford it either. This is bullshit.
This is kind of just something that krept into my mind but I think with a slowing birthrate that we may just end up with too many homes at some point in the next 25 years.
If you’re talking about the US, the slowing birthrate is compensated for by immigration. This is what drives immigration policy and why the US hasn’t fallen into the same demographic slump as Japan has, and China soon will.
Add to this that much of the tight housing market is driven by people around the world investing in US real estate. Some estimates are as high as 30% of homes sitting empty, held by foreign investors, just appreciating.
Between these two things, we are extremely far from being able to visualize too much housing. I hope we get there, though. Because it would fix the high pricing and allow us to demolish some of the oldest, shittiest housing which is only still around because the market is so nuts.
It'll probably even out as we may not have enough people to build them?
Perhaps, but in an energy-scarce world, who would be able to afford living in an old, inefficient house? I obviously hope to be wrong but increasing material price and labour might alone offset whatever price decrease the extra inventory of a decreasing population might bring. I hope to be wrong, ofc.
My old place was a cold, stone cottage and was a nightmare to keep heated.
The kitchen at one point was measuring 6°C and that was with the heating on in the winter.
We got out of there in December 2019 and I'm so glad we did, because with COVID, Brexit and the war, house prices went bananas, energy bills went through the roof and interest rates have increased massively.
We could never have afforded this place today. I really feel for young folks today, we bought our first home at 33 years old after years of saving and that was in the time of almost no interest - it would be impossible now.
There are 2 big obstacles we need to overcome. The first is corporate ownership of residential property. This needs to go away.
The second big issue, we need to build higher density housing, and get rid of the enormous parking spaces that take up our downtowns. Not everyone needs a house. And you can absolutely build medium density housing that doesn't feel cramped. Sure, living in an apartment is not perfect, but you are closer to the places you want to go, and public transportation is more feasible. It's a win-win for everyone.
The problem with high density housing is that the quality is shit. The quality is shit with lower density housing too, but things like thin walls in apartments goes a long way to people wanting to join in the sprawl. Developers fight tooth and nail against any regulations that are focused on QOL or environmental improvements (like "passive house" standards) and promise that they will make it cost far more than necessary if they are so burdened.
Sounds like the solution is to nationalize a good chunk of the home construction industry and run it at cost
Ultimately, change will only happen when the institutions start listening to the people. But we know that won't happen as long as corporations can buy out and bribe the institutions meant to regulate them.
Yeah but the market is going to have to absolutely tank first. There's a lot of money in that bubble, and it's going to be fucking painful when it does. But it'll get there.
When it tanks people would be laid off and have no money for houses. Basically 2007 all over again. The rich would swoop up all the cheap real estate.
And the cycle would repeat a-fucking-gain, with the poor wanting silly things like owning their own land or homes and decent living wages being blamed for the next burst bubble
After the climate mass deaths, migrations and/or wars, there should be plenty of land.
Although it might not be habitable.
Plenty of unoccupied land, but not unowned.
Perhaps, but what is ownership without a state to enforce it? Companies/landlords would need to occupy and defend it themselves.
The problem is not affordable housing, there's plenty of that in the US, the problem is getting people to states where housing is affordable without significant drops in quality of life due to lack of access to services and such.
Like, you could buy land in Detroit for the price of a decent car, put a trailer on it and you're already on the property ladder, but you're in Detroit.
This sounds great, but when people start moving, pricing goes up. There's too much investing and too little self-ownership of housing.
The rise would be slow if it's spread out. In my country it's one of the better ways to build equity. Buy where it's cheaper and wait for prices to go up.
Then sell it in 10 years and buy where you want to live, you'll have atleast half the money and definitely more than what you paid for it
I can’t speak to other markets but in California, the housing bubble is in part supported by investment from around the world. Chinese and Russian nouveau rich are buying homes in CA because it’s a safe place to keep their money relative to their other options. They might even just leave them empty and watch them appreciate. It’s disgusting, when people are struggling like hell just to live.
Perhaps the state could regulate this and ban international purchases or empty homes but I highly doubt it since the horse has left the barn decades ago and this would deeply impact many rich people, and those people have influence. It would also tank the home values of many average Americans, which would be deeply unpopular as many of those folks are banking on taking that value with them to Mexico or Ecuador to retire on. So this regulation would be bad for the rich and unpopular at large. It would help the young and the poor, the two chronically underrepresented groups.
So unless we can change the entire world order, I don’t see this wholly going away. Can we make it better? I think so. We need more supply, and it needs to be high density and low cost. Those are not insurmountable. But right now, private developers and the government don’t have what it takes to do anything.
I know someone who works for a low income housing non profit and they manage 8 big apartment buildings that their non profit built or bought and they operate them as homes for low income people. They are funded by philanthropists large and small as well as some public money.
If we could find a way to direct more money to such things, we could make a real impact. Perhaps a wealth tax that goes directly to such housing.
But even then, it’s like MediCal - it will only help those in abject poverty. It wont help my cousin who is making $125k and still can’t afford to buy a home. Middle class will never get help, basically, and this is why you see them moving elsewhere.
It's not just the Russians and Chinese. In rural wine country where I grew up, more than a third of the properties have been bought up by millionaires that visit maybe two weeks out of the year, hollowing out the town, and gentrifying anyone who was middle class or lower out of the area. Another third of what used to be rental housing is now air BnBs. Teachers and EMTs can't afford to live within an hour drive, so public service quality has cratered. None of the kids I went to high school with still live in the area (although many commute in, as they tried to make their careers where they grew up).
While recently we've seen more Chinese, the Russians haven't really made an impact. The trend (in this locality), however, was absolutely started by New York financiers, and had been ongoing for at least 15 years before foreign investment capital showed up.
This is what irritates me when people say there isn't enough housing supply. There are 16 million vacant homes in the US. It's not a supply issue. It's a class and economic issue.
I know it sounds radical, but I support a law would force landlords with property that has been vacant more than six months to offer it to section 8 recipients as a rental. I think this would cause a significant positive adjustment in the market, making housing more affordable and expanding access to those who need it most. Many landlords refuse to rent to section 8 whatsoever, so if they still want to avoid those tenants, they'd have to ensure their property is rented, opening up more housing and driving down rents.
+1 to everything you said
Yes, that too.
Not until people get off their asses and show the 1% they have no real power. In order to make an omelet, you need to break some eggs. It is long past time to crack some shells.
Problem is, the 1% have so much wealth that they do indeed have the power.
In order to make an omelet, you need to break some eggs
— Joseph Stalin
they have no real power.
Wuahaha. They’ll crush that tiny rebellion of yours with hired forces aka police, who’s prime purpose is to protect property, not people.
No. With climate change more land will be unlivable, there will be more conflicts and more immigration (legal and illegal). Housing will increase because demand is high and supply will shrink further b
I suspect that a strong push for fully remote work would help the US with housing costs due to a chunk of the workforce moving out of the cities and into the boonies.
That already fucked long island. "Everyone" moved out of NYC and bought all the housing on l.i when COVID hit and WFH started, now it's completely unaffordable for anyone under the age of 40 and/or unmarried.
The listings have just become a joke. 300k+ for a twice burned down shed posing as a house in a flood zone and in the worst towns. It's absolutely asinine...
No. Not because of overpopulation or such, but because the powers that be have simply discovered how lucrative it is to use housing as a business investment, and the fact that everyone NEEDS housing, no exceptions.
This is essentially a supply problem, so the "supply side" of this equation is the side with all the power. The end.
Only if capitalism falls. Otherwise zero chance. Sry.
Well, birth rate is steadily dropping. As people die the housing market could change. There are free houses in rural Japan because their population has been declining and young folks all moved to the cities. In 30-50 years we could see something similar.
That's a good point. Well now I'm much happier to not have kids.
you're not factoring in catastrophic climate change into your equation. in 30 to 50 years much of the equatorial regions will ne unlivable. massive levels of climate refuges will be shifting. we're seeing unlivable wet bulb temps TODAY. so this isn't catastrophising. it's an almost certainty at this juncture.
Just keep building, and change zoning laws to make that easier.
Yesterday I caught this little tidbit from the Denver news as I walked through my company’s break room:
Consumers are facing a double whammy as housing is both too expensive and there’s not enough of it.
As someone who grew up before macroeconomics was declared evil and apparently purged out of higher education, it’s no mystery to me that a market with inadequate supply will have high prices.
I’m not necessarily familiar with the exact definition of “macroeconomics” in this context, and I’m far too young to understand the cultural nuances you describe.
But I’m pretty sure it doesn’t take more that two brain cells to understand that the latter point is almost always the direct cause of the former.
Consumers are facing a double whammy as housing is both too expensive and there’s not enough of it.
oh Denver. It's been that way in Portland for several years now.
No.
I never wanted to be a homeowner personally, but earlier this year I noticed that four AirBNB's had materialized just on my little block in America, so I bought a condo. I paid $40,000 more than it cost ten years ago, but it's beautiful, I like it, and it gives me the ability to stay where I want to long-term, so here we are.
The Federal Government is not going to act on the forced scarcity of housing, so expect the issue to be handled similar to the way states handled COVID. Some states had good policies. Most had shitty policies, but overall, the outcomes were negative to some degree, and that's almost certainly what will occur with housing over time.
Sadly, the only way to essentially secure/stabilize your housing costs (with the exception of taxes) is by buying your home. Then with equity, assuming relatively similar markets, it allows you to move from one place to another regardless of land price increases.
Renting doesn't really make financial sense because you'll just get squeezed harder and harder by owners forever.
It used to make sense depending on your area and intended time you were going to rent for. This assumed that rent was significantly less than a mortgage and you were able to save or invest at least some of the difference. That gap has long since evaporated in desirable areas. In many cases, rent is as much as a mortgage. The problem here is that it prevents people from saving for a down payment (which alone could buy a home twenty years ago), and even if they could, homes are being snapped up with all cash offers from investors or corporations... So they can be rented at a profit. It's insane.
To be honest, I never saw myself buying anything. But when rents were raised a whipping $500-600 in a single year in my area, I got concerned for the future. I bought a small condo that I could afford (still at a cost far above what it was worth pre-2020...around $40k like yours) because I was terrified at what would happen if rents continued to skyrocket at suck a rapid trend. Never in my life have I seen that happen before.
Idk if I made a good financial decision or not, but it seems both of us took a similar path). We'll see what the future holds.
No, at least not in countries (e.g., the USA) that rely on the state to micromanage every aspect of zoning, and which therefore allow NIMBYs to derail progress at every possible step.
In a better world we would draft new laws to throw out our entire zoning system, and start over with something much more flexible at the state or national level- ideally based on the approach Japan uses, which defaults to mixed-use for every building and makes NIMBYism structurally impossible.
I think zoning is a related and secondary issue, but so long as the housing market is a market, and a few people have almost all the money, all zoning changes can do for housing prices is temporarily alleviate the problem. People with money are always looking for places to park their capital and collect rent. There's no better vessel for that than real estate.
Obviously, we need to gut literally every aspect of American urban planning for a million other reasons too, but on this specific issue, I think it's second order.
People with money are always looking for places to park their capital and collect rent. There’s no better vessel for that than real estate.
Absolutely the case. A lot of your single digit millionaires became such because they're home owners and landlords.
I mean I do kind of expect the world to completely collapse within 20 years, so kinda?
A cave or a half-destroyed building in an overgrown city are free right? Doesn’t get cheaper than that.
Any kind of prepping is 100% useless unless you're also part of a (para)military organisation that can hold its own after collapse. Imagine trying to defend your homestead against a corps of fully trained and equipped marines with a single shotgun or hunting rifle.
To be fair, that's technically not much different than what you'd have to do to keep the sheriff from evicting you if you were squatting in a house today.
We're starting to see prices decrease right now, since high interest rates are holding. The big analytics firms think we will see a return to affordable housing in 2024 as long as the fed continues to raise interest rates. The reality for larger cities is that prices will most likely stabilize and possibly decrease slightly, but never return to reasonable. Lots of people are in 2% mortgages right now on homes with inflated values. Those people are never moving unless life forces them to. So while rising interest should decrease housing affordability and force prices back down, inventory will remain low, keeping prices pretty stable. Areas with abundant inventory should see a return to normalcy, but for big popular cities, this is probably the new normal. Unfortunately nobody has a crystal ball, and we can't be sure of anything. But this is what the experts think.
The point is that those price declines would benefit only the wealthy who had the money in cash, but regular people are not having so much savings and for them even those "lower" prices are actually higher when considering the interest they will pay to the banks.
We're starting to see prices decrease right now, since high interest rates are holding
That isn't really holding up this year. Interest rates are correlated with price increases. Prices corrected after the initial increase but have since continued to increase. While the cost to borrow has gone up, the reason for increased interest rates will always drive up prices. The federal reserve will raise interest rates if inflation is high (driving up nominal prices) or if employment is too high (increasing demand). Home prices will decrease if there is a recession but then the fed will lower rates to fight unemployment (assuming inflation isn't an issue).
In the US home prices are only down 0.5% year over year. In my high cost of living area (SF Bay area), prices are down 10% but climbing every month. At the current rate of home price growth, the Bay area will be back at all time highs this winter/spring.
I'm just hoping I can find a decent job before I die. I'm on a string of progressively worse and worse jobs that are driving me to the brink.
Same. I had a decent job in my late teens early twenties, decent as in it paid really well and I liked the hours even though they were weird and long. I left because it wasn't the type of job that got me "adult points" and I was sick of being looked down on for what I did (it wasn't anything NSFW or anything, just more of a teen job type that I excelled at and got myself promoted up the ladder). I told one of my co-workers "I like this place, and it's paying me good money, but I don't want to be 30 and still working here."
Well fuck me, because it turns out that I'm in my 30s now and that's still the most money I've ever fucking made. My boss from that job actually just texted me the other day and offered me my job back even though it's been over 8 years and if I hadn't moved 1,000 miles away I might have considered it because he would have almost doubled what he had been paying me before.
I'm back doing the college thing trying to better myself and get into the tech sector, and fuck I hope it works out because if not I might just decide to finally opt out of this world. I've fucking had enough of trying and trying and busting my ass just to keep having the rules change and the goal posts move.
I've been at the same "stable" job for 8 years and am practically suicidal over how much I hate it.
I still hate homelessness and starvation more, so...
All of my friends joke about going in together on buying some property and starting a commune. It’s a passing joke but in the back of our minds I think we’re all seriously considering it. Logistics is the only reason it hasn’t already happened
Look into housing co-ops! They're basically this and there are already (kind of) a ton of them around!
I've been in one for a couple years now and it's going pretty well.
I'm trying to get a mortgage atm. Long term disabled / self-employed with low income, got dad as a guarantor, I feel amazed we managed to get a single lender, we now have a mortgage in principle.
I'm also horribly unlucky so I can predict with near-certainty that yes house prices will crash immediately after I'm on the hook at 7.5%, at which point interest rates will also plummet.
Can't put a price on having my own space and not being evicted on the whim of a greedy landlord though (my current situation, 13 years, £70k in rent, not so much as a thank you or goodbye, just off you fuck so I can get someone in paying more).
You can always refinance if rates plummet. But rates and prices have an inverse relationship. Prices fall when rates increase and prices rise when rates fall. So your ideal scenario is to get in with high rates and low prices, then refinance later for a lower rate. Although right now we have the worst of both worlds, high rates and high prices. Prices are starting to stagnate due to rising rates, and may eventually start trickling back down as high rates hold.
Thanks, that's really helpful info. One of my friends told me I was insane for buying a house right now, but my response was that there's never really a 'good time' to buy a house... the best time was always 10 years ago! Trying to time the market whether with houses, stocks, crypto, whatever is rarely a good idea.
Fate will decide whether we see this in out lifetime, and it will depend a lot on where you live. Several factors affect these prices, and I probably don't have an exhaustive list but here are some.
There is the boomer bubble. Boomers possess most of the houses. When they die, a lot of house will enter the market. Fortunately for us, heat waves and pandemics should accelerate this process.
There is the financial bubble. Housing earns money, and all actors ensure it stays this way. To solve that, you need to kill housing as a finance product. The most effective solution (and I think the only effective solution) would be ceiling to location prices. And with that, forbid, through taxes or rule, empty houses. Let the landlords deal with market shit. This would instantly crash the market, which is an excellent thing for everyone but people who rent houses or plan to sell their house.
There is the actual market: we usually need more houses, but building too fast would crash the market. So if you let building to the market, it will never build enough for prices to go down. You need a government that will force construction. You also need laws or taxes against empty houses.
A note on empty houses: it is a very important factor because it allows landlords to control the market by removing or releasing houses on the market. The only empty houses that should be allowed should be for repair or hostel.
There is the globalisation, especially planes. Planes make connected cities kind of neighbours, which means their house prices will become similar over time. This means that changes in plane traffic, laws or airports can affect local housing market. It's not such a big deal though.
There is probably more to say about finance. Loans are probably a factor too, but I don't know enough of it, and what I say in the finance part will affect it too, an probably in greater proportion.
Tl;Dr is simple : you need a brave government to apply simple and known solutions to the problem. Landlords will be ruined and that shouldn't be a concern but that will probably be the reason why nothing will be done.
Oh I need to add a note about boomers because it's interesting now that I think about it.
The thing is that post ww2 capitalism had it that the dream for workers would be to get a work that allow them to buy a house, maybe a second one, and live a good life for that. It worked well, but like all capitalist dreams it was pyramid scheme that ends with us.
That's why most politicians won't do shit about it: it's the core of the American/capitalist dream. It is also why most boomers will never believe or accept any solution to the problem: their whole life was built on this, and now rely on this.
A lot of boomers are also occupying homes much larger than necessary. I live in an older suburb of 1950s houses so its a mix of older people and younger families. Of my immediate neighbors at least 12 of 30 homes are single old people or couples living in 3 or 4 bedroom homes with yards. These are good neighbors because they are quiet and rarely seen but completely wasting space that families could be living in.
In 2007, I might have said "no."
Not until people quit buying them. And it's not sarcasm or trolling or whatever. There are tons of cheap housing, but it's in places people don't WANT to live. Until people start wanting cheap housing more than a certain location/ job, prices won't come down.
It's not even the "location," it's the people that come with the location. If I could live in a rural area ANYWHERE in the US without having to look at Confederate flags or deal with out and proud bigots, it would be amazing. But that's not the country we've let happen.
It's just gonna get worse until everything crashes completely in a way that nobody will own anything they can't carry on their back.
I think it is achievable. But someone has to start doing the economic planning to make it happen in each local area.
One approach is to take political control of each city and resolve the problem by applying sufficient government. Either you make enough housing for the people who are there, or you seize enough stuff for the project that people start leaving. But that can be hard to muster the political will to do.
Alternatively, "housing" per se is not unaffordable: at whatever reasonable fraction of a normal wage, there is somewhere on Earth that you could pay to live. Plenty of empty space in small towns scattered across the US, for example. The problem is that you can't actually live there, because you also need to have a job to pay for the housing, which isn't where the housing/empty land is. Also many of these places are so under-served by municipal services as to be practically uninhabitable: you can afford an RV and you can afford an acre of desert with no electric, water, or sewer service, but you cannot combine the two to create acceptable housing.
If the people who control the cities where the work and services are are unwilling to accommodate residents, then work and services need to be organized in places not under the control of these malicious actors. Ideally with new mechanisms in place to prevent the same failure modes from reoccurring.
With more of a push for WFH (which could be legally required as an option in some cases) and ensuring smaller towns have good internet access, smaller towns could be a lot more viable. They aren't to everyone's taste, but there's plenty of people who would love to live in a small town if not for the hellish commuting they'd have to do and the shoddy internet access.
Having decent transit options to the nearest big city would also help. Small towns often struggle with cars being a necessity because you'd have to go into the big city for many things.
In the early days of the pandemic I was thinking the shift to working from home would cause people to flee cities and move to smaller towns, causing major demographic and social changes.
I was half right. People did move to smaller towns, myself included. But then we saw firsthand how awful they are and moved back to big cities because it's worth it. I could go the rest of my life not living next to mouth breathing MAGAs.
Not sure if we can rely on smaller towns to moderate our prices..
In Australia, they are bringing in a shared equity program that has given me hope. Roll on 2024...
If curious if "affordable housing" has an actual definition? Like is there some formula that we could use?
If the average habitant in a country can buy a house and pay the whole credit in his lifetime, I consider this as affordable housing
Depends, do you want that person to be able to have a partner, kids and something to eat? If no then yeah, probably.
At this moment in The Netherlands:
Oh, and there is a huge shortage and building has dropped to less then 10% of what is needed, due to inflation. The only way hiusing is affordable is when you already live in a bought house and have been living there for about 15+ year. (Bought mine in 2000, before the prizes exploded and after that the mortage rates exploded)
Either the income needs to improve a lot (with constant prizes and rates), or the prizes need to collaps (when that happens nobody will move, to expensive)
If we have affordable housing, that would lower the prices for landlords, and we can't have the leeches hurt
Affordable housing where?
grimly points in the direction of Ohio
As an Ohioan, it's really not a bad place to live. I'm not sure why Ohio became the butt of so many jokes.
If some more blue voters would move here (or come back) it could really be a great place to live.
... and yes compared to the situation in a lot of other states and metro areas, Ohio is very affordable.
I'd rather be homeless ty
Straight up house prices? Yes.
As soon as people start thinking prices can only go up, housing has dropped. Over and over.
Affordable overall, including insurance and maintenance? No, we have never had that, and probably never will.
People talking about societal collapse here, look at the past. It was worse. We have come forward not backwards, overall. Sure it looks dire, but really, would you rather live in the past? Like maybe, if you are a rich white guy, but if so you are probably doing ok now too.
I've got my ears tuned listening for a shoe shine boy telling people to go buy rental properties, markets to plummet immediately after.
Remember that great scene in The Big Short talking to the stripper in Florida who owned four condos two houses and a boat, something like that.
The cost of borrowing is far higher than it was before the 2008 crash, and subprime adjustable rate mortgages have largely been regulated out of existence since then. So while there will be some kind of crisis, it will look different than 2008.
Yes. Housing prices have always crashed about once a decade, ore or less. Also prices tend to plateau for 10-15 years until Incomes catch up. I don’t see why this won’t continue to happen
The only difference is this time we have clear lack of supply, along with impediments to building more housing in places people want to live. There’s a profit incentive to building more and I wouldn’t bet against overcoming those obstacles. Money always wins
There are 17 million vacant houses in the US. Also 60k homeless people. There is plenty of housing if we crunch down on inequality.
Those numbers really aren’t comparable and the relevant data is not sufficiently detailed to make a valid comparison.
https://www.reddit.com/r/badeconomics/comments/musne8/disproving_the_vacant_homes_myth/
What's a vacant house? Is it unowned? Or is it a second house?
You can buy a full on house in Rochester NY for under 40k but you may not want to live there.
I was going to say something very similar. If I look ahead and think about eventually retiring, there’s no way I could afford to do so in my current high cost of living area. However housing prices in the upstate NY town I grew up in, are next to nothing. I could just quit today and live out my savings, but then I’d have to live there
Not without changes in zoning codes, so no.
Unless there's a massive crash or a bubble pops, leading to a significant recession (unlike what we're currently in... Far more severe, and probably more severe than ever before).... No.
It may come down, and kind of ebb and flow a bit, but "affordable" isn't going to be a word used to describe where prices go from here.
Also, we definitely are in a time of great inflation, which is causing recession-like things to happen. If there's a recession at all right now, it's being manufactured by artificially inflated prices by greedy companies, more than anything else. This would be a good thing if "trickle down" economics existed (it doesn't).... So instead, everyone at the bottom is slowly dying while billionaire bank accounts gain a few more percentage points. When the system snaps from the massive disparagy between the ultra rich and the poor, if the system doesn't entirely collapse at that point, then we'll be in yet another unprecedented, once-in-a lifetime event, like we've never seen before. All of the millennial generation will groan and roll their eyes about it happening yet again.
Millennials, and by proxy gen z, have been so completely fucked by all the ultra rare events that have happened over the past two decades... A housing crash, a pandemic, a recession or two, now out of control inflation and insane race wars heating up. I feel like the entire generation is so burned out from it all that if aliens showed up tomorrow, it would barely be a footnote in most people's daily lives. Honestly, anything an alien race did, like taking over the world, would probably be an improvement. Even death at this point, seems more appealing than a lifetime of indentured servitude in an unfair system designed from the ground up to force the "poor" into positions they don't want, doing things they don't enjoy, just to make enough to live. That's not enough to make most of the generation suicidal, but I don't think many people would give a shit either way at this point. Moreso if you don't have dependents.
I believe there are, and will be. Over 20 years ago, I moved to Dallas, TX area for the same reasons - to get away from unaffordable housing in the west and east coast. At the time, I found Dallas to have a good housing price to income ratio.
But in doing so (moving to Dallas), I may have also potentially taken a big (lifetime) pay cut. I graduated from a top ComSci school, but in moving to Dallas, I put myself outside of the market of the emerging FAANG companies in the west coast.
I think now there are still medium size cities where you may find a good balance of cost to value and quality of life. It really depends on your career goals and life goals. There's always a trade off. I believe right now, the midwest is a good value, if you can stand the winters there :)
I know parking lot minimums make it hell for new stores to be built, but does it also affect mid- and high-rises? Because that would fucking suck if that’s another reason it’s hard to make affordable housing.
Yes, it does, and it does.
As long there is no Mass Genocide and Mass Death of Owner,the only possibility would be a to high Interest Rate that forces home owners to sell.
All the Possibilities
Given that most modern construction has a mortgage with some bank, a "Mass Death of Owners (and their descendants and families)" would just make the homes pass on to be property of the bank.
How would a high interest rate help? My mortgage is locked to a fixed rate.
Interesting fact, the Black Death in Europe gave an opportunity to peasants to get a better life. The ruling class did what the ruling class always does, and try to prevent the peasants from getting a better life. Thankfully, the peasants realized "Fuck this. We have power and we're going to wield it."
How the Black Death made life better
What can the Black Death tell us about the global economic consequences of a pandemic?
Not only no, but you better get a burial plot while you can afford it.
Just throw me in the trash!
Yes and the best thing you can do is get ready for it. Don't give up and wait for something to happen before you start preparing. Save your money now and when prices drop you're ready to strike and get what you want quickly
No. We won't be able to solve the problem because we refuse to believe that viable solutions are any more complicated than "put person in house".
No I don't think there will be a crash. I think we might see legislation meant to help affordability become a topic in the 2028 presidential race, when Trump and Biden are definitely out of it so there's a cluster of low-education populist voters in swing states who become swing voters, and the replacement options are decades younger and they will want fresh ideas to be at The forefront of their campaigns.
Yes. And I think soon. Student loan repayments will force people to make tough choices. I think people got into very large mortgages because they could afford it without the student loans, and likely expected rates to drop before the loans restarted.
Those people will probably have to move, possibly short selling the home (where the bank takes your home and sells it for what it can get, clearing your debt in the process even if it's less than your mortgage).
This kind of stuff happened in 2008, and I just saw a graph showing housing slightly less affordable now than then.
Lmao what universe are you living in where people with student loans own homes.
I work at an engineering firm and my coworkers and myself all own homes with student loans. I'm not saying it's a high percentage of people with student loans, but there's definitely a sizable number.
I'm not sure. I don't really believe things will get better, as they only seem to get worse as time passes. I'm a 3rd worlder...
No.
No in this capitalism situation there is no more chance with the actually prices to own an house.
Not in time for people looking to buy soon. I think eventually it may happen but it might take decades.
Depends if the next pandemic kills 50% of the world's population.
It's all based on supply and demand. There is not enough housing for everyone to have one at a price they can afford. The price depends entirely on what the wealthiest buyers are prepared to pay, or rather what a bank is prepared to lend them. It is nothing to do with how much the land or bricks and mortar are worth.
The only way you'll get a price drop is if the amount of properties go up or the demand drops.
We've had long periods of <1% interest rates. We've normalised 40 year mortgages. We've invented "shared ownership" schemes and "help for first time buyers". None of this has bought the prices down. It's done the opposite and blown them into the stratosphere.
It's not only supply and demand, on some countries there's more empty houses than homeless people, rich people and banks rather leave the houses empty than lower rent or price, governments should step in and tax empty houses.
Yes, but that will only help the homeless if they spend all that tax money (and more) on mental health care and addiction therapy.
Spoiler: That's not where it will go.
Also a lot of these empty houses are in places where nobody in their right mind would want to live even if it were free. There's a little bit of rich people squatting on "investment" property or holiday homes, but it's not the majority.
