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The thing is the property bubble is predominantly in cities. And those properties are much more rarely mortgaged - its kind of an all or nothing deal if you can
by zanny 8y ago
The thing is the property bubble is predominantly in cities. And those properties are much more rarely mortgaged - its kind of an all or nothing deal if you can outright buy a multi-million dollar condo or not, banks are much less willing to mortgage one.
And there the prices are only going up due to NIMBYism about building for density. There is sea change in our cultural dynamics that is following in the wake of widespread adoption of technology and the Internet - we aren't isolating ourselves on quarter acre copy pasted plots an hour long commute by car from the office, we want to live in 500 square feet of space a few miles by bike or one station away from our office. We marry less, we have less kids, but there is absolutely nobody building anything for this demographic.
In an even more broader context we should be incentivizing people to live as close to peak urbanization because its the optimization of the cost to house and maintain people. People are cheaper for all of society and for nature abroad if they live closer in denser housing with more public infrastructure to support them than to have them living in repeated stick and glue mcmansions on HOA mandated lawns that require a thousand liters of water a year to keep green in the midwest.
We are literally doing the opposite of what we should, and its going to cost economic growth for our entire lives in all likelihood.
- Latteland 8y agoMy experience in Seattle is different. Almost every house or condo in the east side or Seattle is a million plus, and it's really common to put 500k toward one, and pay a substantial mortgage (more than half a mil). So these can be lost with reduction in value combined with a short term mortgage that needs to refinanced, like happened in 2008. If you are a software engineering with 5-10 years experience and a family looking for a house you are in this game probably. These people have a good job but they don't need and often don't have money to cover the rest of their house. I agree with the comment about lack of density in housing leads to these prices (cause people keep freaking moving here). And the point about not much housing being built for people leaving in smaller apartments like 500 sq ft in the dense area applies here. There seems to be mostly refurbished old housing in that range. I guess developers don't think there's a market for that (single person?) or they can't make money or both. I think we need all these kinds of housing (higher density, also smaller places closer to work and transit). People don't priotize transit enough in purchases I think, but of course you can only buy what's built in condos.