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They didn't state any theories on why we're seeing an increase. Is it people spending their vacation money on their home since they can't go anywhere? Is it bec

They didn't state any theories on why we're seeing an increase. Is it people spending their vacation money on their home since they can't go anywhere? Is it because they're working from home now and can't stand looking at that fix/upgrade they've been putting off forever? For those here doing work on your home, why now?

hoka 6y ago
Cheap labor maybe from desperate contractors/handy workers? Low rates?
JMTQp8lwXL 6y ago
It's up a large percent because it fell a large percent at the beginning of Covid. It's a non-story.
- samatman 6y ago
  Misleading, yes. Industries recovering to pre-pandemic levels is anything but a non-story. There's nothing inevitable about that happening right now. It's news.
colordrops 6y ago
My belief is that many renters who have the means to buy a house but have been putting it off have now decided to look for homes because they are stuck in their rental all day and can't do with it what they want. Also, many people are moving to other cities now that they can work remote, and a certain percentage of these people will purchase new homes. These cause a shortage of inventory, so the response is to build homes. Furthermore, interest rates are very low and there is a perception that this won't last, so people are scrambling to get a loan. I believe this because I am one of those people and I know several others in similar situations. I'm in escrow right now.
- cinquemb 6y ago
  This is true, I'm waiting to buy (cash, no mortgage) still, not enough owner bankruptcies yet for me. I can wait until things can no longer operate under "extend and pretend".
  - polotics 6y ago
    The market can stay irrational for much longer than you can stay solvent and/or alive.
    - cinquemb 6y ago
      I've been working remote for 5 years, and I live in ~90m2 apt in jakarta paying what i had to pay to live in a 3 bdr apt in boston with 2 other grown men… made enough long tail risk on HY trash, going into the "pandemic", and will make more again when the bottom falls out and load up on all the garbage for ~8.5 cents on the dollar (current amount of HY that is collateralized coming due within then next 4.5-5 years). I hope it goes on longer, more time to build up more leverage selling trash to folks who believe oft repeated things as if they were the word of god.
      - colordrops 6y ago
        I must admit I'm an engineer and not a financial person, and am having a hard time understanding this. Are these correct: long tail risk: assets that have problems that take a long time to affect the price HY: high yield, meaning they change quickly in price by large percentages and can make more money quickly trash: low priced stocks for crappy companies bottom falls out: market takes a dive garbage: same thing as trash collateralized HY coming due: investments backed by assets that will default leverage: money "oft repeated things": aphorisms about finance that are often wrong, in this case the poster you replied to's comment. I'm probably wrong on half of this and I still don't really get what you are saying. Excuse my ignorance.
        cinquemb 6y ago
        No worries, before i worked in finance (wrote code/developed models to trade futures on daily tf for a firm in RI for about a year), I was only vaguely aware of some of these things > long tail risk: assets that have problems that take a long time to affect the price Not necessarily, could be any asset or derivative that could be susceptible to experiencing large declines in return relative to normal conditions during certain periods of time > HY: high yield, meaning they change quickly in price by large percentages and can make more money quickly No, high yield bonds. Avg yield on 4.5-5 year maturing ones right now is about 6%. Or at least the 1217 cusips I track ASOF mon close. > trash: low priced stocks for crappy companies Not just stocks, but yes > garbage: same thing ^^^ > collateralized HY coming due: investments backed by assets that will default about 91.8% of HY bonds coming due in 4.5-5 years are not backed by any collateral. "Will default" is subjective, but my work has about 61% have a good chance of default (from ratings, current price of the bonds, 10-q/10k data available), not including liquidity premiums/discounts for people who "want out now", not including leverage actors take when buying/lending such now like they do. > leverage: money Borrowing money in order to increase ones exposure (or contracts that act as such), larger returns/drawdowns are expected if (not) managed properly compared to not borrowing to finance a position (or buying the underlying out right in cash). > "oft repeated things": aphorisms about finance that are often wrong Or wrong in certain contexts.
bradlys 6y ago
I'm pretty sure it's in the first line of the article. > Construction of new U.S. homes surged 22.6% last month as homebuilders bounced back from a lull induced by the coronavirus pandemic. "bounced back" being the takeaway. It's just bouncing back to somewhat normal levels after it being down a lot.
alasdair_ 6y ago
It sounds like it’s a big deal, and it’s been all over the media, yet US housing starts are still below the levels seem in February 2020, so it’s more a return to normal than anything. https://tradingeconomics.com/united-states/housing-starts https://tradingeconomics.com/united-states/housing-starts That being said, lumber prices are up 50% for just six months ago.
- aaomidi 6y ago
  > That being said, lumber prices are up 50% for just six months ago. How much of this is because of wildfires causing disruptions?
  - foota 6y ago
    I don't think there's that much logging in california, is there? This site[1] has an outdated table. California was 6% of lumber production in 2015. 1: https://oregonforests.org/blog/oregon-number-one https://oregonforests.org/blog/oregon-number-one
    - nostrademons 6y ago
      The areas that are burning are not really large timber producers. The CZU fire is largely in protected state & county parks. The SCU and LNU fires are largely in ranch grassland & chaparral, frequently used for grazing cattle. Christmas season may be a bust though - a lot of the Christmas tree farms in the Bay Area are in areas threatened by the CZU fire. Most of the timber production in California comes from way up north, in the Eureka area and in the Sierra Nevadas. This area is somewhat resistant to fires since it gets so much more moisture and precipitation.
    - aaomidi 6y ago
      > I don't think there's that much logging in california, is there? No idea was just thinking out loud
  - maxerickson 6y ago
    Uncertainty is bad for the supply chain. Saw mills aren't sure they are going to buy logs and living trees are better than rotting logs and so on.
0DHm2CxO7Lb3 6y ago
My guess, people are moving away from the cities out to the suburbs because the great thing about the cities are all the social events, restaurants, and activities which are mostly shutdown and a lot of people don't need commute to work since they work remote now. So might as well move out from an apartment into a bigger house. Then there might also be a fear of higher crime, taxes, etc
- jupiter90000 6y ago
  This theory doesn't make a lot of sense to me, I've heard it a few times though. Why would someone buy a house away from the city during a temporary pandemic shutdown, assuming when things eventually open up again more in say max a year or two, they will need/want to be back in the city? I mean permanent remote work is one thing, I guess, but everything else that has 'gone away' hopefully will not be that way permanently (?)
  - adjkant 6y ago
    Not sure that I buy the theory either at the macro level, but I think one thing I have personally seen/heard of is people who are now realizing how much they don't like the city life (even when things are open) and the pandemic is the straw to break the camel's back here and convince them to go elsewhere to try something else. The key is that it's not temporary for them. Even the people that are there for work and already knew their city reality may also be realizing their gained happiness out of the city is worth more than the financial boost of their job in the city.
  - tal8d 6y ago
    I'll be very surprised if things get much better anytime soon, certainly not before the end of the year. Maybe two years from now... but I wouldn't bet on it. I live in a city where some questionable calls were made with regard to rioters, so I'm eager to put some distance between that and myself.
  - bluGill 6y ago
    Where you live is a compromise. With the city benifet gone but not the suburban ones the suburbs look attractive to people who are on the fence anyway.
jb775 6y ago
Rent prices are sky-high, there's social unrest in large cities, interest rates are crazy low, and many companies are now ok with remote working. It's a good time to invest in the suburbs if you can find a decent price.

hoka 6y ago

Cheap labor maybe from desperate contractors/handy workers? Low rates?

JMTQp8lwXL 6y ago

It's up a large percent because it fell a large percent at the beginning of Covid. It's a non-story.

samatman 6y ago
Misleading, yes. Industries recovering to pre-pandemic levels is anything but a non-story. There's nothing inevitable about that happening right now. It's news.

colordrops 6y ago

My belief is that many renters who have the means to buy a house but have been putting it off have now decided to look for homes because they are stuck in their rental all day and can't do with it what they want. Also, many people are moving to other cities now that they can work remote, and a certain percentage of these people will purchase new homes. These cause a shortage of inventory, so the response is to build homes. Furthermore, interest rates are very low and there is a perception that this won't last, so people are scrambling to get a loan. I believe this because I am one of those people and I know several others in similar situations. I'm in escrow right now.

cinquemb 6y ago
This is true, I'm waiting to buy (cash, no mortgage) still, not enough owner bankruptcies yet for me. I can wait until things can no longer operate under "extend and pretend".
- polotics 6y ago
  The market can stay irrational for much longer than you can stay solvent and/or alive.
  - cinquemb 6y ago
    I've been working remote for 5 years, and I live in ~90m2 apt in jakarta paying what i had to pay to live in a 3 bdr apt in boston with 2 other grown men… made enough long tail risk on HY trash, going into the "pandemic", and will make more again when the bottom falls out and load up on all the garbage for ~8.5 cents on the dollar (current amount of HY that is collateralized coming due within then next 4.5-5 years). I hope it goes on longer, more time to build up more leverage selling trash to folks who believe oft repeated things as if they were the word of god.
    - colordrops 6y ago
      I must admit I'm an engineer and not a financial person, and am having a hard time understanding this. Are these correct: long tail risk: assets that have problems that take a long time to affect the price HY: high yield, meaning they change quickly in price by large percentages and can make more money quickly trash: low priced stocks for crappy companies bottom falls out: market takes a dive garbage: same thing as trash collateralized HY coming due: investments backed by assets that will default leverage: money "oft repeated things": aphorisms about finance that are often wrong, in this case the poster you replied to's comment. I'm probably wrong on half of this and I still don't really get what you are saying. Excuse my ignorance.
      - cinquemb 6y ago
        No worries, before i worked in finance (wrote code/developed models to trade futures on daily tf for a firm in RI for about a year), I was only vaguely aware of some of these things > long tail risk: assets that have problems that take a long time to affect the price Not necessarily, could be any asset or derivative that could be susceptible to experiencing large declines in return relative to normal conditions during certain periods of time > HY: high yield, meaning they change quickly in price by large percentages and can make more money quickly No, high yield bonds. Avg yield on 4.5-5 year maturing ones right now is about 6%. Or at least the 1217 cusips I track ASOF mon close. > trash: low priced stocks for crappy companies Not just stocks, but yes > garbage: same thing ^^^ > collateralized HY coming due: investments backed by assets that will default about 91.8% of HY bonds coming due in 4.5-5 years are not backed by any collateral. "Will default" is subjective, but my work has about 61% have a good chance of default (from ratings, current price of the bonds, 10-q/10k data available), not including liquidity premiums/discounts for people who "want out now", not including leverage actors take when buying/lending such now like they do. > leverage: money Borrowing money in order to increase ones exposure (or contracts that act as such), larger returns/drawdowns are expected if (not) managed properly compared to not borrowing to finance a position (or buying the underlying out right in cash). > "oft repeated things": aphorisms about finance that are often wrong Or wrong in certain contexts.

bradlys 6y ago

I'm pretty sure it's in the first line of the article. > Construction of new U.S. homes surged 22.6% last month as homebuilders bounced back from a lull induced by the coronavirus pandemic. "bounced back" being the takeaway. It's just bouncing back to somewhat normal levels after it being down a lot.

alasdair_ 6y ago

It sounds like it’s a big deal, and it’s been all over the media, yet US housing starts are still below the levels seem in February 2020, so it’s more a return to normal than anything. https://tradingeconomics.com/united-states/housing-starts https://tradingeconomics.com/united-states/housing-starts That being said, lumber prices are up 50% for just six months ago.

aaomidi 6y ago
> That being said, lumber prices are up 50% for just six months ago. How much of this is because of wildfires causing disruptions?
- foota 6y ago
  I don't think there's that much logging in california, is there? This site[1] has an outdated table. California was 6% of lumber production in 2015. 1: https://oregonforests.org/blog/oregon-number-one https://oregonforests.org/blog/oregon-number-one
  - nostrademons 6y ago
    The areas that are burning are not really large timber producers. The CZU fire is largely in protected state & county parks. The SCU and LNU fires are largely in ranch grassland & chaparral, frequently used for grazing cattle. Christmas season may be a bust though - a lot of the Christmas tree farms in the Bay Area are in areas threatened by the CZU fire. Most of the timber production in California comes from way up north, in the Eureka area and in the Sierra Nevadas. This area is somewhat resistant to fires since it gets so much more moisture and precipitation.
  - aaomidi 6y ago
    > I don't think there's that much logging in california, is there? No idea was just thinking out loud
- maxerickson 6y ago
  Uncertainty is bad for the supply chain. Saw mills aren't sure they are going to buy logs and living trees are better than rotting logs and so on.

0DHm2CxO7Lb3 6y ago

My guess, people are moving away from the cities out to the suburbs because the great thing about the cities are all the social events, restaurants, and activities which are mostly shutdown and a lot of people don't need commute to work since they work remote now. So might as well move out from an apartment into a bigger house. Then there might also be a fear of higher crime, taxes, etc

jupiter90000 6y ago
This theory doesn't make a lot of sense to me, I've heard it a few times though. Why would someone buy a house away from the city during a temporary pandemic shutdown, assuming when things eventually open up again more in say max a year or two, they will need/want to be back in the city? I mean permanent remote work is one thing, I guess, but everything else that has 'gone away' hopefully will not be that way permanently (?)
- adjkant 6y ago
  Not sure that I buy the theory either at the macro level, but I think one thing I have personally seen/heard of is people who are now realizing how much they don't like the city life (even when things are open) and the pandemic is the straw to break the camel's back here and convince them to go elsewhere to try something else. The key is that it's not temporary for them. Even the people that are there for work and already knew their city reality may also be realizing their gained happiness out of the city is worth more than the financial boost of their job in the city.
- tal8d 6y ago
  I'll be very surprised if things get much better anytime soon, certainly not before the end of the year. Maybe two years from now... but I wouldn't bet on it. I live in a city where some questionable calls were made with regard to rioters, so I'm eager to put some distance between that and myself.
- bluGill 6y ago
  Where you live is a compromise. With the city benifet gone but not the suburban ones the suburbs look attractive to people who are on the fence anyway.

jb775 6y ago

Rent prices are sky-high, there's social unrest in large cities, interest rates are crazy low, and many companies are now ok with remote working. It's a good time to invest in the suburbs if you can find a decent price.