5 ms·

> But in places like Tampa, Omaha, Cincinnati, and Phoenix the cost of housing (per square foot) has barely gone up at all. Maybe if you stop looking at like 2

> But in places like Tampa, Omaha, Cincinnati, and Phoenix the cost of housing (per square foot) has barely gone up at all. Maybe if you stop looking at like 2018. But my on-the-ground analysis living on one of these cities is cost of housing has fucking exploooded. I built a house just two years ago, which I thought was incredibly expensive at 2 times the median home price in the area. I had it in the back of my head that I was insane to pay so much for a house, but since I could easily afford it, I went ahead with it. Now, the median price has shot up by 25% and there are literally no new houses available for what I paid. My neighbors are relocating after only a year in their house and sold their house for 20% over what they paid new. The new construction 3 miles down the street from me starts at 30% more than what I paid, and a few are double or more. Meaning, 3-5x the median for the area. All of this is trickling down to the rest of the area. Houses that went for $130k in 2015 have sale prices in the $200k range. We're talking 60s era ranch houses that haven't been updated since the 90s.

texuf 6y ago
With the extremely low interest rates, I wonder if the monthly payments are about the same.
- jeffbee 6y ago
  It doesn't help as much as you've implied since 1) you need 20% of the sticker price for the down payment, and 20% of $200k is more than 20% of $130k, and 2) in many jurisdictions you pay tax on the market value, so your taxes go up whenever mortgage rates fall and prices rise.
  - vondur 6y ago
    Is this true any longer? I assumed you can get into most houses with 10% down, so long as your credit and earnings are good.
  - toomuchtodo 6y ago
    FHA mortgage down payment is 3-5%. There’s frontloaded mortgage insurance as well as ongoing monthly mortgage insurance, but the credit score and down payment requirements are very low. Most people with a pulse qualify. If you come with enough money down, you can get a hard money loan with 70% loan to value (30% down) 1 day after bankruptcy or foreclosure.
  - deleted 6y ago
    [deleted]
hkmurakami 6y ago
YoY median home prices were up 13% nationally in August. That's largely driven by the diaspora we're seeing with WFH/COVID, with people pushing into more affordable communities and driving up prices. Until now we were all competing in major metros pushing up only the top end of the curve but now there's a push towards the median priced areas.
- epistasis 6y ago
  Fewer people are moving during this time period than a year ago: https://www.bloomberg.com/amp/news/articles/2020-09-16/the-truth-about-american-migration-during-covid?__twitter_impression=true https://www.bloomberg.com/amp/news/articles/2020-09-16/the-t... The media talk of diaspora, which is based on narrative and anecdote, needs to be measured and quantified before we can treat it as something that drives housing prices.
- treis 6y ago
  >YoY median home prices were up 13% nationally in August. That's a misleading statistic. It simply means that the houses getting sold has shifted towards the higher end of the market. If you look at the price for the same house it's gone up somewhere around 3% YoY.
  - FireBeyond 6y ago
    So new construction only? And sorry, but in markets like mine, over the last year the average house has spent about 72 hours on the market and "the same house" has been sold multiple times in the last decade each time for approximately a 20% increase.
    - treis 6y ago
      I think the low end of the market isn't selling due to economic insecurity. Also being pushed up by well off city folk moving to the burbs due to Covid.
dcolkitt 6y ago
I agree with you in principle. Since the 2008 crisis, previously developer-friendly mid-sized Sunbelt metros have adopted some NIMBY building restriction policies that would make even coastal California blush. But so far, that hasn't really created a housing affordability crisis... yet. A lot of the impact has been mitigated by falling mortgage rates and rising wages. Let's just take Tampa, as one of the hotter housing markets. Since 2014, median listing prices have gone up 57%.[1] Adjusted for inflation[2], that's 49% real price growth. But over the same period, average mortgage rates have fallen from 4.49% to 2.95%[3]. Meaning for the same house cost, the monthly payment on a 30-year fixed mortgage has fallen by 18%. In addition national median incomes have gone up over the period by 10.5%[4]. (And almost certainly more in Tampa specifically.) Therefore housing affordability has only declined by about 14% for the median household in Tampa. All during an extremely hot housing market. Again, that's still indicative of some recent bad NIMBY policies. If housing supply was perfectly elastic, things like lower mortgage rates and higher wages would benefit consumers instead of inflating property prices. But there's no indication that housing has become drastically more expensive in "flyover country". This conclusion can be spot checked by comparing national consumer expenditure surveys over time. The percent of after-tax income spent on shelter has actually slightly declined from 17.8% to 17.0% during the 2013-2019 period.[5] [1] https://www.zillow.com/tampa-fl/home-values/ https://www.zillow.com/tampa-fl/home-values/ [2] https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm [3] http://www.freddiemac.com/pmms/pmms30.html http://www.freddiemac.com/pmms/pmms30.html [4] https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [5] https://www.bls.gov/cex/2019/standard/multiyr.pdf https://www.bls.gov/cex/2019/standard/multiyr.pdf
- lotsofpulp 6y ago
  Economic opportunity is a big part of deciding where to live. Just like people migrate to America because there is a higher probability of securing security and economic advancement for their descendants, people do the same within the US. In decades past, this might not have been so evident because the entire US was growing and opportunities were available everywhere, but as the disparity of economic growth between regions of the US diverges, it makes sense for people to value real estate in those regions more. And if you think the disparity is going to grow in the future, then you might be willing to risk even more to buy in.
FireBeyond 6y ago
Olympia WA, 60 miles from Seattle, 100 miles from Portland: A recognition (debate, but at least some recognition) of what is called "The Missing Middle" (medium density housing, alternative options, not just SFHs and "high rise"). A proposal is put forth, and there are screams from homeowners, because the study shows that the Average Property Value in the urban growth area will _slow_. Not decrease. But instead go from 12% YoY growth (which is insane) over the past 10 years to, if all measures are put into effect, an estimated 7% YoY growth. Somehow these homeowners have got it into their head that they "have a right to" property value growth which, at its worst, will outpace inflation _by a factor of TEN_. So back to the drawing board we go...

texuf 6y ago

With the extremely low interest rates, I wonder if the monthly payments are about the same.

jeffbee 6y ago
It doesn't help as much as you've implied since 1) you need 20% of the sticker price for the down payment, and 20% of $200k is more than 20% of $130k, and 2) in many jurisdictions you pay tax on the market value, so your taxes go up whenever mortgage rates fall and prices rise.
- vondur 6y ago
  Is this true any longer? I assumed you can get into most houses with 10% down, so long as your credit and earnings are good.
- toomuchtodo 6y ago
  FHA mortgage down payment is 3-5%. There’s frontloaded mortgage insurance as well as ongoing monthly mortgage insurance, but the credit score and down payment requirements are very low. Most people with a pulse qualify. If you come with enough money down, you can get a hard money loan with 70% loan to value (30% down) 1 day after bankruptcy or foreclosure.
- deleted 6y ago
  [deleted]

hkmurakami 6y ago

YoY median home prices were up 13% nationally in August. That's largely driven by the diaspora we're seeing with WFH/COVID, with people pushing into more affordable communities and driving up prices. Until now we were all competing in major metros pushing up only the top end of the curve but now there's a push towards the median priced areas.

epistasis 6y ago
Fewer people are moving during this time period than a year ago: https://www.bloomberg.com/amp/news/articles/2020-09-16/the-truth-about-american-migration-during-covid?__twitter_impression=true https://www.bloomberg.com/amp/news/articles/2020-09-16/the-t... The media talk of diaspora, which is based on narrative and anecdote, needs to be measured and quantified before we can treat it as something that drives housing prices.
treis 6y ago
>YoY median home prices were up 13% nationally in August. That's a misleading statistic. It simply means that the houses getting sold has shifted towards the higher end of the market. If you look at the price for the same house it's gone up somewhere around 3% YoY.
- FireBeyond 6y ago
  So new construction only? And sorry, but in markets like mine, over the last year the average house has spent about 72 hours on the market and "the same house" has been sold multiple times in the last decade each time for approximately a 20% increase.
  - treis 6y ago
    I think the low end of the market isn't selling due to economic insecurity. Also being pushed up by well off city folk moving to the burbs due to Covid.

dcolkitt 6y ago

I agree with you in principle. Since the 2008 crisis, previously developer-friendly mid-sized Sunbelt metros have adopted some NIMBY building restriction policies that would make even coastal California blush. But so far, that hasn't really created a housing affordability crisis... yet. A lot of the impact has been mitigated by falling mortgage rates and rising wages. Let's just take Tampa, as one of the hotter housing markets. Since 2014, median listing prices have gone up 57%.[1] Adjusted for inflation[2], that's 49% real price growth. But over the same period, average mortgage rates have fallen from 4.49% to 2.95%[3]. Meaning for the same house cost, the monthly payment on a 30-year fixed mortgage has fallen by 18%. In addition national median incomes have gone up over the period by 10.5%[4]. (And almost certainly more in Tampa specifically.) Therefore housing affordability has only declined by about 14% for the median household in Tampa. All during an extremely hot housing market. Again, that's still indicative of some recent bad NIMBY policies. If housing supply was perfectly elastic, things like lower mortgage rates and higher wages would benefit consumers instead of inflating property prices. But there's no indication that housing has become drastically more expensive in "flyover country". This conclusion can be spot checked by comparing national consumer expenditure surveys over time. The percent of after-tax income spent on shelter has actually slightly declined from 17.8% to 17.0% during the 2013-2019 period.[5] [1] https://www.zillow.com/tampa-fl/home-values/ https://www.zillow.com/tampa-fl/home-values/ [2] https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm [3] http://www.freddiemac.com/pmms/pmms30.html http://www.freddiemac.com/pmms/pmms30.html [4] https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [5] https://www.bls.gov/cex/2019/standard/multiyr.pdf https://www.bls.gov/cex/2019/standard/multiyr.pdf

lotsofpulp 6y ago
Economic opportunity is a big part of deciding where to live. Just like people migrate to America because there is a higher probability of securing security and economic advancement for their descendants, people do the same within the US. In decades past, this might not have been so evident because the entire US was growing and opportunities were available everywhere, but as the disparity of economic growth between regions of the US diverges, it makes sense for people to value real estate in those regions more. And if you think the disparity is going to grow in the future, then you might be willing to risk even more to buy in.

FireBeyond 6y ago

Olympia WA, 60 miles from Seattle, 100 miles from Portland: A recognition (debate, but at least some recognition) of what is called "The Missing Middle" (medium density housing, alternative options, not just SFHs and "high rise"). A proposal is put forth, and there are screams from homeowners, because the study shows that the Average Property Value in the urban growth area will _slow_. Not decrease. But instead go from 12% YoY growth (which is insane) over the past 10 years to, if all measures are put into effect, an estimated 7% YoY growth. Somehow these homeowners have got it into their head that they "have a right to" property value growth which, at its worst, will outpace inflation _by a factor of TEN_. So back to the drawing board we go...