4 ms·

Are all those new houses occupied? Where are all the people coming from?

maxsilver 5y ago
- A bunch are staying un-bought and remain empty. (The bottom of the market is closing in hours, the top of the market is sitting for months) - A bunch are technically getting occupied, but buyers are having to go way beyond their means to get them. (2008-style, except it's not their fault, you have to live somewhere or die, and you can't manufacture used housing, so it's hard to fault them for taking on risky mortgages. There simply isn't cheaper options) - A bunch are getting bought and turned into luxury rentals, and those rentals are getting occupied. (This might seem like a win, since the end result is people-in-housing, which should be a good thing. But forcing people into unaffordable rental rates permanently hollows out those people's finances, it's super unhealthy unsustainable housing strategy) - A handful are getting bought and getting turned into illegal unlicensed hotels. (Permanent "Air-BnB-s"). - A bunch are getting bought and stay empty. (According to local realtors, "second-home" purchases are up 300% since 2019. Generally, this is wealthy or upper-middle-class coastal urbanites realizing the currency conversion between the coasts and the midwest, and using that to their advantage) Individually none of these are the worst thing or the primary culprit. But added all together, it means that "real people buying houses to sustainably live in", is the least likely scenario for any given home on the market right now here. "Demand" is super high, but most of the "Demand" is kind of fake-demand (demand from finance, demand from investment, demand for vacation -- but not demand for housing to house people). > Where are all the people coming from? They aren't coming. House prices are up 250% this decade, but we've only got a ~1.5% YoY population growth rate (for our city) and a 1% population loss YoY (for our state). We aren't a major city, and we've built more new housing units than had actual new population for 5 years straight now.
- N1H1L 5y ago
  But isn't this creating a house of cards? Or are we heading towards China, where there are in many cases more apartments than people and yet prices have never fallen in the last three decades.
  - mac01021 5y ago
    If a large fraction of the dwellings are truly unoccupied then it is a bubble plain and simple. If it's just a matter of out-of-state money willing to pay a high price to own houses that they can then rent out for a high price after cornering the market, then it's less clear.

- A bunch are staying un-bought and remain empty. (The bottom of the market is closing in hours, the top of the market is sitting for months) - A bunch are technically getting occupied, but buyers are having to go way beyond their means to get them. (2008-style, except it's not their fault, you have to live somewhere or die, and you can't manufacture used housing, so it's hard to fault them for taking on risky mortgages. There simply isn't cheaper options) - A bunch are getting bought and turned into luxury rentals, and those rentals are getting occupied. (This might seem like a win, since the end result is people-in-housing, which should be a good thing. But forcing people into unaffordable rental rates permanently hollows out those people's finances, it's super unhealthy unsustainable housing strategy) - A handful are getting bought and getting turned into illegal unlicensed hotels. (Permanent "Air-BnB-s"). - A bunch are getting bought and stay empty. (According to local realtors, "second-home" purchases are up 300% since 2019. Generally, this is wealthy or upper-middle-class coastal urbanites realizing the currency conversion between the coasts and the midwest, and using that to their advantage) Individually none of these are the worst thing or the primary culprit. But added all together, it means that "real people buying houses to sustainably live in", is the least likely scenario for any given home on the market right now here. "Demand" is super high, but most of the "Demand" is kind of fake-demand (demand from finance, demand from investment, demand for vacation -- but not demand for housing to house people). > Where are all the people coming from? They aren't coming. House prices are up 250% this decade, but we've only got a ~1.5% YoY population growth rate (for our city) and a 1% population loss YoY (for our state). We aren't a major city, and we've built more new housing units than had actual new population for 5 years straight now.

N1H1L 5y ago
But isn't this creating a house of cards? Or are we heading towards China, where there are in many cases more apartments than people and yet prices have never fallen in the last three decades.
- mac01021 5y ago
  If a large fraction of the dwellings are truly unoccupied then it is a bubble plain and simple. If it's just a matter of out-of-state money willing to pay a high price to own houses that they can then rent out for a high price after cornering the market, then it's less clear.