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It’s not only a supply issue these days. Even areas that have basically unlimited land and building in Texas have prices going up massively. How do you explain

It’s not only a supply issue these days. Even areas that have basically unlimited land and building in Texas have prices going up massively. How do you explain that?

frankbreetz 5y ago
Building supplies have grown at an insane rate. A lot of builders went out of business because of 2008. It is still a supply issue, just not a land supply issue.
- Ericson2314 5y ago
  Single family homes cannot meet demand, period.
- imtringued 5y ago
  That's a short term problem, it may last 5 years for all I know but it will get solved eventually. Zoning on the other hand is something that will stay for decades and it gets worse over time.
cronix 5y ago
Lumbar as a whole has minimally doubled during the last year[1]. A lot of people are moving to Texas, which raises demand, which raises prices. There is also a current lumbar shortage, which makes house building unpredictable when you have to plan 1+ years out. You don't just go from 0 to a house. There is usually about a year of designing/planning which have to be approved and meet national and local code, numerous inspections, approvals and permits before ground is broken. Most people who move buy an existing house because they want to move "now." Out of all of the places you've lived, how many did you have custom built vs moving into an existing structure? Prices are rising pretty quick in Arizona and Idaho as well. Idaho was the quickest growing state in 2020[2]. Those are also hotbeds of people moving to them. Most are trying to escape California, Chicago and NY. CA and NY lost population and even recently had their US House seats reduced as a result[3]. [1] https://fortune.com/2021/04/27/lumber-prices-are-up-232-and-it-could-spiral-out-of-control-in-the-next-few-months/ https://fortune.com/2021/04/27/lumber-prices-are-up-232-and-... [2] https://www.kxly.com/idaho-leads-country-with-amount-of-people-moving-into-the-state/ https://www.kxly.com/idaho-leads-country-with-amount-of-peop... [3] https://www.usatoday.com/in-depth/news/politics/elections/2021/04/26/census-count-reallocates-7-house-seats-could-affect-2022-midterm/7385392002/ https://www.usatoday.com/in-depth/news/politics/elections/20...
- bobthepanda 5y ago
  For future reference, “lumber” is wood and “lumbar” has to do with your lower back (e.g. “lumbar pain”)
mechagodzilla 5y ago
I'm actually sort-of familiar with this, as I have family that lives all around there. 1) Prices have gone up, but not nearly as much as places where supply is much more constrained (i.e. the bay area or NYC metro area). 2) Even if there is 'unlimited land', the land closest to the city centers where most of the employment is located is still limited. A cheaper house 3 hours away from your job doesn't help someone all that much. 3) Texas absolutely has lots of policies that do things like limit housing density. Many of the huge suburban tracts being developed have home owner's associations that enforce a variety of policies like the ones discussed earlier (enforce uniformity in terms of lot size, minimum house size, parking, etc), as well as limiting your ability to do things like rent or subdivide your property 4) You just need the population to be increasing faster than the housing supply to have a 'supply issue'. This last year has both seen a lot of raw material supply issues (and labor issues) due to the pandemic, and a lot of people also trying to relocate (also due to the pandemic). Sometimes temporary housing prices increases are unavoidable while supply and demand adjust, but long term policy decisions can definitely limit supply and force prices higher. Another commenter also pointed out that low federal interest rates generally promote asset price inflation (as buyers are frequently bidding based on their ability to carry a 30-year monthly mortgage payment, so lower interest rates can almost directly increase home values when people are bidding against each other).

It’s not only a supply issue these days. Even areas that have basically unlimited land and building in Texas have prices going up massively. How do you explain that?

frankbreetz 5y ago

Building supplies have grown at an insane rate. A lot of builders went out of business because of 2008. It is still a supply issue, just not a land supply issue.

Ericson2314 5y ago
Single family homes cannot meet demand, period.
imtringued 5y ago
That's a short term problem, it may last 5 years for all I know but it will get solved eventually. Zoning on the other hand is something that will stay for decades and it gets worse over time.

cronix 5y ago

Lumbar as a whole has minimally doubled during the last year[1]. A lot of people are moving to Texas, which raises demand, which raises prices. There is also a current lumbar shortage, which makes house building unpredictable when you have to plan 1+ years out. You don't just go from 0 to a house. There is usually about a year of designing/planning which have to be approved and meet national and local code, numerous inspections, approvals and permits before ground is broken. Most people who move buy an existing house because they want to move "now." Out of all of the places you've lived, how many did you have custom built vs moving into an existing structure? Prices are rising pretty quick in Arizona and Idaho as well. Idaho was the quickest growing state in 2020[2]. Those are also hotbeds of people moving to them. Most are trying to escape California, Chicago and NY. CA and NY lost population and even recently had their US House seats reduced as a result[3]. [1] https://fortune.com/2021/04/27/lumber-prices-are-up-232-and-it-could-spiral-out-of-control-in-the-next-few-months/ https://fortune.com/2021/04/27/lumber-prices-are-up-232-and-... [2] https://www.kxly.com/idaho-leads-country-with-amount-of-people-moving-into-the-state/ https://www.kxly.com/idaho-leads-country-with-amount-of-peop... [3] https://www.usatoday.com/in-depth/news/politics/elections/2021/04/26/census-count-reallocates-7-house-seats-could-affect-2022-midterm/7385392002/ https://www.usatoday.com/in-depth/news/politics/elections/20...

bobthepanda 5y ago
For future reference, “lumber” is wood and “lumbar” has to do with your lower back (e.g. “lumbar pain”)

mechagodzilla 5y ago

I'm actually sort-of familiar with this, as I have family that lives all around there. 1) Prices have gone up, but not nearly as much as places where supply is much more constrained (i.e. the bay area or NYC metro area). 2) Even if there is 'unlimited land', the land closest to the city centers where most of the employment is located is still limited. A cheaper house 3 hours away from your job doesn't help someone all that much. 3) Texas absolutely has lots of policies that do things like limit housing density. Many of the huge suburban tracts being developed have home owner's associations that enforce a variety of policies like the ones discussed earlier (enforce uniformity in terms of lot size, minimum house size, parking, etc), as well as limiting your ability to do things like rent or subdivide your property 4) You just need the population to be increasing faster than the housing supply to have a 'supply issue'. This last year has both seen a lot of raw material supply issues (and labor issues) due to the pandemic, and a lot of people also trying to relocate (also due to the pandemic). Sometimes temporary housing prices increases are unavoidable while supply and demand adjust, but long term policy decisions can definitely limit supply and force prices higher. Another commenter also pointed out that low federal interest rates generally promote asset price inflation (as buyers are frequently bidding based on their ability to carry a 30-year monthly mortgage payment, so lower interest rates can almost directly increase home values when people are bidding against each other).