5 ms·

7k millennials will be happy to buy them up at affordable prices.

ineedasername 5y ago
Unfortunately, at an average price of about $400,000 most of them are not going to be affordable for a typical young first-time buyer.
- jdavis703 5y ago
  $400k seems very affordable. I could easily buy a house today if that’s what FHA-grade (i.e. something more than a burned out shack) housing went for. In my county the median house goes for over $1 million.
  - Loughla 5y ago
    The median home price in Q3 2021 is $404,000. That is shockingly high, but definitely not close to the 1 million figure.
    - jdavis703 5y ago
      According to Zillow the median price is $1.018 million in Alameda County. I probably should’ve been more specific in my post since “my county” could be anywhere.
  - webinvest 5y ago
    What country is that?
    - kadomony 5y ago
      He said "county", not country.
    - jdavis703 5y ago
      USA.
  - ineedasername 5y ago
    Affordable for you (and any US-based millennial with a strong education & job in the tech sector or other high skilled labor) is very different than affordable for the typical millennial, especially ones born in the last 1/3 of that generation that haven't had as much time to work up the salary scale a bit.
    - jdavis703 5y ago
      Assuming 20% down and good credit, the bank will make a loan to someone earning $61,000 a year for that. This is hardly “tech sector” level income, but yeah it also isn’t affordable to the bottom third of millennials either.
- PragmaticPulp 5y ago
  Not really. Mortgage rates are so low that even with only 5% down the monthly mortgage payments on a $400K house are similar to what someone would be paying for monthly rent in these cities. Mortgage rates are incredibly low and there are a number of options to reduce down payment requirements right now. Meanwhile, wages are up and better paying jobs are more common for young people. $400K isn’t out of reach at all for a lot of first-time home buyers in this economy.
  - whimsicalism 5y ago
    I doubt they are $400k in the city.
  - gizdan 5y ago
    5% is still $20k. When you're living payslip to payslip, even $5k is too much as a deposit is too much.
    - ct0 5y ago
      But 5% is better than 20% down. Most have the capacity to save but choose not to.
      - t-writescode 5y ago
        5% down on a 400k place is 20k. Sure, I suppose someone earning a normal wage could scrounge together 20k in, let's say, 5-10 years, but then they would use *ALL* of their savings and have no emergency fund anymore, to use that 20k. Further, then you look at all the costs you get hit by when buying a house such as closing, etc, and that 20k turns out to be 28k, so they'll need to save for even more years. And now the house isn't 400k, it's 450 or 500, so instead of 20k, they instead need 25k, and with closing costs, now it's 35k because those went up proportionally, as well.
      - gizdan 5y ago
        At current minimum wage, saving 20k will take years and years. Most non-tech folks just do not earn enough to save. It's not that they don't want to, or choose not to. It's that they don't have disposible income. 5% is certainly better than 20%, but when you don't have the money, even 1% deposit is too much.
- brendoelfrendo 5y ago
  Most millennials are in their 30s now, so they're either not typical young first-time buyers or have deferred buying housing until now.
wayoutthere 5y ago
There is plenty of idle money in the investment world that needs places to go, unfortunately. Homebuyers are still being priced out by institutional investors looking to be long-term landlords. The market consensus right now is that inflation is here to stay for the next decade and bond prices aren’t adjusting accordingly, so there’s a flood of cash into all asset classes to try to hedge.
- djrogers 5y ago
  > Homebuyers are still being priced out by institutional investors looking to be long-term landlords. There’s really no evidence that this is the cause of any of the housing bubble. Sure, it makes a good twitter thread, but institutional investors make up a tiny percentage (1%ish) of single family rentals… [1] https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble https://www.vox.com/22524829/wall-street-housing-market-blac...
  - orangepurple 5y ago
    Yet for some reason we are always being outbid by them
  - 88913527 5y ago
    As percentage of the entire market, 1% is small. But prices are set on the margin: the currently active buyers and sellers. Only a small fraction of the entire housing stock churns over each year. So if institutional investors want to buy a few thousand homes, it's absolutely substantial on its impact to prices. Only 40,000 homes are sold annually in San Diego county, despite there being 1.4 million residents.
  - mellavora 5y ago
    Actually, yes there is. My brother has a senior position at HUD, they've been very concerned about this the last few years. You won't hear this at the cabinet level, because those are all political appointees, but when you get down to the career people, they have grave concern over institutional buyers.
- silisili 5y ago
astuyvenberg 5y ago
They're not selling them to retail buyers, they're selling to institutional investors.
agilob 5y ago
Even more people are happy that this scam failed
ishjoh 5y ago
sure, and that would be great, but unfortunately it's more likely this is going to be sold to Invitation Homes Inc or a similar company that will just turn them into rentals and they'll never enter the housing market for sale. Invitation Homes was created after the last crash and currently owns ~80k [1] homes, so an additional 7k would represent ~10% more, and if the discount is right from Zillow they will do it. I'm speculating but I bet that's why Zillow is trying to do this in a bigger deal, they don't want to crash the housing market by actually selling these houses to individuals. [1] - https://en.wikipedia.org/wiki/Invitation_Homes https://en.wikipedia.org/wiki/Invitation_Homes

Unfortunately, at an average price of about $400,000 most of them are not going to be affordable for a typical young first-time buyer.

jdavis703 5y ago
$400k seems very affordable. I could easily buy a house today if that’s what FHA-grade (i.e. something more than a burned out shack) housing went for. In my county the median house goes for over $1 million.
- Loughla 5y ago
  The median home price in Q3 2021 is $404,000. That is shockingly high, but definitely not close to the 1 million figure.
  - jdavis703 5y ago
    According to Zillow the median price is $1.018 million in Alameda County. I probably should’ve been more specific in my post since “my county” could be anywhere.
- webinvest 5y ago
  What country is that?
  - kadomony 5y ago
    He said "county", not country.
  - jdavis703 5y ago
    USA.
- ineedasername 5y ago
  Affordable for you (and any US-based millennial with a strong education & job in the tech sector or other high skilled labor) is very different than affordable for the typical millennial, especially ones born in the last 1/3 of that generation that haven't had as much time to work up the salary scale a bit.
  - jdavis703 5y ago
    Assuming 20% down and good credit, the bank will make a loan to someone earning $61,000 a year for that. This is hardly “tech sector” level income, but yeah it also isn’t affordable to the bottom third of millennials either.
PragmaticPulp 5y ago
Not really. Mortgage rates are so low that even with only 5% down the monthly mortgage payments on a $400K house are similar to what someone would be paying for monthly rent in these cities. Mortgage rates are incredibly low and there are a number of options to reduce down payment requirements right now. Meanwhile, wages are up and better paying jobs are more common for young people. $400K isn’t out of reach at all for a lot of first-time home buyers in this economy.
- whimsicalism 5y ago
  I doubt they are $400k in the city.
- gizdan 5y ago
  5% is still $20k. When you're living payslip to payslip, even $5k is too much as a deposit is too much.
  - ct0 5y ago
    But 5% is better than 20% down. Most have the capacity to save but choose not to.
    - t-writescode 5y ago
      5% down on a 400k place is 20k. Sure, I suppose someone earning a normal wage could scrounge together 20k in, let's say, 5-10 years, but then they would use *ALL* of their savings and have no emergency fund anymore, to use that 20k. Further, then you look at all the costs you get hit by when buying a house such as closing, etc, and that 20k turns out to be 28k, so they'll need to save for even more years. And now the house isn't 400k, it's 450 or 500, so instead of 20k, they instead need 25k, and with closing costs, now it's 35k because those went up proportionally, as well.
    - gizdan 5y ago
      At current minimum wage, saving 20k will take years and years. Most non-tech folks just do not earn enough to save. It's not that they don't want to, or choose not to. It's that they don't have disposible income. 5% is certainly better than 20%, but when you don't have the money, even 1% deposit is too much.
brendoelfrendo 5y ago
Most millennials are in their 30s now, so they're either not typical young first-time buyers or have deferred buying housing until now.

wayoutthere 5y ago

There is plenty of idle money in the investment world that needs places to go, unfortunately. Homebuyers are still being priced out by institutional investors looking to be long-term landlords. The market consensus right now is that inflation is here to stay for the next decade and bond prices aren’t adjusting accordingly, so there’s a flood of cash into all asset classes to try to hedge.

djrogers 5y ago
> Homebuyers are still being priced out by institutional investors looking to be long-term landlords. There’s really no evidence that this is the cause of any of the housing bubble. Sure, it makes a good twitter thread, but institutional investors make up a tiny percentage (1%ish) of single family rentals… [1] https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble https://www.vox.com/22524829/wall-street-housing-market-blac...
- orangepurple 5y ago
  Yet for some reason we are always being outbid by them
- 88913527 5y ago
  As percentage of the entire market, 1% is small. But prices are set on the margin: the currently active buyers and sellers. Only a small fraction of the entire housing stock churns over each year. So if institutional investors want to buy a few thousand homes, it's absolutely substantial on its impact to prices. Only 40,000 homes are sold annually in San Diego county, despite there being 1.4 million residents.
- mellavora 5y ago
  Actually, yes there is. My brother has a senior position at HUD, they've been very concerned about this the last few years. You won't hear this at the cabinet level, because those are all political appointees, but when you get down to the career people, they have grave concern over institutional buyers.
silisili 5y ago

astuyvenberg 5y ago

They're not selling them to retail buyers, they're selling to institutional investors.

agilob 5y ago

Even more people are happy that this scam failed

ishjoh 5y ago

sure, and that would be great, but unfortunately it's more likely this is going to be sold to Invitation Homes Inc or a similar company that will just turn them into rentals and they'll never enter the housing market for sale. Invitation Homes was created after the last crash and currently owns ~80k [1] homes, so an additional 7k would represent ~10% more, and if the discount is right from Zillow they will do it. I'm speculating but I bet that's why Zillow is trying to do this in a bigger deal, they don't want to crash the housing market by actually selling these houses to individuals. [1] - https://en.wikipedia.org/wiki/Invitation_Homes https://en.wikipedia.org/wiki/Invitation_Homes