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Projected population of US in 2050 is 458 million from the current 330 million. Given that underlying reality, housing is going to be an investment.

jeffbee 5y ago
Real-dollar home prices plunged continuously from 1950 to 1970 while the US population increased by one third. Home price inflation is a policy choice, not a law of physics.
- epistasis 5y ago
  Exactly, and in that era the federal government financed massive amounts of new housing (for white people), with the intent of homeownership for nearly all white people. And once homeownership became the norm, those same people started massive downzoning projects to prevent new homes from being built. And shortly after that, funding for public housing was gutted. Which leaves us with the massive shortage we have now. We have plenty of money that is allowed to chase a smaller supply, as long as you can leverage your existing housing asset for a larger down payment. But all those people who didn't buy in the 1980s or earlier are at a massive disadvantage.
onion2k 5y ago
Assuming that the additional 128m people need about 50m - 70m new homes it would make sense that there's going to be a boom in supply of homes in the near future. Without the ability to control or limit that growth it could easily result in an oversupply, especially in any given geographic region, which would lead to a contraction in prices. Unless you're also able to predict where these new citizens will live I'd suggest real estate investing could be quite risky.
- mywittyname 5y ago
  >Unless you're also able to predict where these new citizens will live Larger cities, especially those in warmer regions, is a very good bet.
  - wayoutthere 5y ago
    Climate change will drive a lot of people to the northeast and Midwest in our lifetimes. Much of the Deep South will become unlivably hot and humid, and much of the west will become dry enough that water rationing makes life in the sun not so much fun anymore. If you want to invest, put your money in places like Pittsburgh and Buffalo. Some values along the coast in Baltimore and Philly too. Plenty of cheap real estate out and I suspect we’ll see a revitalization of the rust belt as climate change makes other areas untenable.
ClumsyPilot 5y ago
They are gonna need cars and furniture, yet those are not an investment. Is USA running out of land, or Timber, or unemployed people that could be employed to build a house? We need to get institutional 'investment' out if house flipping and fix zoning. https://youtu.be/CCOdQsZa15o https://youtu.be/CCOdQsZa15o
- epistasis 5y ago
  We have run out of "zoned capacity" in the areas that people want to live. Fortunately, this is an infinite resource, and we could flip simple governmental switches to allow more housing, which generates more property tax to grow the infrastructure. However, existing homeowners are a political bloc that mightily resists flipping that switch, both because they don't like to see change, and also because they benefit financially from a housing shortage. The institutions investors name these exact dynamics in their SEC filings: they know it's a good investment because local politicians listen to homeowners, and the homeowners will guarantee the shortage. So in all honesty, I welcome institutional investors, and lots of them, because one their are more renters, the politics can be flipped. The renters, if they show up as a voting bloc, can finally open up the zoning to allow more housing. Resident homeowners and institutional investors are no different here, they are both greedy investors, except the homeowners are even more greedy (they don't want new people in their city), and rhe homeowners have far more political control.
  - wayoutthere 5y ago
    Agreed about individual homeowners; which is why the use of homes as an investment vehicle is intimately tied with institutionalized racism and redlining. You could not “invest” in redlined areas as banks would not issue mortgages on those properties. So those houses never appreciated in value the same as houses in non-redlined areas, and the generational wealth created by owning your own home was only available to those homeowners in non-redlined areas. The history of redlining is incredibly recent (it was in full force well into the 1990s), so it’s not something we can pretend is a historical artifact. Highly recommend The Color of Law for more on this subject, it really opened my eyes on how laws used to encourage homeownership were also used to marginalize black people.

jeffbee 5y ago

Real-dollar home prices plunged continuously from 1950 to 1970 while the US population increased by one third. Home price inflation is a policy choice, not a law of physics.

epistasis 5y ago
Exactly, and in that era the federal government financed massive amounts of new housing (for white people), with the intent of homeownership for nearly all white people. And once homeownership became the norm, those same people started massive downzoning projects to prevent new homes from being built. And shortly after that, funding for public housing was gutted. Which leaves us with the massive shortage we have now. We have plenty of money that is allowed to chase a smaller supply, as long as you can leverage your existing housing asset for a larger down payment. But all those people who didn't buy in the 1980s or earlier are at a massive disadvantage.

onion2k 5y ago

Assuming that the additional 128m people need about 50m - 70m new homes it would make sense that there's going to be a boom in supply of homes in the near future. Without the ability to control or limit that growth it could easily result in an oversupply, especially in any given geographic region, which would lead to a contraction in prices. Unless you're also able to predict where these new citizens will live I'd suggest real estate investing could be quite risky.

mywittyname 5y ago
>Unless you're also able to predict where these new citizens will live Larger cities, especially those in warmer regions, is a very good bet.
- wayoutthere 5y ago
  Climate change will drive a lot of people to the northeast and Midwest in our lifetimes. Much of the Deep South will become unlivably hot and humid, and much of the west will become dry enough that water rationing makes life in the sun not so much fun anymore. If you want to invest, put your money in places like Pittsburgh and Buffalo. Some values along the coast in Baltimore and Philly too. Plenty of cheap real estate out and I suspect we’ll see a revitalization of the rust belt as climate change makes other areas untenable.

ClumsyPilot 5y ago

They are gonna need cars and furniture, yet those are not an investment. Is USA running out of land, or Timber, or unemployed people that could be employed to build a house? We need to get institutional 'investment' out if house flipping and fix zoning. https://youtu.be/CCOdQsZa15o https://youtu.be/CCOdQsZa15o

epistasis 5y ago
We have run out of "zoned capacity" in the areas that people want to live. Fortunately, this is an infinite resource, and we could flip simple governmental switches to allow more housing, which generates more property tax to grow the infrastructure. However, existing homeowners are a political bloc that mightily resists flipping that switch, both because they don't like to see change, and also because they benefit financially from a housing shortage. The institutions investors name these exact dynamics in their SEC filings: they know it's a good investment because local politicians listen to homeowners, and the homeowners will guarantee the shortage. So in all honesty, I welcome institutional investors, and lots of them, because one their are more renters, the politics can be flipped. The renters, if they show up as a voting bloc, can finally open up the zoning to allow more housing. Resident homeowners and institutional investors are no different here, they are both greedy investors, except the homeowners are even more greedy (they don't want new people in their city), and rhe homeowners have far more political control.
- wayoutthere 5y ago
  Agreed about individual homeowners; which is why the use of homes as an investment vehicle is intimately tied with institutionalized racism and redlining. You could not “invest” in redlined areas as banks would not issue mortgages on those properties. So those houses never appreciated in value the same as houses in non-redlined areas, and the generational wealth created by owning your own home was only available to those homeowners in non-redlined areas. The history of redlining is incredibly recent (it was in full force well into the 1990s), so it’s not something we can pretend is a historical artifact. Highly recommend The Color of Law for more on this subject, it really opened my eyes on how laws used to encourage homeownership were also used to marginalize black people.