43 ms·

Will real estate ever be normal again?

201 points by jbredeche 5y ago

Arthurola 5y ago
The question of real estate has always been one of the most critical issues in everyone's life. Of course, buying your real estate involves a lot of problems, questions, and uncertainties that everyone has to go through. Investing in real estate has been a topical issue for a long time. It is not the wrong way to have an additional or basic income. I think now is the best time to start investing in real estate. But, according to you, there are no decent offers right now. I'm afraid I have to disagree with that because if you're an expert in this business, you can easily find a good option. You don't have to invest in expensive real estate. Many options allow you to earn at a low cost, purchasing an investment property.https://www.playarealestategroup.com/Tulum_Real_Estate_Listings/page_2515901.html https://www.playarealestategroup.com/Tulum_Real_Estate_Listi... The most important thing is to take an interest in this subject and improve your skills.
jschveibinz 5y ago
Clickbait title. Article is about the real estate prices in Austin, TX after Tesla announced the move there. Will real estate ever be normal again? I think that what's happening in real estate is perfectly normal from an economics point of view. Mortgage rates are extremely low, more people are moving because of remote work opportunities, and the younger folks wanting to buy homes now outnumber the baby boomers, all of which has created high demand for houses. Zoning regulations seem to have limited the construction of denser, multi-family home options like townhomes, duplexes, etc. And construction of new homes was likely affected by supply problems with labor and materials during the height of the pandemic.
- mdaniel 5y ago
  > Zoning regulations seem to have limited the construction of denser, multi-family home options like townhomes, duplexes, etc. I was curious about that claim and had a look in Berkeley; there are _a lot_ of R2 zoned plots, and while I didn't do the math, just eyeballing the colors I'd guess there are actually more R2 than R1 plots https://www.cityofberkeley.info/gisportal/ https://www.cityofberkeley.info/gisportal/ The SF map is objectively harder to use, but seems to have a similar "majority is RH-2 zoned" story: https://sfplanning.org/sites/default/files/resources/2019-02/zoning_use_districts.pdf https://sfplanning.org/sites/default/files/resources/2019-02...
- anonu 5y ago
  agree. this is the "new normal". $4tr stimulus which takes years to permeate through the economy + continued low interest rates + population and worker reshuffle post-pandemic which will take many many years to figure out.
- jp57 5y ago
  Yeah, this article is describing the situation in Austin the spring. I'm here, my wife is an agent. Prices are higher now than they were, but the multiple-offer insanity has long since abated. I saw this article and couldn't figure out why it was news.
- vlunkr 5y ago
  On top of the things you mentioned, the pandemic caused supply shortages, meaning new development was slowed at a time when it should have accelerated. Also, I don't have evidence for this, but there seems to be phycological impact where people really want what they can't have, and are willing to bid more, and go into more debt than they would in normal circumstances.
  - janeroe 5y ago
    > the pandemic caused supply shortages Right, it's that Pandemic guy who is ruining everything. He's the one who prints money, closes cities, organizes supply shortages, exacerbates poverty. Someone must arrest him already.
- MuffinFlavored 5y ago
  > which has created high demand for houses Does anybody have any guess on when that high demand will come down and match more closely to the supply? I don't see anything that will push residential real estate prices down in the next few years. Interest rates and property values are linked. Selling agents help buyers target a monthly price figure, all relative to interest rates + property values. Rates low? Raise asking price. Rates high? Lower. In the end, same $x/mo payment they target that they know families can afford/shop by.
rossdavidh 5y ago
Should have a (2007) in the description. :)
- deleted 5y ago
  [deleted]
- Supermancho 5y ago
  https://www.nytimes.com/2021/11/12/magazine/real-estate-pandemic.html https://www.nytimes.com/2021/11/12/magazine/real-estate-pand... The publication year is 2021, which is the typical way a story is tagged. I have to wonder why 2007 and not 1913 or 1929? Throwing out a date does not imply a specific context or add to the discussion.
  - rossdavidh 5y ago
    Sorry, just a joke.
  - ByteJockey 5y ago
    2007 implies right before the 2008 recession where housing prices tanked. In 2007 people were panic buying houses because they thought that if they didn't buy right now, they'd never be able to afford to buy a house.
    - IAmGraydon 5y ago
      It’s true…the market always seems to turn when you start seeing widespread sentiment that it will never turn.
      - iknowSFR 5y ago
        The article directly addresses this: “The last time U.S. housing saw such rampant price growth was in 2005, and the market corrected itself, infamously, in 2008. But the underlying reality today is different. Back then, a geyser of subprime adjustable-rate mortgages sputtered out as borrowers defaulted. (According to Bloomberg News, 60 percent of mortgages during the bubble years were adjustable rate; fewer than 0.1 percent of mortgages are now.) The current boom is better compared to a river, one fed by streams that have long been visible on the horizon: high demand, low supply and a dysfunctional economy in which wages are stagnant while restrictive zoning and poor public policy have turned housing into an artificially scarce commodity. Historically low 30-year fixed mortgage interest rates, hovering between 2.68 and 3.08 for the last year, are narrowing the riverbed, quickening the current.”
WarOnPrivacy 5y ago
Renters and buyers are increasingly in the same boat - the one where people with money in the bank are finding there's nowhere to live. In the case of renters, many with savings are facing homelessness - once those savings are burned up on hotels. This isn't a dramatization or overstatement. It's what I'm witnessing personally and very nearly happened to us. We were one of the few to beat long odds and score a place to live.
- thefounder 5y ago
  Why don't you move to a cheaper place/smaller city? I don't understand why there are some many homeless people in big cities (i.e NYC). If people would just move to cheaper areas/cities the whole issue of housing would be fixed.
  - ioseph 5y ago
    * Not everybody can work remotey (nor want to) * Health and Education services tend to be much poorer
  - hprotagonist 5y ago
    My community is here. How is it just that I be forced into exile because “the market” says so? I’ve done no wrong.
    - wankerrific 5y ago
      Sorry. You’re going to have to move. Owning is for investors, banks, and other financial entities. /s The best part is that if things go upside down in a few years we get to bail them out.
      - flyinglizard 5y ago
        Aren’t most houses owned by their inhabitants, rather than evil corporate entities?
jschveibinz 5y ago
I commented on this same article yesterday: https://news.ycombinator.com/item?id=29212851 https://news.ycombinator.com/item?id=29212851 Here is a link to a relevant article on the zoning part of the problem, posted today: https://news.ycombinator.com/item?id=29219042 https://news.ycombinator.com/item?id=29219042
- dang 5y ago
  I've moved your lonely comment into this thread and rolled back the clock on it so it ranks normally relative to the others. Thanks for not copy-pasting :) I've also put that other submission into the second-chance pool (https://news.ycombinator.com/pool https://news.ycombinator.com/pool, explained at https://news.ycombinator.com/item?id=26998308 https://news.ycombinator.com/item?id=26998308), so it will get a random placement on HN's front page. Thanks!
99_00 5y ago
"Normal" is meaningless. Markets are always changing. This market will also change. Maybe increasing impact of work from home and empty office buildings will do it in the near term. Maybe baby boomers downsizing, moving into homes, and dying will do it in the long term. Maybe there will be runaway inflation and the fed will bring in and crippling interest rates that cause a deep recession in the short term. But the future market won't be what it is today. The same shortsightedness that wasn't able to foresee the impact of millennials will fail to see what comes next. The demographic impact of the millennial generation was a big topic of discussion in the late 90s and early 2000s. Since then the discussion has gotten a lot stupider focusing on pop culture stereotypes. A large group of people passing through life stages at the same time are going to have an impact.
throwaway55421 5y ago
It will change when people want it to change, just like workers' rights did over the last century. If you don't want to pay a million quid for a house in London, refuse the game. Move elsewhere. Find a different way to get by in life, perhaps even a different country. People won't do that, though. It's more likely, IMO, that the entire world becomes more feudalist again until there are few escape hatches. But it'll ultimately be because people keep buying in. As long as people, en masse, continue to max bid housing (whether for rent or to buy) this situation will continue.
- jedberg 5y ago
  Workers' rights and housing are very different. It's a lot easier to move jobs than to move house. It's also a lot easier to create jobs than to create housing.
  - throwaway55421 5y ago
    Workers rights were not generally gained by moving jobs, it was unionization and protest. Moving house doesn't change the market unless everyone else does it, and even then, the major benefit would come from something like large numbers of people agreeing not to max bid (i'm not suggesting that such a thing would be realistic, but it's an example of unionization)
- chuckee 5y ago
  > If you don't want to pay a million quid for a house in London, refuse the game. Move elsewhere. Find a different way to get by in life, perhaps even a different country. People did exactly what you suggest. And the country they moved to was England, and the city, London, which now has 38% non-UK born residents: https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/ukpopulationbycountryofbirthandnationality/2017#london-has-the-highest-proportion-of-non-uk-born-and-non-british-nationals https://www.ons.gov.uk/peoplepopulationandcommunity/populati...
  - throwaway55421 5y ago
jedberg 5y ago
Not until zoning or ownership laws change. More people want to live in the places then there are places to live. There are three ways to fix this: incentivize builders to build more places to live, have the government build housing, or penalize investors. Or any combination of the three.
- DannyBee 5y ago
  Or tell people no, and be happy with a place that works. Eventually people will leave when they can't be there. The option of "growing to meet exponential need" rarely, if ever, actually works in the end. By works i mean "leads to an equilibrium that actually is any good" Usually what happens is people push on creating housing, and think once they've done it, the rest will take care of itself. This is the easy part. The rest is much worse - now you have more people! The density and scale of population will increase until the local governments/etc fail hard enough at providing services, which often happens quicker than one would expect. Being effective at providing public transportation/police/fire/schools/health/etc in a dense, populous area is much harder and more expensive than often seems thought. Especially if you haven't been planning to do it for 50 years and setting yourself up for it. It also requires ever more careful planning as it grows (in how land is laid out, etc), and you will hit tons of problems anyway. For a random example: When your police/fire grows large enough, it ends up with lots of political power of its own. It's also much harder for governments to stay efficient in spending at all as they grow, making services/etc even more expensive to provide. The places that i knew that were successful at becoming denser were willing to admit this. The ones that were not, often pretend they will make it back in increased taxes on their own, but they never did (and often end up in cycles of tax increase/drops/etc until the infrastructure fails) Once you are forced to raise taxes/bonds/etc, you end up with a whole host of practical problems (politicians winning on short-term-lower-taxes-long-term-destruction platforms) This is just a sampling. Overall, it's like scaling anything human. Having a team of 10 works really well. Having a team of 1000 is really hard. Lots of cities that go down this path end up as basically tax revenue Ponzi schemes - they have to keep growing because they need to keep borrowing against the ever-more-expensive future In the end, it simply isn't unreasonable for cities to not want to play the game, and to be happy with sustainable size, services, and tax revenue, even if it makes things unhappy for others who want to join in. Thankfully population growth is slowing down, and we are below replacement rate right now.
Mandatum 5y ago
https://archive.md/AAMM6 https://archive.md/AAMM6
- neonate 5y ago
  http://web.archive.org/web/20211114163033/https://www.nytimes.com/2021/11/12/magazine/real-estate-pandemic.html http://web.archive.org/web/20211114163033/https://www.nytime...
uejfiweun 5y ago
The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently priced out of home ownership and many other things. We enter a new era of cyberfeudalism, which probably involves some blood in the streets. It seems like they are going with option 2. I am 24 years old and I can't say I'm particularly excited. It doesn't even really seem like any of the high paying jobs are enough to keep up with this insane market. All I can do at this point is raise my fist to the sky and say fuck the fed, fuck the financial system, fuck the greedy rich, fuck BlackRock, and fuck you.
- polskibus 5y ago
  Fed printing operation is affecting the whole world, not just USA. Because international trade is denominated in dollars, every other country is priced out by USA when buying something just because they are farther from the main printer. IMHO, there will be bloodbath with p.2 too.
- RappingBoomer 5y ago
  the problem is that if inflation continues, then interest rates will go up, whether the fed wants them to or not...once rates go up, money will flow from asset investment to bonds etc...and that will crash asset prices...checkmate...one way or another, asset prices WILL crash
  - listenallyall 5y ago
    That's assuming a free market with true price discovery. In reality, we have the Fed buying up financial assets and printing enormous amounts of money, and bailing out companies (which reduces risk, keeping rates low)... the entire thing is specifically engineered to AVOID true price discovery.
    - 5y ago
sushsjsuauahab 5y ago
I don't have any economic theories to offer. All I know is I love my house, with all of its land, trees, and nice quality living. I will protect this thing to my death, because it is so much better than living in an apartment. I don't care if it costs me $4,000 a month.
- bumby 5y ago
  How do you define “protecting” that thing? If it involves, for example, lobbying against high-density housing, that might be part of the problem.
  - syshum 5y ago
    " land, trees, and nice quality living." are mutually exclusive, High-Density housing is terrible and I NEVER want to live in a highly dense urban settings. My home in the suburbs with 1/2 acre lots is FAR FAR FAR too dense for me... I want less density than that, but newer subdivisions are dropping to 1/4 or 1/5 acre lots, it is terrible
    - lotsofpulp 5y ago
      And this is why I do not think carbon emissions will or climate change will ever be curtailed barring the discovery of a new emission-less, highly efficient energy source. The effects of anyone who does individually sacrifice will be offset by the plenty who will opt for 1/2 acre or even 1/4 lots and the energy consumption that must follow.
      - hallway_monitor 5y ago
        We can build houses much more efficiently. Build the majority of the house underground and heating and cooling become much less of an issue. We can conserve energy without living in a termite colony.
        lotsofpulp 5y ago
dzhiurgis 5y ago
I'm no expert, but seems there's some sort of feedback loop going on: * leverage existing property to get new loan (sometimes at mere 20%) * rent goes up because "market adjustment" * first home buyer dreams inches further way since less disposable income & higher initial deposit * property owners accumulate equity even quicker At least in NZ, PM Jacinda Ardern said multiple times no one's equity should go negative essentially offering protection to property investors (whose main risk is over-leverage).
- Nition 5y ago
  One factor that makes things even worse here in New Zealand is, from what I've heard in the US a home mortgage is usually at a fixed interest rate for the entire term - is that correct? Whereas in New Zealand the rate will usually be fixed for a maximum of five years. So you might have a 30-year mortgage fixed at 3.5%, but if interest rates go up, then in year five you might start paying 5%, and maybe you can't afford it anymore. I suspect the banks require a bigger buffer between payments and income than they do in the US to allow for potential interest rate increases, but that only works up to a point.
  - digianarchist 5y ago
    Correct. 5 year fixed term mortgages are common to UK/Canada/NZ/Australia. Not that interest is as significant in the United States considering it can be deducted from your taxes.
    - wastedhours 5y ago
      You also tend to pay for the privilege of a 5 year fix (as a first time buyer) - about a 0.4% increase for a 5 year vs a 2 year for us.
  - dzhiurgis 5y ago
    From what I've heard US is more of an exception with 30yr fixed. Most of the world runs on variable rates. Also, when you apply for mortgage your income is tested against something like 5-7% interest rate.
mlcrypto 5y ago
Once investors figure out that Bitcoin is the superior investment property after you already have a primary residence the excess speculation will get sucked out of real estate. This may be in the 2024 halving cycle. I say Bitcoin is superior because it's more portable, more fungible, no property tax, and the work of managing the properties doesn't scale linearly with the amount you own. Don't need to worry about bad tenants, government regulation preventing rent collection, wear & tear, list goes on.
- paulryanrogers 5y ago
  Bitcoin is burning the world to move some numbers around. People need housing. Though I'm not convinced either should be an investment vehicle.
- theaeolist 5y ago
  You also don't have to worry about owning anything that is, you know, useful in any way.
- rafaelero 5y ago
  Exactly. Hopefully, Bitcoin will soak the monetary premium from real estate and correct this mess.
- neilparikh 5y ago
  Bitcoin isn't going make the law of rent incorrect.
alexose 5y ago
I know this may be sacrilege to some, but: Consider moving to a less desirable place if you can. I got priced out of my hometown of Seattle. So I moved to a small town in rural Oregon and I couldn't be happier. The combination of spending comparatively little on housing + a tech salary is hard to beat. I have my own shop! It feels like freedom, even if it comes at the cost of being near my extended family.
- hammock 5y ago
  >Consider moving to a less desirable place if you can. I got priced out of my hometown of Seattle. So I moved to a small town in rural Oregon Speak for yourself. That sounds more desirable to me, not less
  - alexose 5y ago
    Hah! I guess I meant generally desirable. I personally find this place desirable.
- jshen 5y ago
  I don’t think this is good advice financially, though there is more to life than money. First, if by “tech salary” you mean a software engineers salary or a product managers, then you should be able to afford a house in a place like Seattle. It might be tight if you are early in your career, but it is very doable. The main reason this is likely to be bad financially is that your house won’t appreciate like a house in Seattle. I’ve been doing tech for a long time at this point, and have seen people make both choices and how it plays out over the long run. Those that stayed in the big city are basically financially independent at this point, and those that moved are not. The difference in net worth after 20 years is very significant.
  - t-writescode 5y ago
    I live in Seattle. I have an engineer’s salary. I cannot presently afford a condo, let alone a house. By the time I have enough for the down payment, I will again not be able to afford a home.
boplicity 5y ago
There should be a law (in a city, or state, etc) that says housing costs should be a fixed percentage of income -- and outline the measures needed to make that happen, in terms of actual policy requirements. As part of that, if the right policies fail to be enacted, courts should be empowered to enforce them. In other words, legislatures should require themselves to fix the problem of high housing costs, and if they're not capable, the courts should be empowered to solve the issue by cutting through red tape, issuing fines, etc.
- handmodel 5y ago
  I sadly don't think that is practical. Housing costs would go down if it was legal to build 20 story apartment buildings in areas currently zoned for single family homes. As a political YIMBY I would love to see this happen - but don't see how a court could be given discretion on its own to decide which zoning measures should be eliminated and which have legitimate reasons to exist.
  - boplicity 5y ago
    Courts don't have to make these types of decisions, however they can issue increasingly steep fines against governments until the problem is solved. This happened, for example, in Washington State with funding for schools not being adequate, and in violation of the law. The courts issued massive fines, and increased them, until the legal funding requirements were met.
spaetzleesser 5y ago
Maybe the “normal” state of the world is some form of feudalism where most people own nothing? I often wonder if the 20th century with a rising middle class was just an aberration and things will go back to “normal”. The rising inequality seems to be a first indicator.
- brutusborn 5y ago
  Also, could the 20th century rise of the middle class be explained by the amount of death during the great wars? This would result in reduction in demand which would make things like land much cheaper.
shephardjhon 5y ago
I am surprized no one me tioned we could just limit home ownership to 2-3 for individuals and lets say 20 or so for a company. The actual limits can be decided based on discussion and metrics but just having a limit, any limit could stop companies or rich assholes from buying real estate as "assets" as opposed to a place where people live. Also a limit on just holding property that is meant to be rented out. Either use it, or rent it out to someone who will use it and keep increasing the fine until they rent it out to encourage a real free market.
- klipt 5y ago
  > lets say 20 or so for a company Wouldn't rich people just create multiple companies each holding 20 properties?
  - TheGigaChad 5y ago
    Leftists are not very smart.
- autarch 5y ago
  Instead of artificially limiting demand I think it'd be better to stop artificially limiting supply (zoning). If there was enough housing to meet demand, then it would naturally be a poorer investment, and so rich assholes would stop buying so much of it.
  - nicbou 5y ago
    That didn't fix the issue for us in Europe, with out reasonable zoning laws.
rnantes 5y ago
In Canada extremely unaffordable housing has been the reality since the Pandemic. I think the US is just catching up and when it does there will be more unrest because of how much influence the states have over social media and news in general around the world.
- harambae 5y ago
  >when it does there will be more unrest because of how much influence the states have over social media and news This sounds vaguely similar to a point Jim Rogers was making (on the Wealthion interview) recently - that back in 1930's people more or less accepted the screwed up and unfair system and marched onward. But people today (for better or worse) expect more fairness and will be angrier and react worse.
hikerclimber1 5y ago
Yea when we have hyper inflation and the fed is forced to raise interest rates really high.
marcrosoft 5y ago
Articles with titles like this are actually a really good indicator of a top. Markets usually crash when people think they can’t possibly go down.
- rytill 5y ago
  There’s no such easy indicator.
deleted 5y ago
[deleted]
_huayra_ 5y ago
I see a lot of fellow millenials thinking that the only way to escape the poverty trap that is being chronically burdened by onerous rent payments is to "play the game", i.e. to do all of the house hacking stuff to by MFUs, live-in-and-flip, or whatever the thing to do is. There is no doubt that this stuff can work. If you become a very savvy investor, you can start seeing net positive on your housing as an investment. However, what doesn't get written up is the horrible downsides of this, e.g. not being able to find tenants because of a market miscalculation and then being financially screwed for years to come, or having a crappy contractor try to fix your house only to have to deal with their faulty stuff for a year or more while getting another contractor to fix it. I decided that I don't want to become a "real estate guru" just to avoid paying rent, so I just found a small apartment that was well within my salary and leveraged my existing CS skillset to almost quadruple my compensation within about 3-4 years of studying my ass off and making the right career hops. I am still paying miniscule rent on a small place, but I spend almost no time in my apartment; I'm either at work, or climbing a mountain somewhere. Perhaps I "should" buy a house, but as there is a huge surplus of ADUs as everyone else is trying to house hack (i.e. supply is large!), I can spend a teensy tiny portion of my income "wasted" on rent while spending none of my time worrying about housing issues or avoiding financial ruin in a risky bet. Basically, this house hacking stuff is about leveraging your time to hopefully produce a monetary gain. You have to learn how to not get absolutely screwed over in some of the largest financial outflows you'll ever make in your life, and it's easy to get screwed when much larger fish (e.g. black rock) are way more savvy than you. This obviously doesn't apply if a 1br/1ba is not for you (e.g. you have a family) or you want to have a home for sentimental reasons. edit: Basically, what I'm trying to say is that there is a huge, life-altering downside to failing at the real estate game, but there is almost no downside to mastering a new, valuable skill that can lead towards a better job (and more pay).
- Monkoton1 5y ago
  As someone who also enjoys time in the mountains, how do you find yourself balancing work with your hobbies? In those 4 years you quadrupled your salary, were you also climbing? I feel like it's hard to do both well.
- deleted 5y ago
  [deleted]
cutler 5y ago
No. It's been completely borked here in the UK since Thatcher's Housing Act of 1980 which introduced the right to buy your council house. The upper middle class have been popping champagne corks ever since whilst the rest of us struggle to afford a roof over our heads. So long as the government treats its property stock as a source of private profit instead of a roof over one's head nothing will change.
eBombzor 5y ago
I finished reading this and the first thing that I thought was this article could be condensed to about half it's size. So much irrelevant information and too many jumps in that Drew/Amena segment. Any ways... yeah the market is in a sad state of affairs. Doesn't help that the mentioned interviewees are also doing a cash grab for themselves by opening up private real estate firms and AirBnb's. Though it's not all over America, you can't point to Austin to generalize the entire small market. I'm pretty sure houses in Iowa are as cheap as ever.
- harambae 5y ago
  >I'm pretty sure houses in Iowa are as cheap as ever As a percentage, they actually aren't [0] if you look at the history of sales on most of them, although maybe the total change is more easily tolerated [0] https://www.zillow.com/homedetails/1236-46th-St-Des-Moines-IA-50311/807690_zpid/ https://www.zillow.com/homedetails/1236-46th-St-Des-Moines-I...
mikewarot 5y ago
When interest rates on mortgages go back up to 8% or more, the prices will return to sanity. A house is a decaying pile of construction materials requiring constant maintenance. It is NOT an investment, it's barely an asset.
1vuio0pswjnm7 5y ago
"The world is ending, they said to themselves. Why the hell not?" The world is ending?
gigatexal 5y ago
I came here to talk or respond to folks against seeing homes as investments. Full disclosure I own a rental and over time as my finances allow it I hope to have a few if not 10 by the time I retire such that I can sell most if not all and have something to retire on. (Not all of my retirement is in this scheme, I've a 401k and a modest IRA). The rental I have was once our main home. When we moved to Berlin we decided to hold on to it and rent it while we were gone in case we needed a place to come back to if our Berlin experiment failed. We bought it with all the savings we had at the time we got married with a <5% downpayment. I had no idea the market would rise like it did. We are still renting it mostly because the rental laws in Portland, Oregon are very much tenant-biased that it would cost us more to sell than to keep renting it. Which is fine. We've a good tenant and we haven't raised rents in 3-years. (We should have but that was mostly because I had bad advice from my management but that's a whole other thread). For the average worker making less than 100k like me without prospects to make multiples of that number anytime soon (or ever -- I'm not that smart) buying a home -- if one is lucky enough to -- and maybe renting it is a good way to participate in the upside of home values and also to create some long term wealth when one does not have the luxury of joining an early stage start-up on it's path to being the next unicorn or making obscene salaries at a Netflix. I fully understand that in doing so I add myself to the market of potential buyers and/or bidders for already scarce homes and with a business mindset I participate in the speculation that is raising home prices for would-be owner-occupied homes. I don't know how to balance that with my desire to have a well balanced approach to my finances which would consist of investments in stocks (401k via mutual funds), savings, and real-estate. The world is only getting more expensive and it behooves the rational person to diversify and seek all ways to keep up so as to not be left behind or without ample funds to retire on. So you might see me as part of the problem but at least maybe now you see where I am coming from.
thomcano 5y ago
Real Estate prices are beyond saving at this point, prices skyrocketed slowly up until now.
Mack2021 5y ago
Here's the reality. The reason why home prices have increased in a short time is simply, supply and demand. The supply issue has been caused primarily because of the moratorium on foreclosures. Additionally, in my opinion, there's one other item that's been overlooked by most economists, and that's the increased usage of an escalation clause. For the most part, there haven't been foreclosures for almost two years. The timeline to allow foreclosures have been delayed multiple times. Once they turn that faucet on, the supply issue will virtually dissipate overnight, and not to be pessimistic, but, overnight we could see a collapse in the real estate market that would make 2008 look like a little annoying gnat. It does appear they will start the foreclosure process in phases, and in short, starting with those that have ignored their bank. With the 2022 midterms, it wouldn't surprise me if they continue to delay the foreclosure process and have support from both sides of the aisle, because no one running for re-election wants a depression before an election; IMHO. This could simply be another regulatory delay, it could come as a two-week shutdown after Christmas to give a political reason for another delay, or some other cause; just throwing ideas out. However, the most likely solution to an all-out real estate collapse is the Federal Reserve using one of its tools. They could loan a large sum of the trillions they have available to large corporations at a low rate and encourage them in one way or another to purchase foreclosures at the current market price. For example, search "Blackrock Houston." The problem with this tool is that if it's executed like it was in the past, the corporations put the homes on the market and offer them as rent to own. And in mass, IMHO, this threatens the middle class. Off the top of my head, I believe the stats on those who end up purchasing a home from rent to own contract was somewhere in the mid to low 30% range.

201 points by jbredeche 5y ago

The question of real estate has always been one of the most critical issues in everyone's life. Of course, buying your real estate involves a lot of problems, questions, and uncertainties that everyone has to go through. Investing in real estate has been a topical issue for a long time. It is not the wrong way to have an additional or basic income. I think now is the best time to start investing in real estate. But, according to you, there are no decent offers right now. I'm afraid I have to disagree with that because if you're an expert in this business, you can easily find a good option. You don't have to invest in expensive real estate. Many options allow you to earn at a low cost, purchasing an investment property.https://www.playarealestategroup.com/Tulum_Real_Estate_Listings/page_2515901.html https://www.playarealestategroup.com/Tulum_Real_Estate_Listi... The most important thing is to take an interest in this subject and improve your skills.

jschveibinz 5y ago

Clickbait title. Article is about the real estate prices in Austin, TX after Tesla announced the move there. Will real estate ever be normal again? I think that what's happening in real estate is perfectly normal from an economics point of view. Mortgage rates are extremely low, more people are moving because of remote work opportunities, and the younger folks wanting to buy homes now outnumber the baby boomers, all of which has created high demand for houses. Zoning regulations seem to have limited the construction of denser, multi-family home options like townhomes, duplexes, etc. And construction of new homes was likely affected by supply problems with labor and materials during the height of the pandemic.

mdaniel 5y ago
> Zoning regulations seem to have limited the construction of denser, multi-family home options like townhomes, duplexes, etc. I was curious about that claim and had a look in Berkeley; there are _a lot_ of R2 zoned plots, and while I didn't do the math, just eyeballing the colors I'd guess there are actually more R2 than R1 plots https://www.cityofberkeley.info/gisportal/ https://www.cityofberkeley.info/gisportal/ The SF map is objectively harder to use, but seems to have a similar "majority is RH-2 zoned" story: https://sfplanning.org/sites/default/files/resources/2019-02/zoning_use_districts.pdf https://sfplanning.org/sites/default/files/resources/2019-02...
anonu 5y ago
agree. this is the "new normal". $4tr stimulus which takes years to permeate through the economy + continued low interest rates + population and worker reshuffle post-pandemic which will take many many years to figure out.
jp57 5y ago
Yeah, this article is describing the situation in Austin the spring. I'm here, my wife is an agent. Prices are higher now than they were, but the multiple-offer insanity has long since abated. I saw this article and couldn't figure out why it was news.
vlunkr 5y ago
On top of the things you mentioned, the pandemic caused supply shortages, meaning new development was slowed at a time when it should have accelerated. Also, I don't have evidence for this, but there seems to be phycological impact where people really want what they can't have, and are willing to bid more, and go into more debt than they would in normal circumstances.
- janeroe 5y ago
  > the pandemic caused supply shortages Right, it's that Pandemic guy who is ruining everything. He's the one who prints money, closes cities, organizes supply shortages, exacerbates poverty. Someone must arrest him already.
MuffinFlavored 5y ago
> which has created high demand for houses Does anybody have any guess on when that high demand will come down and match more closely to the supply? I don't see anything that will push residential real estate prices down in the next few years. Interest rates and property values are linked. Selling agents help buyers target a monthly price figure, all relative to interest rates + property values. Rates low? Raise asking price. Rates high? Lower. In the end, same $x/mo payment they target that they know families can afford/shop by.

rossdavidh 5y ago

Should have a (2007) in the description. :)

deleted 5y ago
[deleted]
Supermancho 5y ago
https://www.nytimes.com/2021/11/12/magazine/real-estate-pandemic.html https://www.nytimes.com/2021/11/12/magazine/real-estate-pand... The publication year is 2021, which is the typical way a story is tagged. I have to wonder why 2007 and not 1913 or 1929? Throwing out a date does not imply a specific context or add to the discussion.
- rossdavidh 5y ago
  Sorry, just a joke.
- ByteJockey 5y ago
  2007 implies right before the 2008 recession where housing prices tanked. In 2007 people were panic buying houses because they thought that if they didn't buy right now, they'd never be able to afford to buy a house.
  - IAmGraydon 5y ago
    It’s true…the market always seems to turn when you start seeing widespread sentiment that it will never turn.
    - iknowSFR 5y ago
      The article directly addresses this: “The last time U.S. housing saw such rampant price growth was in 2005, and the market corrected itself, infamously, in 2008. But the underlying reality today is different. Back then, a geyser of subprime adjustable-rate mortgages sputtered out as borrowers defaulted. (According to Bloomberg News, 60 percent of mortgages during the bubble years were adjustable rate; fewer than 0.1 percent of mortgages are now.) The current boom is better compared to a river, one fed by streams that have long been visible on the horizon: high demand, low supply and a dysfunctional economy in which wages are stagnant while restrictive zoning and poor public policy have turned housing into an artificially scarce commodity. Historically low 30-year fixed mortgage interest rates, hovering between 2.68 and 3.08 for the last year, are narrowing the riverbed, quickening the current.”

WarOnPrivacy 5y ago

Renters and buyers are increasingly in the same boat - the one where people with money in the bank are finding there's nowhere to live. In the case of renters, many with savings are facing homelessness - once those savings are burned up on hotels. This isn't a dramatization or overstatement. It's what I'm witnessing personally and very nearly happened to us. We were one of the few to beat long odds and score a place to live.

thefounder 5y ago
Why don't you move to a cheaper place/smaller city? I don't understand why there are some many homeless people in big cities (i.e NYC). If people would just move to cheaper areas/cities the whole issue of housing would be fixed.
- ioseph 5y ago
  * Not everybody can work remotey (nor want to) * Health and Education services tend to be much poorer
- hprotagonist 5y ago
  My community is here. How is it just that I be forced into exile because “the market” says so? I’ve done no wrong.
  - wankerrific 5y ago
    Sorry. You’re going to have to move. Owning is for investors, banks, and other financial entities. /s The best part is that if things go upside down in a few years we get to bail them out.
    - flyinglizard 5y ago
      Aren’t most houses owned by their inhabitants, rather than evil corporate entities?

jschveibinz 5y ago

I commented on this same article yesterday: https://news.ycombinator.com/item?id=29212851 https://news.ycombinator.com/item?id=29212851 Here is a link to a relevant article on the zoning part of the problem, posted today: https://news.ycombinator.com/item?id=29219042 https://news.ycombinator.com/item?id=29219042

dang 5y ago
I've moved your lonely comment into this thread and rolled back the clock on it so it ranks normally relative to the others. Thanks for not copy-pasting :) I've also put that other submission into the second-chance pool (https://news.ycombinator.com/pool https://news.ycombinator.com/pool, explained at https://news.ycombinator.com/item?id=26998308 https://news.ycombinator.com/item?id=26998308), so it will get a random placement on HN's front page. Thanks!

99_00 5y ago

"Normal" is meaningless. Markets are always changing. This market will also change. Maybe increasing impact of work from home and empty office buildings will do it in the near term. Maybe baby boomers downsizing, moving into homes, and dying will do it in the long term. Maybe there will be runaway inflation and the fed will bring in and crippling interest rates that cause a deep recession in the short term. But the future market won't be what it is today. The same shortsightedness that wasn't able to foresee the impact of millennials will fail to see what comes next. The demographic impact of the millennial generation was a big topic of discussion in the late 90s and early 2000s. Since then the discussion has gotten a lot stupider focusing on pop culture stereotypes. A large group of people passing through life stages at the same time are going to have an impact.

throwaway55421 5y ago

It will change when people want it to change, just like workers' rights did over the last century. If you don't want to pay a million quid for a house in London, refuse the game. Move elsewhere. Find a different way to get by in life, perhaps even a different country. People won't do that, though. It's more likely, IMO, that the entire world becomes more feudalist again until there are few escape hatches. But it'll ultimately be because people keep buying in. As long as people, en masse, continue to max bid housing (whether for rent or to buy) this situation will continue.

jedberg 5y ago
Workers' rights and housing are very different. It's a lot easier to move jobs than to move house. It's also a lot easier to create jobs than to create housing.
- throwaway55421 5y ago
  Workers rights were not generally gained by moving jobs, it was unionization and protest. Moving house doesn't change the market unless everyone else does it, and even then, the major benefit would come from something like large numbers of people agreeing not to max bid (i'm not suggesting that such a thing would be realistic, but it's an example of unionization)
chuckee 5y ago
> If you don't want to pay a million quid for a house in London, refuse the game. Move elsewhere. Find a different way to get by in life, perhaps even a different country. People did exactly what you suggest. And the country they moved to was England, and the city, London, which now has 38% non-UK born residents: https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/ukpopulationbycountryofbirthandnationality/2017#london-has-the-highest-proportion-of-non-uk-born-and-non-british-nationals https://www.ons.gov.uk/peoplepopulationandcommunity/populati...
- throwaway55421 5y ago

jedberg 5y ago

Not until zoning or ownership laws change. More people want to live in the places then there are places to live. There are three ways to fix this: incentivize builders to build more places to live, have the government build housing, or penalize investors. Or any combination of the three.

DannyBee 5y ago
Or tell people no, and be happy with a place that works. Eventually people will leave when they can't be there. The option of "growing to meet exponential need" rarely, if ever, actually works in the end. By works i mean "leads to an equilibrium that actually is any good" Usually what happens is people push on creating housing, and think once they've done it, the rest will take care of itself. This is the easy part. The rest is much worse - now you have more people! The density and scale of population will increase until the local governments/etc fail hard enough at providing services, which often happens quicker than one would expect. Being effective at providing public transportation/police/fire/schools/health/etc in a dense, populous area is much harder and more expensive than often seems thought. Especially if you haven't been planning to do it for 50 years and setting yourself up for it. It also requires ever more careful planning as it grows (in how land is laid out, etc), and you will hit tons of problems anyway. For a random example: When your police/fire grows large enough, it ends up with lots of political power of its own. It's also much harder for governments to stay efficient in spending at all as they grow, making services/etc even more expensive to provide. The places that i knew that were successful at becoming denser were willing to admit this. The ones that were not, often pretend they will make it back in increased taxes on their own, but they never did (and often end up in cycles of tax increase/drops/etc until the infrastructure fails) Once you are forced to raise taxes/bonds/etc, you end up with a whole host of practical problems (politicians winning on short-term-lower-taxes-long-term-destruction platforms) This is just a sampling. Overall, it's like scaling anything human. Having a team of 10 works really well. Having a team of 1000 is really hard. Lots of cities that go down this path end up as basically tax revenue Ponzi schemes - they have to keep growing because they need to keep borrowing against the ever-more-expensive future In the end, it simply isn't unreasonable for cities to not want to play the game, and to be happy with sustainable size, services, and tax revenue, even if it makes things unhappy for others who want to join in. Thankfully population growth is slowing down, and we are below replacement rate right now.

Mandatum 5y ago

https://archive.md/AAMM6 https://archive.md/AAMM6

neonate 5y ago
http://web.archive.org/web/20211114163033/https://www.nytimes.com/2021/11/12/magazine/real-estate-pandemic.html http://web.archive.org/web/20211114163033/https://www.nytime...

uejfiweun 5y ago

The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently priced out of home ownership and many other things. We enter a new era of cyberfeudalism, which probably involves some blood in the streets. It seems like they are going with option 2. I am 24 years old and I can't say I'm particularly excited. It doesn't even really seem like any of the high paying jobs are enough to keep up with this insane market. All I can do at this point is raise my fist to the sky and say fuck the fed, fuck the financial system, fuck the greedy rich, fuck BlackRock, and fuck you.

polskibus 5y ago
Fed printing operation is affecting the whole world, not just USA. Because international trade is denominated in dollars, every other country is priced out by USA when buying something just because they are farther from the main printer. IMHO, there will be bloodbath with p.2 too.
RappingBoomer 5y ago
the problem is that if inflation continues, then interest rates will go up, whether the fed wants them to or not...once rates go up, money will flow from asset investment to bonds etc...and that will crash asset prices...checkmate...one way or another, asset prices WILL crash
- listenallyall 5y ago
  That's assuming a free market with true price discovery. In reality, we have the Fed buying up financial assets and printing enormous amounts of money, and bailing out companies (which reduces risk, keeping rates low)... the entire thing is specifically engineered to AVOID true price discovery.
  - 5y ago

sushsjsuauahab 5y ago

I don't have any economic theories to offer. All I know is I love my house, with all of its land, trees, and nice quality living. I will protect this thing to my death, because it is so much better than living in an apartment. I don't care if it costs me $4,000 a month.

bumby 5y ago
How do you define “protecting” that thing? If it involves, for example, lobbying against high-density housing, that might be part of the problem.
- syshum 5y ago
  " land, trees, and nice quality living." are mutually exclusive, High-Density housing is terrible and I NEVER want to live in a highly dense urban settings. My home in the suburbs with 1/2 acre lots is FAR FAR FAR too dense for me... I want less density than that, but newer subdivisions are dropping to 1/4 or 1/5 acre lots, it is terrible
  - lotsofpulp 5y ago
    And this is why I do not think carbon emissions will or climate change will ever be curtailed barring the discovery of a new emission-less, highly efficient energy source. The effects of anyone who does individually sacrifice will be offset by the plenty who will opt for 1/2 acre or even 1/4 lots and the energy consumption that must follow.
    - hallway_monitor 5y ago
      We can build houses much more efficiently. Build the majority of the house underground and heating and cooling become much less of an issue. We can conserve energy without living in a termite colony.
      - lotsofpulp 5y ago

dzhiurgis 5y ago

I'm no expert, but seems there's some sort of feedback loop going on: * leverage existing property to get new loan (sometimes at mere 20%) * rent goes up because "market adjustment" * first home buyer dreams inches further way since less disposable income & higher initial deposit * property owners accumulate equity even quicker At least in NZ, PM Jacinda Ardern said multiple times no one's equity should go negative essentially offering protection to property investors (whose main risk is over-leverage).

Nition 5y ago
One factor that makes things even worse here in New Zealand is, from what I've heard in the US a home mortgage is usually at a fixed interest rate for the entire term - is that correct? Whereas in New Zealand the rate will usually be fixed for a maximum of five years. So you might have a 30-year mortgage fixed at 3.5%, but if interest rates go up, then in year five you might start paying 5%, and maybe you can't afford it anymore. I suspect the banks require a bigger buffer between payments and income than they do in the US to allow for potential interest rate increases, but that only works up to a point.
- digianarchist 5y ago
  Correct. 5 year fixed term mortgages are common to UK/Canada/NZ/Australia. Not that interest is as significant in the United States considering it can be deducted from your taxes.
  - wastedhours 5y ago
    You also tend to pay for the privilege of a 5 year fix (as a first time buyer) - about a 0.4% increase for a 5 year vs a 2 year for us.
- dzhiurgis 5y ago
  From what I've heard US is more of an exception with 30yr fixed. Most of the world runs on variable rates. Also, when you apply for mortgage your income is tested against something like 5-7% interest rate.

mlcrypto 5y ago

Once investors figure out that Bitcoin is the superior investment property after you already have a primary residence the excess speculation will get sucked out of real estate. This may be in the 2024 halving cycle. I say Bitcoin is superior because it's more portable, more fungible, no property tax, and the work of managing the properties doesn't scale linearly with the amount you own. Don't need to worry about bad tenants, government regulation preventing rent collection, wear & tear, list goes on.

paulryanrogers 5y ago
Bitcoin is burning the world to move some numbers around. People need housing. Though I'm not convinced either should be an investment vehicle.
theaeolist 5y ago
You also don't have to worry about owning anything that is, you know, useful in any way.
rafaelero 5y ago
Exactly. Hopefully, Bitcoin will soak the monetary premium from real estate and correct this mess.
neilparikh 5y ago
Bitcoin isn't going make the law of rent incorrect.

alexose 5y ago

I know this may be sacrilege to some, but: Consider moving to a less desirable place if you can. I got priced out of my hometown of Seattle. So I moved to a small town in rural Oregon and I couldn't be happier. The combination of spending comparatively little on housing + a tech salary is hard to beat. I have my own shop! It feels like freedom, even if it comes at the cost of being near my extended family.

hammock 5y ago
>Consider moving to a less desirable place if you can. I got priced out of my hometown of Seattle. So I moved to a small town in rural Oregon Speak for yourself. That sounds more desirable to me, not less
- alexose 5y ago
  Hah! I guess I meant generally desirable. I personally find this place desirable.
jshen 5y ago
I don’t think this is good advice financially, though there is more to life than money. First, if by “tech salary” you mean a software engineers salary or a product managers, then you should be able to afford a house in a place like Seattle. It might be tight if you are early in your career, but it is very doable. The main reason this is likely to be bad financially is that your house won’t appreciate like a house in Seattle. I’ve been doing tech for a long time at this point, and have seen people make both choices and how it plays out over the long run. Those that stayed in the big city are basically financially independent at this point, and those that moved are not. The difference in net worth after 20 years is very significant.
- t-writescode 5y ago
  I live in Seattle. I have an engineer’s salary. I cannot presently afford a condo, let alone a house. By the time I have enough for the down payment, I will again not be able to afford a home.

boplicity 5y ago

There should be a law (in a city, or state, etc) that says housing costs should be a fixed percentage of income -- and outline the measures needed to make that happen, in terms of actual policy requirements. As part of that, if the right policies fail to be enacted, courts should be empowered to enforce them. In other words, legislatures should require themselves to fix the problem of high housing costs, and if they're not capable, the courts should be empowered to solve the issue by cutting through red tape, issuing fines, etc.

handmodel 5y ago
I sadly don't think that is practical. Housing costs would go down if it was legal to build 20 story apartment buildings in areas currently zoned for single family homes. As a political YIMBY I would love to see this happen - but don't see how a court could be given discretion on its own to decide which zoning measures should be eliminated and which have legitimate reasons to exist.
- boplicity 5y ago
  Courts don't have to make these types of decisions, however they can issue increasingly steep fines against governments until the problem is solved. This happened, for example, in Washington State with funding for schools not being adequate, and in violation of the law. The courts issued massive fines, and increased them, until the legal funding requirements were met.

spaetzleesser 5y ago

Maybe the “normal” state of the world is some form of feudalism where most people own nothing? I often wonder if the 20th century with a rising middle class was just an aberration and things will go back to “normal”. The rising inequality seems to be a first indicator.

brutusborn 5y ago
Also, could the 20th century rise of the middle class be explained by the amount of death during the great wars? This would result in reduction in demand which would make things like land much cheaper.

shephardjhon 5y ago

I am surprized no one me tioned we could just limit home ownership to 2-3 for individuals and lets say 20 or so for a company. The actual limits can be decided based on discussion and metrics but just having a limit, any limit could stop companies or rich assholes from buying real estate as "assets" as opposed to a place where people live. Also a limit on just holding property that is meant to be rented out. Either use it, or rent it out to someone who will use it and keep increasing the fine until they rent it out to encourage a real free market.

klipt 5y ago
> lets say 20 or so for a company Wouldn't rich people just create multiple companies each holding 20 properties?
- TheGigaChad 5y ago
  Leftists are not very smart.
autarch 5y ago
Instead of artificially limiting demand I think it'd be better to stop artificially limiting supply (zoning). If there was enough housing to meet demand, then it would naturally be a poorer investment, and so rich assholes would stop buying so much of it.
- nicbou 5y ago
  That didn't fix the issue for us in Europe, with out reasonable zoning laws.

rnantes 5y ago

In Canada extremely unaffordable housing has been the reality since the Pandemic. I think the US is just catching up and when it does there will be more unrest because of how much influence the states have over social media and news in general around the world.

harambae 5y ago
>when it does there will be more unrest because of how much influence the states have over social media and news This sounds vaguely similar to a point Jim Rogers was making (on the Wealthion interview) recently - that back in 1930's people more or less accepted the screwed up and unfair system and marched onward. But people today (for better or worse) expect more fairness and will be angrier and react worse.

hikerclimber1 5y ago

Yea when we have hyper inflation and the fed is forced to raise interest rates really high.

marcrosoft 5y ago

Articles with titles like this are actually a really good indicator of a top. Markets usually crash when people think they can’t possibly go down.

rytill 5y ago
There’s no such easy indicator.

deleted 5y ago

[deleted]

_huayra_ 5y ago

I see a lot of fellow millenials thinking that the only way to escape the poverty trap that is being chronically burdened by onerous rent payments is to "play the game", i.e. to do all of the house hacking stuff to by MFUs, live-in-and-flip, or whatever the thing to do is. There is no doubt that this stuff can work. If you become a very savvy investor, you can start seeing net positive on your housing as an investment. However, what doesn't get written up is the horrible downsides of this, e.g. not being able to find tenants because of a market miscalculation and then being financially screwed for years to come, or having a crappy contractor try to fix your house only to have to deal with their faulty stuff for a year or more while getting another contractor to fix it. I decided that I don't want to become a "real estate guru" just to avoid paying rent, so I just found a small apartment that was well within my salary and leveraged my existing CS skillset to almost quadruple my compensation within about 3-4 years of studying my ass off and making the right career hops. I am still paying miniscule rent on a small place, but I spend almost no time in my apartment; I'm either at work, or climbing a mountain somewhere. Perhaps I "should" buy a house, but as there is a huge surplus of ADUs as everyone else is trying to house hack (i.e. supply is large!), I can spend a teensy tiny portion of my income "wasted" on rent while spending none of my time worrying about housing issues or avoiding financial ruin in a risky bet. Basically, this house hacking stuff is about leveraging your time to hopefully produce a monetary gain. You have to learn how to not get absolutely screwed over in some of the largest financial outflows you'll ever make in your life, and it's easy to get screwed when much larger fish (e.g. black rock) are way more savvy than you. This obviously doesn't apply if a 1br/1ba is not for you (e.g. you have a family) or you want to have a home for sentimental reasons. edit: Basically, what I'm trying to say is that there is a huge, life-altering downside to failing at the real estate game, but there is almost no downside to mastering a new, valuable skill that can lead towards a better job (and more pay).

Monkoton1 5y ago
As someone who also enjoys time in the mountains, how do you find yourself balancing work with your hobbies? In those 4 years you quadrupled your salary, were you also climbing? I feel like it's hard to do both well.
deleted 5y ago
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cutler 5y ago

No. It's been completely borked here in the UK since Thatcher's Housing Act of 1980 which introduced the right to buy your council house. The upper middle class have been popping champagne corks ever since whilst the rest of us struggle to afford a roof over our heads. So long as the government treats its property stock as a source of private profit instead of a roof over one's head nothing will change.

eBombzor 5y ago

I finished reading this and the first thing that I thought was this article could be condensed to about half it's size. So much irrelevant information and too many jumps in that Drew/Amena segment. Any ways... yeah the market is in a sad state of affairs. Doesn't help that the mentioned interviewees are also doing a cash grab for themselves by opening up private real estate firms and AirBnb's. Though it's not all over America, you can't point to Austin to generalize the entire small market. I'm pretty sure houses in Iowa are as cheap as ever.

harambae 5y ago
>I'm pretty sure houses in Iowa are as cheap as ever As a percentage, they actually aren't [0] if you look at the history of sales on most of them, although maybe the total change is more easily tolerated [0] https://www.zillow.com/homedetails/1236-46th-St-Des-Moines-IA-50311/807690_zpid/ https://www.zillow.com/homedetails/1236-46th-St-Des-Moines-I...

mikewarot 5y ago

When interest rates on mortgages go back up to 8% or more, the prices will return to sanity. A house is a decaying pile of construction materials requiring constant maintenance. It is NOT an investment, it's barely an asset.

1vuio0pswjnm7 5y ago

"The world is ending, they said to themselves. Why the hell not?" The world is ending?

gigatexal 5y ago

I came here to talk or respond to folks against seeing homes as investments. Full disclosure I own a rental and over time as my finances allow it I hope to have a few if not 10 by the time I retire such that I can sell most if not all and have something to retire on. (Not all of my retirement is in this scheme, I've a 401k and a modest IRA). The rental I have was once our main home. When we moved to Berlin we decided to hold on to it and rent it while we were gone in case we needed a place to come back to if our Berlin experiment failed. We bought it with all the savings we had at the time we got married with a <5% downpayment. I had no idea the market would rise like it did. We are still renting it mostly because the rental laws in Portland, Oregon are very much tenant-biased that it would cost us more to sell than to keep renting it. Which is fine. We've a good tenant and we haven't raised rents in 3-years. (We should have but that was mostly because I had bad advice from my management but that's a whole other thread). For the average worker making less than 100k like me without prospects to make multiples of that number anytime soon (or ever -- I'm not that smart) buying a home -- if one is lucky enough to -- and maybe renting it is a good way to participate in the upside of home values and also to create some long term wealth when one does not have the luxury of joining an early stage start-up on it's path to being the next unicorn or making obscene salaries at a Netflix. I fully understand that in doing so I add myself to the market of potential buyers and/or bidders for already scarce homes and with a business mindset I participate in the speculation that is raising home prices for would-be owner-occupied homes. I don't know how to balance that with my desire to have a well balanced approach to my finances which would consist of investments in stocks (401k via mutual funds), savings, and real-estate. The world is only getting more expensive and it behooves the rational person to diversify and seek all ways to keep up so as to not be left behind or without ample funds to retire on. So you might see me as part of the problem but at least maybe now you see where I am coming from.

thomcano 5y ago

Real Estate prices are beyond saving at this point, prices skyrocketed slowly up until now.

Mack2021 5y ago

Here's the reality. The reason why home prices have increased in a short time is simply, supply and demand. The supply issue has been caused primarily because of the moratorium on foreclosures. Additionally, in my opinion, there's one other item that's been overlooked by most economists, and that's the increased usage of an escalation clause. For the most part, there haven't been foreclosures for almost two years. The timeline to allow foreclosures have been delayed multiple times. Once they turn that faucet on, the supply issue will virtually dissipate overnight, and not to be pessimistic, but, overnight we could see a collapse in the real estate market that would make 2008 look like a little annoying gnat. It does appear they will start the foreclosure process in phases, and in short, starting with those that have ignored their bank. With the 2022 midterms, it wouldn't surprise me if they continue to delay the foreclosure process and have support from both sides of the aisle, because no one running for re-election wants a depression before an election; IMHO. This could simply be another regulatory delay, it could come as a two-week shutdown after Christmas to give a political reason for another delay, or some other cause; just throwing ideas out. However, the most likely solution to an all-out real estate collapse is the Federal Reserve using one of its tools. They could loan a large sum of the trillions they have available to large corporations at a low rate and encourage them in one way or another to purchase foreclosures at the current market price. For example, search "Blackrock Houston." The problem with this tool is that if it's executed like it was in the past, the corporations put the homes on the market and offer them as rent to own. And in mass, IMHO, this threatens the middle class. Off the top of my head, I believe the stats on those who end up purchasing a home from rent to own contract was somewhere in the mid to low 30% range.