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Nah the next president will just start offering government backed 100 year mortgages with 0 down. Really the most concerning aspect is that the cost to build n

Nah the next president will just start offering government backed 100 year mortgages with 0 down. Really the most concerning aspect is that the cost to build new housing has drastically gone up. We are at an all time housing deficit. I don’t see how that corrects itself unless we get to the point where building a new house is cheaper than buying an existing house.

ldjkfkdsjnv 5y ago
Nah its a monetary problem. Basically, from a finance perspective: Cost to borrow money (for an institutional investor) and buy a house with that money generates a return. Meaning they can buy these homes up all day long and make a profit.
- mywittyname 5y ago
  Single family home are poor long term investments for institutions, outside of maybe California. Prices tend to follow inflation while property taxes and maintenance eat growth. States without income taxes tends to make up revenue through higher property taxes. Because of these facts, I don't see this trend of investors gobbling up SFHs to be sustainable. I suspect most of them are in this for a quick buck, and will quickly dump these homes the minute it becomes obvious that this was a dumb idea.
  - adam_arthur 5y ago
    They buy them with leverage though. A 3% yearly return with 5x leverage is 15% a year
lijogdfljk 5y ago
> Really the most concerning aspect is that the cost to build new housing has drastically gone up. Any idea why? This is a life plan for my wife and I, we're currently looking for the right spot of land (~10 acres) and then we hope to start building in ~5 years after significant saving and planning. We're in the initial stages of planning out our floor plan/etc, and costs are high, but we haven't really noticed a huge difference between building and buying. .. but i suppose we also aren't far enough long that we're getting real price estimates either.
- mywittyname 5y ago
  There's a large gradient between "custom" and custom. Modifying an already designed home is so much cheaper than something from the ground up. As in, thousands vs tens of thousands. Depending on where you live and what you're building, that's a decent % of the total cost of a house.
- UncleOxidant 5y ago
  Lumber, materials, labor. Homebuilding needs to be disrupted with more automation, use of cheaper, sustainable materials (3D printed concrete, for example).
- abcc8 5y ago
  Here is the link to a very interesting reddit post about the various reasons for the increase in the price of wood: https://old.reddit.com/r/investing/comments/stwrnr/ive_documented_every_major_reason_lumber_has/ https://old.reddit.com/r/investing/comments/stwrnr/ive_docum... While the post is worth a read, the TLDR is that there are multiple issues, each of which could seemingly independently be the source of the increase.
- yardie 5y ago
  From what I heard, from an architect friend, the difference in price between a builder and custom home is 10% premium. Because whatever economy of scale saved by the build is taken up in profit. To the buyer prices are just about the same. And conveniently, the commission for an architect is also 10%. So if you can design and self certify you also save a bit.

ldjkfkdsjnv 5y ago

Nah its a monetary problem. Basically, from a finance perspective: Cost to borrow money (for an institutional investor) and buy a house with that money generates a return. Meaning they can buy these homes up all day long and make a profit.

mywittyname 5y ago
Single family home are poor long term investments for institutions, outside of maybe California. Prices tend to follow inflation while property taxes and maintenance eat growth. States without income taxes tends to make up revenue through higher property taxes. Because of these facts, I don't see this trend of investors gobbling up SFHs to be sustainable. I suspect most of them are in this for a quick buck, and will quickly dump these homes the minute it becomes obvious that this was a dumb idea.
- adam_arthur 5y ago
  They buy them with leverage though. A 3% yearly return with 5x leverage is 15% a year

lijogdfljk 5y ago

> Really the most concerning aspect is that the cost to build new housing has drastically gone up. Any idea why? This is a life plan for my wife and I, we're currently looking for the right spot of land (~10 acres) and then we hope to start building in ~5 years after significant saving and planning. We're in the initial stages of planning out our floor plan/etc, and costs are high, but we haven't really noticed a huge difference between building and buying. .. but i suppose we also aren't far enough long that we're getting real price estimates either.

mywittyname 5y ago
There's a large gradient between "custom" and custom. Modifying an already designed home is so much cheaper than something from the ground up. As in, thousands vs tens of thousands. Depending on where you live and what you're building, that's a decent % of the total cost of a house.
UncleOxidant 5y ago
Lumber, materials, labor. Homebuilding needs to be disrupted with more automation, use of cheaper, sustainable materials (3D printed concrete, for example).
abcc8 5y ago
Here is the link to a very interesting reddit post about the various reasons for the increase in the price of wood: https://old.reddit.com/r/investing/comments/stwrnr/ive_documented_every_major_reason_lumber_has/ https://old.reddit.com/r/investing/comments/stwrnr/ive_docum... While the post is worth a read, the TLDR is that there are multiple issues, each of which could seemingly independently be the source of the increase.
yardie 5y ago
From what I heard, from an architect friend, the difference in price between a builder and custom home is 10% premium. Because whatever economy of scale saved by the build is taken up in profit. To the buyer prices are just about the same. And conveniently, the commission for an architect is also 10%. So if you can design and self certify you also save a bit.