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I won't feel one ounce of pity for the "investors" who lose their shirts when this bubble finally pops. We should regulate investors almost entirely out of hou

I won't feel one ounce of pity for the "investors" who lose their shirts when this bubble finally pops. We should regulate investors almost entirely out of housing. Yes, there is still a need for people with lots of capital to go in and repair dilapidated homes. But we don't need people hoarding homes and renting them out as AirBnbs.

1270018080 5y ago
Is it a bubble? Where is the irrational exuberance? Lots of people need homes, there aren't enough, prices go up. And investors hoarding equity by forcing people to rent have a captive audience. Both of those aren't really tulip/crypto hysteria. It's just a shitty situation. I would love to see investors get burned too, but I don't think there's anything to pop. We're just a decade behind Canada.
- llanowarelves 5y ago
  People are FOMO'ing into buying sight-unseen houses the same day they get listed because they think it will continue doing 20-30% year-over-year with no significant pullback in the near future. Or same FOMO on the interest (mortgage) rate. That's not healthy
- x86_64Ubuntu 5y ago
  I see your point, but I look at the houses going up all around me and their prices, and I wonder where folks are getting this money from. I know what I do for a living and how well it pays, but people who make less than half of my salary are buying homes that are twice as expensive. Also, talking to realtors they mention that homes are sometimes sold before they hit sites like Zillow and such. Sight-unseen, waived inspections, $20K over asking. This can't be sustainable.
  - throwaheyy 5y ago
    It’s more than just salary. Take an elder millennial who has been working in bigtechco for 10 years or so. The RSUs they collected in their early years could be worth >10x today. Same with crypto over an even shorter term.
- bogomipz 5y ago
  I think the irrational exuberance is over. I think the period of exuberance ended when the 30 year fixed mortgages went above 5%. Of course people need homes but I think the interest rates combined with the energy costs to heat and/or cool that home along with the price of gas to get to and from that home have all started to make the purchase less viable for many. There's actually a bit of a rush right now for sellers to sell before rates go up further. See: https://archive.ph/9uU3j https://archive.ph/9uU3j The other side is that anyone who sells right now will need to buy at the top of the market, possibly incur the 5%+ interests rates(if they didn't make out extremely well) and afford the increase in taxes on their new home's possibly insane property valuation. This is of course in addition to all the other current inflationary concerns of maintaining a house right now.
DamnYuppie 5y ago
I have seen AirBnB referenced many times in these comments as having something to do with the increase in home prices. From what I can find there are 660,000 AirBnB hosts in the US; this was found under the Airbnb Statistics by Region section from here https://www.stratosjets.com/blog/airbnb-statistics/ https://www.stratosjets.com/blog/airbnb-statistics/ seems to also be found here https://ipropertymanagement.com/research/airbnb-statistics https://ipropertymanagement.com/research/airbnb-statistics. Most likely both of those take their data from some other source which may or not be up to date. A little bit of Googling around seems to indicate that there are ~95,000,000 single family homes in the US. So all of those AirBnB's represent less than 1% of all homes. If all of those AirBnB's were in a given year they may have an impact on purchase prices. Yet these purchases have been spread out over many years which leads me to believe their impact is negligible as a driving force in price appreciation. Are they a player, sure, are they a big player.....probably not nearly as much as people think.
- JoeJonathan 5y ago
  95 million homes total, or available homes? Seems like it would make a difference. That said, I suspect you're right that AirBnB is less responsible for driving up housing prices than, say, the fact that the pace of homebuilding hasn't recovered since 2008.
- kelnos 5y ago
  Just wanted to point out that the article you reference says 660k listings in the US, not hosts. I was initially concerned by your wording that the number of properties for rent on Airbnb was much higher (since often hosts have multiple properties, or the host is listed as a management company), but it does seem that 660k is the number of listings. And I agree with you that number is much lower than I would have expected, and doesn't seem like enough to meaningfully move housing prices overall. Also consider that some number of those listings are people renting out a spare room in their owner-occupied property, which I don't think is fair to count "against" Airbnb; not sure what that number is, though. It would be interesting to also see more local numbers. Like what percent of units in each of SF, NYC, downtown LA, Chicago, DC, etc. are listed on Airbnb? There are a lot of housing units in small towns and cities across the US that don't have much tourist appeal, so they likely don't see many Airbnb listings. But they also likely don't have housing-cost issues like some cities that are more attractive to tourists. I think people try to invent complicated reasons for skyrocketing home prices, when it's fairly simple: we aren't building enough in the places where people want to live. Sure, other things (Airbnb, foreign investment[0], cheap credit, etc.) don't help matters, but I think they're pretty minor factors. If there's demand, and you don't meet it, prices go up. Econ 101. It's interesting to note that Vancouver and Toronto instituted 20% and 15% (respectively) foreign buyer taxes for home purchases a bunch of years ago. These taxes did actually do their job of deterring foreign buyers, but, sadly, home prices still continued to go up, undeterred. And now Canada overall has barred foreign buyers for two years. I doubt it will help. I expect Airbnb bans would have a similar non-effect.
kelnos 5y ago
It's somewhat fashionable for well-off people/families to have a vacation home somewhere vacation-y. Before Airbnb, most of those homes just sat vacant for most of the year[0]. Clearly, that's not a great use of that land. Often these sorts of properties would be in pretty desirable locations, and doing it this way would deprive most people the use of that space. Certainly there are still some people who are wealthy enough to keep their vacation homes vacant most of the time (and prefer it that way, since doing short-term rentals tends to involve quite a bit of wear-and-tear on a house and its furnishings). But many list on Airbnb now. I consider this a net positive for society. Of course, Airbnb isn't all roses. In many places, investors buy up housing stock that would otherwise be used for long-term rentals, and deprive locals of much-needed stable housing. My guess would be that this is even -- unfortunately -- the primary use of Airbnb these days (I doubt they are primarily people renting out a room in their already-occupied house anymore). So this does suck. On the renter side, I've found a lot of great places to stay through Airbnb over the years, experiences hotels just can't provide, and often prices hotels can't match. Should I just not be allowed to have these sorts of experiences? (It's totally fair if the answer to that is "yes", as much as it'd be disappointing.) Can we find some sort of balance so that we can curb most of the negatives that come with real-estate investing, but keep most of the positives? [0] Yes, vacation rental companies existed before Airbnb, but Airbnb completely changed this space.
- wheelerwj 5y ago
  > Certainly there are still some people who are wealthy enough to keep their vacation homes vacant most of the time (and prefer it that way, since doing short-term rentals tends to involve quite a bit of wear-and-tear on a house and its furnishings). But many list on Airbnb now. I consider this a net positive for society. why? Do you think the average person is renting out vacation homes for extended stays? Yes, having cool places to stay is fun but there are better ways to accomplish that then rich people renting out their 2-nth homes.
  - kelnos 5y ago
    > Do you think the average person is renting out vacation homes for extended stays? Why do the stays have to be extended? I consider simply making more nice real estate in desirable locations accessible to more people a good thing. Doesn't matter if it's for a long weekend or several months. > Yes, having cool places to stay is fun but there are better ways to accomplish that then rich people renting out their 2-nth homes. Such as? Hotels are the primary existing option, and they're fine, but not always what I'm looking for (especially if I want to cook; hotel rooms with full kitchens are rare and expensive). Hostels are meh; I'm not a broke college student anymore. Actual bed and breakfasts are nice, but aren't for everyone. If I want to stay in something that feels like an actual home for a short duration, is there a better way than something like Airbnb? To be clear, I agree with the top-level poster's bit about us not needing people hoarding homes just so they can rent them out as Airbnbs. That's exclusionary, (literally) rent-seeking behavior. But is there no middle ground where people like that don't get to satisfy their greed, but we still get to have nice things?
charcircuit 5y ago
>we don't need people hoarding homes If you made a good enough offer you could buy it from them. Investors aren't trying to hoard. They want to make a return on their investment.
- kelnos 5y ago
  You're just trying to soften the words here; the result is the same. Higher-income people buy properties that lower-income people would love to own, and then end up paying rent instead. Often to someone else, because many of these homes end up only available as short-term rentals. "Return on investment" shouldn't be more important than housing people affordably.
- woeirua 5y ago
  How many homes do you need to actually live? Most likely, the answer is one. Are homes for living in, or for making money? That's the fundamental question we need to resolve. Because if its the former, then we are doing an abysmal job at satisfying that need. If its the latter, then we're doing a bang up job.
  - charcircuit 5y ago
    Why not both? You can buy pokemon cards to play the game, but you can also sell them later. Even if you can only live in one at a time, you may want to temporarily live somewhere else. What if you feel like going to the beach for a weekend?
tick_tock_tick 5y ago
We regulated investors into the housing market. We've created a nearly guaranteed ROI by making it impossible to build.
- chowells 5y ago
  I think you've got cause and effect backwards. We told people that housing is an investment, and now people fight tooth and nail to protect the value of their "investment". Of course housing availability has fallen precipitously.
UnpossibleJim 5y ago
To be totally honest, it probably isn't the "AirBnB" types, but (at least in the Washington state area) the loosening of rent regulations, which allows single family homes and neighborhoods to be zoned and converted to multiple family units fairly cheaply and easily. Landlords buy these up, do conversions on the cheap (and with minimal knowledge, a lot of the time) and rent them out. Rents have outpaced mortgage costs and the return on investment has been ridiculous. People all over here have jumped into it. Hell, I've had people tell me I should do it... No F'in way I'm dealing with tenants and house calls in the middle of the night, though. I fix my own house, poorly and struggle to do that. I fix computers and call people to fix the house, usually, so it gets done right. I venture out of my lane every once and again, but I know I'll usually call a professional =)

1270018080 5y ago

Is it a bubble? Where is the irrational exuberance? Lots of people need homes, there aren't enough, prices go up. And investors hoarding equity by forcing people to rent have a captive audience. Both of those aren't really tulip/crypto hysteria. It's just a shitty situation. I would love to see investors get burned too, but I don't think there's anything to pop. We're just a decade behind Canada.

llanowarelves 5y ago
People are FOMO'ing into buying sight-unseen houses the same day they get listed because they think it will continue doing 20-30% year-over-year with no significant pullback in the near future. Or same FOMO on the interest (mortgage) rate. That's not healthy
x86_64Ubuntu 5y ago
I see your point, but I look at the houses going up all around me and their prices, and I wonder where folks are getting this money from. I know what I do for a living and how well it pays, but people who make less than half of my salary are buying homes that are twice as expensive. Also, talking to realtors they mention that homes are sometimes sold before they hit sites like Zillow and such. Sight-unseen, waived inspections, $20K over asking. This can't be sustainable.
- throwaheyy 5y ago
  It’s more than just salary. Take an elder millennial who has been working in bigtechco for 10 years or so. The RSUs they collected in their early years could be worth >10x today. Same with crypto over an even shorter term.
bogomipz 5y ago
I think the irrational exuberance is over. I think the period of exuberance ended when the 30 year fixed mortgages went above 5%. Of course people need homes but I think the interest rates combined with the energy costs to heat and/or cool that home along with the price of gas to get to and from that home have all started to make the purchase less viable for many. There's actually a bit of a rush right now for sellers to sell before rates go up further. See: https://archive.ph/9uU3j https://archive.ph/9uU3j The other side is that anyone who sells right now will need to buy at the top of the market, possibly incur the 5%+ interests rates(if they didn't make out extremely well) and afford the increase in taxes on their new home's possibly insane property valuation. This is of course in addition to all the other current inflationary concerns of maintaining a house right now.

DamnYuppie 5y ago

I have seen AirBnB referenced many times in these comments as having something to do with the increase in home prices. From what I can find there are 660,000 AirBnB hosts in the US; this was found under the Airbnb Statistics by Region section from here https://www.stratosjets.com/blog/airbnb-statistics/ https://www.stratosjets.com/blog/airbnb-statistics/ seems to also be found here https://ipropertymanagement.com/research/airbnb-statistics https://ipropertymanagement.com/research/airbnb-statistics. Most likely both of those take their data from some other source which may or not be up to date. A little bit of Googling around seems to indicate that there are ~95,000,000 single family homes in the US. So all of those AirBnB's represent less than 1% of all homes. If all of those AirBnB's were in a given year they may have an impact on purchase prices. Yet these purchases have been spread out over many years which leads me to believe their impact is negligible as a driving force in price appreciation. Are they a player, sure, are they a big player.....probably not nearly as much as people think.

JoeJonathan 5y ago
95 million homes total, or available homes? Seems like it would make a difference. That said, I suspect you're right that AirBnB is less responsible for driving up housing prices than, say, the fact that the pace of homebuilding hasn't recovered since 2008.
kelnos 5y ago
Just wanted to point out that the article you reference says 660k listings in the US, not hosts. I was initially concerned by your wording that the number of properties for rent on Airbnb was much higher (since often hosts have multiple properties, or the host is listed as a management company), but it does seem that 660k is the number of listings. And I agree with you that number is much lower than I would have expected, and doesn't seem like enough to meaningfully move housing prices overall. Also consider that some number of those listings are people renting out a spare room in their owner-occupied property, which I don't think is fair to count "against" Airbnb; not sure what that number is, though. It would be interesting to also see more local numbers. Like what percent of units in each of SF, NYC, downtown LA, Chicago, DC, etc. are listed on Airbnb? There are a lot of housing units in small towns and cities across the US that don't have much tourist appeal, so they likely don't see many Airbnb listings. But they also likely don't have housing-cost issues like some cities that are more attractive to tourists. I think people try to invent complicated reasons for skyrocketing home prices, when it's fairly simple: we aren't building enough in the places where people want to live. Sure, other things (Airbnb, foreign investment[0], cheap credit, etc.) don't help matters, but I think they're pretty minor factors. If there's demand, and you don't meet it, prices go up. Econ 101. It's interesting to note that Vancouver and Toronto instituted 20% and 15% (respectively) foreign buyer taxes for home purchases a bunch of years ago. These taxes did actually do their job of deterring foreign buyers, but, sadly, home prices still continued to go up, undeterred. And now Canada overall has barred foreign buyers for two years. I doubt it will help. I expect Airbnb bans would have a similar non-effect.

kelnos 5y ago

It's somewhat fashionable for well-off people/families to have a vacation home somewhere vacation-y. Before Airbnb, most of those homes just sat vacant for most of the year[0]. Clearly, that's not a great use of that land. Often these sorts of properties would be in pretty desirable locations, and doing it this way would deprive most people the use of that space. Certainly there are still some people who are wealthy enough to keep their vacation homes vacant most of the time (and prefer it that way, since doing short-term rentals tends to involve quite a bit of wear-and-tear on a house and its furnishings). But many list on Airbnb now. I consider this a net positive for society. Of course, Airbnb isn't all roses. In many places, investors buy up housing stock that would otherwise be used for long-term rentals, and deprive locals of much-needed stable housing. My guess would be that this is even -- unfortunately -- the primary use of Airbnb these days (I doubt they are primarily people renting out a room in their already-occupied house anymore). So this does suck. On the renter side, I've found a lot of great places to stay through Airbnb over the years, experiences hotels just can't provide, and often prices hotels can't match. Should I just not be allowed to have these sorts of experiences? (It's totally fair if the answer to that is "yes", as much as it'd be disappointing.) Can we find some sort of balance so that we can curb most of the negatives that come with real-estate investing, but keep most of the positives? [0] Yes, vacation rental companies existed before Airbnb, but Airbnb completely changed this space.

wheelerwj 5y ago
> Certainly there are still some people who are wealthy enough to keep their vacation homes vacant most of the time (and prefer it that way, since doing short-term rentals tends to involve quite a bit of wear-and-tear on a house and its furnishings). But many list on Airbnb now. I consider this a net positive for society. why? Do you think the average person is renting out vacation homes for extended stays? Yes, having cool places to stay is fun but there are better ways to accomplish that then rich people renting out their 2-nth homes.
- kelnos 5y ago
  > Do you think the average person is renting out vacation homes for extended stays? Why do the stays have to be extended? I consider simply making more nice real estate in desirable locations accessible to more people a good thing. Doesn't matter if it's for a long weekend or several months. > Yes, having cool places to stay is fun but there are better ways to accomplish that then rich people renting out their 2-nth homes. Such as? Hotels are the primary existing option, and they're fine, but not always what I'm looking for (especially if I want to cook; hotel rooms with full kitchens are rare and expensive). Hostels are meh; I'm not a broke college student anymore. Actual bed and breakfasts are nice, but aren't for everyone. If I want to stay in something that feels like an actual home for a short duration, is there a better way than something like Airbnb? To be clear, I agree with the top-level poster's bit about us not needing people hoarding homes just so they can rent them out as Airbnbs. That's exclusionary, (literally) rent-seeking behavior. But is there no middle ground where people like that don't get to satisfy their greed, but we still get to have nice things?

charcircuit 5y ago

>we don't need people hoarding homes If you made a good enough offer you could buy it from them. Investors aren't trying to hoard. They want to make a return on their investment.

kelnos 5y ago
You're just trying to soften the words here; the result is the same. Higher-income people buy properties that lower-income people would love to own, and then end up paying rent instead. Often to someone else, because many of these homes end up only available as short-term rentals. "Return on investment" shouldn't be more important than housing people affordably.
woeirua 5y ago
How many homes do you need to actually live? Most likely, the answer is one. Are homes for living in, or for making money? That's the fundamental question we need to resolve. Because if its the former, then we are doing an abysmal job at satisfying that need. If its the latter, then we're doing a bang up job.
- charcircuit 5y ago
  Why not both? You can buy pokemon cards to play the game, but you can also sell them later. Even if you can only live in one at a time, you may want to temporarily live somewhere else. What if you feel like going to the beach for a weekend?

tick_tock_tick 5y ago

We regulated investors into the housing market. We've created a nearly guaranteed ROI by making it impossible to build.

chowells 5y ago
I think you've got cause and effect backwards. We told people that housing is an investment, and now people fight tooth and nail to protect the value of their "investment". Of course housing availability has fallen precipitously.

UnpossibleJim 5y ago

To be totally honest, it probably isn't the "AirBnB" types, but (at least in the Washington state area) the loosening of rent regulations, which allows single family homes and neighborhoods to be zoned and converted to multiple family units fairly cheaply and easily. Landlords buy these up, do conversions on the cheap (and with minimal knowledge, a lot of the time) and rent them out. Rents have outpaced mortgage costs and the return on investment has been ridiculous. People all over here have jumped into it. Hell, I've had people tell me I should do it... No F'in way I'm dealing with tenants and house calls in the middle of the night, though. I fix my own house, poorly and struggle to do that. I fix computers and call people to fix the house, usually, so it gets done right. I venture out of my lane every once and again, but I know I'll usually call a professional =)