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This seems like a very Big Coastal Metro-centric view that is probably true in those areas but doesn't capture what's happening elsewhere. Home prices in Metro

This seems like a very Big Coastal Metro-centric view that is probably true in those areas but doesn't capture what's happening elsewhere. Home prices in Metro Detroit, for example, used to be quite reasonable and have recently exploded to being rather unaffordable for most people. There hasn't really been any population growth to speak of, so it's not clear to me why would we need or want more housing to be constructed in order for prices to be reasonable, as was the historic norm.

downrightmike 4y ago
Even in a cheap area in a western red state, last year, flippers bought a house, slapped a for sale sign and doubled the price the next month. Those are still sitting unsold. And now houses are being bought by flippers who are slapping an extra 2.5 times the price they got it for in the same month. None of these houses are selling. Just sitting empty.
- Animats 4y ago
  That sort of thing should end with the end of low interest rates. When interest rates were near zero, borrowing money to purchase unused real estate could be profitable if you could sell some of it. No longer true.
  - bobthepanda 4y ago
    Right, unless those flippers paid with straight cash, they are going to have a hard time raising more money to buy more houses, and they might go underwater on the current ones. To see what that looks like on steroids, China's economy is at real risk of recession due to property developers running out of cash and failing to build promised developments. (Most apartments in China are purchased before construction starts, so you can buy a house and not end up with one in the end.)
    - edmundsauto 4y ago
      Even if investors pay cash, they need cheap interest rates to be able to sell at a profit to people who need a loan.
  - wil421 4y ago
    The average time to flip a house is 45 days to 6 months. Let’s pretend it’s going to cost $500 more a month in interest rates, that’s only $3000 more dollars. If you could do 3 in a year you’ll only lose about $10k.
- WirelessGigabit 4y ago
  I wish the tax on flipping houses went up. Something is sleeping there that it economically makes sense. Like if I sell 1 car, ok, but if I sell 10 I need a dealer license. Same should happen with the flippers. More regulations, because they’re cutting corners all the way.
  - joe-collins 4y ago
    Rather than targeting flipping, I think ownership of more than one housing unit should be taxed progressively and become prohibitive rapidly.
    - sokoloff 4y ago
      Do you feel that renters should be punished economically (which I think would be an inevitable consequence of that policy)?
      - KptMarchewa 4y ago
        I think amount of renters would rapidly drop off.
        sokoloff 4y ago
        I agree. Some to ownership. Others to homelessness.
        KptMarchewa 4y ago
        It depends on what facilities the country would provide. Assuming it's USA it's homelessness. If it was another country, it might be provided social housing.
        JumpCrisscross 4y ago
        Why not skip the taxation and homelessness and just build the social housing?
- astrange 4y ago
  They don't have infinite money to do this, not anymore. Eventually the market's going to clear or they're going out of business. Although in my experience people are convinced there's "vacant houses" absolutely everywhere based on not seeing the lights on at night. It's not true and this is not a major contribution to the housing crisis.
- huijzer 4y ago
  This is also a nice description of the stock market over the last few years. Buy high and quickly sell higher. Works great until the music stops.
- Fatnino 4y ago
  https://www.zillow.com/homedetails/303-Atherton-Ave-Atherton-CA-94027/15597953_zpid/ https://www.zillow.com/homedetails/303-Atherton-Ave-Atherton... Scroll down to price and tax history. This house has been on the market for at least 15 months and has had its price slashed by over 3 million dollars and nobody is nibbling. It's become a bit of a running joke around here, trying to guess if it's still the most expensive listing in the local paper each week. As an aside, the local papers are really just pages and pages of real estate ads with a few paragraphs of news sprinkled here and there. Can literally rip out half the pages and not lose a single line of news.
addicted 4y ago
The places that have cheap housing stock are usually places that are undesirable to live in because of crime, an undeserved reputation for crime, and generally pathetic government services. Metro Detroit has low housing expenses because the government provides no services. Even if we assume low crime, if a middle class family were to move to urban Detroit, because Detroit has been deliberately designed so all the rich people live in the suburbs, that family will have no decent schools to send their kids to. So they will basically be trading their child’s education and future for a cheaper rent. That’s almost always a terrible decision. And that’s before we consider the fact that the governor of Michigan probably doesn’t give shit about Detroit or Flint or the fact that those families are drinking lead in their water. L
- astrange 4y ago
  Flint's water has been fixed for years.
  - mcv 4y ago
    I'm finding conflicting reports about this. Some say it's been fixed for all houses in Flint, others say there's 2000 houses where it still hasn't been fixed. But there's apparently a lot of people who simply don't trust it because they're been lied to for too long.
- bryanrasmussen 4y ago
  >Metro Detroit has low housing expenses because the government provides no services. The parent claimed that prices in Metro Detroit have gone up and become unaffordable.
- yostrovs 4y ago
  Detroit was designed for rich people. Unlike almost any large city, it consists of large, single family homes, each on a relatively large parcel of land. It was a city, before "the riots," that was one of the richest in the world. Everyone had cars. There was so much entertainment that new music genres came from Detroit.
- 4y ago
aperson_hello 4y ago
Unaffordable is relative. $150k for a 1500 sq ft house is pretty common there...Detroit needs better incomes, not more housing. On the other hand, SF needs more housing, not more income
maerF0x0 4y ago
People also need to stop flocking to the Oligarchy of cities. New and upcoming cities need to become the norm because those are the ones with a maxima of opportunity plus lower costs. As in all industries, so long as we refuse to consider alternatives, they'll hold all the power to raise the price. It happens with brands like Apple, it happens/happened to big brand name cities like Miami, Austin, San Francisco ...

downrightmike 4y ago

Even in a cheap area in a western red state, last year, flippers bought a house, slapped a for sale sign and doubled the price the next month. Those are still sitting unsold. And now houses are being bought by flippers who are slapping an extra 2.5 times the price they got it for in the same month. None of these houses are selling. Just sitting empty.

Animats 4y ago
That sort of thing should end with the end of low interest rates. When interest rates were near zero, borrowing money to purchase unused real estate could be profitable if you could sell some of it. No longer true.
- bobthepanda 4y ago
  Right, unless those flippers paid with straight cash, they are going to have a hard time raising more money to buy more houses, and they might go underwater on the current ones. To see what that looks like on steroids, China's economy is at real risk of recession due to property developers running out of cash and failing to build promised developments. (Most apartments in China are purchased before construction starts, so you can buy a house and not end up with one in the end.)
  - edmundsauto 4y ago
    Even if investors pay cash, they need cheap interest rates to be able to sell at a profit to people who need a loan.
- wil421 4y ago
  The average time to flip a house is 45 days to 6 months. Let’s pretend it’s going to cost $500 more a month in interest rates, that’s only $3000 more dollars. If you could do 3 in a year you’ll only lose about $10k.
WirelessGigabit 4y ago
I wish the tax on flipping houses went up. Something is sleeping there that it economically makes sense. Like if I sell 1 car, ok, but if I sell 10 I need a dealer license. Same should happen with the flippers. More regulations, because they’re cutting corners all the way.
- joe-collins 4y ago
  Rather than targeting flipping, I think ownership of more than one housing unit should be taxed progressively and become prohibitive rapidly.
  - sokoloff 4y ago
    Do you feel that renters should be punished economically (which I think would be an inevitable consequence of that policy)?
    - KptMarchewa 4y ago
      I think amount of renters would rapidly drop off.
      - sokoloff 4y ago
        I agree. Some to ownership. Others to homelessness.
        KptMarchewa 4y ago
        It depends on what facilities the country would provide. Assuming it's USA it's homelessness. If it was another country, it might be provided social housing.
        JumpCrisscross 4y ago
        Why not skip the taxation and homelessness and just build the social housing?
astrange 4y ago
They don't have infinite money to do this, not anymore. Eventually the market's going to clear or they're going out of business. Although in my experience people are convinced there's "vacant houses" absolutely everywhere based on not seeing the lights on at night. It's not true and this is not a major contribution to the housing crisis.
huijzer 4y ago
This is also a nice description of the stock market over the last few years. Buy high and quickly sell higher. Works great until the music stops.
Fatnino 4y ago
https://www.zillow.com/homedetails/303-Atherton-Ave-Atherton-CA-94027/15597953_zpid/ https://www.zillow.com/homedetails/303-Atherton-Ave-Atherton... Scroll down to price and tax history. This house has been on the market for at least 15 months and has had its price slashed by over 3 million dollars and nobody is nibbling. It's become a bit of a running joke around here, trying to guess if it's still the most expensive listing in the local paper each week. As an aside, the local papers are really just pages and pages of real estate ads with a few paragraphs of news sprinkled here and there. Can literally rip out half the pages and not lose a single line of news.

addicted 4y ago

The places that have cheap housing stock are usually places that are undesirable to live in because of crime, an undeserved reputation for crime, and generally pathetic government services. Metro Detroit has low housing expenses because the government provides no services. Even if we assume low crime, if a middle class family were to move to urban Detroit, because Detroit has been deliberately designed so all the rich people live in the suburbs, that family will have no decent schools to send their kids to. So they will basically be trading their child’s education and future for a cheaper rent. That’s almost always a terrible decision. And that’s before we consider the fact that the governor of Michigan probably doesn’t give shit about Detroit or Flint or the fact that those families are drinking lead in their water. L

astrange 4y ago
Flint's water has been fixed for years.
- mcv 4y ago
  I'm finding conflicting reports about this. Some say it's been fixed for all houses in Flint, others say there's 2000 houses where it still hasn't been fixed. But there's apparently a lot of people who simply don't trust it because they're been lied to for too long.
bryanrasmussen 4y ago
>Metro Detroit has low housing expenses because the government provides no services. The parent claimed that prices in Metro Detroit have gone up and become unaffordable.
yostrovs 4y ago
Detroit was designed for rich people. Unlike almost any large city, it consists of large, single family homes, each on a relatively large parcel of land. It was a city, before "the riots," that was one of the richest in the world. Everyone had cars. There was so much entertainment that new music genres came from Detroit.
4y ago

aperson_hello 4y ago

Unaffordable is relative. $150k for a 1500 sq ft house is pretty common there...Detroit needs better incomes, not more housing. On the other hand, SF needs more housing, not more income

maerF0x0 4y ago

People also need to stop flocking to the Oligarchy of cities. New and upcoming cities need to become the norm because those are the ones with a maxima of opportunity plus lower costs. As in all industries, so long as we refuse to consider alternatives, they'll hold all the power to raise the price. It happens with brands like Apple, it happens/happened to big brand name cities like Miami, Austin, San Francisco ...