4 ms·

Housing is more expensive today than it was in the past. Sure they might have gotten an expensive mortgage but what's the alternative if you want to start a fam

Housing is more expensive today than it was in the past. Sure they might have gotten an expensive mortgage but what's the alternative if you want to start a family? Shame on the boomer generation for continually prioritizing their generation over future generations. They deviated from the long outstanding trend to sacrifice today for the betterment of the future. Boomers left us with a housing shortage, education decline, health decline, public-pension deficits, unsustainable government deficit, trade deficit, and so much more. Hopefully the younger generations can look towards reformation that while maybe painful for us makes our childrens, and their children's life better.

adam_arthur 4y ago
Agreed that the past generation has made policy at the expense of their children/descendants. That's what taking on a higher debt as a percentage of GDP effectively is. But there is no housing shortage. There was a shortage of listings for a period of time, not a structural shortage. Number of housing units per household is same as it was 20 years ago. 1.1:1 [Different metric, but gives an idea] https://fred.stlouisfed.org/graph/?g=MvZv https://fred.stlouisfed.org/graph/?g=MvZv Prices in previous tech hub areas will fall drastically if remote work sticks, so won't be a problem for future residents of SF/Bay/Seattle/Austin.
- cjbgkagh 4y ago
  With real estate management software enabling the market to act as a cartel you can have an 'excess' of housing yet maintain an apparent shortage and extract monopoly rents.
  - adam_arthur 4y ago
    True, though I question how effectively a cartel on rents can be formed in practice. I believe that specific piece of software is already being investigated by the Government for anti-competitive, price fixing like behavior
    - cjbgkagh 4y ago
      Effective enough to elicit government investigation. There is a huge industry of data aggregators and managers for which this cartel like emergent behavior is the primary value offering. My current rent is managed by it and I can presume at least 10% rent hike every year. The entrenched money benefits from this status quo so without an establishment threatening crisis I doubt much would be done about it.
      - adam_arthur 4y ago
        Rents are declining nominally right now, not rising. If you look at recent MoM data. The software can't just tell companies to raise rents 10% if the market doesn't bear it. It would require a unilateral cartel without meaningful supply outside of that agreement to actually fix prices. That being said, this kind of behavior should be subdued as much as possible, within reason
        cjbgkagh 4y ago
        They would be declining more without the software, you can still extract monopolistic rents in an economic downturn. Just because the rents have declined does not mean they’re not monopolistic. A lot of this is geographical monopolies and actual liquid stock is often quite limited, so long as price is set at the margin and the managed property is on that margin they can elevate the price. This is easy enough to do as low rent options don’t stay on the market. Plus non-managed properties will benchmark themselves against the market which includes the managed properties allowing for price leadership. There is a whole zoo of anti-competitive behavior strewn through business that is tolerated due to the immense amount of money that is made that is beneficial to governments who tax it and politicians who receive donations. I don’t know how to fix it, step 1 seems to be fix political corruption and that already seems impossible. Once something becomes corrupted it’s very difficult to un-corrupt it.
- mistrial9 4y ago
  > there is no housing shortage. you are factually inaccurate there, for most US metropolitan areas on the East and West coasts. In particular, the San Francisco Bay Area for sustained decade+, had several hundred thousand more available jobs than available places to live. source: professional Urban Planners in California
  - adam_arthur 4y ago
    I'm talking nationally. There are going to be outliers you can cherry pick for local concerns. The national data is quite clear on this, reference any stats you want on FRED or otherwise And those jobs in SF are likely to go remote in large part, as we've already seen a strong transition towards. It's not very economically efficient to make employment contingent on location, so I'm doubtful that will continue to be the baseline model for white collar work. Home prices in the Bay Area are driven by local employment, yet I can take the same job now and move to Texas and buy a 300k house rather than 3 million. The amenities and culture will develop over time. Doesn't seem to be a very favorable outlook from a fundamental perspective for BA RE prices to me
    - _huayra_ 4y ago
      And Silicon Valley is uniquely messed up by Prop 13 and NIMBYs, not to mention the fact that there is no room to sprawl out like midwest cities given the geography. That's not to say that other cities don't have a similar mix, but those other cities are not home to the headquarters of highly-paid software folks who all compete for housing. Even Seattle folks priced out can possibly afford places way up north in Everett or down south in Tacoma, if one absolutely must have a house for whatever reason. Even cities that are a heinous commute to Silicon Valley (e.g. Santa Cruz) are still wildly expensive.
- nostrademons 4y ago
  Note that "total housing units / working age population" is the wrong metric. Many baby boomers are choosing to stay in their houses long after they have retired, and retirement lasts longer because life expectancy is now ~15 years past retirement (more in many of the blue states that are the most housing constrained). The proper metric would be "population entering peak home-buying & child-rearing years / (deaths + population entering senior homes + new home construction)". I'm pretty sure that metric is pretty bleak just looking at the U.S. population pyramid: https://www.populationpyramid.net/united-states-of-america/ https://www.populationpyramid.net/united-states-of-america/
  - adam_arthur 4y ago
    I gave the "housing units to households" metric, which is the one that matters most. It's 1.1 housing unit to 1 household, same as it was in 2001. You can corroborate with FRED data for total households vs total housing units Demographics were favorable for demand for the past few years due to millenials reaching homebuying age, but they quickly shift against demand over the next decade due to large elderly population passing on and lower population growth. Not even considering that homebuilding is at an all time high https://fred.stlouisfed.org/series/UNDCONTNSA https://fred.stlouisfed.org/series/UNDCONTNSA
zeroonetwothree 4y ago
At least when they die we will get their stuff
- bushbaba 4y ago
  Most won’t. The assisted living centers will, and the workers at the facilities. Assisted living is a money pit, and most boomers aren’t sitting on massive amounts of wealth.
  - gammarator 4y ago
    The owners of the assisted living facilities will. The workers there will presumably continue to be paid peanuts.
ghaff 4y ago
There has also been a change in people in younger professional demographics actually wanting to live in (certain) cities which was mostly not the case 25 years ago. When I took a job in the MA computer industry out of grad school, I don't think anyone in my class actually lived in Boston/Cambridge. (And all the computer companies were out in suburbs/exurbs anyway though finance was downtown of course.)
rayiner 4y ago
Don’t blame boomers, blame knowledge economy industries and the unbalanced and concentrated rewards they produce (not just at the top, but all the way down the line). When we came to America we moved to Northern VA, and we’re able to afford a nice house in a good school district even without my mom working. Subsequent waves of mg family are moving to places like Texas for the same reason. To get housing prices under control, it’s not going to be enough to tackle the supply side by building more housing. You also need to tackle the demand side by heavily taxing those knowledge workers so they have less disposable income to spend on housing.
- gammarator 4y ago
  No. The “good school district” in your comment is the tell. As long as access to good education is gated by housing, parents will plow any salary gains back into bidding up homes in “good districts.” See “The Two Income Trap,” two decades ago.
deleted 4y ago
[deleted]

adam_arthur 4y ago

Agreed that the past generation has made policy at the expense of their children/descendants. That's what taking on a higher debt as a percentage of GDP effectively is. But there is no housing shortage. There was a shortage of listings for a period of time, not a structural shortage. Number of housing units per household is same as it was 20 years ago. 1.1:1 [Different metric, but gives an idea] https://fred.stlouisfed.org/graph/?g=MvZv https://fred.stlouisfed.org/graph/?g=MvZv Prices in previous tech hub areas will fall drastically if remote work sticks, so won't be a problem for future residents of SF/Bay/Seattle/Austin.

cjbgkagh 4y ago
With real estate management software enabling the market to act as a cartel you can have an 'excess' of housing yet maintain an apparent shortage and extract monopoly rents.
- adam_arthur 4y ago
  True, though I question how effectively a cartel on rents can be formed in practice. I believe that specific piece of software is already being investigated by the Government for anti-competitive, price fixing like behavior
  - cjbgkagh 4y ago
    Effective enough to elicit government investigation. There is a huge industry of data aggregators and managers for which this cartel like emergent behavior is the primary value offering. My current rent is managed by it and I can presume at least 10% rent hike every year. The entrenched money benefits from this status quo so without an establishment threatening crisis I doubt much would be done about it.
    - adam_arthur 4y ago
      Rents are declining nominally right now, not rising. If you look at recent MoM data. The software can't just tell companies to raise rents 10% if the market doesn't bear it. It would require a unilateral cartel without meaningful supply outside of that agreement to actually fix prices. That being said, this kind of behavior should be subdued as much as possible, within reason
      - cjbgkagh 4y ago
        They would be declining more without the software, you can still extract monopolistic rents in an economic downturn. Just because the rents have declined does not mean they’re not monopolistic. A lot of this is geographical monopolies and actual liquid stock is often quite limited, so long as price is set at the margin and the managed property is on that margin they can elevate the price. This is easy enough to do as low rent options don’t stay on the market. Plus non-managed properties will benchmark themselves against the market which includes the managed properties allowing for price leadership. There is a whole zoo of anti-competitive behavior strewn through business that is tolerated due to the immense amount of money that is made that is beneficial to governments who tax it and politicians who receive donations. I don’t know how to fix it, step 1 seems to be fix political corruption and that already seems impossible. Once something becomes corrupted it’s very difficult to un-corrupt it.
mistrial9 4y ago
> there is no housing shortage. you are factually inaccurate there, for most US metropolitan areas on the East and West coasts. In particular, the San Francisco Bay Area for sustained decade+, had several hundred thousand more available jobs than available places to live. source: professional Urban Planners in California
- adam_arthur 4y ago
  I'm talking nationally. There are going to be outliers you can cherry pick for local concerns. The national data is quite clear on this, reference any stats you want on FRED or otherwise And those jobs in SF are likely to go remote in large part, as we've already seen a strong transition towards. It's not very economically efficient to make employment contingent on location, so I'm doubtful that will continue to be the baseline model for white collar work. Home prices in the Bay Area are driven by local employment, yet I can take the same job now and move to Texas and buy a 300k house rather than 3 million. The amenities and culture will develop over time. Doesn't seem to be a very favorable outlook from a fundamental perspective for BA RE prices to me
  - _huayra_ 4y ago
    And Silicon Valley is uniquely messed up by Prop 13 and NIMBYs, not to mention the fact that there is no room to sprawl out like midwest cities given the geography. That's not to say that other cities don't have a similar mix, but those other cities are not home to the headquarters of highly-paid software folks who all compete for housing. Even Seattle folks priced out can possibly afford places way up north in Everett or down south in Tacoma, if one absolutely must have a house for whatever reason. Even cities that are a heinous commute to Silicon Valley (e.g. Santa Cruz) are still wildly expensive.
nostrademons 4y ago
Note that "total housing units / working age population" is the wrong metric. Many baby boomers are choosing to stay in their houses long after they have retired, and retirement lasts longer because life expectancy is now ~15 years past retirement (more in many of the blue states that are the most housing constrained). The proper metric would be "population entering peak home-buying & child-rearing years / (deaths + population entering senior homes + new home construction)". I'm pretty sure that metric is pretty bleak just looking at the U.S. population pyramid: https://www.populationpyramid.net/united-states-of-america/ https://www.populationpyramid.net/united-states-of-america/
- adam_arthur 4y ago
  I gave the "housing units to households" metric, which is the one that matters most. It's 1.1 housing unit to 1 household, same as it was in 2001. You can corroborate with FRED data for total households vs total housing units Demographics were favorable for demand for the past few years due to millenials reaching homebuying age, but they quickly shift against demand over the next decade due to large elderly population passing on and lower population growth. Not even considering that homebuilding is at an all time high https://fred.stlouisfed.org/series/UNDCONTNSA https://fred.stlouisfed.org/series/UNDCONTNSA

zeroonetwothree 4y ago

At least when they die we will get their stuff

bushbaba 4y ago
Most won’t. The assisted living centers will, and the workers at the facilities. Assisted living is a money pit, and most boomers aren’t sitting on massive amounts of wealth.
- gammarator 4y ago
  The owners of the assisted living facilities will. The workers there will presumably continue to be paid peanuts.

ghaff 4y ago

There has also been a change in people in younger professional demographics actually wanting to live in (certain) cities which was mostly not the case 25 years ago. When I took a job in the MA computer industry out of grad school, I don't think anyone in my class actually lived in Boston/Cambridge. (And all the computer companies were out in suburbs/exurbs anyway though finance was downtown of course.)

rayiner 4y ago

Don’t blame boomers, blame knowledge economy industries and the unbalanced and concentrated rewards they produce (not just at the top, but all the way down the line). When we came to America we moved to Northern VA, and we’re able to afford a nice house in a good school district even without my mom working. Subsequent waves of mg family are moving to places like Texas for the same reason. To get housing prices under control, it’s not going to be enough to tackle the supply side by building more housing. You also need to tackle the demand side by heavily taxing those knowledge workers so they have less disposable income to spend on housing.

gammarator 4y ago
No. The “good school district” in your comment is the tell. As long as access to good education is gated by housing, parents will plow any salary gains back into bidding up homes in “good districts.” See “The Two Income Trap,” two decades ago.

deleted 4y ago

[deleted]