5 ms·

Duh? Cost of living here is spiraling out of control and housing is the biggest line item. But it's going to take something big and heavy (like federal interven

Duh? Cost of living here is spiraling out of control and housing is the biggest line item. But it's going to take something big and heavy (like federal intervention) to fix it.

lazide 2y ago
Actually, it’s already on the way to being fixed the old fashioned way - with a market crash. Inventory is rising, volume is dropping, and while prices are going up - that is pretty common as the market starts to grind to a halt. [https://www.redfin.com/state/California/housing-market https://www.redfin.com/state/California/housing-market] When the line keeps going up and to the right, everyone builds that into their spreadsheets and times are good. When the line starts going down and to the right, they hope it’s temporary. But after awhile, they need to update their spreadsheets - and then times are bad. As long as the fed keeps rates high, the crash is inevitable. I give it another year or two. Bankruptcies are likely to be incredibly painful.
- pylua 2y ago
  I see your point, but a crash would be extremely bad for the states budget, which is already struggling. Hopefully a small correction at most. The market also does seem strangely stubborn to correct.
  - lazide 2y ago
    This will not be a small correction.
    - testval123 2y ago
      So many people 'want' a correction that it's clear there is a ton of demand. Ergo, I wouldn't be too hopeful.
      - lazide 2y ago
        Last year maybe, now everyone is either giving up or white knuckling it. In my experience, that’s when it gets moving.
  - deleted 2y ago
    [deleted]
- dilyevsky 2y ago
  I hear predictions of crash every year since 2012-2013 at least. Foreclosures are still low. Inventory rising is locale dependent thing, e.g Palm Springs - basically vacation home flips/airbnbs. I dont see how it could crash when stocks are still at all times high
  - lazide 2y ago
    Many of the stock market changes are in line with inflation, but yup - we could be in for more pump. We’ll see how it goes.
- kjkjadksj 2y ago
  Theres so much pent up money that Powell just has to tweet a picture of a dove and the market will go up 15% the next day. Markets been lumbering up since mid april despite all the doom and gloom narrative with the interest rate and continually being told no cuts for now by the fed the entire time. Anytime the fed says no cuts recently, seems like its Powell creating a buying opportunity more than anything and a week later the ship is back on course. Whenever they do cut rates this year there will be fireworks.
  - lazide 2y ago
    The issue the Fed is trying to resolve is exactly too much money freely moving around - also known as inflation. We’ll see when things change, but for now they’re not freeing up cash. And the housing market in particular’s momentum has been steadily changing.
fragmede 2y ago
subsidies for construction is the obvious answer that we're too stupid to be able to implement.
- sio8ohPi 2y ago
  Subsidizing a heavily regulated industry sounds like a good way to waste a lot of money.
  - zbrozek 2y ago
    Construction is expensive but at least not difficult. Entitlement and permitting are the real nightmare here. It's why we basically don't build anything.
    - greenie_beans 2y ago
      what about the massive amount of housing starts that dropped off after the financial crisis and took a while to recover, and never got back to the same level? that seems like a big part of the problem too. https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST
      - zbrozek 2y ago
        How many of those are in California?
        greenie_beans 2y ago
        idk, i'm curious but ain't got time to look for that. you should look it up if you're curious, or are you trying to make a point?
        zbrozek 2y ago
        The article is about California and I would suspect that relatively few entitled projects are abandoned there. If you know where to get the relevant data, please share.
pylua 2y ago
Federal intervention? The state should manage itself.
- zbrozek 2y ago
  That would be great but it's not going to be swift or sufficient. The thing that would really do the trick is overturning Euclid v. Ambler, and really only SCOTUS or Congress can do that.
  - kjkjadksj 2y ago
    That case was more about separating industrial and residential land. Zoning is a good thing but putting a cap on development within a zone is what has caused these issues with prices and a lack of housing supply. Everywhere that you'd consider first world has some zoning. Tokyo too of course; you can't just open a landfill next to your neighbors house for example, but at the same time there's a lot of by right development that adds housing capacity if the area can handle height with respect to the available infrastructure.
    - zbrozek 2y ago
      The case was about building residential in a residential area. https://tile.loc.gov/storage-services/service/ll/usrep/usrep272/usrep272365/usrep272365.pdf https://tile.loc.gov/storage-services/service/ll/usrep/usrep...
      - kjkjadksj 2y ago
        Read it again: "The recent industrial development of the City of Cleveland, following the railroad lines, has already reached the Village and to some extent extends over into it. In its obvious course, this industrial expansion will soon absorb the area in the Village for industrial enterprises. It is in restraint of this prospect that the ordinance seeks to operate. In effect it erects a dam to hold back the flood of industrial development and thus to preserve a rural character in portions of the Village which, under the operation of natural economic laws, would be devoted most profitably to industrial undertakings. This, the evidence shows, destroys value without compensation to the owners of lands who have acquired and are holding them for industrial uses." "...the ordinance of its own force operates greatly to reduce the value of appellee's lands and destroy their marketability for industrial, commercial and residential uses; and the attack is directed, not against any specific provision or provisions, but against the ordinance as an entirety."

Duh? Cost of living here is spiraling out of control and housing is the biggest line item. But it's going to take something big and heavy (like federal intervention) to fix it.

lazide 2y ago

Actually, it’s already on the way to being fixed the old fashioned way - with a market crash. Inventory is rising, volume is dropping, and while prices are going up - that is pretty common as the market starts to grind to a halt. [https://www.redfin.com/state/California/housing-market https://www.redfin.com/state/California/housing-market] When the line keeps going up and to the right, everyone builds that into their spreadsheets and times are good. When the line starts going down and to the right, they hope it’s temporary. But after awhile, they need to update their spreadsheets - and then times are bad. As long as the fed keeps rates high, the crash is inevitable. I give it another year or two. Bankruptcies are likely to be incredibly painful.

pylua 2y ago
I see your point, but a crash would be extremely bad for the states budget, which is already struggling. Hopefully a small correction at most. The market also does seem strangely stubborn to correct.
- lazide 2y ago
  This will not be a small correction.
  - testval123 2y ago
    So many people 'want' a correction that it's clear there is a ton of demand. Ergo, I wouldn't be too hopeful.
    - lazide 2y ago
      Last year maybe, now everyone is either giving up or white knuckling it. In my experience, that’s when it gets moving.
- deleted 2y ago
  [deleted]
dilyevsky 2y ago
I hear predictions of crash every year since 2012-2013 at least. Foreclosures are still low. Inventory rising is locale dependent thing, e.g Palm Springs - basically vacation home flips/airbnbs. I dont see how it could crash when stocks are still at all times high
- lazide 2y ago
  Many of the stock market changes are in line with inflation, but yup - we could be in for more pump. We’ll see how it goes.
kjkjadksj 2y ago
Theres so much pent up money that Powell just has to tweet a picture of a dove and the market will go up 15% the next day. Markets been lumbering up since mid april despite all the doom and gloom narrative with the interest rate and continually being told no cuts for now by the fed the entire time. Anytime the fed says no cuts recently, seems like its Powell creating a buying opportunity more than anything and a week later the ship is back on course. Whenever they do cut rates this year there will be fireworks.
- lazide 2y ago
  The issue the Fed is trying to resolve is exactly too much money freely moving around - also known as inflation. We’ll see when things change, but for now they’re not freeing up cash. And the housing market in particular’s momentum has been steadily changing.

fragmede 2y ago

subsidies for construction is the obvious answer that we're too stupid to be able to implement.

sio8ohPi 2y ago
Subsidizing a heavily regulated industry sounds like a good way to waste a lot of money.
- zbrozek 2y ago
  Construction is expensive but at least not difficult. Entitlement and permitting are the real nightmare here. It's why we basically don't build anything.
  - greenie_beans 2y ago
    what about the massive amount of housing starts that dropped off after the financial crisis and took a while to recover, and never got back to the same level? that seems like a big part of the problem too. https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST
    - zbrozek 2y ago
      How many of those are in California?
      - greenie_beans 2y ago
        idk, i'm curious but ain't got time to look for that. you should look it up if you're curious, or are you trying to make a point?
        zbrozek 2y ago
        The article is about California and I would suspect that relatively few entitled projects are abandoned there. If you know where to get the relevant data, please share.

pylua 2y ago

Federal intervention? The state should manage itself.

zbrozek 2y ago
That would be great but it's not going to be swift or sufficient. The thing that would really do the trick is overturning Euclid v. Ambler, and really only SCOTUS or Congress can do that.
- kjkjadksj 2y ago
  That case was more about separating industrial and residential land. Zoning is a good thing but putting a cap on development within a zone is what has caused these issues with prices and a lack of housing supply. Everywhere that you'd consider first world has some zoning. Tokyo too of course; you can't just open a landfill next to your neighbors house for example, but at the same time there's a lot of by right development that adds housing capacity if the area can handle height with respect to the available infrastructure.
  - zbrozek 2y ago
    The case was about building residential in a residential area. https://tile.loc.gov/storage-services/service/ll/usrep/usrep272/usrep272365/usrep272365.pdf https://tile.loc.gov/storage-services/service/ll/usrep/usrep...
    - kjkjadksj 2y ago
      Read it again: "The recent industrial development of the City of Cleveland, following the railroad lines, has already reached the Village and to some extent extends over into it. In its obvious course, this industrial expansion will soon absorb the area in the Village for industrial enterprises. It is in restraint of this prospect that the ordinance seeks to operate. In effect it erects a dam to hold back the flood of industrial development and thus to preserve a rural character in portions of the Village which, under the operation of natural economic laws, would be devoted most profitably to industrial undertakings. This, the evidence shows, destroys value without compensation to the owners of lands who have acquired and are holding them for industrial uses." "...the ordinance of its own force operates greatly to reduce the value of appellee's lands and destroy their marketability for industrial, commercial and residential uses; and the attack is directed, not against any specific provision or provisions, but against the ordinance as an entirety."