4 ms·

Im a rube but it my knee jerk reading tfa is there has to be some correction or young people are financially and domestically doomed. The solutions you listed h

Im a rube but it my knee jerk reading tfa is there has to be some correction or young people are financially and domestically doomed. The solutions you listed here seem great. Is there momentum behind establishing these in the US? Is it more likely the trend continues and young people will simply become priced out, or is a correction more likely? If the latter, what are smart people expecting?

frmersdog 2y ago
You are correct. >Is it more likely the trend continues and young people will simply become priced out, or is a correction more likely? As a layman, take this with a huge grain of salt: it depends. By established rules, a major correction should be imminent. In fact, it should have happened one of several times already. Examples of catalysts include a bond liquidity crisis in late 2019, the flash crash at the start of the COVID pandemic, the Gamestop debacle in early 2021, the collapse of the Chinese real estate market later in 2021, and the US bank collapses of early 2023. There are also others, though several venture into conspiracy theory territory. In every example I mentioned, unprecedented action was undertaken to prevent a catastrophic event that might have lead to financial contagion across global markets. There will be probably be more. It remains to be seen whether authorities will continue undertaking steps to shore things up when the bubble threatens to pop. (Trump's return to office is an interesting wrinkle; grab another grain of salt, but it's my opinion that the Gamestop thing only got as bad as it did because the regulatory regime under his tenure was asleep at the wheel.) It should be noted that a correction doesn't necessarily lead to affordability if purchasing power simply continues falling or remains stagnant, as a result of a weaker job market. There are people who believe that sellers will simply refuse to drop residential real estates prices, as they have with commercial properties. Consolidation of ownership under large entities - as we've already seen to some extent - would allow owners to simply squat on properties, perhaps renting then out. Who knows what happens to the algorithmic rent fixing lawsuits, that might have brought those costs back to Earth a bit, after this year's electoral red wave.
- toomuchtodo 2y ago
  A correction won't occur because there is a housing shortage of between 3-8M units, depending on who you ask. There is not enough labor to build more units at any reasonable rate, so it'll be a slow burn as the system reaches equilibrium over time (new housing comes into the market when owners must sell, demand destruction due to pricing). Due to demographics, a lot more housing could be satisfied by smaller units accounting for reduced forward looking family formation, but the challenge remains in sourcing labor to build these units. With regards to the labor market, due to structural demographics and labor shortages, it is highly unlikely in my opinion that the job market weakens to the point where housing experiences a crisis from a rapid, sustained increase in homeowners who cannot afford their mortgage payments. https://www.voronoiapp.com/demographics/Over-Half-of-Households-in-the-US-Dont-Have-Kids--2933 https://www.voronoiapp.com/demographics/Over-Half-of-Househo... ("Over Half of Households in the U.S. Don't Have Kids") https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives... ("U.S. Housing Shortage: Everything, Everywhere, All at Once") https://www.fanniemae.com/media/45106/display https://www.fanniemae.com/media/45106/display ("Fannie Mae: The U.S. Housing Shortage from a Local Perspective") https://www.marketplace.org/shows/marketplace/the-housing-sector-droops-under-a-labor-shortage-and-price-hikes/ https://www.marketplace.org/shows/marketplace/the-housing-se... ("APM Marketplace: The housing sector droops under a labor shortage and price hikes") https://www.businessinsider.com/baby-boomers-housing-wealth-home-prices-housing-shortage-retirement-2024-11 https://www.businessinsider.com/baby-boomers-housing-wealth-... | https://archive.today/OsNgL https://archive.today/OsNgL ("Business Inside: Baby boomer homeowners got rich from skyrocketing house prices. Now they can't find retirement housing.") https://www.bloomberg.com/news/articles/2024-09-18/us-faces-a-deficit-of-6-million-workers-in-less-than-a-decade https://www.bloomberg.com/news/articles/2024-09-18/us-faces-... | https://archive.today/Lyr5t https://archive.today/Lyr5t ("Bloomberg: US Faces a Deficit of 6 Million Workers in Less Than a Decade") https://www.axios.com/2024/06/27/labor-shortage-workforce-economy https://www.axios.com/2024/06/27/labor-shortage-workforce-ec... ("Axios: Labor shortages are the new normal") https://www.axios.com/2023/08/27/labor-shortages-air-traffic-health-care-teachers-police https://www.axios.com/2023/08/27/labor-shortages-air-traffic... ("Axios: Labor shortages plague high-stakes industries") https://www.axios.com/2023/05/08/us-labor-shortage-older-workers https://www.axios.com/2023/05/08/us-labor-shortage-older-wor... ("Axios: Why labor shortages could be here to stay")
DrillShopper 2y ago
Every time there is the potential for a correction (2008 being close to mind) the government just hands the banks a ton of taxpayer money because they're "too big to fail". So I wouldn't expect a correction until the US is unable to borrow more money or defaults on its debt. Much like climate change it will already be too late by the time young people have the power to change it. So I'm not surprised many of them have sort of checked out from the "spouse/house/kids" grift/grind

frmersdog 2y ago

You are correct. >Is it more likely the trend continues and young people will simply become priced out, or is a correction more likely? As a layman, take this with a huge grain of salt: it depends. By established rules, a major correction should be imminent. In fact, it should have happened one of several times already. Examples of catalysts include a bond liquidity crisis in late 2019, the flash crash at the start of the COVID pandemic, the Gamestop debacle in early 2021, the collapse of the Chinese real estate market later in 2021, and the US bank collapses of early 2023. There are also others, though several venture into conspiracy theory territory. In every example I mentioned, unprecedented action was undertaken to prevent a catastrophic event that might have lead to financial contagion across global markets. There will be probably be more. It remains to be seen whether authorities will continue undertaking steps to shore things up when the bubble threatens to pop. (Trump's return to office is an interesting wrinkle; grab another grain of salt, but it's my opinion that the Gamestop thing only got as bad as it did because the regulatory regime under his tenure was asleep at the wheel.) It should be noted that a correction doesn't necessarily lead to affordability if purchasing power simply continues falling or remains stagnant, as a result of a weaker job market. There are people who believe that sellers will simply refuse to drop residential real estates prices, as they have with commercial properties. Consolidation of ownership under large entities - as we've already seen to some extent - would allow owners to simply squat on properties, perhaps renting then out. Who knows what happens to the algorithmic rent fixing lawsuits, that might have brought those costs back to Earth a bit, after this year's electoral red wave.

toomuchtodo 2y ago
A correction won't occur because there is a housing shortage of between 3-8M units, depending on who you ask. There is not enough labor to build more units at any reasonable rate, so it'll be a slow burn as the system reaches equilibrium over time (new housing comes into the market when owners must sell, demand destruction due to pricing). Due to demographics, a lot more housing could be satisfied by smaller units accounting for reduced forward looking family formation, but the challenge remains in sourcing labor to build these units. With regards to the labor market, due to structural demographics and labor shortages, it is highly unlikely in my opinion that the job market weakens to the point where housing experiences a crisis from a rapid, sustained increase in homeowners who cannot afford their mortgage payments. https://www.voronoiapp.com/demographics/Over-Half-of-Households-in-the-US-Dont-Have-Kids--2933 https://www.voronoiapp.com/demographics/Over-Half-of-Househo... ("Over Half of Households in the U.S. Don't Have Kids") https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives... ("U.S. Housing Shortage: Everything, Everywhere, All at Once") https://www.fanniemae.com/media/45106/display https://www.fanniemae.com/media/45106/display ("Fannie Mae: The U.S. Housing Shortage from a Local Perspective") https://www.marketplace.org/shows/marketplace/the-housing-sector-droops-under-a-labor-shortage-and-price-hikes/ https://www.marketplace.org/shows/marketplace/the-housing-se... ("APM Marketplace: The housing sector droops under a labor shortage and price hikes") https://www.businessinsider.com/baby-boomers-housing-wealth-home-prices-housing-shortage-retirement-2024-11 https://www.businessinsider.com/baby-boomers-housing-wealth-... | https://archive.today/OsNgL https://archive.today/OsNgL ("Business Inside: Baby boomer homeowners got rich from skyrocketing house prices. Now they can't find retirement housing.") https://www.bloomberg.com/news/articles/2024-09-18/us-faces-a-deficit-of-6-million-workers-in-less-than-a-decade https://www.bloomberg.com/news/articles/2024-09-18/us-faces-... | https://archive.today/Lyr5t https://archive.today/Lyr5t ("Bloomberg: US Faces a Deficit of 6 Million Workers in Less Than a Decade") https://www.axios.com/2024/06/27/labor-shortage-workforce-economy https://www.axios.com/2024/06/27/labor-shortage-workforce-ec... ("Axios: Labor shortages are the new normal") https://www.axios.com/2023/08/27/labor-shortages-air-traffic-health-care-teachers-police https://www.axios.com/2023/08/27/labor-shortages-air-traffic... ("Axios: Labor shortages plague high-stakes industries") https://www.axios.com/2023/05/08/us-labor-shortage-older-workers https://www.axios.com/2023/05/08/us-labor-shortage-older-wor... ("Axios: Why labor shortages could be here to stay")

DrillShopper 2y ago

Every time there is the potential for a correction (2008 being close to mind) the government just hands the banks a ton of taxpayer money because they're "too big to fail". So I wouldn't expect a correction until the US is unable to borrow more money or defaults on its debt. Much like climate change it will already be too late by the time young people have the power to change it. So I'm not surprised many of them have sort of checked out from the "spouse/house/kids" grift/grind