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> This is yet another press release from the 'I want to build upwards in newly hot urban neighborhoods and get some of that upper-middle class 20-something movi

> This is yet another press release from the 'I want to build upwards in newly hot urban neighborhoods and get some of that upper-middle class 20-something moving from the suburbs into the city' money. I'll take it. The "I want to build condos so I can cash out ASAP, and then turn around and stick that money into mortgage-backed securities so I can also cash in over the long haul, perhaps at the expense of those same people I just sold a condo to" money has been dominating the conversation for far too long. Back in the 2000s I got kicked out of a perfectly fine apartment along with everyone else living in the building so that the property owner could flip all the units over to condos. Last I checked the building's still at ~50% occupancy, down from 100% when I was living there. And about half the units that are occupied are also for sale. It's far from the only former apartment building in that neighborhood with a similar story to tell, either. Yes, that does mean that there's an incredible amount of vacancy in the area. But - and this is critical - the amount of vacancy that's a reasonable option for people who aren't in a good position to take out a 30-year is very, very small. If you're in your 20s and single with no kids, a 1-bedroom apartment is a great idea. But unless you're confident that you'll remain single with no kids for the rest of your life, a 1-bedroom condo (that you probably won't be allowed to sublet) is a kind of stupid idea. And all those empty condos units are difficult to flip back to rental because condminium developments have legal encumbrances that make things more difficult. So for now they're going to stay vacant and continue being a senseless waste.

pessimizer 12y ago
It's purely a survival decision from the banks. Enough single-family housing was built during the bubble to safely house us all well into the next decade. Every homebuilder in the country is smart enough not to invest in adding to that overhang. The prices/sales are dropping now - what will they look like a year from now? These articles are like those skills-shortage rationalizations for the current level of prime-age employment that ignore the fact that neither hours or wages are rising, so there clearly isn't a shortage that is having an economic impact.
- bunderbunder 12y ago
  Absolutely, a lot of housing was built during the bubble. At least around here, it takes the form of a bunch of McMansions way out in the 'burbs. It's housing that was designed by baby boomers for baby boomers - the demographic whose current vector points out of the mainstream housing market and into retirement communities. For young folks entering the market, many have decided there's just way too much time, money, and gasoline in between those houses and the desirable jobs. You might as well say, "Well there are plenty of houses up for grabs in Detroit." That's well and true, but also pretty much irrelevant to someone trying to make a career in the job sectors that are currently growing. I'm sure the market will eventually sort it out; the current situation is creating plenty of opportunities to make a buck for someone smarter than the banks have proven to be. But that doesn't mean it isn't an irritating situation.
- brownbat 12y ago
  > smart enough not to invest in adding to that overhang This is interesting... new housing and old housing affect each others' prices, but aren't quite fungible. I'm surprised some developers aren't just confidently outcompeting existing stock with better quality newer homes. Are newer homes absorbing an equal or larger share of the vacancies than older homes? Is there some class of home that is absorbing a disproportionate share of the vacancies?
zanny 12y ago
Sounds like a great time to live in studio condos. What cities are the most vulnerable right now in that regard? Getting a good deal on housing can offset thousands a year in income loss from relocating.

pessimizer 12y ago

It's purely a survival decision from the banks. Enough single-family housing was built during the bubble to safely house us all well into the next decade. Every homebuilder in the country is smart enough not to invest in adding to that overhang. The prices/sales are dropping now - what will they look like a year from now? These articles are like those skills-shortage rationalizations for the current level of prime-age employment that ignore the fact that neither hours or wages are rising, so there clearly isn't a shortage that is having an economic impact.

bunderbunder 12y ago
Absolutely, a lot of housing was built during the bubble. At least around here, it takes the form of a bunch of McMansions way out in the 'burbs. It's housing that was designed by baby boomers for baby boomers - the demographic whose current vector points out of the mainstream housing market and into retirement communities. For young folks entering the market, many have decided there's just way too much time, money, and gasoline in between those houses and the desirable jobs. You might as well say, "Well there are plenty of houses up for grabs in Detroit." That's well and true, but also pretty much irrelevant to someone trying to make a career in the job sectors that are currently growing. I'm sure the market will eventually sort it out; the current situation is creating plenty of opportunities to make a buck for someone smarter than the banks have proven to be. But that doesn't mean it isn't an irritating situation.
brownbat 12y ago
> smart enough not to invest in adding to that overhang This is interesting... new housing and old housing affect each others' prices, but aren't quite fungible. I'm surprised some developers aren't just confidently outcompeting existing stock with better quality newer homes. Are newer homes absorbing an equal or larger share of the vacancies than older homes? Is there some class of home that is absorbing a disproportionate share of the vacancies?

zanny 12y ago

Sounds like a great time to live in studio condos. What cities are the most vulnerable right now in that regard? Getting a good deal on housing can offset thousands a year in income loss from relocating.