Housing market
- Thread starter simply1
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What I am mainly saying is actually construct lesser products. Same %, but less $. Instead of making $100k on a unit, maybe make a four that will net you $25k. And those for will be lessor than the 1.
But I get it, why take the risk of building 4 when you can just build one for much less effort? The reason is to reach more people.
Its the same reason lawyers, tax preparers, etc. do pro bono work. Do they want to? Most likely no. Is it good for the community?
Home ownership is not for everyone... but it is for the very significant majority.
It's easy to see that the cost of materials has gone up over the last few years, which has an effect on the affordability of new homes. But another significant factor is the rapidly increasing cost of land. This also cuts into builder profits.
The builder has to hire the same subs and go through the same permit/planning process no matter the final price of the house.
The problem is a lot of the mid-twenties folks can't even get into a house. There's a ridiculous amount of entry level housing being bought up to become rental properties sight unseen for cash. Younger folks have the 20% but are competing with a cash offer and can't win.
Home ownership isn't for everyone but when the cost of renting exceeds the cost that would otherwise be spent on a mortgage that's just a giveaway to the top in general. Apartments are going up at ridiculous paces around the country because people have been brainwashed to believe that's assisting in the housing crisis. It isn't.
You are right. Lets all just worry about ourselves and let the politicians fix it. Name of the game, it is what it is. This mantra has suited me well.
But we've have seen the incredible increase in the wealth gap, and the crazy increase in house prices while salaries and wages have not kept pace. Its just hard for me to think this is a good thing for the long term. And if we go back to my original post, builders are only part of the problem. So are peoples expectations. So are politics. So is my lack of charitable giving.
Its just crazy to me that we have gotten to a point where we only do things if we are fully incentivized. Was it like that in 50 years ago? 200 years ago? There was a time when being a politician was not a full time job. I am led to believe in those times, profit was not the end all be all driver of each and every decision.
While you make valid points in your first paragraph, i'd disagree on a couple things in the second:
The cost of renting often exceeds a mortgage, yes. But a lot of people make this comparison when it isn't really a valid one. Rent also includes built in expenses covered by the landlord such as maintenance, something that many people don't factor in well if they figure "i can afford this much rent, so the same amount in mortgage is in my range too".
Secondly, how could apartments going up not help this? Supply and demand here, our underlying problem is not enough units. The more units of all kinds that are constructed, the more of a dent that is made into that.
Lol - no one is saying 23 year olds have a ‘right’ to a house.
But in many of the geographic areas of the US that really drive our national economic growth (read: cities, especially on the coast), dual-income 30 somethings with household income above the median, trying to start families, can not afford a basic house.
You can try to make this about ‘entitlement’ or expectations if you like, but for me the bottom line is our economy is leaving lots of potential growth on the table when our leading job centers are not decent and affordable places to live for the workers who are driving the growth.
This. I rented for over 10 years out of college. Always trying to ensure my rent was "cheap". Does that even exist anymore? Even when I had cheap rent I was crazy for "not buying a house and building equity."
I also don't think just move somewhere with cheaper housing is always an option. Like up here in the cities I'd have to move quite a ways out of town (at least 45 minutes if not more) and then I'm having a really long commute and also limiting future job opportunities if they're on a different side of town. Not to mention potentially nothing going on around me and not being near any friends
Poor choice of words on my part.
My thought would be apartments aren't the appropriate type of permanent housing. Owner occupied duplexes, single family homes, etc. are the "desirable" housing I'd much prefer to see. Apartments have a place but in my opinion they aren't the solution to the lack of affordable owner occupied housing.
The notion that "all new homebuyers want 3 car garages, finished basements, granite countertops, etc." is wrong. The problem is that's what new builder grade houses are and those are the houses those people can actually get their hands on because the cheaper houses are gobbled up.
The American dream still lives in Sheldahl, brother!
Luckily I have a partner who makes decent money as well so we were able to find a place. But it took awhile and we just got lucky too. If I was by myself I couldn't see myself being able to afford anything until my mid to late 30s.
Another good Economist article today on this. House Prices
This chart was interesting; shows the relative cost rising very rapidly recently, but not INSANELY so compared to say, the 80s. Question is does it rebound (down) or climb even higher?
This chart was interesting; shows the relative cost rising very rapidly recently, but not INSANELY so compared to say, the 80s. Question is does it rebound (down) or climb even higher?
Just a matter of time before it merges with slater from all the growth
Couldn’t believe it when I went to Alleman and they had a Whole Foods.
I guess I'd frame the question in a different way:
What good is coming from people not being able to get entry-level housing?
What good is coming from people having to wait until later in life to have children? (of note, this is intelligent people procreating who are waiting...not idiots)
What good is coming from people not being able to get educated?
I would argue people having fewer children is better for the planet but that's going to produce ugly economics down the road.
What good is coming from a group of wealthy investors building an apartment complex to hold it for 13 months and then sell it to other investors who will jack the rents to make the finances work?
What good is coming from people not being able to get entry-level housing?
What good is coming from people having to wait until later in life to have children? (of note, this is intelligent people procreating who are waiting...not idiots)
What good is coming from people not being able to get educated?
I would argue people having fewer children is better for the planet but that's going to produce ugly economics down the road.
What good is coming from a group of wealthy investors building an apartment complex to hold it for 13 months and then sell it to other investors who will jack the rents to make the finances work?
I'd agree, I just think they are part of the piece. Overall we just need more and more units. We also need to pare back a lot of the zoning restrictions that have made it unprofitable for builders to build at smaller scales. Not just smaller single family homes, but things like duplexes, row homes, smaller multifamily (like <10 units) etc built within the normal neighborhood fabric . Theres very much a missing middle.
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