Housing market

[Tri4Cy]

I work in the real estate industry and I'll have to disagree with a few things here. We lost a decade of contractors/laborers due to the recession. Our supply chains have been disrupted beyond just covid-19, meaning labor and materials will continue to go up (though not like lumber this past year). The entitlement process in bigger cities takes a long time, so it's not as simple as buying some land and building on it a few months later.

At the peak, the twin cities were building about 18k housing units per year. this year they're on track for about 10k, with higher demand. Sure, prices might not go up like a rocket but i don't see an all-out crash like we had a decade ago.

This is my take as well. Based on economic factors I'm just assuming that the price of my new house will be flat for a few years. Supply is still an issue which will help with price stability. The growth in prices we've seen over the last couple years is clearly not sustainable but I don't foresee a big correction type event.

 

[Tri4Cy]

I agree with this. Trades and skilled positions were not emphasized when I was in high school .... it was college or bust even though I know there were people in my class who had the aptitude for a skilled trade. There was NO ONE encouraging them to seek it. Our society needs to stop viewing college as the holy grail and only post-high school option.

I have an opinion that is going to probably get me lit up, but I will take the dumbs and push back. I think a major part of this is the treat everyone the same mentality by high schools. What I mean by this is, you know by the end of their sophomore year that 1/3 of the kids will be going into the workforce directly out of HS. You also have a good feel that 1/3 of them will be going into a college. You don't just know a third will, but you have an extremely good idea which kids are in those thirds. That leaves about 1/3 that could go either way and a trade school is probably an extremely solid choice for several of them, but the guidance counselors say they have to do the same thing for everyone. My opinion is, no you don't really need to do the exact same guidance for everyone. Walk them through the steps similarly, yes. Give the exact same steps all the way through, no.

Our counselor is hell bent on student debt is 100% the devil that he tells kids that having the least amount of debt out of school is priority number one. This leads a lot of kids into community colleges that just give you the prep classes but nothing very much into a typical bachelor degree. For those determined to get a bachelors, he is hurting them, IMO. Many kids end up with an extra semester or year going this route because the credits transfer, but not necessarily the classes so they get to retake too many. I understand that student debt is negative, but leaving with 5-10k of debt should not derail you from what suits you best. Besides, if you have to go another semester/year, you have blown any savings anyhow.

I think the schools wait too long to start being realistic with many students. They will talk about work force stuff to kids like mine that are a lock to go to a four year school and talk about colleges to those with a 1.1 HS gpa by the end of their sophomore year. Sometimes guiding a kid is also being realistic with a kid.

I don't completely disagree, just sort of I can tell you from first hand experience that the message I received from my guidance counselor and financial aid officer was the exact opposite message and it ****** me for a long time. They sat across the desk from me and told me how I wouldn't be anything without a college degree (I was already dead-set on going so that didn't skew my opinion) but (I can still remember this guys face as he tells me this) "This money is practically free. You should take max loans to get a head start on life. Once you graduate you'll make plenty of money to pay it off in no time." Well after 13 years of making student loan payments higher than my rent/mortgage which gave me little to know discretionary income, I finally paid those loans off. So yeah, as someone who fell into that scam, I would agree with their bias.

Another data-point that supports that is the number of kids who get pushed into university and leave after a year or two without a degree. Now they have a larger debt load and no additional perceived value from an employer. Rationale is that for 2/3's of those kids per your example, it may make more sense for them to "test the waters" at a community college for a fraction of the cost. Average dropout rates at 4 year universities in the US is 56%!!! So statistically speaking, the counselor is more likely to be correct in assuming the kid will drop out than not. To be completely fair, the 2 year data looks even worse. However I'm assuming those rates would go down if more kids went the 2 yr route first vs jumping straight to a 4 yr program.

Source: Drop Out Rates

 

[qwerty]

Wow. 200k worker office space with communal seating. That’s a big ass office.

No, it's communal seating. Stack 'em and Rack 'em.

 

[brianhos]

I still have friends there and they don't like it at all. I think they start going back to the office in October.

I know some IT people there, good luck on getting them to go back. They can find new jobs in minutes if you don't treat them right.

 

[mynameisjonas]

We didn't get a house last weekend and we were the highest offer. 18k over because of a 3k over asking contingency up to 28k over and the first 3k in repairs. They countered with us waiving the inspection and when we said no they went with a lower offer. I guess we'll get the next one.

When a seller wants you to waive the inspection that is about as big of a red flag as you can Ask for.

 

[KnappShack]

This is my take as well. Based on economic factors I'm just assuming that the price of my new house will be flat for a few years. Supply is still an issue which will help with price stability. The growth in prices we've seen over the last couple years is clearly not sustainable but I don't foresee a big correction type event.

Demand is strong as millennials are forming families and wanting to buy homes.

If we have a huge spike in interest rates then demand could change.

Supply is still less than ideal. Some price fluctuation possible? Sure. A collapse like some on here would like....no. Hoping for a collapse is really getting something you don't want

 

[ISpyCy]

Materials are expensive, labor is nearly non-existent, zoning codes are too restrictive (sometimes) and contractors are only building if they have a suitor for the home. Production of housing is really only favoring those that already have the means to purchase a lot and build a home on their own, rather than creating an affordable product for specific incomes,

City governments and Economic Development people need to get more involved with creating partnerships with developers and funders while maintaining relationships with land owners in hopes to get more housing built. Instead, housing is "not their thing" so just let free market decide what is needed. There are several creative and innovative programs being used in Iowa communities that create housing opportunities and choice for a more desirable market.

 

[jcyclonee]

This is not a disagreement with your post. Good points made. However the average debt for a bachelors degree is like 25k.

I'm sure your number is roughly accurate but it seems like it should be more than that.

 

[KnappShack]

Materials are expensive, labor is nearly non-existent, zoning codes are too restrictive (sometimes) and contractors are only building if they have a suitor for the home. Production of housing is really only favoring those that already have the means to purchase a lot and build a home on their own, rather than creating an affordable product for specific incomes,

City governments and Economic Development people need to get more involved with creating partnerships with developers and funders while maintaining relationships with land owners in hopes to get more housing built. Instead, housing is "not their thing" so just let free market decide what is needed. There are several creative and innovative programs being used in Iowa communities that create housing opportunities and choice for a more desirable market.

Affordable housing is an interesting topic. A small town I spent a lot of time in is really falling apart. The downtown buildings are literally collapsing. Almost all businesses are gone now. Casey's and a dollar store are about all that's left.

It's a 1/2 hour from two employment centers so not a crazy commute

It would be interesting to have the state help facilitate a partnership to acquire cheap land and put up starter homes. Plop down 1,000 sq ft manufactured or stick built homes and rejuvenate the area.

Hell. This sounds like Habitat for Humanity actually

 

[CycloneDaddy]

I'm sure your number is roughly accurate but it seems like it should be more than that.

That is what I thought but that is what Google said.

 

[wxman1]

Affordable housing is an interesting topic. A small town I spent a lot of time in is really falling apart. The downtown buildings are literally collapsing. Almost all businesses are gone now. Casey's and a dollar store are about all that's left.

It's a 1/2 hour from two employment centers so not a crazy commute

It would be interesting to have the state help facilitate a partnership to acquire cheap land and put up starter homes. Plop down 1,000 sq ft manufactured or stick built homes and rejuvenate the area.

Hell. This sounds like Habitat for Humanity actually

If only there were a surplus we could use to reinvest in the state...

 

[ISpyCy]

Affordable housing is an interesting topic. A small town I spent a lot of time in is really falling apart. The downtown buildings are literally collapsing. Almost all businesses are gone now. Casey's and a dollar store are about all that's left.

It's a 1/2 hour from two employment centers so not a crazy commute

It would be interesting to have the state help facilitate a partnership to acquire cheap land and put up starter homes. Plop down 1,000 sq ft manufactured or stick built homes and rejuvenate the area.

Hell. This sounds like Habitat for Humanity actually

Too many people think "Affordable Housing" and "Low-Income Housing" are the same thing, which couldn't be further from the truth. HFH, NeighborWorks, CHDOs, etc. are all wanting to help, but communities need to actively market themselves with land and infrastructure readiness. Even major employers providing down payment or closing cost assistance for new employees moving to a specific area (with the assistance of local ED professionals, of course)

I have worked in towns with less than 1,000 population that know this process better than some 10,000+ communities. Housing development is economic development. Housing is where jobs go to sleep every night.

 

[KnappShack]

Too many people think "Affordable Housing" and "Low-Income Housing" are the same thing, which couldn't be further from the truth. HFH, NeighborWorks, CHDOs, etc. are all wanting to help, but communities need to actively market themselves with land and infrastructure readiness. Even major employers providing down payment or closing cost assistance for new employees moving to a specific area (with the assistance of local ED professionals, of course)

I have worked in towns with less than 1,000 population that know this process better than some 10,000+ communities. Housing development is economic development. Housing is where jobs go to sleep every night.

And maybe I'm thinking of it strictly from a supply standpoint.

If we have these communities with infrastructure already there and some (any?) economic reason to exist then is there a way to make the numbers work? Is there a way to build new homes at a price point that is accessible to their market?

In my scenario there are homes that are "affordable", but they are also ready to fall over.

And even if a miracle happened and the stars and the moon aligned would we have the labor to build the homes?

 

[ISpyCy]

And maybe I'm thinking of it strictly from a supply standpoint.

If we have these communities with infrastructure already there and some (any?) economic reason to exist then is there a way to make the numbers work? Is there a way to build new homes at a price point that is accessible to their market?

In my scenario there are homes that are "affordable", but they are also ready to fall over.

And even if a miracle happened and the stars and the moon aligned would we have the labor to build the homes?

Infill is tricky because of setback requirements, zoning regulations, consistency in construction style with surrounding properties and market desirability of the finished product; but that's not to say it can't be done. "Land Banking" was just made legal in all Nebraska municipalities for a sole entity to acquire and keep inventory of where vacant lots and abandoned, distressed properties are located so they can be cleaned up, rehabilitated or demolished and potentially sold to a developer or property owner for structural replacement. In some cases, multiple adjoining lots can be purchased to make way for a more desirable project.

USDA-RD and CDBG monies are frequently used in smaller towns that don't have financial capacity to contribute to housing. You'd be surprised how many people living in **** housing actually want to make their living situation better, but for personal finance reasons, they are unable to. Housing foundations and financial contributors are important; the more partnerships you have, the more buckets of money you can tap into to buy down the cost of a project.

Labor is another issue. many contractors are backed up for months, maybe years, on projects because of this. That's why relationships with builders are so important. There are developers that do have their own contracting entities that, after building their product over and over again, could do it in their sleep and push a project to completion faster. Sometimes, a joint project with a neighboring community can make a development program more enticing,

Lots and lots and LOTS of little parts need to come together, but it's not an impossible task either.

 

[brianhos]

Affordable housing is an interesting topic. A small town I spent a lot of time in is really falling apart. The downtown buildings are literally collapsing. Almost all businesses are gone now. Casey's and a dollar store are about all that's left.

It's a 1/2 hour from two employment centers so not a crazy commute

It would be interesting to have the state help facilitate a partnership to acquire cheap land and put up starter homes. Plop down 1,000 sq ft manufactured or stick built homes and rejuvenate the area.

Hell. This sounds like Habitat for Humanity actually

Get good fiber connections to those areas and they would be great for WFH people. But unless the prices are much lower, it is not going to be worth it vs living in a suburb.

 

[HFCS]

This is not a disagreement with your post. Good points made. However the average debt for a bachelors degree is like 25k.

Isn’t that probably mostly because even many people who take out loans still get some financial help from parents? Whether it’s just parents paying for some or they are able to live at home while getting degree.

Paying for my own school at ISU with in state tuition I had more debt than that 20 years ago before paying a dime of interest so I imagine quite a bit more than that today.

 

[KnappShack]

Get good fiber connections to those areas and they would be great for WFH people. But unless the prices are much lower, it is not going to be worth it vs living in a suburb.

This is an additional layer on top of everything Spy and Trail put out there

In my scenario the town lost its school a decade ago too. So even with 2 employment centers (one is a state university) it's a tough puzzle to put together.

Especially if the employment areas are also feeling the pinch. There are plenty of homes in those areas, but they are also a considerable number in very bad condition.

Land, labor, zoning, government programs, macro economic trends.... it's a tough issue

 

[Gunnerclone]

Isn’t that probably mostly because even many people who take out loans still get some financial help from parents? Whether it’s just parents paying for some or they are able to live at home while getting degree.

Paying for my own school at ISU with in state tuition I had more debt than that 20 years ago before paying a dime of interest so I imagine quite a bit more than that today.

That’s an average. So for every you that had to fully fund with debt, there is a them that had their parents or grandparents cover 100%.

 

[ISpyCy]

Much of the issue is infrastructure costs and the inability to build 3 or 4 unit projects. Today everything is a single family house or a 60+ unit apartment building.

At what point do we utilize resources to invest in growing areas rather than prop up dying ones? If you remove emotion from the equation, it's probably a better public investment to put money into areas that will see more growth than areas that will continue to decline.

Smart communities have capital improvement plans to take care of the infrastructure replacement in older neighborhoods; it's the installation of the new stuff that is the bigger challenge.

Resources need to be invested across the board, for new development and preservation of the old. By focusing solely on building new and leaving the old buildings to rot away, you're creating blight and unsafe conditions that could be a welcome mat for crime, pests, and unsanitary living. This is a challenge for both homeowners and commercial building owners. Too many historic buildings are being used for personal storage of useless junk and it causes the core of the community to sink and sink fast. Local ED personnel need to be aware of this.

 

[BigBake]

Wells employees are not going back full time. 2-3 days per week. All depends on what departments you're in.

I didn't say they were. They are ending the full time remote employee option. You now will be required to go in to the office 2 - 3 times per week depending on your role.