Net Worth private poll

[kirk89gt]

This is all true. I would argue that this problem really started decades earlier in the 80s and 90s with zoning laws - specifically minimum lot sizes and minimum home sizes increasing. Drive through any metro area and you'll see a distinct difference in housing density as you move further out of the city and into the suburbs.

Interestingly, the average size of family (measured in people) has been steady or decreasing while the average size of home - and the lot it sits on - is probably double what it was in the 60s. We're simply not maximizing for density like we used to. By the 2000s and later the only place to build in many metro areas is like an hour outside of downtown and guess what? No one wants to commute that far and younger adults aren't looking for 4 BR/3 BA homes an hour from downtown anywhere.

The only thing making this feasible for a lot of people now is the ability to work hybrid or full time remote. And that is coming at the serious detriment of commercial real estate and many downtown/city centers are hanging on by a thread. It's just pick your poison at this point.

I've spent the last 20+ years in residential real estate and mortgage and have worked in housing policy for many years of that. I honestly don't know where we go from here to be totally honest.

Great points…..additionally worth noting the lead up to the Great Recession was in part due to the astronomically high interest rates of the late 70’s & early 80’s. The demand shriveled up but didn’t go away and once interest rates came down the dam burst and we were off to the races for the next ~20 years. Just like the law of gravity, the laws of supply and demand, are constantly in effect, albeit on a different timeline. Unfortunately the historically low interest rates of that lead up to the GR conditioned (or recalibrated) us to what “high” and “low” interest rates are / were.

My first home was financed at 7.5% in the early 2000’s. When I mentioned that to my parents, my dad replied, “that is a pretty good rate.” Then proceeded to tell me how he felt that he “got a steal” for the home I grew up in @ 12% in the early 80’s. When you add it all up, where we are today isn’t that bad, but when your experience had been that home loan money was nearly “free”, it changes your perspective.