When property values exploded in Vancouver BC about 15 years ago with wealthy Chinese immigrants bidding up the price of homes, someone started a new real estate service.
Crack shack or mansion?
intercst
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That is an impressively humorous game… if you don’t have to play it in real life.
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Sad to see such high home prices. We have too many people in the world.
But we will from now on see more and more people all over the world suffer high temperatures, massive storms, deluges, fires burning homes/towns, lack of clean water, lack of clean air, more chemical pollution, and more sickness.
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I bought my home in 2010, right about at the bottom of the crash.
Based on recent sales in the area, it’s gone up in price about 300%.
That sounds good, but a seller that wants to stay in the same area will just have to pay 300% more for a replacement home.
And of course property taxes are going up every year, and it is a fool’s errand to try to contest/appeal the increase, as the comps are right there for the tax appraiser to reference.
I do not think this is a good thing, young people are getting priced out of ownership at the same time rents are skyrocketing, while current homeowners are losing disposable income to tax bills…
No idea what can be done about it, though.
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Build more housing, both multi-family and single.
DB2
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Absolutely the root of most of our problems.
Yet there is little discussion about it and what could be done to reduce that number.
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Minneapolis seems to be a success story in this regard
In May, the Twin Cities became the first major metropolitan area to see annual inflation fall below the Federal Reserve’s target of 2%. Its 1.8% pace of price increases was the lowest of any region that month.
the city of Minneapolis eliminated zoning that allowed only single-family homes and since 2018 has invested $320 million for rental assistance and subsidies.
That helped unleash a boom in construction of apartments and condos
Rent growth in Minneapolis since 2017 is just 1%, compared with 31% in the U.S. overall, according to the Pew Charitable Trusts. Its share of affordable rental units and ratio of rent to income are better than most comparable U.S. metro areas.
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The discussion was had and the conclusion was
- Educate girls and women
- Provide quality infant and child care
as those two steps consistently cause a radical decrease in the birth rate as women and some men then start doing family planning early and consistently.
The delays in carrying out those steps and the generational delay in seeing changing gross population accounts for the continuing bulge.
david fb
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Then there is the Harvard Effect where people of middle, upper middle and upper classes strata think where do we send the kids? The wealth effect slows the population growth. By the time couples can send their kids to private schools they are often older parents.
The solution to high prices is high prices.
Why your rent is about to fall
A dramatic uptick in new supply over the next couple of years is poised to exacerbate the headaches for landlords and open up more opportunities for renters. More than 971,000 apartment units were under construction across the US at the end of 2022, the second-largest number on record. About 575,000 multifamily units are scheduled to be completed this year, RealPage reported. An additional 39,000 single-family rental homes are also under development, according to Yardi Matrix, a provider of data for commercial real estate.
DB2
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Where I live, the city is giving millions of dollars in tax breaks to real estate developers that have bought & paid for the City Council. The tax breaks are for “affordable housing” for someone earning a minimum of 80% of the median income, about $82,000/yr. (Median is over $100K/yr)
The people sleeping in their cars on the street outside my condo complex aren’t earning $82,000/yr. They should be using the millions of dollars in tax breaks to build barracks-style housing for someone earning the minimum wage – about $32,000/yr. At least keep these folks off the streets.
intercst
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Inflation since 1900 has played a cruel trick. Nominally what people earn in the lower middle class is horrifying low compared to the cost of living. Yet probably a lot better than 1900.
There are two problems. One how do we normalize a better standard of living for honest work? Two how do we do so without inflation? The best answer is to buildout our industrial base so the wealth of the nation recovers. Our poverty problems have come about because we have not had an industrial plan.
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One key point omitted: In 1900, the majority of people in the US lived and worked on farms in agricultural areas. So the ability to feed themselves was not hard or expensive. Today, employment on farms is roughly 2% to 4%. So “earning/having money to spend” is a major problem for most of the unemployed today vs 1900 because they are required to buy food rather than grow/produce/raise it.
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Yeah when I was little we moved into a 1900 farmhouse. At that point only 1.5 acres of land. There were apple and crab apple trees. You wont find that moving into most modern contemporary houses.
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Case-Shiller Home Price Index (HPI) divided by CPI was:
flat until the year 2000
up 50% from 2000 to 2006
down 33% from 2006 to 2012
linear rise from 2012 to now (65% over 11 years)
The 2006 bubble was driven by liar loans. The 2022 peak may have been driven by home improvements. If the home improvements started in 2000, they possibly could have added significantly to value over 23 years.
==== links ====
The Case-Shiller Home Price Index (HPI) is based on successive arms-length sales of the same house recorded in local property records.
"we found the Case-Shiller HPIs are biased because they do not properly control for improvements to the property (or the lack thereof)”
https://business.sdsu.edu/news/2020/02/building-a-better-home-price-index
Case-Shiller U.S. National Home Price Index / Consumer Price Index for All Urban Consumers: Rent of Primary Residence in U.S. City Average
Case-Shiller U.S. National Home Price Index / Consumer Price Index
uses:
Case-Shiller U.S. National Home Price Index (CSUSHPINSA)
Rent of Primary Residence in U.S. City Average (CUSR0000SEHA)
Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL)
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That’s an excellent study from SDSU. Annual home maintenance is 1% to 3% of home value depending on where you live (e.g., 1% in a dry, temperate climate like Salt Lake City, 3% or more in coastal Florida.) It’s not just granite countertops. Is a fireproof metal roof an improvement, or just what you need to keep the home standing?
intercst
1 Like