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Home Price to Income Ratio

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Re: Home Price to Income Ratio

#111

Post by topspin »

standardUser wrote: post #5

Some very clever and influential people better start finding and implementing real solutions to housing prices right now. If they don't, expect overwhelming support from Millennials for massive expansions to public housing and rent control, if not even more draconian measures.

"better start finding and implementing real solutions to housing prices right now"

They can't. Providing supply will suffer the wrath of BANANA/CAVE/NIMBY anywhere you dream of living. Constraining demand will either get you voted out of office or devastate your political network or both, depending on which policy you attempt. You're competing with a whole planet full of people that want to live here and have more means than you.

Seek property where demand is lower and development isn't effectively outlawed. Forget any livable cities or high population states. For 99% of you that means living far away from your preferred locale among people you probably loath. If that's not acceptable then keep renting or live in a van.

The good news is many of you can work remote. That is an affordance you can leverage to great benefit.

Re: Home Price to Income Ratio

#112

Post by itake »

alexpotato wrote: post #104
itake wrote: post #100

Earlier quoted context omitted.

I suspect that dual income families could be a contributing factor in increased home prices of single-family homes. Even 'worse' is dual income, no kid families that are delaying and skipping child costs. Thus with "double" the cash flow and shared costs, couples afford higher prices at a lower cost.

I've often wondered about this myself. E.g. it's a lot easier to have two working people in a couple make $300K total vs only one person making $300K. It would be interesting to go back in time and correlate the rise of dual working couples vs housing prices adjusted for other factors e.g. inflation

At least in tech hubs, the "one person making $300k" is marrying up with another person that makes $300k, resulting in a $600k household and $1-3M home prices.

Re: Home Price to Income Ratio

#113

Post by TuringNYC »

marcodiego wrote: post #45

Are we close to another housing bubble like in 2008?

In the US, lending standards in 2005-2008 were openly silly and terrible. Lending standards today are much stricter, though not perfect.

I'd bet on a horizontal. (The best they can do is try to contain it. We've already seen the government too scared to reign in monetary policy in 2009-2021 even when things were good -- so thats a good indication of how scared they are to normalize things again.

The best they can do is allow controlled inflation, as they are doing, and allowing real prices to stabalize on an inflation adjusted basis.

Unfortunately, in all this, US fiscal and monetary policy has truly punished the young.

Re: Home Price to Income Ratio

#114

Post by asdff »

loeg wrote: post #103
standardUser wrote: post #5

Some very clever and influential people better start finding and implementing real solutions to housing prices right now. If they don't, expect overwhelming support from Millennials for massive expansions to public housing and rent control, if not even more draconian measures.

The solution is to build more housing. California has historically been terrible about that but SB9 and 10 are significant steps in the right direction.

California being terrible is only a recent phenomenom. It used to be common to convert your sfh into an apartment complex. There are 5 story single lot brick apartments on my block that are still illegal to build on a neighboring lot today with SB9 and 10.

Even just straight up rolling back to zoning codes that existed in 1960 without much further change would do a lot for supply. Los Angeles in 2010 had a population of 4 million and was zoned for 4.3 million homes. Los Angeles in 1960 on the other hand had a population of 2.5 million and was actually zoned for 10 million homes.

Re: Home Price to Income Ratio

#115

Post by [deleted] »

topspin wrote: post #111
standardUser wrote: post #5

Some very clever and influential people better start finding and implementing real solutions to housing prices right now. If they don't, expect overwhelming support from Millennials for massive expansions to public housing and rent control, if not even more draconian measures.

"better start finding and implementing real solutions to housing prices right now" They can't. Providing supply will suffer the wrath of BANANA/CAVE/NIMBY anywhere you dream of living. Constraining demand will either get you voted out of office or devastate your political network or both, depending on which policy you attempt. You're competing with a whole planet full of people that want to live here and have more me…

[deleted]

Re: Home Price to Income Ratio

#116

Post by noneeeed »

tharne wrote: post #108
loeg wrote: post #103

Earlier quoted context omitted.

The solution is to build more housing. California has historically been terrible about that but SB9 and 10 are significant steps in the right direction.

It consistently shocks me how rarely this is brought up as a solution. Price of something too high? Increase the supply.

It's been so frustrating watching people celebrating UK governments who have repeatedly failed to really tackle the supply side issues while propping up the demand side with tweaks that just increase the prices.

The most amazing example of this was the stamp-duty holiday to help stimulate the market for a few months during covid. The maximum you could save was £15k. The average house price increased during that time by about £16k...

Re: Home Price to Income Ratio

#117

Post by cryptoz »

tharne wrote: post #108
loeg wrote: post #103

Earlier quoted context omitted.

The solution is to build more housing. California has historically been terrible about that but SB9 and 10 are significant steps in the right direction.

It consistently shocks me how rarely this is brought up as a solution. Price of something too high? Increase the supply.

This is brought up all the time. There is frequently huge opposition from locals anywhere regarding increasing housing supply.

Re: Home Price to Income Ratio

#118

Post by dpweb »

gp wrote: post #32

While it doesn't directly affect the average person's purchasing power, the same dramatic increase is happening in other asset values as well. [0] One interesting thing to note is that 2019 EV / EBITDA values were already "high," before the coronavirus was spreading. I suspect these two phenomena have different causes overall, but low interest rates are a common factor that cause all asset prices to increase. On the…

When it's all assets going up, it's not the assets cost more, it's the dollar is worth less. So for all the help and assistance. Housing is LESS affordable than ever before.

You cannot infuse trillions of extra dollars into the economy without inflation. There's no magic pill - there must be consequences.

Re: Home Price to Income Ratio

#119

Post by tomkat0789 »

tharne wrote: post #108
loeg wrote: post #103

Earlier quoted context omitted.

The solution is to build more housing. California has historically been terrible about that but SB9 and 10 are significant steps in the right direction.

It consistently shocks me how rarely this is brought up as a solution. Price of something too high? Increase the supply.

Me too! I think the average American thinks "increase supply" means skyscrapers with apartments, rather than lower impact multiunit, mixed-use apartments/street shops that are more common in Europe.

Another issue with increasing supply/density: where is every household going to park its 2-3 cars?!

(Disclaimer: I've been watching tons of City Beautiful and Not Just Bikes on Youtube)

Re: Home Price to Income Ratio

#120

Post by the_gastropod »

dpweb wrote: post #118
gp wrote: post #32

While it doesn't directly affect the average person's purchasing power, the same dramatic increase is happening in other asset values as well. [0] One interesting thing to note is that 2019 EV / EBITDA values were already "high," before the coronavirus was spreading. I suspect these two phenomena have different causes overall, but low interest rates are a common factor that cause all asset prices to increase. On the…

When it's all assets going up, it's not the assets cost more, it's the dollar is worth less. So for all the help and assistance. Housing is LESS affordable than ever before. You cannot infuse trillions of extra dollars into the economy without inflation. There's no magic pill - there must be consequences.

I know this is a common belief in the hilarious world of crypto enthusiasts. But, y'know, we measure inflation, and what you're suggesting is just flat out not true. https://tradingeconomics.com/united-states/inflation-cpi
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