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U.S. home prices are the most unaffordable they've been in nearly 100 years

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Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#171

Post by brabel »

grensley wrote: post #152
Joeri wrote: post #144

Earlier quoted context omitted.

It’s weird that the insurance industry hasn’t capitalized on this. Make people pay for covering the risk that their house will drop in value, and make money on the fact that the vast majority of houses will rise in value.

Will the vast majority of houses rise in value?

Almost everywhere in the world, yes. There may be some localized falls, but those are temporary and as long as there's people having to live in a place, prices will keep going up, the whole system is built for making that happen.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#172

Post by EVa5I7bHFq9mnYK »

junofan wrote: post #132
pphysch wrote: post #106

There's a lot of noise about supply, demand, investment cycles, AirBnB, but the elephant in the room is that USA housing is a casino and the banks are the "house", which always wins. The banks only care that housing prices remain astronomical--the mechanics are not important--so that mortgages must be taken out. And, as recent history shows, the mortgage casino is "too big to fail" because of the globally-systemic ro…

It’s pretty unusual that we have people approach residential real estate in this hyper-financialized way. It’s a weird 1930s way to inject liquidity, and we have better tools now. An individual is fucked if something happens to crater the price of their house. Nobody hedges, really. It’s a toxic system.

I think more likely the wages and the egg prices will catch up, that is, USD will lose another 50% of its value.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#173

Post by brabel »

drewrbaker wrote: post #151
htag wrote: post #97

Earlier quoted context omitted.

> If homes are to be affordable that means more need to be built. Try pricing what it would take to buy a plot of land and build a home on it. In some places there are very expensive local regulations that must be satisfied. However, just the base value of some land with utility access, physical materials, and labor to assemble the home is "unaffordable." If the difference between the cost to produce a home and the s…

In 2019 I purchased land in Mt Washington, about 15mins outside downtown Los Angeles for $200k. My father is a builder back home in Australia so we know more about building that most. Even the after 3+ years, we finally received permits. The city is making us widen the road ($75k), extend a water main 12 feet ($75k), move 3 power poles (can’t get LADWP to tell us what that’s going to cost yet as they have to design i…

> move 3 power poles > House will be 3200sqft > Construction budget is $2m > impossible for new construction by family’s

Sorry, but this looks like one of the most incredibly out-of-touch rich people comments I've ever read. You're building a freaking castle in the middle of the city, moving roads around, and then you go on to say "families" can't build??

Maybe you're right and even building a modest home in the suburbs is harder than it should, but your project is definitely not proof of that.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#174

Post by EVa5I7bHFq9mnYK »

Joeri wrote: post #144
junofan wrote: post #132

Earlier quoted context omitted.

It’s pretty unusual that we have people approach residential real estate in this hyper-financialized way. It’s a weird 1930s way to inject liquidity, and we have better tools now. An individual is fucked if something happens to crater the price of their house. Nobody hedges, really. It’s a toxic system.

It’s weird that the insurance industry hasn’t capitalized on this. Make people pay for covering the risk that their house will drop in value, and make money on the fact that the vast majority of houses will rise in value.

in 2007-2009 home prices in the US declined by $6T, plus commercial real estate declined $2t. Insurance companies simply don't have that kind of money. AIG tried to insure only very tiny percentage of that market, and lost.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#177

Post by 9991 »

pandaman wrote: post #150
anovikov wrote: post #100

Earlier quoted context omitted.

I think these days, proportion of cash buyers in the last several years was highest in history - inequality did it's job and most people who can afford buying a house, can afford buying it on cash. And before, prices were much lower so most certainly won't fall down back again, forcing banks to invoke foreclosures. So i don't even think rising rates or falling prices may cause a snowballing collapse like they did in…

"Cache buyers" does not really mean people buy houses with their disposable funds. It means only that the deal does not involve a mortgage contract. The deal can still be financed through a loan, just not a mortgage. During the highly competitive market in 2021 people had been takin such loans to make cache offers and beat competition [1]. Also we had massive emigration from the states with high RE prices such as CA…

Does your misspelling of “cash” mean anything other than signaling you know CS?

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#178

Post by 8note »

EVa5I7bHFq9mnYK wrote: post #174
Joeri wrote: post #144

Earlier quoted context omitted.

It’s weird that the insurance industry hasn’t capitalized on this. Make people pay for covering the risk that their house will drop in value, and make money on the fact that the vast majority of houses will rise in value.

in 2007-2009 home prices in the US declined by $6T, plus commercial real estate declined $2t. Insurance companies simply don't have that kind of money. AIG tried to insure only very tiny percentage of that market, and lost.

But then, you cash out during boom times, and go bankrupt in bad times.

Not a good reason for people to buy your insurance, but some people might believe in the boom times

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#179

Post by EVa5I7bHFq9mnYK »

pzo wrote: post #43
superkuh wrote: post #10

From 1950 to 2008 the USA built ~25 million homes per (edit, not year) decade. From 2008 to 2018 it was about 7 million. In recent years building rates have mostly recovered but there's still that gap in production combined with everything else the last handful of years. This isn't to discount the shift of ownership from human persons to corporate persons, that's a factor too. But just numbers of available houses ver…

So in those 7 decades there has been build 175 million houses. Population of usa is around 350 million. Most people probsbly also not living alone and some houses that were build before 1950 probsbly still are in use just maybe modernized. Not familiar with USA market but wondering: Are current houses just more fragile and fell apart within 50 years?

Yes, Americans build everything of wood, rather than cement or bricks, like in the civilized world. Remember the tale about 3 little pigs? After 50-70 years it falls apart and needs to be teared down.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#180

Post by mihaic »

junofan wrote: post #132
pphysch wrote: post #106

There's a lot of noise about supply, demand, investment cycles, AirBnB, but the elephant in the room is that USA housing is a casino and the banks are the "house", which always wins. The banks only care that housing prices remain astronomical--the mechanics are not important--so that mortgages must be taken out. And, as recent history shows, the mortgage casino is "too big to fail" because of the globally-systemic ro…

It’s pretty unusual that we have people approach residential real estate in this hyper-financialized way. It’s a weird 1930s way to inject liquidity, and we have better tools now. An individual is fucked if something happens to crater the price of their house. Nobody hedges, really. It’s a toxic system.

If you're affraid that your house's value will drop in value, this seems to be a very broken system.

If you own it and you're using it as much as you want, you living quality is not at all affected by fluctuations in its hypothetical price.

Your ability to borrow against it is a downside, but maybe we also shouldn't be supporting that.

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