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U.S. now short 4.5M homes as housing deficit grows

zillow.mediaroom.com

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Re: U.S. now short 4.5M homes as housing deficit grows

#51

Post by aynyc »

goalonetwo wrote: post #35
aynyc wrote: post #33

Earlier quoted context omitted.

I did this math many many times. I have yet to see SP500 outperform owning a house in my area (I'm in NYC burbs).

Use the NYT Rent or Buy calculator. Most home made math don't account for the ton of fees/taxes/insurances and the time-value of money, and the exceptional returns of the SP500. I have yet to find a single place that would have been worth it long term versus renting (Bay area, which is a VHCOL) while you do the correct math.

The problem of your math is that you are assuming rentals are equal from one place to another as long as the price match. I can tell you that's not true. My old 3BR apartment in a very desirable school neighborhood went from $2K to $5K now. My old neighbor still paying that price because their kids are in the school. They are kicking themselves right now for not buying when the rate was lower. Now, they are desperate to buy anything in the area.

Re: U.S. now short 4.5M homes as housing deficit grows

#52

Post by esalman »

goalonetwo wrote: post #6

Do we really have a housing deficit? If you look at prices they indeed go up because nobody wants to sell and too many people have been wrongly convinced that buying is always a good idea. If you look at rent on the other hand it has stabilized in most location. I was even able to negotiate a rent decrease last summer. I'm not convinced we have a housing deficit. But I'm convinced that too many people are blindly buy…

There's been a 13% rent hike in the similar townhomes to one that I am staying in. I wasn't thinking about buying in this VHCOL area but now I am forced to.

Re: U.S. now short 4.5M homes as housing deficit grows

#53

Post by esalman »

infotapeworm wrote: post #34

Friendly reminder - Data released by Zillow, Redfin, and the likes is not regulated in any capacity. They choose the narrative that best fits their wallets.

Even then, there's absolutely to denying that inventory has gone down and prices has gone up in last few years and it created an affordability crisis for many.

Re: U.S. now short 4.5M homes as housing deficit grows

#54

Post by esalman »

infotapeworm wrote: post #31

Not sure why a month old press release is being posted. This was released today - https://zillow.mediaroom.com/2024-07-16-Nearly-1-in-4-seller... A buyer's market looms, brethren & sistren

I am shopping for houses and this does not help.

Re: U.S. now short 4.5M homes as housing deficit grows

#55

Post by goalonetwo »

aynyc wrote: post #51
goalonetwo wrote: post #35

Earlier quoted context omitted.

Use the NYT Rent or Buy calculator. Most home made math don't account for the ton of fees/taxes/insurances and the time-value of money, and the exceptional returns of the SP500. I have yet to find a single place that would have been worth it long term versus renting (Bay area, which is a VHCOL) while you do the correct math.

The problem of your math is that you are assuming rentals are equal from one place to another as long as the price match. I can tell you that's not true. My old 3BR apartment in a very desirable school neighborhood went from $2K to $5K now. My old neighbor still paying that price because their kids are in the school. They are kicking themselves right now for not buying when the rate was lower. Now, they are desperate…

The rent or buy calculator from the NYT includes an expected rent increase over time:

https://www.nytimes.com/interactive/2024/upshot/buy-rent-cal...

Re: U.S. now short 4.5M homes as housing deficit grows

#56

Post by esalman »

hooo wrote: post #14
josefresco wrote: post #8

Earlier quoted context omitted.

Your source does not support your claim. It doesn't even mention housing, or have anything to do with US housing.

How does it not support the claim? More people more housing need.

Not the same kind of housing.

People who are crossing the border illegally are never going to come close to qualifying for a mortgage, at least in next 5-10 years.

But a different kind of immigration does affect the crisis, and it is on the other end. You can fast track permanent residency by investing money, around $1m, into a US business. So every corrupt technocrats, police and army higher ups, politicians, gang leaders, unscrupulous business people I know of from my native developing country own multiple houses for themselves, their spouses and kids in US and Canada. This is what is making homeownership more and more unaffordable for average Americans.

Re: U.S. now short 4.5M homes as housing deficit grows

#57

Post by pneill »

esalman wrote: post #36
pneill wrote: post #29

Asking why there isn't enough housing is like asking why water is wet. The answer is state/local government regulation. There's an old saying "your margin is my opportunity" and I suspect that the current crop of homes that are built have decent margins, but in a deregulated market an entrepreneur could come in offer more affordable housing options with lower margins. You can see this in vehicles. Nobody complains ab…

Housing is actually a good business. Otherwise everyone starting from upper middle class families to trillion dollar hedge funds would not clamor to get into it. Also, there might be regulations, but there is also lots of incentives and tax benefits which makes up for it.

Of course it's a good business. Just not at the price points people can afford.

Watch the video I liked to above. It's about a person that owns a laundromat in SF who wants to convert the building to affordable house. He basically wants to do the right thing, but the regulations make it impossible. It was EYE OPENING for me.

Re: U.S. now short 4.5M homes as housing deficit grows

#58

Post by iambateman »

goalonetwo wrote: post #32
iambateman wrote: post #23

Earlier quoted context omitted.

Well...the substantial difference is that I could borrow at 3.6% and 2.7% respectively. On my first home, I put $5,000 down on a $96,000 house. I owe $40k (15-year mortgage) and it's worth $180k. Subtract $20k in seller costs, and $20k in expenses over the past decade and I have $100k in equity. That is about 6x better than just investing the $5k in the S&P.

How could you only put 20k$ of expenses over the last decade? That doesn't even cover close to the principal and interests on your mortgage. You also don't account for the time-value of money. In this case you might get slightly ahead than a simple boring SP500 investment, but those returns are the outlier and it would be extremely unlikely to repeat in the future (especially with the current interest rates)

Agree on the interest rate change.

I didn’t include P+I because when it was my primary residence it’s just my housing cost (which I can’t otherwise invest) and now as a rental those are paid for out of rental income.

Regardless, my original point is that the returns outpace inflation, which I consider a political-social problem given the number of parents who are currently explaining to their kids that buying a home is a “good investment.”

Re: U.S. now short 4.5M homes as housing deficit grows

#59

Post by iambateman »

goalonetwo wrote: post #48
onlyrealcuzzo wrote: post #45

Earlier quoted context omitted.

> Now, your house is going up 4.63% a year. You have 3% of fees and 3% of interest a year (or 7.5% if you buy today). How is your 5:1 leverage going to help you? This is not how it works. You would have to pay rent. You'd take the opportunity cost of the difference in rent vs the cost of your house after the mortgage interest deduction (discounting principal, since that isn't a cost). If it's an investment - you'd co…

you are right and you also need to include the rent equivalent, yes. I would advise to use the rent or buy calculator: https://www.nytimes.com/interactive/2024/upshot/buy-rent-cal... It is the best one I have found so far. Even in the ZIRP era, I couldn't find places that made sense buying based on that calculator. Nowadays it is even more clear cut that buying doesn't make sense financially (it could make sense for…

The buy vs rent calculator is good, I’ve used it before.

In my particular case, I hoped to live in the same place for multiple decades, and correctly guessed that my city was on a strong growth path, and was able to get once-in-lifetime interest rates.

Obviously if those factors changed housing would be a worse investment. But as it is, those are two of the best financial decisions I’ve ever made.

Re: U.S. now short 4.5M homes as housing deficit grows

#60

Post by BadHumans »

EVa5I7bHFq9mnYK wrote: post #37
BadHumans wrote: post #13

Earlier quoted context omitted.

North Carolina in general has some of the most sprawl in the nation and hasn't kept up with the demand that tech has brought to the state.

Housing shortage DECREASED 30% from a year ago, not increased. Looks like people leaving in droves. Well, maybe just a statistical fluc.

I misread that as 30% less housing. I stand by what I said though. It looks like Raleigh housing supply took a dip during the pandemic followed by a large swing climb back up and now it looks fairly stable.

Source: https://fred.stlouisfed.org/series/ACTLISCOU39580

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