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What happens when housing prices go down?

clmarohn.substack.com

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Re: What happens when housing prices go down?

#211

Post by lordnacho »

thinkingtoilet wrote: post #160
stego-tech wrote: post #89

Ultimately, there is no solution in which the core groups will all be appeased: * If prices keep going up, then home ownership remains a luxury of the wealthy and an exploitation of the poor. Asset holders will be thrilled with returns, but the majority struggling to get or stay on the proverbial property ladder will grow increasingly angry at sky-high rents and prices with stagnant wages * On the other hand, if pric…

>Existing asset owners will be angry at losing (illusory/on-paper-only) money I wouldn't be. I bought my house to live in it, not as a financial vehicle. I would be thrilled if prices came down and others in my generation could afford a house because I had the dumb luck of purchasing one in 2018 before the shit hit the fan. I couldn't even afford my own house now.

I think the same. I have a house, but the mortgage is not massive. If I can just live in it with no appreciation, that's fine with me. I even want to encourage building in the area, since we have a train station that seems underutilized.

There's a more selfish reason for wanting prices to not rise. I have kids. In a few years, they will be adults. If prices keep rising, how will they launch their own lives? I'll get asked to buy another house again.

Re: What happens when housing prices go down?

#212

Post by tacticalturtle »

rwarfield wrote: post #77

This article is a mess. From the third paragraph: > What happens when prices actually start to fall? Because that’s not just a hypothetical. It’s already happening in places like Phoenix, Atlanta, Miami, Dallas... Then two paragraphs later > In The Atlantic, Rogé Karma recently pointed out that housing prices are rising fastest in the very cities once seen as escapes from high-cost coasts, places like Phoenix and Dal…

As soon as I saw it was the founder of Strong Towns it all made sense.

Strong Towns, Not Just Bikes, and all those content creators are fulfilling the “hobby” of city planning (ie, watching hours of city planning YouTube videos, but never actually organizing at a local level)

This is a really great video about one man’s experience with trying to improve his community, getting involved in local government, and his criticism that the city planning YouTubers always gloss over what this actually looks like - they just point out what we’re doing wrong.

https://youtu.be/bUs0ecnbOdo?si=8dVweyWfvIF5ddg-

So I think that’s why the logic doesn’t make sense. It’s not meant to be actionable. It’s meant to be easily digestible so that people participating in the hobby can feel enlightened.

Re: What happens when housing prices go down?

#213

Post by s1artibartfast »

stego-tech wrote: post #164
thinkingtoilet wrote: post #160

Earlier quoted context omitted.

>Existing asset owners will be angry at losing (illusory/on-paper-only) money I wouldn't be. I bought my house to live in it, not as a financial vehicle. I would be thrilled if prices came down and others in my generation could afford a house because I had the dumb luck of purchasing one in 2018 before the shit hit the fan. I couldn't even afford my own house now.

You and I are in a growing minority on this, I find. When I started my homebuying journey four years ago, I did so expecting to eat an on-paper devaluation of up to 50% during my lifetime - and was fine with that, because I wanted stability , not profit.

That makes sense if people have more and more of their assets tied up in home value. It's a positive feedback loop.

I assume that 50% markdown wouldn't be a 50% loss on your assets or retirement.

Re: What happens when housing prices go down?

#215

Post by ecshafer »

queenkjuul wrote: post #170
ecshafer wrote: post #166

Earlier quoted context omitted.

I absolutely care if its a developer or the city building it. If its the developer who puts a high rise on my block, they want to make money and they sell it for a profit. The people that move in are the people that can afford a condo in a high rise. If its the city building it, they don't want to make a profit, they want to get votes. So after they fill the high rise with their quota of homeless people and a drug de…

Ridiculous. Such disdain for poor people! Not even poor people either. Plenty of working and middle class people can't afford decent homes right now.

I grew up in poverty. I worked hard to NOT have to deal with that shit as an adult and to not have my kids deal with that either. People screaming in the street at night on schizo rants, meth heads, getting your bikes stolen, people vandalizing your house, drug dealers, fights, schools being less safe and effective because of gangs/ problem children. This stuff actually sucks to live through constantly in a day by day situation. And the only way to get away from it is to not live where that shit happens, and you don't invite it into your back yard.

Re: What happens when housing prices go down?

#216

Post by FireBeyond »

queenkjuul wrote: post #118

Where i live, NIMBYs just killed an ADU ordinance and were screaming just as loudly and about all the same things they would have if you were replacing their grandma's cottage with a high rise. They can't be rationed with. Social housing is the only thing that will really work.

Yeah, sounds like here. Homeowners on cul-de-sacs complaining about the rise in traffic and how it will keep them up at night. Complaining that improving the missing middle will lower projected year-over-year property value increases from 11% to 8%. Hyperbole and hysteria about having to widen streets to accommodate parking and traffic.

Re: What happens when housing prices go down?

#217

Post by xyzzy123 »

amanaplanacanal wrote: post #145
Apreche wrote: post #62

Earlier quoted context omitted.

The tenant can not do what the landlord did only because they are not already wealthy enough for the bank to give them a huge loan. Even if a bunch of tenants band together to collectively develop a property, a bank will not choose them when a wealthy developer is available instead.

Banks have essentially infinite money. The band of tenants is not competing with the landlord for the loan. If the tenants are likely to pay the loan off, they will get a loan, as well as the landlord.

Then how do we explain this? https://www.cnbc.com/2024/11/04/homebuyer-average-age-rises-...

I feel like you are skipping over the part where people bid for houses, a process which advantages people with more access to capital in a fairly obvious way.

In risk terms the landlord is a better bet because they have collateral.

Landlords have assets they can leverage to acquire more property, while renters have to save deposits from income that's steadily eaten away by... rent...

Re: What happens when housing prices go down?

#218

Post by DangitBobby »

indymike wrote: post #155
aprilthird2021 wrote: post #97

Earlier quoted context omitted.

> Bringing prices down is usually a losing idea with existing asset holders Good. They should lose because they abused government policies through NIMBYism to inflate their assets prices. Happy to see them lose

This would be nearly every family in America. I'm not happy seeing my kids, my 80 year old mother lose money they are counting on. This is really the problem - reducing home prices hurts homeowners. And homeowners are litteraly everyone.

It certainly hurts homeowners who would be upside down on their mortgage, which would mostly be people who just bought a house and people with a 2nd mortgage. My house costing twice what it did when I bought it does literally nothing for me because so does every other house! I can't actually get anything from the increased "value". Actually, it mostly hurts me because I pay more in insurance and property taxes.

Re: What happens when housing prices go down?

#219

Post by queenkjuul »

ecshafer wrote: post #215
queenkjuul wrote: post #170

Earlier quoted context omitted.

Ridiculous. Such disdain for poor people! Not even poor people either. Plenty of working and middle class people can't afford decent homes right now.

I grew up in poverty. I worked hard to NOT have to deal with that shit as an adult and to not have my kids deal with that either. People screaming in the street at night on schizo rants, meth heads, getting your bikes stolen, people vandalizing your house, drug dealers, fights, schools being less safe and effective because of gangs/ problem children. This stuff actually sucks to live through constantly in a day by da…

You're making a ridiculous assumption that everyone that would move into social housing is a criminal and that everyone who moves into social housing is in poverty. This isn't necessarily the case and there's plenty of examples to prove it.

Good hard working people are being priced out of my neighborhood. Social housing could be a huge step in stopping that process.

Re: What happens when housing prices go down?

#220

Post by octopoc »

hollywood_court wrote: post #61
octopoc wrote: post #47

Earlier quoted context omitted.

Sounds like an improvement TBH. The quality of life improves for people in Alabama, and the company can pay people less. Sort of like the economic argument for offshoring people. The only people losing are the people in Detroit.

Not exactly. Everyone on the line in Alabama had to have second jobs because the pay was not sustainable for our area. Not to mention the vacations, extra benefits, and other protections the Alabama workers didn't receive compared to their peers in Detroit. So the company makes more money by moving their operations to the south where they exploit their workers without interference from the government.

Has the situation in Alabama gotten better over time? Have the Alabama workers been able to negotiate for more protections/better pay?

Because that’s the explanation for why offshoring to countries with fewer regulations is a good thing. Yeah it’s tough at the beginning, but it theoretically gives the workers leverage over the company because there aren’t any cheaper sources of labor. It’s supposed to give the cheapest labor the option to grow a pro-labor movement.

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