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Denver rent is back to 2022 prices after 20k new units hit the market

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Re: Denver rent is back to 2022 prices after 20k new units hit the market

#301

Post by kelnos »

deathanatos wrote: post #267
akudha wrote: post #208

Earlier quoted context omitted.

How is it fair to compare buying a house to buying a TV? One costs 500$ and the other costs 500k plus ongoing costs like repairs and taxes. Not saying you’re wrong, just that the comparison isn’t apt

Because if you're buying a house for a house , then it (mostly, generally¹) doesn't matter that the housing market has moved downwards and you'll be underwater until you pay down a bit on the house. You still have a house! So long as you can afford the mortgage — something you should have already planned for given you bought the house — you can still afford it. You might have remorse at having paid +$100k right befor…

What if your company transfers you to another place, and you need to move, and you can't pay off the remainder of principal on the home with the (now lower) proceeds you get from the sale? Or even if you can, but you don't have enough for a down payment on a house in the new area?

Even regardless of that, I don't love the idea that a change in housing policy could make people feel trapped in their current home, unable to move. Granted, current housing policy (e.g. California Prop 13) has that effect on some people already. And I bet it sucks. Now, I'm not sure the government should be bailing out people who can continue to pay their (now underwater) mortgage but would just like the option to sell it and move. But I think this requires a bit more thought than just wielding that axe and letting things fall where the are. I mean, hopefully we're not advocating for more of the DOGE method.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#302

Post by brenainn »

standardUser wrote: post #110
JumpCrisscross wrote: post #54

Earlier quoted context omitted.

> because this doesn’t magically solve the housing crisis It does. Twenty thousand units represent about 5% of Denver's housing stock [1]. Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis. (You'll probably need to bail out recent homebuyers, who will be permanently underwater, but that's a separate issue.) [1] http://censusreporter.org/pr…

> You'll probably need to bail out recent homebuyers, who will be permanently underwater If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators. It's called buyer's remorse. We accept…

As someone that's bought their first house in the last few years, it's hard not to take offense.

A car or a TV are much smaller investments relative to a house. Over a decade of savings is tied up in my home. If the ass drops out of the market, myself, and others like me, who have broken into the market without assistance at the peak of housing prices will be virtually permanently financially set back. And to call buying a house around this time a mistake is crazy. I would be as much a speculator if I continued to rent and pay someone else's mortgage, hoping that prices dropped so I could get a good deal. It's a home and this attitude of treating homes as investments or mere purchases is why we're in this mess in the first place.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#303

Post by kelnos »

naasking wrote: post #276
deathanatos wrote: post #267

Earlier quoted context omitted.

Because if you're buying a house for a house , then it (mostly, generally¹) doesn't matter that the housing market has moved downwards and you'll be underwater until you pay down a bit on the house. You still have a house! So long as you can afford the mortgage — something you should have already planned for given you bought the house — you can still afford it. You might have remorse at having paid +$100k right befor…

I think you're neglecting to account for a big risk. If the house retains or increases in value, the bank can just take the house to recoup what you owe them of you can no longer pay the mortgage due to ill health, accidents, etc. What do you think happens if the houses value drops a lot and you can no longer pay what you owe? You don't just lose the house, you're in a much, much deeper hole. How property values go s…

> You don't just lose the house, you're in a much, much deeper hole.

Oof, I was about to question if this is correct or not, but it turns out that this is indeed true in most US states: if you default on your mortgage, and the bank can't resell your house for at least as much principal as you have left to pay, you still owe the difference, and they can get a court to garnish your wages, put a lien on any future home you may buy, get your accounts frozen.

Didn't realize this was a thing... I live in a non-recourse state (California) where the bank only gets the property on default and can't pursue you further.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#304

Post by nkmnz »

dingnuts wrote: post #149
ozgrakkurt wrote: post #121

Earlier quoted context omitted.

Yeah, pretty sure a government won’t bail me out if I invested in a stock so much that it would crush me if the stock went down. If buying a house is an investment and not for living, then it should be treated like it is.

people call buying a house to live in an investment but that's because they don't know the technical term is a "hedge" so you know: most localities do treat the house you live in very differently from a tax perspective than they do any additional properties you might have, because everyone is born short housing, until they own 1 place to live. so yes, the proposed bailouts up thread would be for people who bought a h…

Buying a house is investment. Living in a house you own is consumption.

These are two distinct things that are coupled through life choices. It's a real pity that tax regulations are different just because you make individual life choices.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#305

Post by tpxl »

kelnos wrote: post #297
standardUser wrote: post #110

Earlier quoted context omitted.

> You'll probably need to bail out recent homebuyers, who will be permanently underwater If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators. It's called buyer's remorse. We accept…

I agree in principle that we shouldn't be bailing people out for the consequences of making purchases with their eyes open, but if something like this happened, a lot of people would be mad . And I get it. The problem in this eventuality is mobility: if you buy a house for $400k, live there for, say, 5 years and the resale value of your house is at $300k, that's going to be a big problem if you have (or just want) to…

> Losing a car or a TV is not going to make someone homeless.

Your house losing 100k$ in value isn't going to make you homeless either (quite the opposite actually). If you buy a house and it depreciates, so what?

Not to mention if everyone's house depreciates, your new house is cheaper to buy. You lose _nothing_, except imaginary dollar values.

> Calling people like that speculators shows a severe lack of understanding and empathy.

I don't know what you call preventing young people from buying, or even renting, at affordable prices so 'people like that' don't have a possibility of losing some money, but you sure as fuck don't call it empathy either.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#306

Post by kelnos »

itake wrote: post #173
izacus wrote: post #167

Earlier quoted context omitted.

Isn't that something regulation (of mortgages) solves way better than forever banning decrease in housing costs?

how would that work?

Easy: make it illegal to require PMI in that case. Some loans will require PMI at signing (IIRC, often this will be when you put down less than 20%; you're required to carry PMI until you've paid off enough to get your principal below 80% of the purchase price), but we can certainly make clauses unenforceable that require it later under whatever conditions.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#307

Post by kelnos »

_carbyau_ wrote: post #283
cocaclub wrote: post #236

Earlier quoted context omitted.

These are my feelings too, but in the interests of compassion, I would suggest a return of some proportion of equity to (human, non-LLC, non-corporate, primary resident) buyers in cash, up to bank failure. Hopefully they can then buy another house at the presumably much lower prevailing market rate. Someone has to lose, let it be in order of "he who should have known what he was doing in making this catastrophe possi…

I mean, there are a few things here. Like if the bank want the house sold on the loan because the house value goes down even though the person with the loan is willing to continue servicing it - then that seems like an own goal for the bank. There are a variety of circumstances that can be dreamt up for either side of the equation. And I have no compassion for lenders either. As you say, maybe the mortgage/loan shoul…

> But ultimately "he who should have known" is the person asking for money to buy XYZ thing. A person should be responsible for their actions.

I agree with this in principle, but the real world is messy, and many (most? all?) people end up having to make decisions in their lives where they maybe should know, but don't know everything they should. Perfect information is rarely a thing, and even if you have it, you need a certain level of education to exploit it that we can't expect anywhere near everyone to have.

I don't give even the smallest shit for lenders. I care about people. I care about people having housing security, food security, and a little extra so they don't have to live paycheck to paycheck. No, I don't think we should just be printing money and firing it off in a t-shirt cannon at people for the hell of it. But I think we need to be compassionate, and understand that a huge, unexpected change in housing policy that tanked their home value is not something they "should have known" might happen.

I feel like many of us here forget (or were, oof, too young for) the 2007/08 financial crisis. We bailed out a lot of banks, and left a lot of regular folks holding the bag. I don't want to see that happen ever again. And yes, I get that housing policy changes that create lots of new housing is different. But the outcome could be very similar.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#308

Post by kelnos »

rufus_foreman wrote: post #147
standardUser wrote: post #110

Earlier quoted context omitted.

> You'll probably need to bail out recent homebuyers, who will be permanently underwater If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators. It's called buyer's remorse. We accept…

Whether a house is worth $400k or $300k is, sometimes, a choice the government makes. It isn't always, but sometimes it is. Through regulations, through monetary policy, through other policies. Now if the government decides that you, you personally, standardUser, are going to lose $100k, I don't think the government should bail you out. It's called "moral hazard". You lost $100k. Deal with it. If the government decid…

> It isn't always, but sometimes it is.

I think it always is, frankly. The price of pretty much every single house in the US[0] is a function of decades of government housing policy. And I don't think it's particularly fair to say, "oopsie, our housing policy since before you were born was kinda bad, we're going to fix it right now, but it's going to put you underwater on your mortgage... sorry, but you'll have to just deal with it".

[0] Sure, maybe this isn't the case for an off-the-grid cabin out in the woods, far from any town, but that describes a teeny tiny portion of the housing stock.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#309

Post by kelnos »

JumpCrisscross wrote: post #142
standardUser wrote: post #130

Earlier quoted context omitted.

I agree there are political considerations, but we are talking about a scenario where the only damage done is that the buyer must continue to live in the home they purchased at the price they purchased it for, and where the recipient of government benefits is a household capable of purchasing a house, presumably at the height of the market. Is a tax dollar better spent placating grumpy homeowners who already have a p…

> we are talking about a scenario where the only damage done is that the buyer must continue to live in the home they purchased at the price they purchased it for In non-recourse states, you'd expect to see defaults as people leave the keys in the mail to reduce their housing costs by moving next door at the reduced price or rent. More broadly, people don't like seeing their wealth go down. > Is a tax dollar better s…

> If it gets you the reform, yes. The point is you don't get housing reform with grumpy homeowners barring a massive shift in voting patterns.

I think this is a really good insight. The reason for long-lived NIMBY policies is because NIMBYs[0] vote and lobby more than everyone else does. I have, do, and will continue to vote for pro-housing policies, but there are a lot of people -- probably still in the majority -- who will not vote for anything or anyone that will reduce the value of their homes.

What matters is outcomes. If paying off the NIMBYs gets you a good future housing policy, then we should do it.

[0] I know "NIMBY" is generally a pejorative, and I agree with that for the most part, but I will admit that many NIMBYs are operating and voting quite logically, for their own interest, even if it hurts others, and hurts society collectively.

Re: Denver rent is back to 2022 prices after 20k new units hit the market

#310

Post by kelnos »

sokoloff wrote: post #210
Schnitz wrote: post #184

Earlier quoted context omitted.

It’s a valid point of view. That said, for most homeowners it is as simple as: My house is multiples More expensive than my next expensive asset. Loosing all the equity in my home will affect my lifestyle and financial future negatively, a lot. I will therefore continue to vote against whatever brings home values down. There really isn’t an easy and elegant way out where you neither pay off the haves nor pitch the ha…

> nor pitch the have nots majority against the haves There are almost twice as many owner-occupied homes ("haves") as not ("have nots"). https://fred.stlouisfed.org/series/RHORUSQ156N

Yup, and that's why it's so hard to get housing policy changed. To make it harder, I'd wager that homeowners, proportionately, lobby and vote more than renters do.

You only win here if you placate the homeowners, and a surefire way to do that is by making them whole when you whack 20% off their home's resale value. Maybe there are better ways, but I'm having trouble thinking of them.

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