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The Folk Economics of Housing

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Re: The Folk Economics of Housing

#191

Post by supportengineer »

SoftTalker wrote: post #13

I think that what contributes to this view is that new construction always seems to be at the high end of the market. This makes sense, it doesn't cost the builder a lot more to build a $500k house than to build a $250k house, and building two $250k houses will take twice the time and close to twice the costs. So builders/developers are going to build what is most profitable, which is the most expensive houses that t…

In other words, housing capacity is created and "trickles down" to the bottom.

If there was such as thing as a $250k house within a few hours drive, I would buy all of them and just sit on them, maybe rent them out.

Re: The Folk Economics of Housing

#192

Post by ch4s3 »

stego-tech wrote: post #72
whall6 wrote: post #46

Earlier quoted context omitted.

Curious for the source on the 25% figure if you wouldn’t mind sharing.

It was a series of studies earlier this year that made media rounds; searching for “Wall street housing 25%” returns a myriad of results from mainstream sources citing a number of different studies and papers: https://fortune.com/2025/07/08/investors-buying-25-us-homes-... I’m on mobile and can’t dig into total ownership figures at the moment, but I do know that in the sunbelt states property acquisition by investmen…

That isn't a study, its just an article in fortune that says

> Nearly 27% of all homes sold in the first three months of the year were bought by investors

That isn't PE firms, it's all investors meaning anyone who isn't planning on living in the home. Most investors are regular people who own 2-3 properties.

Re: The Folk Economics of Housing

#193

Post by brandonmenc »

starkparker wrote: post #85
legitster wrote: post #25

One thing few people take into account is that demand housing is much, much more elastic than people realize - per capita people are consuming far more square footage than they used to. Houses that were built to be house multiple generations under one roof now only hold one generation. Usually elderly empty nesters. In our area we also see people buying up lots of older duplexes or triplexes and converting them into…

There was a brief time 15 or so years ago where the $200-500k homes in the six or so blocks I live in were being snapped up by young upper-middle-class families on long 3-4% mortgages. Those families' kids have now grown up, and the houses have appreciated, sometimes as much as 2-3x, due to a nearby light rail development connecting the neighborhood to the city at large on cheap transit. So those families are cashing…

> out of spite

Or, they're just protecting their property value and neighborhood composition, like anyone else would do.

Re: The Folk Economics of Housing

#194

Post by legitster »

myhf wrote: post #185
whall6 wrote: post #37

Earlier quoted context omitted.

Curious for a source on the sq footage per capita if you wouldn’t mind sharing. That’s very interesting. Could that also be explained perhaps by the fact that people are willing to live farther away from cities (where land / homes are cheaper and larger) because they only have to work 3 days a week from the office? Or because commuting is less painful with newer cars?

Square footage per capita can be misleading because it goes up as an area moves from low density to medium density, but goes down as the same area moves to high density.

Square footage of land != square footage of real estate. A stack of apartments is high density, but each resident could enjoy more square footage than if they were crammed into a single family home with a ton of roommates.

Re: The Folk Economics of Housing

#195

Post by amelius »

SoftTalker wrote: post #13

I think that what contributes to this view is that new construction always seems to be at the high end of the market. This makes sense, it doesn't cost the builder a lot more to build a $500k house than to build a $250k house, and building two $250k houses will take twice the time and close to twice the costs. So builders/developers are going to build what is most profitable, which is the most expensive houses that t…

What if a Chinese real estate investor buys US property just for the sake of it? Just one of many scenarios this doesn't take into account.

Re: The Folk Economics of Housing

#196

Post by crooked-v »

supportengineer wrote: post #191
SoftTalker wrote: post #13

I think that what contributes to this view is that new construction always seems to be at the high end of the market. This makes sense, it doesn't cost the builder a lot more to build a $500k house than to build a $250k house, and building two $250k houses will take twice the time and close to twice the costs. So builders/developers are going to build what is most profitable, which is the most expensive houses that t…

In other words, housing capacity is created and "trickles down" to the bottom. If there was such as thing as a $250k house within a few hours drive, I would buy all of them and just sit on them, maybe rent them out.

What you're missing here is that housing is only a good investment because it's in such short supply. If plenty of $250K houses were available, they wouldn't be doubling in price every few years, and "sitting on them" and eating the maintenance costs would just lose money compared to other investments.

Re: The Folk Economics of Housing

#197

Post by kube-system »

epistasis wrote: post #186
stego-tech wrote: post #141

Earlier quoted context omitted.

** right off. If I’m in a downtown metro near any newer development at night - rentals or owners - they’re largely dark and empty with little to no signs of life. Your statistics are damned lies to those of us observing lived life in our cities. Nobody is hand-checking every single unit out there for accurate statistics on housing utilization, it’s all self-reporting.

People lie about high vacancies in new buildings almost compulsively. There was a big splash of PR for a report on high vacancies in new LA apartment buildings a few years ago, and it had to be retracted within a week because the methodology was pretty much nonexistent, like counting lights in windows at night and not realizing that people visit friends, go to concerts, go out to eat, stay at their girlfriend's place…

That is quite a wild methodology. Just go try to rent an apartment in the off season and you'll see how few vacancies there are.

Re: The Folk Economics of Housing

#198

Post by 9rx »

thereisnospork wrote: post #184
9rx wrote: post #178

Earlier quoted context omitted.

I suppose that goes without saying. If it were cheap and easy to build, there wouldn't be high demand. Would it really be that cheap, though? Hell, even a single wide trailer built in a factory, which is about as ideal as it gets from a cost perspective, is still a home largely out of reach of the average Joe. It remains unclear who is going to buy all these new houses unless they are sold at a loss — but who is goin…

I'm seeing new single wides for around 40k new? The trailer not the land. Even rounding to an even 100k for a nice unit, delivered/plumbed/etc'd that's what, 500 hundred dollars a month on a 30 year mortgage? That's pretty darn affordable - less than any rent I've ever paid.

> Even rounding to an even 100k for a nice unit, delivered/plumbed/etc'd

Which is about the same as the value of the average used home, less the land. But remember, the average Joe can't afford that. If they could, we wouldn't be here.

Re: The Folk Economics of Housing

#199

Post by WalterBright »

amelius wrote: post #195
SoftTalker wrote: post #13

I think that what contributes to this view is that new construction always seems to be at the high end of the market. This makes sense, it doesn't cost the builder a lot more to build a $500k house than to build a $250k house, and building two $250k houses will take twice the time and close to twice the costs. So builders/developers are going to build what is most profitable, which is the most expensive houses that t…

What if a Chinese real estate investor buys US property just for the sake of it? Just one of many scenarios this doesn't take into account.

Why would he leave it vacant?

Re: The Folk Economics of Housing

#200

Post by glial »

WalterBright wrote: post #199
amelius wrote: post #195

Earlier quoted context omitted.

What if a Chinese real estate investor buys US property just for the sake of it? Just one of many scenarios this doesn't take into account.

Why would he leave it vacant?

Because the value always goes up and managing renters and repairs is a PITA.
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