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Home buyers need 80% more income to buy than 4 years ago

washingtonexaminer.com

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Re: Home buyers need 80% more income to buy than 4 years ago

#31

Post by mullingitover »

idiotsecant wrote: post #25
paulddraper wrote: post #19

Earlier quoted context omitted.

So..... Now they have to permanently "rent" them (maybe from a company they have ownership in)? Maybe we should just build more houses.

Any suggestions on how to make that happen? People are already free to build as many houses as they want. They don't because building houses is expensive and there are easier ways to make more money with that capital

Permitting and lawsuits by NIMBYs are a giant blocker for development.

Pass a regulation saying any building permit application that isn't reviewed in 10 days is default approved. Then defund the permit offices.

In tandem, gut the ability for anyone to file suits (I'm looking at you, CEQA) that block development.

Re: Home buyers need 80% more income to buy than 4 years ago

#33

Post by KingMachiavelli »

idiotsecant wrote: post #25
paulddraper wrote: post #19

Earlier quoted context omitted.

So..... Now they have to permanently "rent" them (maybe from a company they have ownership in)? Maybe we should just build more houses.

Any suggestions on how to make that happen? People are already free to build as many houses as they want. They don't because building houses is expensive and there are easier ways to make more money with that capital

> People are already free to build as many houses as they want.

At (inflation adjusted) price X in location Y + regulator time/cost Z, the number of housing units that can be legally built has decreased considerably. Part of this is we've exhausted undeveloped/raw land and haven't upzoned in most locations.

The fixed costs and regulatory hurdles for building housing units can certainly be reduced - if the political challenges can be overcome.

Even some relatively sane regulations like insulation and safety standards could be re-evaluated. The issue is we are not doing any cost-benefit analysis of these regulations; even a 10% increase in the average home price should logically have a large impact on overall quality of life; that extra 10% spent on housing (~$50,000) in young adulthood reduces retirement savings >$300,000 assuming 8% returns, 30-40 years of investment, etc.

Re: Home buyers need 80% more income to buy than 4 years ago

#34

Post by andrewstuart »

Owning a house is not for ordinary people any more.

People/sheep are renters.

Houses around the world are being sold to:

corporate mega landlords

"Mum and Dad" investors

international money laundering criminals

money fleeing countries like China where economies are collapsing and the government is becoming more authoritarian

Re: Home buyers need 80% more income to buy than 4 years ago

#35

Post by turnsout »

mixmastamyk wrote: post #30
turnsout wrote: post #28

Earlier quoted context omitted.

I guess it's all relative, but when I say "luxury condo" I'm thinking of $800k–$1M new construction with fancy appliances. Honestly not my particular taste. But when I see 30-somethings coming out of these buildings walking their dogs and pushing a stroller, I just can't figure out how the math works out.

I was describing one for $750k. What you mention are two million in our neighborhood. Math sure doesn’t work for me even with a good job.

At that level I think the only possible answer is generational wealth (must be nice)

Re: Home buyers need 80% more income to buy than 4 years ago

#36

Post by NAHWheatCracker »

paulddraper wrote: post #14

How much has income increased? (Not 80% but you need to include that)

> “The income needed to comfortably afford a home is up 80% since 2020, while median income has risen 23% in that time,” the report states. That equates to $47,000 more than four years ago.

It's the second paragraph in the article.

Re: Home buyers need 80% more income to buy than 4 years ago

#37

Post by Auracle »

rtev wrote: post #11

This appears to be what happens when rich people that don’t need houses buy them anyway as investments. There should be laws preventing a person from owning more than three houses in the United States.

They’re only good investments because supply and demand being off balance, and those houses are still supplying housing (and rent needs to compete with mortgages).

Re: Home buyers need 80% more income to buy than 4 years ago

#38

Post by delish »

amluto wrote: post #26
delish wrote: post #16

Earlier quoted context omitted.

I'll try to invoke Cunningham's Law by saying: Housing is close to a perfectly-competitive market. I think the above is true, but I'd welcome counterexamples. So, the way to depress housing prices is to build more houses. _Most_ housing regulations, including making it illegal for people to own four houses, reshuffle the ownership of existing houses, and don't depress their prices. As regards that regulation: if the…

> Housing is close to a perfectly-competitive market. Pick any US jurisdiction (with the possible exception of Puerto Rico? I’m not very familiar with how taxation works there) and contemplate the tax implications of selling an appreciated property. Further contemplate how those implications are different for different potential buyers and sellers of that same property at the same price. Then say again that it’s perf…

Transfer fees and title fees equally affect any buyer and any seller in the long run, don't they?

>Further contemplate how those implications are different for different potential buyers and sellers of that same property at the same price.

Sure -- this is why I was asking for examples. "Rich people having more options than poor people" (which is what I think 1031 exchanges and your nod to capital gains refers to) is true across all domains without exception. It's true that I tend to discount that, acknowledging its unfairness. My point was prices are public(!), and historic sale-prices are public(!). A _particular_ (rich) buyer may have individual reasons for buying a house, but the market is almost perfectly competitive, because prices are public.

Re: Home buyers need 80% more income to buy than 4 years ago

#39

Post by Auracle »

delish wrote: post #16
rtev wrote: post #11

This appears to be what happens when rich people that don’t need houses buy them anyway as investments. There should be laws preventing a person from owning more than three houses in the United States.

I'll try to invoke Cunningham's Law by saying: Housing is close to a perfectly-competitive market. I think the above is true, but I'd welcome counterexamples. So, the way to depress housing prices is to build more houses. _Most_ housing regulations, including making it illegal for people to own four houses, reshuffle the ownership of existing houses, and don't depress their prices. As regards that regulation: if the…

The other way that everyone outside of Canada seems to ignore is get a handle on the demand side of things.

Re: Home buyers need 80% more income to buy than 4 years ago

#40

Post by mistrial9 »

idiotsecant wrote: post #25
paulddraper wrote: post #19

Earlier quoted context omitted.

So..... Now they have to permanently "rent" them (maybe from a company they have ownership in)? Maybe we should just build more houses.

Any suggestions on how to make that happen? People are already free to build as many houses as they want. They don't because building houses is expensive and there are easier ways to make more money with that capital

this is strident ignorance of the highest magnitude

source: two years in a professional US urban planning office

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