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
U.S. now short 4.5M homes as housing deficit grows
31–40 of 82 posts
Re: U.S. now short 4.5M homes as housing deficit grows
#32Earlier quoted context omitted.
How much did you "make" on your investment once you account for the ton of fees that are involved in housing though? If your house doesn't go up at least 5% a year, you are already losing money once you account for HOA, insurance, taxes, repairs etc. I would bet you would have had a better outcome renting and investing in the SP500 instead.
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)
Re: U.S. now short 4.5M homes as housing deficit grows
#33My first home (bought 2014) is up 100% and my second home (bought 2019) is up 55% over purchase price. It's unsustainable for this country to think that houses can be both (1) an appreciating investment and (2) affordable. But in order for us to find long-term price stability, people like me must make peace with the idea of our houses _never_ appreciating beyond inflation.
How much did you "make" on your investment once you account for the ton of fees that are involved in housing though? If your house doesn't go up at least 5% a year, you are already losing money once you account for HOA, insurance, taxes, repairs etc. I would bet you would have had a better outcome renting and investing in the SP500 instead.
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).
Re: U.S. now short 4.5M homes as housing deficit grows
#34Friendly reminder - Data released by Zillow, Redfin, and the likes is not regulated in any capacity. They choose the narrative that best fits their wallets.
Re: U.S. now short 4.5M homes as housing deficit grows
#35Earlier quoted context omitted.
How much did you "make" on your investment once you account for the ton of fees that are involved in housing though? If your house doesn't go up at least 5% a year, you are already losing money once you account for HOA, insurance, taxes, repairs etc. I would bet you would have had a better outcome renting and investing in the SP500 instead.
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.
Re: U.S. now short 4.5M homes as housing deficit grows
#36Asking 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.
Re: U.S. now short 4.5M homes as housing deficit grows
#37What's up with Raleigh NC? I used to live nearby, that's a nice place and not expensive, why suddenly 30% less housing shortage?
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.
Re: U.S. now short 4.5M homes as housing deficit grows
#38Earlier quoted context omitted.
How much did you "make" on your investment once you account for the ton of fees that are involved in housing though? If your house doesn't go up at least 5% a year, you are already losing money once you account for HOA, insurance, taxes, repairs etc. I would bet you would have had a better outcome renting and investing in the SP500 instead.
If you're up 55% in 5 years on 5:1 leverage - that's a 275% return - or an annualized return of 22.5%. S&P returned ~16% over the same period. This is pretty consistent for the last ~20 years. A 6.5% annualized return might not sound like a huge difference - but over 40 years - that's an order of magnitude difference in your outcome. i.e. the difference in a $100k investment being worth $335M or $37M ($102M vs $11M i…
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Re: U.S. now short 4.5M homes as housing deficit grows
#39Earlier 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.
The link is about the number of people Border Patrol caught, and thus won't be using US housing (or will be doing so legally as refugees). It's safe to assume there are others who don't get caught, but it provides no information about whether this is increasing, decreasing or forms a significant portion of the population growth.
From 2007 to 2019 the estimated number of unauthorized immigrants was slightly declining[1], at the same time that the population of the US as a whole (and the housing shortage) was growing, so it certainly wasn't a significant part of the problem then. From 1990 to 2007, the unauthorized migrant population grew about 500k/year relative to about 3M/year total. Even unauthorized migrants accounted for 17% of the population like they did then, which is debatable, that still wouldn't account for all of the discrepancy between housing growth and population growth. So it is fair to ask for numbers that actually support the parents position.
[1] https://www.pewresearch.org/short-reads/2023/11/16/what-we-k...
Re: U.S. now short 4.5M homes as housing deficit grows
#40Friendly reminder - Data released by Zillow, Redfin, and the likes is not regulated in any capacity. They choose the narrative that best fits their wallets.
100%. I have been following the housing market for the last few years. So-called data is all over the place. It really feels that all those companies have a narrative in mind and are nitpicking the data to fit the narrative.
I have rarely seen so much narrative-driven BS as in the housing market. The realtors being the absolute best at coming up with a reason why it is always the perfect time to buy or sell.