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

denverite.com

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

#331

Post by cko »

ctrlp wrote: post #329
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…

If the government passed subsidy laws or building requirements that caused your loss, then you might expect compensation. Did you disagree with bailing out small businesses shuttered during COVID and their furloughed employees? Same principle.

Small businesses being bailed out was presumably because of liquidity issues.

Being underwater does not cause a liquidity issue.

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

#332

Post by Retric »

sokoloff wrote: post #215
Retric wrote: post #190

Earlier quoted context omitted.

For single family homes square footage alone has a fairly modest impact on housing prices. Land, driveway, number and quality of fixtures, electrical hookups, cabinets, countertops, doors, clearing land, water, sewage, etc can be nearly identical costs for a 1,000 sf or a 3,000sf home. Many things like wall insulation and heating demand increase sub linearly with square footage. Which is why home builders so heavily…

A 1000 sqft, 3BR, 1 Bath, basic kitchen unit will be cheaper than a 3000 sqft 4BR, 2.5 Bath, fancy kitchen unit. Builders (and most everyone else involved in real estate) make a lot more money on the latter than the former, though.

Cheaper sure, but a large fraction of the difference is that extra 1.5 bathroom and fancy kitchen. Plus all the other little difference like more larger and nicer windows.

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

#333

Post by sokoloff »

Retric wrote: post #332
sokoloff wrote: post #215

Earlier quoted context omitted.

A 1000 sqft, 3BR, 1 Bath, basic kitchen unit will be cheaper than a 3000 sqft 4BR, 2.5 Bath, fancy kitchen unit. Builders (and most everyone else involved in real estate) make a lot more money on the latter than the former, though.

Cheaper sure, but a large fraction of the difference is that extra 1.5 bathroom and fancy kitchen. Plus all the other little difference like more larger and nicer windows.

Exactly; those are the things that are needed to turn "smaller more affordable homes would be a better solution" into reality.

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

#334

Post by 42772827 »

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…

>It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house we're supposed to give massive government support to correct the buyer's mistake?

The difference is order of magnitude as proportion of net worth and the necessity of the purchase.

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

#335

Post by no_wizard »

mixdup wrote: post #23
no_wizard wrote: post #12

Lets keep the trend going. Lets get them back to 2019 levels! It would be a real feat if they can keep the cost going down instead of up .

that's unlikely. the pipeline of new units will be slowing, it's just that a bunch of projects that got spun up at the peak are finally delivering, but new starts have been down so we're probably approaching the bottom of a trough

So this is at best a temporary fix not a long term solution

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

#336

Post by sokoloff »

bombcar wrote: post #209
phkahler wrote: post #185

Earlier quoted context omitted.

Nope. Smaller more affordable homes would be a better solution. Most people who rent cant afford to buy, but rent is a worse deal long term.

It’s actually quite hard to definitively quantify if renting or owning is better in a given area/scenario. Obviously the case near me where the mortgage payment on a house would be $2600/mo but the rent for the identical one next door is $2000 is going to swing heavily toward renting, but there’s more to it than just that. Maintenance is huge and real and people just seem to ignore it on the “own” side, but 5-10% of…

> where the mortgage payment on a house would be $2600/mo but the rent for the identical one next door is $2000 is going to swing heavily toward renting

I think those figures point towards buying being favored, especially if the mortgage payment is PITI, but even if it's principal and interest only, I think buying is likely to be better in the long-term if the spread is that small.

Maintenance is not going to run 5% of the purchase price on average, except in the most extreme low-cost housing situations. A house that sold for ~$500K (as would be implied by a $2600 mortgage payment) is not going to cost $500K in maintenance over the next 20 years (as 5% would imply) and certainly not over the next 10 (as 10% would).

You may have an individual year that's over 10%, but that's a cashflow issue not an overall cost issue.

The advantage of renting is the flexibility, lack of commitment to a specific house or area, and the lack of need for a large upfront sum (in this example, renting might need $6K upfront [$2K of which is the first month's rent], while buying might need traditionally $100K to avoid PMI or ~$20K on an FHA first-time buyer mortgage and associated transaction costs).

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

#337

Post by specialist »

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…

We (government) does debt forgiveness all the time. For very practical reasons. Can't some of the cheddar be redirected from the 0.1% to the rest of us?

A $400k home is probably a starter home. Owners are probably a young couple (millennials). They probably want to have kids.

Forgiving 100k of their debt means they (and their kids) will have a fair chance at success. Earning more money. Saving more. Paying more taxes (over their life times).

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

#338

Post by dastbe »

_carbyau_ wrote: post #235
14 wrote: post #192

Earlier quoted context omitted.

While at the end of the day I don’t think people should be bailed out, I don’t agree that everyone who over paid is a speculator. Many people are just wanting to own their own home. The market has been crazy for the last 5 years. Many people are just buying to own not to flip it for a huge profit. So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightl…

> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them. I feel a little sorry for them but they are not missing the money total of "the whole house". They can sell the house, have a shitty $100k debt, a tale of woe, and hopefully a better idea of how to go about spending money they didn't have. I feel there are too many people who "b…

we’re talking about wiping out most of the stored wealth of roughly a quarter of all homeowners here. and they cannot take that home with them when a new job opportunity comes up or worse get fired/sick.

this sounds more like a suicide pact than a plan.

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

#339

Post by sokoloff »

bombcar wrote: post #263
arcticfox wrote: post #252

Earlier quoted context omitted.

> but 5-10% of the value of the house a year in maintenance isn’t unheard of. I assure you I am not paying ~$30k in maintenance on my ~$400k house every year... that would be comical

Add it up and work it out; factor out the land if you must (e.g., pretend it’s a landlord business and you’re renting to yourself). Maintenance items add up, and some only happen every 20-30 years, it can hit hard. A new roof every 30 years at $10k is already noticeable.

The $10K roof is noticeable precisely because it's an outlier that pulls the average up towards the 1-2% per year range for all but the least expensive houses.

If houses really consumed 5-10% of the purchase price on average per year, people wouldn't worry or talk so much about roof replacements; they'd be just other drops in the bucket.

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

#340

Post by theoreticalmal »

JumpCrisscross wrote: post #54
aynyc wrote: post #33

Just because this doesn’t magically solve the housing crisis, doesn’t mean it’s not a good start. We have to stop looking at magical solutions that will solve all our problems in one shot. We have to start somewhere.

> 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…

Why would we consider bailing out entities that are financially solvent? These homeowners may have an underwater investment, but they (presumably) can still pay the mortgage to get it paid off
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