> Maybe really low/no interest loans for first time home buyers so they can at least get into the market. These sort of "fixes" make the problem worse rather than better. By making it easier for people to buy high priced houses, it increases demand for high priced houses, and increases house prices.
Exactly what happened with college education expenses in the US.
And with subprime lending. The government force the banks to give those subprime loans, and that led to the housing crisis.
People go where the jobs are. That’s increasingly in urban areas. It’s also where amenities like good hospitals and schools are located.
One of the most eye opening books on this topic was "Order without Design" by Alain Bertaud. Essentially, cities exist entirely as job markets - where individuals make tradeoffs to handle geographic constraints. It will be interesting to see if the WFH shift changes this dynamic.
‘Order without Design’ is one of my favorite books on the topic.
Or they just need to have parents who will help with down payment. Estimates are that over half of first time buyers get family assistance. It’s the new feudalism.
You don't need a down payment anymore to buy a house… If you have decent credit, and can pay the closing costs, you can get a loan back by the federal housing administration.
This whole "downpayment" nonsense is a myth to scare people away.
How do they drive up rent or home prices if they dump houses back on the market then? If neither supply nor demand changed as a result, why would the price change? Also, why does it happen with houses (that provide crappy average returns because they don't capture the effects of productivity growth i.e. do not create real rent, they are more like crypto), not with stocks?
> If neither supply nor demand changed as a result, why would the price change? If I buy all the lithium supply in the world and sell it back, what price do you think that I will charge? Monopolies and cartels make prices go up.
You wont change price by buying and selling back. Because neither supply nor demand have changed. You can keep prices up by buying and hoarding over a long time, but it means locking up capital in something that doesn't generate return... And wait, this has been tried in 2008 :) didn't end well especially for investors because no Ponzi scheme can run indefinitely. Eventually the stream of stupid money runs out because there are no bigger fools left, and to generate returns you need to sell, and if you sell, market falls.
People go where the jobs are. That’s increasingly in urban areas. It’s also where amenities like good hospitals and schools are located.
One of the most eye opening books on this topic was "Order without Design" by Alain Bertaud. Essentially, cities exist entirely as job markets - where individuals make tradeoffs to handle geographic constraints. It will be interesting to see if the WFH shift changes this dynamic.
Even with working from home, some people have certain needs that are easier to fulfill in/near cities. For example, people with chronic medical conditions may have an easier time finding quality health care resources if they are closer to a metro area. Another consideration in America is being a member of an ethnic, religious, or sexual minority and how accepting each community is. It's sad that I have to bring this up in 2023, but it's reality.
Oh wow it is another instance of "X has investigated X and found that X has done nothing wrong".
You can take it with whatever grain of salt you want, but a public asset management firm saying "we don't own any X" is a pretty categorial statement. Like if they are lying here they would have the FTC and client lawsuits crawling all over them.
Why would the government investigate or punish those who are helping the "own nothing" agenda of the establishment.
How do they drive up rent or home prices if they dump houses back on the market then? If neither supply nor demand changed as a result, why would the price change? Also, why does it happen with houses (that provide crappy average returns because they don't capture the effects of productivity growth i.e. do not create real rent, they are more like crypto), not with stocks?
> If neither supply nor demand changed as a result, why would the price change? If I buy all the lithium supply in the world and sell it back, what price do you think that I will charge? Monopolies and cartels make prices go up.
BlackRock does not have a monopoly on unoccupied housing stock and acquiring such a position would be extremely expensive.
It's completely insane. I bought my house in Austin in 2013 for $245k (I thought it was already hilariously overpriced) and last year during Peak Hype a house sold on my street for almost a million. Like I guess I'm staying here until I die?
Speaking as a fellow Texan (though I don't know about Austin specifics), I'd say you're there until you can no longer afford the wealth/property taxes.
People go where the jobs are. That’s increasingly in urban areas. It’s also where amenities like good hospitals and schools are located.
One of the most eye opening books on this topic was "Order without Design" by Alain Bertaud. Essentially, cities exist entirely as job markets - where individuals make tradeoffs to handle geographic constraints. It will be interesting to see if the WFH shift changes this dynamic.
Anecdotally, as a remote worker, I have little interest in leaving the urban core I live in. I rarely drive and walk most places I need to go. That quality of life makes a huge difference.
I grew up in a suburban bedroom community where everything involved driving in a car and there were few places you could reasonably walk to.
Regardless of my freedom to live where I want, I have little interest to move to low density suburbs or rural areas because the convenience of urban areas is just too nice for me.
I think this is only half of the story. There are still lots of affordable houses - in parts of the country that no one wants to live anymore. The value of my sibling's property in Illinois has barely kept up with inflation. So I think some of the national statistics about house prices vs number of units are a bit misleading. We're increasingly paying a premium because we are increasingly concentrating where we want…
> in parts of the country that no one wants to live anymore. The value of my sibling's property in Illinois has barely kept up with inflation. It reminds me of some politician in the south whining about people leaving the state (to get to the coast). And he wished silicon valley would "come to real America to create jobs here too". Of course, as you guessed it, it was one of the deep red states and we all can guess w…
“Real America” tells you everything you need to know.