Housing market

[dtISU]

Because financially prudent housing is unavailable for a concerning amount of the population.

But yeah **** the poors. Everyone else can worry about that. I’m good.

A civil, mutually beneficial society is a delicate balance. And that balance is closer to a tipping point than it ever has been. We don’t know the tipping point but we know we are closer than ever before. (See wealth gap statistics)

Keep in mind smaller profit (on some products, not all) does not equal no profit.

If you're going to ask the builder to lower his profit margins, the quickest way to do that is to reduce the amount of wages he pays to the laborers...which is the group you're claiming to want to help.

Home ownership is NOT for everyone, and it's tough when you're in your early to mid twenties. Many people reached the home ownership level by renting and saving the down payment. Sure, you don't get the immediate satisfaction of owning a cool house in a great neighborhood, but asking a producer to artificially lower the price of his product not the way to go. But as long as it makes you feel better.....

 

[simply1]

If there’s still money to be made, you’d think other builders would form or current builders grow to fill that gap in the affordability space.

 

[Cyclone06]

If you're going to ask the builder to lower his profit margins, the quickest way to do that is to reduce the amount of wages he pays to the laborers...which is the group you're claiming to want to help.

Home ownership is NOT for everyone, and it's tough when you're in your early to mid twenties. Many people reached the home ownership level by renting and saving the down payment. Sure, you don't get the immediate satisfaction of owning a cool house in a great neighborhood, but asking a producer to artificially lower the price of his product not the way to go. But as long as it makes you feel better.....

What I am mainly saying is actually construct lesser products. Same %, but less $. Instead of making $100k on a unit, maybe make a four that will net you $25k. And those for will be lessor than the 1.

But I get it, why take the risk of building 4 when you can just build one for much less effort? The reason is to reach more people.

Its the same reason lawyers, tax preparers, etc. do pro bono work. Do they want to? Most likely no. Is it good for the community?

Home ownership is not for everyone... but it is for the very significant majority.

 

[mynameisjonas]

Home ownership is not for everyone... but it is for the very significant majority.

Ummm…you must not frequent places like Marshalltown.

 

[dtISU]

What I am mainly saying is actually construct lesser products. Same %, but less $. Instead of making $100k on a unit, maybe make a four that will net you $25k. And those for will be lessor than the 1.

But I get it, why take the risk of building 4 when you can just build one for much less effort? The reason is to reach more people.

Its the same reason lawyers, tax preparers, etc. do pro bono work. Do they want to? Most likely no. Is it good for the community?

Home ownership is not for everyone... but it is for the very significant majority.

It's easy to see that the cost of materials has gone up over the last few years, which has an effect on the affordability of new homes. But another significant factor is the rapidly increasing cost of land. This also cuts into builder profits.

The builder has to hire the same subs and go through the same permit/planning process no matter the final price of the house.

 

[Gunnerclone]

One thing that also gets overlooked is that people are demanding they live in specific neighborhoods that are higher end also. If you are just starting out, maybe live in Sheldahl where housing is cheaper. You have to drive a little but with WFH being more common, it will be more than off-setting. You don't have to live in Waukee because that is "thee" place if your funds are tighter.

Hard for me to believe this is a thing but I know you’re right.

 

[IcSyU]

If you're going to ask the builder to lower his profit margins, the quickest way to do that is to reduce the amount of wages he pays to the laborers...which is the group you're claiming to want to help.

Home ownership is NOT for everyone, and it's tough when you're in your early to mid twenties. Many people reached the home ownership level by renting and saving the down payment. Sure, you don't get the immediate satisfaction of owning a cool house in a great neighborhood, but asking a producer to artificially lower the price of his product not the way to go. But as long as it makes you feel better.....

The problem is a lot of the mid-twenties folks can't even get into a house. There's a ridiculous amount of entry level housing being bought up to become rental properties sight unseen for cash. Younger folks have the 20% but are competing with a cash offer and can't win.

Home ownership isn't for everyone but when the cost of renting exceeds the cost that would otherwise be spent on a mortgage that's just a giveaway to the top in general. Apartments are going up at ridiculous paces around the country because people have been brainwashed to believe that's assisting in the housing crisis. It isn't.

 

[Cyclone06]

Maximizing profit is the name of the game sorry that doesn't fit your world view but its a reality of this world we live in. I'm not taking a job that I'm going to make less money on over a job that I'd make more money. There are only so many hours in the day and only so much help. No way I'm tying either of those up for less margin.

Can you share your pay stubs and your donations to charity after each one? No reason for you to make any profit that goes toward your savings.

You are right. Lets all just worry about ourselves and let the politicians fix it. Name of the game, it is what it is. This mantra has suited me well.

But we've have seen the incredible increase in the wealth gap, and the crazy increase in house prices while salaries and wages have not kept pace. Its just hard for me to think this is a good thing for the long term. And if we go back to my original post, builders are only part of the problem. So are peoples expectations. So are politics. So is my lack of charitable giving.

Its just crazy to me that we have gotten to a point where we only do things if we are fully incentivized. Was it like that in 50 years ago? 200 years ago? There was a time when being a politician was not a full time job. I am led to believe in those times, profit was not the end all be all driver of each and every decision.

 

[alarson]

The problem is a lot of the mid-twenties folks can't even get into a house. There's a ridiculous amount of entry level housing being bought up to become rental properties sight unseen for cash. Younger folks have the 20% but are competing with a cash offer and can't win.

Home ownership isn't for everyone but when the cost of renting exceeds the cost that would otherwise be spent on a mortgage that's just a giveaway to the top in general. Apartments are going up at ridiculous paces around the country because people have been brainwashed to believe that's assisting in the housing crisis. It isn't.

While you make valid points in your first paragraph, i'd disagree on a couple things in the second:

The cost of renting often exceeds a mortgage, yes. But a lot of people make this comparison when it isn't really a valid one. Rent also includes built in expenses covered by the landlord such as maintenance, something that many people don't factor in well if they figure "i can afford this much rent, so the same amount in mortgage is in my range too".

Secondly, how could apartments going up not help this? Supply and demand here, our underlying problem is not enough units. The more units of all kinds that are constructed, the more of a dent that is made into that.

 

[ianoconnor]

The problem is a lot of the mid-twenties folks can't even get into a house. There's a ridiculous amount of entry level housing being bought up to become rental properties sight unseen for cash. Younger folks have the 20% but are competing with a cash offer and can't win.

Home ownership isn't for everyone but when the cost of renting exceeds the cost that would otherwise be spent on a mortgage that's just a giveaway to the top in general. Apartments are going up at ridiculous paces around the country because people have been brainwashed to believe that's assisting in the housing crisis. It isn't.

How are new apartment units not helping with the housing supply?

 

[clonechemist]

If you're going to ask the builder to lower his profit margins, the quickest way to do that is to reduce the amount of wages he pays to the laborers...which is the group you're claiming to want to help.

Home ownership is NOT for everyone, and it's tough when you're in your early to mid twenties. Many people reached the home ownership level by renting and saving the down payment. Sure, you don't get the immediate satisfaction of owning a cool house in a great neighborhood, but asking a producer to artificially lower the price of his product not the way to go. But as long as it makes you feel better.....

Lol - no one is saying 23 year olds have a ‘right’ to a house.

But in many of the geographic areas of the US that really drive our national economic growth (read: cities, especially on the coast), dual-income 30 somethings with household income above the median, trying to start families, can not afford a basic house.

You can try to make this about ‘entitlement’ or expectations if you like, but for me the bottom line is our economy is leaving lots of potential growth on the table when our leading job centers are not decent and affordable places to live for the workers who are driving the growth.

 

[Cyclone06]

The problem is a lot of the mid-twenties folks can't even get into a house. There's a ridiculous amount of entry level housing being bought up to become rental properties sight unseen for cash. Younger folks have the 20% but are competing with a cash offer and can't win.

Home ownership isn't for everyone but when the cost of renting exceeds the cost that would otherwise be spent on a mortgage that's just a giveaway to the top in general. Apartments are going up at ridiculous paces around the country because people have been brainwashed to believe that's assisting in the housing crisis. It isn't.

This. I rented for over 10 years out of college. Always trying to ensure my rent was "cheap". Does that even exist anymore? Even when I had cheap rent I was crazy for "not buying a house and building equity."

 

[CloniesForLife]

I also don't think just move somewhere with cheaper housing is always an option. Like up here in the cities I'd have to move quite a ways out of town (at least 45 minutes if not more) and then I'm having a really long commute and also limiting future job opportunities if they're on a different side of town. Not to mention potentially nothing going on around me and not being near any friends

 

[IcSyU]

While you make valid points in your first paragraph, i'd disagree on a couple things in the second:

The cost of renting often exceeds a mortgage, yes. But a lot of people make this comparison when it isn't really a valid one. Rent also includes built in expenses covered by the landlord such as maintenance, something that many people don't factor in well if they figure "i can afford this much rent, so the same amount in mortgage is in my range too".

Secondly, how could apartments going up not help this? Supply and demand here, our underlying problem is not enough units. The more units of all kinds that are constructed, the more of a dent that is made into that.

How are new apartment units not helping with the housing supply?

Poor choice of words on my part.

My thought would be apartments aren't the appropriate type of permanent housing. Owner occupied duplexes, single family homes, etc. are the "desirable" housing I'd much prefer to see. Apartments have a place but in my opinion they aren't the solution to the lack of affordable owner occupied housing.

The notion that "all new homebuyers want 3 car garages, finished basements, granite countertops, etc." is wrong. The problem is that's what new builder grade houses are and those are the houses those people can actually get their hands on because the cheaper houses are gobbled up.

 

[clonechemist]

I also don't think just move somewhere with cheaper housing is always an option. Like up here in the cities I'd have to move quite a ways out of town (at least 45 minutes if not more) and then I'm having a really long commute and also limiting future job opportunities if they're on a different side of town. Not to mention potentially nothing going on around me and not being near any friends

The American dream still lives in Sheldahl, brother!

 

[CloniesForLife]

The American dream still lives in Sheldahl, brother!

Luckily I have a partner who makes decent money as well so we were able to find a place. But it took awhile and we just got lucky too. If I was by myself I couldn't see myself being able to afford anything until my mid to late 30s.

 

[CascadeClone]

Another good Economist article today on this. House Prices

This chart was interesting; shows the relative cost rising very rapidly recently, but not INSANELY so compared to say, the 80s. Question is does it rebound (down) or climb even higher?

 

[simply1]

The American dream still lives in Sheldahl, brother!

Just a matter of time before it merges with slater from all the growth

 

[Gunnerclone]

Just a matter of time before it merges with slater from all the growth

Couldn’t believe it when I went to Alleman and they had a Whole Foods.

 

[IcSyU]

I guess I'd frame the question in a different way:

What good is coming from people not being able to get entry-level housing?

What good is coming from people having to wait until later in life to have children? (of note, this is intelligent people procreating who are waiting...not idiots)

What good is coming from people not being able to get educated?

I would argue people having fewer children is better for the planet but that's going to produce ugly economics down the road.

What good is coming from a group of wealthy investors building an apartment complex to hold it for 13 months and then sell it to other investors who will jack the rents to make the finances work?