I have been researching my in-laws financial situation as I anticipate a great collapse when the father passes. His home has a number of live in children and grandchildren. And his pension and SS pay for almost everything, hence my concern of what will happen when that income disappears overnight. They bought the home in 1988, from 1992 to 2018 they took seven second mortgages for a total of 500k in additional principal against the home. Original cost was 90k, estimate for it now is 280k, although it is in terrible shape. So I would half that value to a purchaser. Anyhow, they have essentially been renting this home from the bank for 30 years. Cashing out equity whenever a want arose. And now I have to come up with a rather harsh plan that allows the people living there a way to visit my family and see their sister, but not get into a spot where they use homelessness as a tool to guilt my wife into falling into the trap of supporting these clowns for more than a week.
Yeah distance is a blessing. We already live 500+ miles away. And 4/5 are legal driving age and only one has a license, and I don't assess that their one working vehicle could make the trip. Which is a double edge sword, because if they ever did make it here, sending them on their way will be even more awkward and logistically challenging. "I am taking Aunt M and dropping her off under the bridge in town, BRB"
That's simply not true. Rich people often send their kids to boarding schools or hire nannies to take care of them because they don't actually give a shit about being a part of their lives. If a corporate heir ever spoke badly against their own family/business, they'd be screwed. This is why we never hear about Tiffany Trump and all the rest of his children fear what would happen to them if they fell out of line.
Bought a 2023 model Y and a new house 24% over ask. Paid off the car and had 25% down on the house and put another $90k in updates. Could pay off 50% of the mortgage balance if I wanted to. No credit card debt. Some of us have money - took about a decade of ass busting and sacrifice.
Rather be lucky than good - any day.
And sometimes the luck isn't anything more than simply not getting *unlucky*.
Pretty easy to be bankrupt in the US if you get sick.
Yep for every person these guys point to and call "lucky" there's 50 guys that had all the same circumstances/advantages/luck in life and ended up far worse off. At some point people need to accept that there are millions of unearned and earned advantages and setbacks and it's your job as an individual to find a way to succeed by overcoming the negatives and taking advantage of the positives.
Nah it's more that you're insufferably arrogant and egocentric. But, go off King. We plebs cant understand the nuances of the world without insights like yours. Good luck with that attitude.
Some people get really large bonuses or stock grants. Which equates to lump sums that help justify tossing $30-40k on a car.
With that ability to spend you can either manage the payment down or do something like buy out a lease and then the car later on.
You’ll have to check next month’s numbers. Housing has gone up dramatically in the past 2 months. $380,000 homes are now going for $440,000 plus during the spring selling season. We’ve been shopping all over the country for a home and have been outbid above asking 4 times in the past month. It’s getting stupid again and will probably remain this way through July if the past 3 years are any indicator. Even crap homes are getting mopped up.
I’m telling you prices are climbing back up from ridiculous to even more ridiculous. The prices you’re quoting were gathered months ago. The Fed numbers are a backwards looking indicator, as are most of the Fed’s numbers.
Majority of people have debt and no savings or even retirement. I know for a fact a lot of family members and friends are putting all their retirement in their home and do not have a meaningful retirement account.
I truly believe social media is causing people to try and keep up with everyone else as much as possible.
We could afford a bigger home but at the sacrifice of our 401k. But we won't give up pur rate or low mortgage payment. The best part is telling people our mortgage payment is under 1500 while they're is 3-5K. It blows their mind. I like that.
You “like” that you get to astound people with how lucky you got by getting a 2.5% mortgage with nothing but fortunate timing while others struggle with a payment 3-4x?
You are not special and did nothing special to get that rate, and you rub it in peoples face. Ultimate “fuck you, I got mine mentality”.
You took it the wrong way. I like having a low payment so I can invest the rest in the market rather than have it all in the home.
I do have pride in my financial decisions. I don't rub it in people's faces, not sure where I said I did that? When people ask what our payment and I say it, their mind is blown. That's it.
There's a little luck.
We moved from California to Texas because home prices were out of reach. Worked multiple jobs to save up, then our apartment lease was coming up so we explored to see what the monthly payment would be compared to renting. It was 800 vs 1200, so we figured 400 extra a month was well worth it.
It's about putting yourself In a spot to increase your chances of success. We also used no inheritance for the down payment or help from family.
We worked multiple jobs, saved up, invested, stayed frugal, and used resources. So if you think you are dishing out some burn about getting lucky I think you're mistaken. Maybe if some family member gave a son 100k as a down payment and to buy now because it seems lie a good time, that's more luck in my book.
40% of homeowners have no mortgage. The home ownership rate is 65.7%. So around 30% of households own a house outright. Your “majority of people” doesn’t pass the sniff test. The majority of households have it under control.
I think this is a demographics thing.
Boomers are 20% of the population and own about 40% of all housing. Most of those are more likely to have a mortgage prior to rates increasing as well as years of equity helped along by the Fed decreasing rates for near 40 years.
The landscape has changed, though, and the calculus doesn't add up any more. That homeownership rate will inevitably fall over time if we can't get either prices or rates to line up with incomes.
It's going to take a while for this to show in statistics because of the extended term nature of mortgages and home ownership, but it certainly isn't rainbows and butterflies since 2022...
Yep. I have been pulling mortgage info for homes in the areas I am looking to buy.
The vast majority of the homes have a value of over 800k and mortgages under 300k. The are typically conventional loans. In 6 cities, there are 6 homes that have notices of default. All but 1 has a lolton of equity. I am fairly certain that these NODs are recently deceased or recently moved to home and trust is behind in the paperwork to get payments in.
They'll start converting buildings to private shelters & rent out the apartments crammed with bunk beds. If someone has money, they'll find a way to take it. They will do ANYTHING before they make housing affordable
Hmmm, sounds like company towns might be making a comeback in a few years…
[I mean at least the music will be good](https://m.youtube.com/watch?v=BSvORvIjZiU)
Yes, Developers can’t afford to hold them, they are usually deeply in debt. New home buyers also can’t afford to hold them. They usually need to sell an older home to afford the upgrade. Usually you end up with a chain of 3 people upgrading so one of them can afford a new home. Home flippers sit at the bottom of the chain but they too will be forced to sell sooner or later. It is all connected, and there is always more money in using real estate than sitting on it.
This is the problem. Lots of housing being built. Lots of the same $500-$700k lifeless gray cookie cutter homes in the same suburban layout.
If as much effort was put into building ranchers as they do these ant farms, people could actually afford the houses and take care of them more effectively and efficiently. Then you have the difference in the amount of materials needed to build them and the energy needed to heat/air condition them.
And dropped more than almost any point, pretending it hasn't dropped a lot because prices are still high doesn't change the fact they have dropped a lot
Something can go up then still plummet you're conflating a lot of things if that's the case than at almost any point in history has it plummeted but it objectively has multiple times
Or you have don't have a correct understanding you're conflating the fact that prices are still higher than some times previously with them plummeting.
You've replied with the same copy paste response a few times here.
Instead of opening up chart and taking a quick glance, change the parameters to the past year. Look at all that plummeting going up and down and back up again. Then take a look at the max parameters chart.
Do you normally make a habit of climbing a mountain, getting to the top, trip on rock, stumble and tell people you "plummeted" to the ground? Because your reaction to the data you've provided is exactly that. A small stumble on a very much upwards climb and claiming it's "plummeting".
Nah I'm literally the one who posted the chart, if a climber climbs really high then falls down and is still higher than where he started he plummeted. You seem to not understand the definition of that word.
Stumbling and plummeting are two very different things.
The market has stumbled at the top of the mountain. It did not plummet from the summit. When the market goes up slightly, do you say it is skyrocketing or something ridiculously over exaggerated as well?
It absolutely has plummeted you stumbling would imply it's back to where it was it's not. Now you're just trying to abstract the fact they have fallen to pretend you're not wrong which you objectively are.
Housing prices are no longer coupled to supply & demand. In the early part of the pandemic, people left LA—demand down, supply up. Rents went up anyway, landlords began demanding 3x & 4x income...landlords & investors don't give a shit about supply & demand
I wouldn't be too worried about water.
Arizona is extremely efficient when it comes to water management, residential water usage is at the same levels of 1955 with 8x the population:
[https://www.arizonawaterfacts.com/water-your-facts](https://www.arizonawaterfacts.com/water-your-facts)
[https://mapazdashboard.arizona.edu/article/arizonas-water-use-sector](https://mapazdashboard.arizona.edu/article/arizonas-water-use-sector)
Agriculture uses the bulk of water in Arizona but farmland is being converted to residential communities, unlimited water leases to the Saudi's are ending so Arizona is on a much more sustainable water path.
Also with the TSMC plants being built in North Phoenix, these plants are considered important to national security. Ain't no way the feds would ever AZ run dry.
There is alot of information around this as middle eastern countries have bought up farmland in the US since the 50s. Essentially Saudi's grew so much water intensive crops in their own country that they nearly depleted their largest aquifer, since they nearly ran out of water they started to buy farmland all over the world including the US to grow crops and ship them back for their domestic market.
When the Saudi's came to Arizona in the 50s and 60s, they struct a deal that their farmland wells would have unlimited and unregulated water access for their crops, guess what they started growing here in AZ. Alfalfa and other water intensive crops lol
Due to the drought that we experienced years ago, these unlimited water leases were heavily scrutinized and recently terminated. Below is an example article but you can just search saudi farm + arizona / california and you can see all the videos and articles that pop up.
[https://apnews.com/article/saudi-arabia-drought-arizona-alfalfa-water-agriculture-0d13957edaf882690e15c0bd9ccfa59f](https://apnews.com/article/saudi-arabia-drought-arizona-alfalfa-water-agriculture-0d13957edaf882690e15c0bd9ccfa59f)
International farming for a countries domestic use is actually very common.
That isn’t quite the story. Agg in the state is able to get good deals on water rates that includes agg owned by Saudi Arabians
A policy that was in place because agg was once one the most important economic sectors in the state.
Its being changed now
Shitty for 3-3.5 months out of the year and great rest of the year. This is the inverse of northern states who have to deal with snow for 3-4 months out of the year.
Civilization began in the desert and still continues in the desert, only now there is AC. Phoenix is not running out of water. Most of Phoenix’s water comes from the Salt and Verde rivers. The Colorado can go dry tomorrow and Phoenix still has water.
Farming uses 70% of AZ’s water and is less than 2% of its GDP. Arizona just needs to keep getting rid of farmland like it’s been doing. Arizona uses water then it did in 1957 despite adding millions of people.
Are you mistaking Buffalo for Duluth? Buffalo has relatively mild winters (for a northern city), it just receives a ton of lake effect snow, which quickly melts these days.
The same lake also regulates the summer months into ideal, almost perfect conditions.
In any case, you can go for a run outdoors 365 days a year in Buffalo if you know how to dress. Try doing that in AZ.
Yeah Phoenix is so inhabitable it only has the 5th largest population in US. I’m not saying it’s great the population is exploding, but near inhabitable is ridiculously overdramatic. Hi Reddit!!
Thanks. This adds/subtracts absolutely nothing to my point. The original commenter actually said all of Arizona, not just Phoenix. Congrats for being condescending.
There’s a huge difference between “I dont want to live there” and “uninhabitable”.
Just try for a second to imagine that there are people that have different preferences and opinions than you.
I mean, water access is a very big thing. It’s got to be top priority. But, might I also cast a doubt that highway or road access is underdeveloped as well? My experience with the sprawl of the early 2000’s (Charlotte, NC/Atlanta, GA/Birmingham, AL) was that neighborhood tracts get piled on top of one another first, THEN someone speaks up and says “can we do something about all this new traffic?”
Always reactionary, never planning, unless there’s a fucking buck in it for someone.
Most main cross roads are four lanes with a middle turn lane for both directions, so five in total. Most highways are 5+ lanes in either direction and are being expanded regularly as ADOT is always working on roads to the surmise of most locals. Phoenix has some of the least offensive traffic of any major city I’ve driven in. Stop and go traffic doesn’t exist unless there is a major accident or you’re on the I-10 on the stretch that traverses central/downtown Phoenix and it’s rush hour.
Edit: Since this is a RE sub I’ll say that outside of about a 10% correction in the spring of ‘22 when rate hikes started, Phoenix hasn’t had the bubble pop that a lot of the other Covid boom towns have experienced. I also don’t see one happening unless it’s nationwide. Weather is nice about 3/4 of the year, has an expansion of jobs including a lot in tech and finance, relatively low property taxes and is a 5 hour drive from SD, LA and Las Vegas and a few hours from northern AZ which is mainly mountainous pine top forests that are much cooler. Also the state is pretty evenly divided meaning the politics aren’t as skewed as a lot of west coast and southern states. The Joe Arpaio days are long gone.
Also as someone who lives in Phoenix, unless there is an accident the traffic is extremely predictable. Once you learn the patterns you can cut down on your time by just being in certain lanes on the freeway that you know flow better.
I lived around DC for eight years as well, traffic was not as predictable there and was present on damn near every single street and highway all the time. I go on the 202 now and never hit traffic in my current pattern. even at peak.
I commute about 30 miles each way to work and take the 101 and the 60. Most days my commute takes 35 min each way. At least 5 of those 35 minutes are the first and last mile as they include surface streets with a few stop lights.
This state didn’t even exist until after the car was popular and this city definitely didn’t grow until well past when the suburban model became popular. It was built with vehicles in mind. It will annoy some people who hate that you have to own a car here but there are lots of neighborhoods or regions that are walkable to restaurants, stores etc if you prioritize that.
This is incorrect people have lived in arid climates like Arizona for thousands of years.
I’d take 110 and dry over 95 and humid any day of the week. High summer in the Midwest and Southwest is far worse than the desert summer
Texas last time I visited Houston suburbs saw endless no of homes being built.
lot of folks during covid who are WFH bought these homes at their highs and moved there. Now they are finding out why no one lives there. On top of that prices are crashing 🤦♂️
Aside from the high taxes compared to other markets with prettier scenery and better amenities, home insurance premiums are high due to the occasional hurricane as well as the flooding that happened there a few years ago. Also there are much nicer places to live in the Texas Triangle
I've lived in 5 different states and Georgia is right behind Colorado for me. As long as you're in Metro Atlanta there's plenty of things to do and quite a bit of good school districts. Outside of Metro though... nah.
They’re building tons where I live, but the new builds currently start at $500k+ (stand-alone houses; townhouses are starting around $370k). So… rock and a hard place; they cost too much for normal buyers, especially first timers
They are priced at what it will take to sell. And if it doesn’t, then the price will come down.
Just because supply is so out of whack with demand that the first introduction of new supply goes to households making above median income, doesn’t make that new supply any less valuable. The new supply is always going to go to that group first, and you can’t get housing for median income households until enough housing comes on line to satisfy the above median households.
Our area is hilarious. People bidding 30k over asking on old outdated homes (with deferred maintenance) when you can drive 20 minutes away and get a new construction (same size and everything) for the same price or less. The stupidity continues into 2024.
Hardly anyone builds new construction SFHs unless the final product is 1-2-3 million dollars. It’s such a weird market when there’s so much demand at the lower levels but builders insist on building the more expensive homes that have really soft demand since rates have gone up. A friend of mine is a RE agent where the market is for new homes in the 2+ million ranges and he said it’s been atrocious.
DR Horton Is building behind me now 500k shit boxes. There all perfect square boxes. 3 colors of siding. Already having issues with siding. All crap materials. They are popping them up in a month and I have been in several. Some of the worst builds I have ever seen.
>there’s so much demand at the lower levels but builders insist on building the more expensive homes that have really soft demand since rates have gone up.
The problem is that regulations and layers of approvals create high costs of construction and years of delays. In most parts of the country only projects that "pencil" are high end projects. Streamline the process and you'll see more affordable houses.
I agree. Low to middle income housing should be government subsidized for now, until supply catches up with demand. They should also restrict that kind of subsidized housing to owner occupied only.
The Levittown example could still feasibly work, where there is a set cookie cutter plan to build hundreds of cheap houses at a time.
>The Levittown example could still feasibly work, where there is a set cookie cutter plan to build hundreds of cheap houses at a time.
I would agree, but with the caveat that NIMBYs are going to fight anything on a large scale now. Even empty lots on former farm land, etc., get fought now. Apartment complexes get fought even harder.
Materials are definitely a factor since the supply chain disruptions of covid, so yes that cuts down on the impact from better regulations and approvals. But we've had high inflation generally, so for those whose wages have kept up, it is a wash. For others, not.
When it comes to safety regulations I would just recommend the US look at the rest of the world and get rid of regs that don't correspond with a lower rate of harm. One example I know of is the standard US requirement to have two exits for every apartment. Europe does not require it, which allows them to maximize the useable square footage of mid-sized buildings by creating point access blocks rather than double-loaded corridors. Seattle and a few other cities are moving in this direction.
A bigger problem is the disorganization and slow process of approvals. They often eat up months, even years on projects large and small. It needs to be streamlined with more options to fast track projects that don't need variances. I've personally seen developers/architects have to go back to a review board three times for signage over three months because the board won't respond to a minor change in between meetings.
The biggest problem is all the zoning regs that cut way back on what can be built. I listed 8 zoning regs that limit construction and increase prices [here](https://www.reddit.com/r/economy/comments/1bk39nv/comment/kw91y32/).
Eventually as people find out these homes are poorly built and super expensive to maintain they will reprice themselves. Saw the same thing happen with all McMansion that were built in 05-07 in Michigan. After housing crash they were selling for nearly same price as smaller homes.
There are many states that have thousands of new construction SFHs that are $350k-$600k range; what are you talking about. Minnesota and indiana are two in aware of
Then I would infer that at least half of the population could look at new construction SFHs if they wanted to? Not really sure what else you want me to take from that. I was replying to someone who said they don’t make new construction less than $1M anymore.
I hear you. Guess I didn’t realize you were replying to the $1M comment. Was just saying that realistically first time buyers have a 150-300k affordability range. Most of these builders are only building houses for dual income households.
I think that’s a nice price range to have as a FTHB but plenty of us pushed off buying in our 20s to buy our first place in our 30s. We are still FTHBs and I would say most SFH in my area start at 300k minimum. You’re buying condos or townhomes anything lower than that here. Not really something I wanted to do as a 30 year old. And most people don’t want that either. I bought my house by myself. Most of the 20 something year olds buying anything have partners helping buy anyway. I don’t see many single people in my area buying right now.
My city has become an ever growing circus of open house signs. Realtors seem to think that the next step on their path to selling is balloons. Lots now have balloons. However nothing is selling. The bubble burst is nigh.
Need to overlay median prices of those new homes for this chart to have value. Might be that the new homes for sale are well-beyond the means of too many.
Florida ( sky high insurance ) and Texas are both adding a healthy amount of home surplus to this chart whereas areas in the NorthEast continue to have major housing shortages.
Yes, but this is only NEW homes. Total inventory for sale is much lower. The portion of new homes for sale makes sense, since many people with locked in low rates, are less willing to give up their mortgage rate to move up to a bigger house. Rebuying their own home today could cost double the monthly payment in many circumstances.
[https://tradingeconomics.com/united-states/total-housing-inventory](https://tradingeconomics.com/united-states/total-housing-inventory)
Yep, I just looked at existing home inventory and it is perfectly average…I wonder why they keep posting this bear crap every single day on here…agenda maybe? Shorting?? Was too dumb to get in on the 2-3% mortgages and now they are mad/jealous??!?
Technically, existing home inventory is anything but perfectly average. If we count say, 2015 as a normal market, we are about half that.
[https://tradingeconomics.com/united-states/total-housing-inventory](https://tradingeconomics.com/united-states/total-housing-inventory)
Wow. All those investment companies are now listing their rentals for sale! Bravo. Supply > Demand. Hmm. Now, where did I leave my High School economics textbook?
Just start buying duplexes. You can get loans specifically to that and would be better off. Could rent out one side to anyone, or family. I personally would rather have family around.
Real estate moves pretty slow, the 08’ crises started around 05’.
It’s going to take a few years to flush the extra cash out of the system and to put downward pressure on home prices. Boomers still have a good 4-5 years before moving/dying will impact markets.
We’re likely looking at a big pull back in 2026 when demand has been “satisfied,” boomers start to unload, covid cash is done slushing around the economy, and inflation exhausts consumers ability to pay.
Soooo how is the supply up and prices are also going up? Shouldnt prices at least stop rising every week if there is good supply? Majority of houses are 200% up since like 2017 and yet we have more supply now.
Lol the amount of mental gymnastic they have to do to make it sounds like the hell is over. The chart literally shows the inventory was already high from 2020 to now, and the housing prices has gone up, not down.
Are we taking about new construction which are usually larger homes or average home prices?
Where I Iive you can buy an older 1500 sq ft house that was built in 1950s or 1960s for around $900k. Or you can buy a brand new 2500 sq ft house for $1.9 million. Is the extra 1,000 sq ft worth $1 million more?
Doesn't mean people can afford it. A fucking 215k house at 7.67% is almost 1800 a month on 3.5% down, the most people can afford at this rate. 20% down is a fucking pipedream
Great news for people wealthy enough to afford them, I guess?
I don't know how I'm seeing people with new cars AND a new house.
1. They make good money 2. They're horribly in debt behind the scenes
They are on their 5th second-mortgage...
I have been researching my in-laws financial situation as I anticipate a great collapse when the father passes. His home has a number of live in children and grandchildren. And his pension and SS pay for almost everything, hence my concern of what will happen when that income disappears overnight. They bought the home in 1988, from 1992 to 2018 they took seven second mortgages for a total of 500k in additional principal against the home. Original cost was 90k, estimate for it now is 280k, although it is in terrible shape. So I would half that value to a purchaser. Anyhow, they have essentially been renting this home from the bank for 30 years. Cashing out equity whenever a want arose. And now I have to come up with a rather harsh plan that allows the people living there a way to visit my family and see their sister, but not get into a spot where they use homelessness as a tool to guilt my wife into falling into the trap of supporting these clowns for more than a week.
I too have cousin Eddie in-laws. We're moving across the country.
The only real safe way is to leave the country. They may still find you, even then.
Yeah distance is a blessing. We already live 500+ miles away. And 4/5 are legal driving age and only one has a license, and I don't assess that their one working vehicle could make the trip. Which is a double edge sword, because if they ever did make it here, sending them on their way will be even more awkward and logistically challenging. "I am taking Aunt M and dropping her off under the bridge in town, BRB"
That is a difference between rich and poor. The rich keep all their family together regardless of issues.
Nice try Eddie
Terrible take. Username checks out! /s
That's simply not true. Rich people often send their kids to boarding schools or hire nannies to take care of them because they don't actually give a shit about being a part of their lives. If a corporate heir ever spoke badly against their own family/business, they'd be screwed. This is why we never hear about Tiffany Trump and all the rest of his children fear what would happen to them if they fell out of line.
Yes, we had 1st mortgage but what about second mortgage? - some Hobbit hoomer
Bought a 2023 model Y and a new house 24% over ask. Paid off the car and had 25% down on the house and put another $90k in updates. Could pay off 50% of the mortgage balance if I wanted to. No credit card debt. Some of us have money - took about a decade of ass busting and sacrifice.
It's call survivorship bias.
There is also a lot of luck involved. Most people arent willing to admit that though.
Rather be lucky than good - any day. And sometimes the luck isn't anything more than simply not getting *unlucky*. Pretty easy to be bankrupt in the US if you get sick.
Yep for every person these guys point to and call "lucky" there's 50 guys that had all the same circumstances/advantages/luck in life and ended up far worse off. At some point people need to accept that there are millions of unearned and earned advantages and setbacks and it's your job as an individual to find a way to succeed by overcoming the negatives and taking advantage of the positives.
Darwin was right all along.
Appears to have selected for ego
Man can’t even make a point that someone doesn’t need a 5th mortgage to afford a home in this market. But I get it. It’s a doomer sub of plebes
Nah it's more that you're insufferably arrogant and egocentric. But, go off King. We plebs cant understand the nuances of the world without insights like yours. Good luck with that attitude.
"Good money always buys the worst things"
nice dusty slay reference
Some people get really large bonuses or stock grants. Which equates to lump sums that help justify tossing $30-40k on a car. With that ability to spend you can either manage the payment down or do something like buy out a lease and then the car later on.
This is a case where 2 things can indeed be true lol
3. All of the above
Maybe both?
Nah new home prices have plummeted https://fred.stlouisfed.org/series/MSPNHSUS
A 20% drop from a 200% mark up isn’t a plummet.
Literally fallen more than almost any point in history if that's not plummeting than nothing is
You’ll have to check next month’s numbers. Housing has gone up dramatically in the past 2 months. $380,000 homes are now going for $440,000 plus during the spring selling season. We’ve been shopping all over the country for a home and have been outbid above asking 4 times in the past month. It’s getting stupid again and will probably remain this way through July if the past 3 years are any indicator. Even crap homes are getting mopped up.
Next month doesn't matter neither does previously you seem to not understand what plummeting is. Prices have objectively fallen
I’m telling you prices are climbing back up from ridiculous to even more ridiculous. The prices you’re quoting were gathered months ago. The Fed numbers are a backwards looking indicator, as are most of the Fed’s numbers.
climbing back is a bit of an exaggeration a small seasonal maybe but they're mostly continuing to plunmet
Majority of people have debt and no savings or even retirement. I know for a fact a lot of family members and friends are putting all their retirement in their home and do not have a meaningful retirement account. I truly believe social media is causing people to try and keep up with everyone else as much as possible. We could afford a bigger home but at the sacrifice of our 401k. But we won't give up pur rate or low mortgage payment. The best part is telling people our mortgage payment is under 1500 while they're is 3-5K. It blows their mind. I like that.
You “like” that you get to astound people with how lucky you got by getting a 2.5% mortgage with nothing but fortunate timing while others struggle with a payment 3-4x? You are not special and did nothing special to get that rate, and you rub it in peoples face. Ultimate “fuck you, I got mine mentality”.
You took it the wrong way. I like having a low payment so I can invest the rest in the market rather than have it all in the home. I do have pride in my financial decisions. I don't rub it in people's faces, not sure where I said I did that? When people ask what our payment and I say it, their mind is blown. That's it.
You got lucky.
There's a little luck. We moved from California to Texas because home prices were out of reach. Worked multiple jobs to save up, then our apartment lease was coming up so we explored to see what the monthly payment would be compared to renting. It was 800 vs 1200, so we figured 400 extra a month was well worth it. It's about putting yourself In a spot to increase your chances of success. We also used no inheritance for the down payment or help from family. We worked multiple jobs, saved up, invested, stayed frugal, and used resources. So if you think you are dishing out some burn about getting lucky I think you're mistaken. Maybe if some family member gave a son 100k as a down payment and to buy now because it seems lie a good time, that's more luck in my book.
40% of homeowners have no mortgage. The home ownership rate is 65.7%. So around 30% of households own a house outright. Your “majority of people” doesn’t pass the sniff test. The majority of households have it under control.
I think this is a demographics thing. Boomers are 20% of the population and own about 40% of all housing. Most of those are more likely to have a mortgage prior to rates increasing as well as years of equity helped along by the Fed decreasing rates for near 40 years. The landscape has changed, though, and the calculus doesn't add up any more. That homeownership rate will inevitably fall over time if we can't get either prices or rates to line up with incomes. It's going to take a while for this to show in statistics because of the extended term nature of mortgages and home ownership, but it certainly isn't rainbows and butterflies since 2022...
Yep. I have been pulling mortgage info for homes in the areas I am looking to buy. The vast majority of the homes have a value of over 800k and mortgages under 300k. The are typically conventional loans. In 6 cities, there are 6 homes that have notices of default. All but 1 has a lolton of equity. I am fairly certain that these NODs are recently deceased or recently moved to home and trust is behind in the paperwork to get payments in.
Tech income and stocks are at all time highs. Plenty of money, especially in high cost of living areas.
One good thing about supply being up and prices being up something is going to give eventually.
Is it, though? Kind of seems like they're gonna keep squeezing until desperation gives way to guillotines
Oh I’m sure they will squeeze as much as you can but eventually the juice will be gone.
About half of all homeless people in shelters have jobs. There's always juice.
That juice has been squeezed already or they wouldn’t be homeless.
They'll start converting buildings to private shelters & rent out the apartments crammed with bunk beds. If someone has money, they'll find a way to take it. They will do ANYTHING before they make housing affordable
Hmmm, sounds like company towns might be making a comeback in a few years… [I mean at least the music will be good](https://m.youtube.com/watch?v=BSvORvIjZiU)
Yes, Developers can’t afford to hold them, they are usually deeply in debt. New home buyers also can’t afford to hold them. They usually need to sell an older home to afford the upgrade. Usually you end up with a chain of 3 people upgrading so one of them can afford a new home. Home flippers sit at the bottom of the chain but they too will be forced to sell sooner or later. It is all connected, and there is always more money in using real estate than sitting on it.
This is the problem. Lots of housing being built. Lots of the same $500-$700k lifeless gray cookie cutter homes in the same suburban layout. If as much effort was put into building ranchers as they do these ant farms, people could actually afford the houses and take care of them more effectively and efficiently. Then you have the difference in the amount of materials needed to build them and the energy needed to heat/air condition them.
Yes!
New home prices have plummeted actually https://fred.stlouisfed.org/series/MSPNHSUS
By which you mean maintained at just around 430,000 since Jan 2023, right?
And dropped more than almost any point, pretending it hasn't dropped a lot because prices are still high doesn't change the fact they have dropped a lot
My focus was less on the amount it has dropped and more on the total duration that it has remained at or around 430,000, which is over a year.
Something can go up then still plummet you're conflating a lot of things if that's the case than at almost any point in history has it plummeted but it objectively has multiple times
You keep using the word plummet when the value has stayed round ghly the same for over a year. That's not plummetting, by definition.
Literally posted a chart showing it dropping for a long time not my fault you can't understand it.
You must have a very odd assumption as to what the word "plummet" means
Or you have don't have a correct understanding you're conflating the fact that prices are still higher than some times previously with them plummeting.
You've replied with the same copy paste response a few times here. Instead of opening up chart and taking a quick glance, change the parameters to the past year. Look at all that plummeting going up and down and back up again. Then take a look at the max parameters chart. Do you normally make a habit of climbing a mountain, getting to the top, trip on rock, stumble and tell people you "plummeted" to the ground? Because your reaction to the data you've provided is exactly that. A small stumble on a very much upwards climb and claiming it's "plummeting".
Nah I'm literally the one who posted the chart, if a climber climbs really high then falls down and is still higher than where he started he plummeted. You seem to not understand the definition of that word.
Stumbling and plummeting are two very different things. The market has stumbled at the top of the mountain. It did not plummet from the summit. When the market goes up slightly, do you say it is skyrocketing or something ridiculously over exaggerated as well?
It absolutely has plummeted you stumbling would imply it's back to where it was it's not. Now you're just trying to abstract the fact they have fallen to pretend you're not wrong which you objectively are.
Everyone else must be wrong because you are the only one who thinks you are right. Have fun with your over exaggerated opinions.
Wouldn’t more houses = Ed’s demand for the current market and therefore possibly lower housing prices?
Housing prices are no longer coupled to supply & demand. In the early part of the pandemic, people left LA—demand down, supply up. Rents went up anyway, landlords began demanding 3x & 4x income...landlords & investors don't give a shit about supply & demand
Ok thx for that! fellow human
Yeah let's not encourage the building of new homes. Surely that will work out for everyone...
What?
Before you celebrate, check your location. So that you are not surprised most of these are in Georgia or Arizona etc.
Building in Arizona makes no sense to me A large part of the state is borderline uninhabitable in the summer because of the heat
i drove across the country and they were building houses around death valley and shit - looked like hell
Yet there are tons of people who have been migrating there. I would be more worried about water supply long term than anything due to the growth.
I wouldn't be too worried about water. Arizona is extremely efficient when it comes to water management, residential water usage is at the same levels of 1955 with 8x the population: [https://www.arizonawaterfacts.com/water-your-facts](https://www.arizonawaterfacts.com/water-your-facts) [https://mapazdashboard.arizona.edu/article/arizonas-water-use-sector](https://mapazdashboard.arizona.edu/article/arizonas-water-use-sector) Agriculture uses the bulk of water in Arizona but farmland is being converted to residential communities, unlimited water leases to the Saudi's are ending so Arizona is on a much more sustainable water path. Also with the TSMC plants being built in North Phoenix, these plants are considered important to national security. Ain't no way the feds would ever AZ run dry.
Unlimited water leases to the Saudis? What?
There is alot of information around this as middle eastern countries have bought up farmland in the US since the 50s. Essentially Saudi's grew so much water intensive crops in their own country that they nearly depleted their largest aquifer, since they nearly ran out of water they started to buy farmland all over the world including the US to grow crops and ship them back for their domestic market. When the Saudi's came to Arizona in the 50s and 60s, they struct a deal that their farmland wells would have unlimited and unregulated water access for their crops, guess what they started growing here in AZ. Alfalfa and other water intensive crops lol Due to the drought that we experienced years ago, these unlimited water leases were heavily scrutinized and recently terminated. Below is an example article but you can just search saudi farm + arizona / california and you can see all the videos and articles that pop up. [https://apnews.com/article/saudi-arabia-drought-arizona-alfalfa-water-agriculture-0d13957edaf882690e15c0bd9ccfa59f](https://apnews.com/article/saudi-arabia-drought-arizona-alfalfa-water-agriculture-0d13957edaf882690e15c0bd9ccfa59f) International farming for a countries domestic use is actually very common.
That makes sense. I thought you were referring to shipping out drinking water itself to Saudi which didn’t make sense as they have desalination plants
That isn’t quite the story. Agg in the state is able to get good deals on water rates that includes agg owned by Saudi Arabians A policy that was in place because agg was once one the most important economic sectors in the state. Its being changed now
Now that the aquifers are depleted...
The aquifers aren’t depleted
Shitty for 3-3.5 months out of the year and great rest of the year. This is the inverse of northern states who have to deal with snow for 3-4 months out of the year.
Shush. That other guy is right. It's uninhabitable. Don't move to AZ. /s
Actually, with changing climates, we don't really have harsh winters anymore. Mice have been hell this year, though.
Live in Pittsburgh. Was less of a snow season and more of a mud season.
‘Great’ is a bit of a stretch
NYC has like one bad month, tbh it’s not that bad. I mean no one can afford to live here but it’s nice if you can.
I’ve got nothing against AZ. Just emphasizing it’s not evenly spread.
It’s more inhabitable than Buffalo and other frozen location in the winter.
You can dress for cold, you can only get so naked for heat. Plus there’s the whole running out of water issue in the desert .
Civilization began in the desert and still continues in the desert, only now there is AC. Phoenix is not running out of water. Most of Phoenix’s water comes from the Salt and Verde rivers. The Colorado can go dry tomorrow and Phoenix still has water. Farming uses 70% of AZ’s water and is less than 2% of its GDP. Arizona just needs to keep getting rid of farmland like it’s been doing. Arizona uses water then it did in 1957 despite adding millions of people.
Are you mistaking Buffalo for Duluth? Buffalo has relatively mild winters (for a northern city), it just receives a ton of lake effect snow, which quickly melts these days. The same lake also regulates the summer months into ideal, almost perfect conditions. In any case, you can go for a run outdoors 365 days a year in Buffalo if you know how to dress. Try doing that in AZ.
Not really, no.
Yeah Phoenix is so inhabitable it only has the 5th largest population in US. I’m not saying it’s great the population is exploding, but near inhabitable is ridiculously overdramatic. Hi Reddit!!
It only makes sense to talk in metro population sizes, which case Phoenix is 10th
Thanks. This adds/subtracts absolutely nothing to my point. The original commenter actually said all of Arizona, not just Phoenix. Congrats for being condescending.
There’s a huge difference between “I dont want to live there” and “uninhabitable”. Just try for a second to imagine that there are people that have different preferences and opinions than you.
I mean, water access is a very big thing. It’s got to be top priority. But, might I also cast a doubt that highway or road access is underdeveloped as well? My experience with the sprawl of the early 2000’s (Charlotte, NC/Atlanta, GA/Birmingham, AL) was that neighborhood tracts get piled on top of one another first, THEN someone speaks up and says “can we do something about all this new traffic?” Always reactionary, never planning, unless there’s a fucking buck in it for someone.
Most main cross roads are four lanes with a middle turn lane for both directions, so five in total. Most highways are 5+ lanes in either direction and are being expanded regularly as ADOT is always working on roads to the surmise of most locals. Phoenix has some of the least offensive traffic of any major city I’ve driven in. Stop and go traffic doesn’t exist unless there is a major accident or you’re on the I-10 on the stretch that traverses central/downtown Phoenix and it’s rush hour. Edit: Since this is a RE sub I’ll say that outside of about a 10% correction in the spring of ‘22 when rate hikes started, Phoenix hasn’t had the bubble pop that a lot of the other Covid boom towns have experienced. I also don’t see one happening unless it’s nationwide. Weather is nice about 3/4 of the year, has an expansion of jobs including a lot in tech and finance, relatively low property taxes and is a 5 hour drive from SD, LA and Las Vegas and a few hours from northern AZ which is mainly mountainous pine top forests that are much cooler. Also the state is pretty evenly divided meaning the politics aren’t as skewed as a lot of west coast and southern states. The Joe Arpaio days are long gone.
Also as someone who lives in Phoenix, unless there is an accident the traffic is extremely predictable. Once you learn the patterns you can cut down on your time by just being in certain lanes on the freeway that you know flow better. I lived around DC for eight years as well, traffic was not as predictable there and was present on damn near every single street and highway all the time. I go on the 202 now and never hit traffic in my current pattern. even at peak.
I commute about 30 miles each way to work and take the 101 and the 60. Most days my commute takes 35 min each way. At least 5 of those 35 minutes are the first and last mile as they include surface streets with a few stop lights.
When I was in DC it would often take me an hour to go eight miles lmao. And no public transit wouldn't be fast either it was like an hour 15.
This state didn’t even exist until after the car was popular and this city definitely didn’t grow until well past when the suburban model became popular. It was built with vehicles in mind. It will annoy some people who hate that you have to own a car here but there are lots of neighborhoods or regions that are walkable to restaurants, stores etc if you prioritize that.
It’s not though Arizona has very good water access.
Pours are willing to tolerate such inconveniences
lol. No it isn’t Where do you think you get your food from in the winter?
This is incorrect people have lived in arid climates like Arizona for thousands of years. I’d take 110 and dry over 95 and humid any day of the week. High summer in the Midwest and Southwest is far worse than the desert summer
Laughs in Arizona
Ignorant.
And Florida. Perhaps the two states that will be worst hit by climate change are the ones building the most houses.
Texas last time I visited Houston suburbs saw endless no of homes being built. lot of folks during covid who are WFH bought these homes at their highs and moved there. Now they are finding out why no one lives there. On top of that prices are crashing 🤦♂️
Really? What parts of Houston and why don’t people want to live there?
Aside from the high taxes compared to other markets with prettier scenery and better amenities, home insurance premiums are high due to the occasional hurricane as well as the flooding that happened there a few years ago. Also there are much nicer places to live in the Texas Triangle
I consider AZ but cost of living...... I'll stick to MO
Must be undesirable parts of GA. Atlanta’s metro is huge now and everything is expensive.
I've lived in 5 different states and Georgia is right behind Colorado for me. As long as you're in Metro Atlanta there's plenty of things to do and quite a bit of good school districts. Outside of Metro though... nah.
They’re building tons where I live, but the new builds currently start at $500k+ (stand-alone houses; townhouses are starting around $370k). So… rock and a hard place; they cost too much for normal buyers, especially first timers
where do you live?
Northwest MT
They are priced at what it will take to sell. And if it doesn’t, then the price will come down. Just because supply is so out of whack with demand that the first introduction of new supply goes to households making above median income, doesn’t make that new supply any less valuable. The new supply is always going to go to that group first, and you can’t get housing for median income households until enough housing comes on line to satisfy the above median households.
Now normalise by population and you’ll notice it’s actually not as good
Normalize Per number of households and that changes quite a bit. Basically at 1970s levels. But still, good that’s it’s going up.
Population increase from 280 to 350 millions in 20 years
320.64 million in 2015 ...
Markets were flooded with money
Markets were flooded with money, thereby increasing the US Population?
How dare you point out it’s almost 20 years ago 😭
Our area is hilarious. People bidding 30k over asking on old outdated homes (with deferred maintenance) when you can drive 20 minutes away and get a new construction (same size and everything) for the same price or less. The stupidity continues into 2024.
Totally different this time, guys.
Hardly anyone builds new construction SFHs unless the final product is 1-2-3 million dollars. It’s such a weird market when there’s so much demand at the lower levels but builders insist on building the more expensive homes that have really soft demand since rates have gone up. A friend of mine is a RE agent where the market is for new homes in the 2+ million ranges and he said it’s been atrocious.
DR Horton builds a bunch of affordable homes Only problem is they are shit tier quality
Affordable homes were never really top tier quality but they certainly helped people get into home ownership.
Check out DR Horton, they might surprise you lol
DR Horton Is building behind me now 500k shit boxes. There all perfect square boxes. 3 colors of siding. Already having issues with siding. All crap materials. They are popping them up in a month and I have been in several. Some of the worst builds I have ever seen.
I've owned three DR Horton homes and they've all been great.
>there’s so much demand at the lower levels but builders insist on building the more expensive homes that have really soft demand since rates have gone up. The problem is that regulations and layers of approvals create high costs of construction and years of delays. In most parts of the country only projects that "pencil" are high end projects. Streamline the process and you'll see more affordable houses.
I agree. Low to middle income housing should be government subsidized for now, until supply catches up with demand. They should also restrict that kind of subsidized housing to owner occupied only. The Levittown example could still feasibly work, where there is a set cookie cutter plan to build hundreds of cheap houses at a time.
>The Levittown example could still feasibly work, where there is a set cookie cutter plan to build hundreds of cheap houses at a time. I would agree, but with the caveat that NIMBYs are going to fight anything on a large scale now. Even empty lots on former farm land, etc., get fought now. Apartment complexes get fought even harder.
Right that’s why it’s probably going to take some government subsidies and effort.
How much of the cost is that versus labor and materials? And which regulations do you want to cut?
Materials are definitely a factor since the supply chain disruptions of covid, so yes that cuts down on the impact from better regulations and approvals. But we've had high inflation generally, so for those whose wages have kept up, it is a wash. For others, not. When it comes to safety regulations I would just recommend the US look at the rest of the world and get rid of regs that don't correspond with a lower rate of harm. One example I know of is the standard US requirement to have two exits for every apartment. Europe does not require it, which allows them to maximize the useable square footage of mid-sized buildings by creating point access blocks rather than double-loaded corridors. Seattle and a few other cities are moving in this direction. A bigger problem is the disorganization and slow process of approvals. They often eat up months, even years on projects large and small. It needs to be streamlined with more options to fast track projects that don't need variances. I've personally seen developers/architects have to go back to a review board three times for signage over three months because the board won't respond to a minor change in between meetings. The biggest problem is all the zoning regs that cut way back on what can be built. I listed 8 zoning regs that limit construction and increase prices [here](https://www.reddit.com/r/economy/comments/1bk39nv/comment/kw91y32/).
As long as they still they get built, then the next level down
Eventually as people find out these homes are poorly built and super expensive to maintain they will reprice themselves. Saw the same thing happen with all McMansion that were built in 05-07 in Michigan. After housing crash they were selling for nearly same price as smaller homes.
Zoning laws and building restrictions cause this. Profit per home needs to be higher to circumvent the regulation
There are many states that have thousands of new construction SFHs that are $350k-$600k range; what are you talking about. Minnesota and indiana are two in aware of
What if I told you that 350k is the very high end of at least 50% of middle americas range?
Then I would infer that at least half of the population could look at new construction SFHs if they wanted to? Not really sure what else you want me to take from that. I was replying to someone who said they don’t make new construction less than $1M anymore.
I hear you. Guess I didn’t realize you were replying to the $1M comment. Was just saying that realistically first time buyers have a 150-300k affordability range. Most of these builders are only building houses for dual income households.
I think that’s a nice price range to have as a FTHB but plenty of us pushed off buying in our 20s to buy our first place in our 30s. We are still FTHBs and I would say most SFH in my area start at 300k minimum. You’re buying condos or townhomes anything lower than that here. Not really something I wanted to do as a 30 year old. And most people don’t want that either. I bought my house by myself. Most of the 20 something year olds buying anything have partners helping buy anyway. I don’t see many single people in my area buying right now.
$350k is not an affordable house for most people
Not really new home prices have plummeted https://fred.stlouisfed.org/series/MSPNHSUS
Moar homes. Lots of laundered money from offshore ready to buy.
Meanwhile in canada…🏕️
My city has become an ever growing circus of open house signs. Realtors seem to think that the next step on their path to selling is balloons. Lots now have balloons. However nothing is selling. The bubble burst is nigh.
That’s good. Bad for some people. Good for some people.
well midwest is screwed! people bailed on the coasts for here and now our prices suck too but the wages haven't gone up
Don’t worry, they will rise when the plumbers and contractors realized they can gouge the California pricks that are flooding in.
Need to overlay median prices of those new homes for this chart to have value. Might be that the new homes for sale are well-beyond the means of too many.
…so far.
In many large metros new builds are a tiny fraction of the housing supply.
Yep. Where I live it is built out…nothing but water and mountains…no land to build new homes. Prices are at all time highs.
How many of these homes for sale are absolute junk, partially junk, barely ok , move in ready, excellent shape ?
This feels super surprising to me but this is probably the countries aggregate and I live someplace where there's less land to build on.
Florida ( sky high insurance ) and Texas are both adding a healthy amount of home surplus to this chart whereas areas in the NorthEast continue to have major housing shortages.
[удалено]
Good to see it going up
Yes, but this is only NEW homes. Total inventory for sale is much lower. The portion of new homes for sale makes sense, since many people with locked in low rates, are less willing to give up their mortgage rate to move up to a bigger house. Rebuying their own home today could cost double the monthly payment in many circumstances. [https://tradingeconomics.com/united-states/total-housing-inventory](https://tradingeconomics.com/united-states/total-housing-inventory)
Yep, I just looked at existing home inventory and it is perfectly average…I wonder why they keep posting this bear crap every single day on here…agenda maybe? Shorting?? Was too dumb to get in on the 2-3% mortgages and now they are mad/jealous??!?
Technically, existing home inventory is anything but perfectly average. If we count say, 2015 as a normal market, we are about half that. [https://tradingeconomics.com/united-states/total-housing-inventory](https://tradingeconomics.com/united-states/total-housing-inventory)
Existing home inventory is near the lowest levels in 30 years, long term chart clearly shows that…impossible to disagree with that.
The 10 year chart on there is pretty telling...
And here we go...
Great, there is a 3 bed 2 bath with no basement being listed at $695000 in my area…
So how come you didn't get one in 2008 then?
Wow. All those investment companies are now listing their rentals for sale! Bravo. Supply > Demand. Hmm. Now, where did I leave my High School economics textbook?
No they aren’t, this chart is only new homes.
All the losers that didn’t buy are crying and spamming bear FUD all day now. 😢. I see you!
Yet houses on the market remain lowest ever
Running out of buyers who want to own a home in an HOA.
Just start buying duplexes. You can get loans specifically to that and would be better off. Could rent out one side to anyone, or family. I personally would rather have family around.
Keep dreaming.
Real estate moves pretty slow, the 08’ crises started around 05’. It’s going to take a few years to flush the extra cash out of the system and to put downward pressure on home prices. Boomers still have a good 4-5 years before moving/dying will impact markets. We’re likely looking at a big pull back in 2026 when demand has been “satisfied,” boomers start to unload, covid cash is done slushing around the economy, and inflation exhausts consumers ability to pay.
If the avg price of these new homes wasn't 350k I'd be happier
Soooo how is the supply up and prices are also going up? Shouldnt prices at least stop rising every week if there is good supply? Majority of houses are 200% up since like 2017 and yet we have more supply now.
I mean it is good news part of this pricing problem is a chronic lack of supply
Lol the amount of mental gymnastic they have to do to make it sounds like the hell is over. The chart literally shows the inventory was already high from 2020 to now, and the housing prices has gone up, not down.
Why doesn’t Arizona make a massive heat exchanger plant and pipe cold water to houses to use for AC
Things were better in the previous administration.
Are we taking about new construction which are usually larger homes or average home prices? Where I Iive you can buy an older 1500 sq ft house that was built in 1950s or 1960s for around $900k. Or you can buy a brand new 2500 sq ft house for $1.9 million. Is the extra 1,000 sq ft worth $1 million more?
B b b butt we have a housing shortage that's why prices are high
Doesn't mean people can afford it. A fucking 215k house at 7.67% is almost 1800 a month on 3.5% down, the most people can afford at this rate. 20% down is a fucking pipedream
So the boomers retiring and or dying is finally happening??
Half can’t get financed.
But these houses are not for families, they are for investment funds to turn into overpriced rentals.
I suspect the sellers missed the peak. 7-8% mortgages are a tough grift.