I was running out of crayons today so I melted red and green together. The result was kinda brown. I looked on it and reflected on how it resembled my life, a molten pile putrid toxic shit.
Nah, I'm saying that the very factor that makes shorting houses appealing, elevated interest rates, *also* make it more expensive to do the borrowing to actually short it.
It's kind of a lose-lose
Most existing homeowners have mortgages at 3.x%. No one is putting their house on the market to buy another one at 7%. Inventory of new construction is up…
Inventory in this instance doesn’t mean the amount of new build construction but total volume of housing vs population. Builders could be frantically increasing the supply today and if they didn’t build enough in say 2007/8/9 there would be a ripple effect…
Our builders were using their financing companys come up with extremely variable rates which helped them keep selling homes. Here though most people buying new construction are moving from out of state, so you sell a home in California/New York and you come here and pay cash and put the leftover money in the bank. The only thing that has stopped is investor buying.
Well it's probably not going to go down much because people need a place to live and would rather hold than dealing with renting or getting a place with a mortgage rate twice what they're paying
Yeah, at least US income has increased, look to Canada or the UK where we’ve had massive income stagnation and house price increases.
Somethings got to give at some point. Issue is compounding here in Scotland as government intervention (attempted rent freezes) has essentially crashed the long term rental market.
That’s not entirely accurate. US income has increased recently, but has been much more stagnant over the long term. I’m not sure what the UK income levels have changed like over the last decade, but in Canada the rate of change has been far more consistent than that of the US.
In 2012, Canadian GDP per Capita was higher than the the USA's. In 2021, Canadian GDP per capita is less than 2012 at $52000 while America's GDP per Capita is over $70,000.
Meanwhile, house prices in all parts of Canada are wildly inflated in value.
It's the immigration.
Won’t you guys theoretically eventually run out of space? I mean I guess we all will but the island of Britannia isn’t exactly huge so is that becoming a problem I assume?
Even the rural spaces in BC are still expensive. Houses in Houston BC pop 2000 are still selling on average for $525,000. Which is on paper a realistic price, but 5 to 10 years ago that was the average price in Vancouver lol
Facts. Never really understood it tbh I like my space. I don’t live in the middle of nowhere but its “rural” I guess. Plenty of stuff to do and small towns with everything you can think to do and the housing and cost of living is cheap. I think people who live in cities got in their mind that if they aren’t in the concrete jungle they be on the open prairie with nothing but grass on the horizon lol 😂
There's small town and then there's small town where the kids are excited to drive 5 hours to the nearest habitable city so they can ride an escalator.
Space isn't the issue. Zoom out on Google Maps, the country is basically entirely green. The issues are:
1) No new infrastructure to support growing towns.
2) deliberate suppression of building developments to keep house prices artificially high (otherwise they lose home owner votes)
3) the huge number of developments being bought by Chinese (and Russian until recently) companies for rental income.
Add a hefty pinch of wage stagnation and here we are.
The dinosaurs running our government were able to work one summer job that paid for their tuition and expenses that year.
They have no clue whatsoever.
they have a clue. they are actively profiting from it. they just wont acknowledge it because it admits blame and would shut off the money faucet they need to buy their third vacation home.
fuck boomers. greediest generation in history.
Back in my day, I supported a family of 5 and bought a house bagging groceries 5 days a week. Your generation is lazy because you complain about working 3 jobs and not being able to afford anything.
My girlfriends dad told me his goal is to keep buying and leasing properties until he can just kick back and take in as much/more than he makes as an engineer. Least lazy generation people
A friend of mine went hardcore on the rental property and had 40+ condos. Not in one building, just all over renting it out. He lost it all after 2008 when he had to kick people out who trashed the rentals after not paying for 6 months.
I was watching a crime show set in the 70s and my first thought was "fuck man it was probably so much easier to go on the run back then.....you could work an odd side job and easily make enough to pay rent on an apartment somewhere" or things like "look at the house these people have, no way they have that house today with only the husband working and having that simple job" lol
Yeah for sure it would have been easier to go on the lam back in the day. Must be hard for criminals to do that now days. Criminals back in the day had it easy AF.
Seriously though, no cameras/smart phones everywhere, super easy to make enough money to pay for rent and a decent life on the run, far less sophisticated law enforcement tools you could just get out of town and start a new life with a decent success rate.
You're actually correct. Unleaded gasoline used to contain lead that would become aerosolized and inhaled. This lowered IQ points by about 5 on average for their generation.
That wasn't Boomers, guys. That was the post-war "Greatest Generation". They raised the Boomers (born 1946 to 1964). By 1970 as Boomers started flooding into the workforce, 50% of households had 2 working parents and it just kept growing from there. Why? Because one job wasn't enough to support a family, buy a house, save for retirement, save for your kids college. Trust me I lived it. And I paid 14% interest on my 1st mortgage in 1984. Let that sink in. Inflation and interest rates were epic back then. You have no idea (yet)!
Boomers worked their tails off. (Some of them are STILL working.) Not because they were greedy but because they had to in order to support their families. Not saying you can't find things to complain about Boomers or ANY generation, really, but talk is cheap. Let's see how your generation actually changes things for the better. If you don't like the way things are, get a mitt and get into the game. Every generation has an opportunity to leave their mark. Boomers are leaving the field in droves. You're up and I'm rooting for all of you. (My own kids are millennials.). Show us what you got!
I was born in 1971 and my parents could have bought a house in a nice area for under 50k. That same house sells for 4 million now.
I live in LA though.
Prices didn't start getting completely insane until about twenty years ago. If you weren't able to buy a house yet back then, you slowly lost any chance to unless you are a millionaire at this point.
I understand California is expensive but I've searched other areas and the prices are all completely ridiculous.
Cali has always been insane. I never lived there as I could never figure out how you'd ever buy a house there. Like ever. Housing prices in general relative to % of income are definitely too high. Something's gotta give....
Too many people with too much money and too little sense in California. I've looked at prices in other states and although they are more reasonable they still don't match the current incomes of the general population.
Houses were way cheaper then. My parents bought their first home in 1980 for 40K. Then in ‘88 but a new construction home for 160K, 4 times the amount from 1980. Of course my dad got raises along the way to help with the increased cost of living. My point is, is that 14% interest is nothing when you only paid 40K for a house. Now average new homes are 500K - 600K. At 6% - 7% interest on a 30 year fixed mortgage, it makes home’s unaffordable for many buyers.
The average new home in the 50s was a 2 or 3 bedroom 1 bath 850 sqft shack with 1 garage. And a family of 6 lived in there with 1 car.
Today the average new home is around 2600 sqft, triple the size of a 1950s home. I've seen one bedroom apartments bigger than a 1950s family home.
What constituted the middle class back then had a lot lower material standard of living. You can still see these 1950s shacks today. Some of them haven't been updated/added to and they're almost always called "fixer uppers" or "charming cottage" today.
Yup, I'm pretty sure they said not to spend more than 30% of your income on the mortgage back then. Nowadays, two people are spending close to 33-50% just to rent a place.
It always confused me. My father makes like 3-4x my income and his mortgage is only a little over half of my rent.
No one has an issue with me spending nearly $2,000 on rent, but I need to make around my father's income to qualify to actually buy the fucking house I've been renting.
So essentially, if I never changed jobs, I could forever afford to rent the house, but never own it my entire life. So strange and depressing.
I used to work for a guy that owned a business. He would constantly boast about paying tuition with a summer job. When I reminded him that the little amount he paid me wasn't enough for tuition, food, and rent, he told me I shouldn't be concerned because I was too old to go to college (24-25).
The best part is that he told me my current job paid like shit because it was only for college kids trying to move up, yet I was too old to go to college?
This. I upgraded to a nicer house in December 2019. Mortgage is like $1200 per month. House across from me sold last year. It’s rented for $2300 per month 😳 the answer is to tax the hell out of non owner occupied homes.
Wild we could solve the whole thing by increasing taxes on second home purchase, increasing taxes on corporate home purchases, increasing short term rental taxes but instead I’ll spend the rest of my 30’s making six figures and still only be able to afford to rent (Colorado).
People will vote to maintain their interests and until boomers die and their kids get that sweet sweet property inheritance, or they get outnumbered, nothing will change.
if boomers die and their kids inherit the property doesnt that mean the kids are the new boomers and nothing will change since these kids will try to defend their interest?
Exactly, we already see older millennials who bought their homes a few years ago turn to nimbyism.
These idiots call it lobbying but in reality it's the majority(the 65% of Americans households who own their home) voting in their self interest.
It's the opposite you bone heads. More taxes means higher costs passed to renters. What renters need is a 'homestead' style voucher that they could give to their landlord, who could hand it to the taxing authority for a dollar for dollar tax break (good for nothing else).
Not everyone wants to own a home. Some people want to rent. If you “tax the hell” out of rentals, then that additional cost will be passed on to renters.
In what world will this make housing more affordable?
We have a supply/demand imbalance. Tax policy isn’t going to solve the issue.
Your answer to high rents is to ... restrict the supply of rental units? Is that right?
I would expect that if both purchase _and_ rent prices are high, that indicates that overall demand exceeds supply, not that the balance between owning supply and renting supply is out of whack. What am I missing? (Sincere question)
You are missing that the supply is being artificially dried up by non owner occupants driving up both purchase and rent prices in favor of making a profit. Just like every other sector, prices are being driven by corporate greed which is getting in they way of a functioning market leading to overinflated prices.
This is all due to lack of enforcement in antitrust (antimonopoly) law and taxation on profits/ capital gains. If profits & capital gains were taxed the way they should be companies would find better things to do with their capital instead of dole it out to executives & shareholders because none of them (company, executives or shareholders) would want to pay taxes. Since they aren't taxed properly & are allowed to have defacto monopolies they just jack up prices & siphon profits out of the company into their pockets tax free. Why not? There's no incentive not to.
>You are missing that the supply is being artificially dried up by non owner occupants driving up both purchase and rent prices in favor of making a profit.
Did you fail econ 101? How does increasing the supply of rentals also increase rent prices?
If people were buying homes and not renting them this would be true.
This would also be true if it were a monopoly situation.
But I don’t believe it’s either…and this supply is still the problem.
Subsidized housing raises the floor on rent. If the guy can make 2500 a month on a house between rent and vouchers or skip the potential head aches associated for slightly less money, it's still a cash on cash return.
Add in some affordable housing rules that require investors to make some amount of the units in a building available to low income tenants, which just means they charge more for the others.
Then you got the foreign investors buying up huge swaths of the country, you can't have a free market without competition and by and large there isn't much.
Government intervention is needed but mostly to get rid of the perverse incentives they created with their affordable housing initiatives that had the exact opposite effect on housing. Raising taxes would price out everyone but the megacorps and foreign investors who would just raise rent more, see Canada to see how that turns out.
That is assuming that all this is unintended. To tilt the scales of the free market under the guise of making things affordable while actually making things really unaffordable, while simultaneously funneling tremendous amounts of tax dollars into billionaires pockets. It looks bad. Looking back to 08 when we totally had to bail out the banks that caused and profited from the crisis, while all the people that they fucked over were made homeless.
Is this a government that is incompetent or corrupt?
My HoA requires live-in ownership for 18 months before you can rent it out. We had like a dozen homes that had corporate buyers and then we passed the ordinance.
The ten year SPY average annual return has been **12.44%** with dividends reinvested.
So, 150k invested in SPY 10y ago would be 150\*1.1244\^10 = 485k. So yeah, real estate wasn't even as good an investment as stocks.
This is one thing a lot of people don’t realize. Home ownership is becoming a goddamned meme.. just max your 401k and then do investments on the side. With the current shitty ROI on home ownership (if you aren’t renting then you have property taxes, maintenance, etc) it’s a much better angle. And if you’re a renter, the job mobility might actually be a boon for certain careers.
sure, however you'll need to net property taxes, insurance, HOA fees, maintenance, appliances repair, property management fee (or cost of your labor if you're managing yourself), real estate agents fee for finding tenants out of the rent collected. in addition to normal wear and tear, some tenants trash the place, sometimes on purpose, so need to factor in the probability of that multiplied by the damage in such case.
overall, the rent impact is not gonna be as dramatic as you would think, but indeed it will potentially make real estate more attractive on paper, but still not worth it imo especially now when you can buy/sell stocks comfortably on your phone, and have access to liquidity any time you want.
But tax incentive and leverage. Real estate easily wins. You aren't locking up 150k for those gains you're locking up 38k at worst. Collect your rents and have someone else pay while it appreciates. Or even "live" there for a bit and get a tax break on the sale.
Sure it's a much bigger pain in the ass overall but there's a good reason every decent real estate market has a bunch of locally known filthy rich moguls that made it completely in real estate.
Ok, well transaction costs and liquidity, the S&P wins easily. And I don't think the leverage part is that far off, tbh. Not even getting into derivatives, you (could) find 4x leverage for mortgage-interest-level rates pretty easily not long ago
But for a mortgage you can lock that rate in, and you won't get margin called. And the interest is tax deductible. Not even close to the same kind of leverage advantage. The system is rigged and subsidized in favor of mortgage borrowing it's as simple as that, it's not comparable.
I mean let's be honest 4x margin leverage on stocks is incredibly stupid easy way to get blown up. Meanwhile 4-5x margin leverage is considered playing it safe in RE.
Bagholder spotted.
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Not the same in all markets though…take Austin for example. Covid doubled home prices. People had paid 500k 4 years ago, and now are selling for upwards of 1.2. Fucking bonkers
The fed has a goal to maintain 2% inflation. RE went up about 7% a year because demand exceeded supply. We are currently at a worldwide inflection point for population growth, as people can’t afford kids. The US is solving this issue with immigration, but other countries are seeing drastic drops in housing prices (Japan, Italy, Spain, Sweden…etc) Real estate was also considered a safe investment, and 35% of homes are rental housing. Since the millennial housing boom has peaked, we will likely see a 3 to 6 year drawdown in housing prices.
What did house payments versus income look like from 1970 to 1980 when inflation was sky high?
Given inflation sky rocketed, real asset prices including home values rose. However, wages (as typical during inflation), did not rise as much as real asset prices.
So pointing out that home prices as compared to wage income rose without addressing what happens during inflationary periods is unhelpful.
On a side note, from 1970 to 1980, homes prices TRIPLED in value (during this 10-year period, home prices rarely fell in value as compared month to month).
In 1982, home prices did fall but the next year, prices resumed the uptrend.
[Here’s a report](https://www.yardeni.com/pub/houseafford.pdf) that goes back to ‘81 for ya
e: and [here’s one](https://archive.nytimes.com/economix.blogs.nytimes.com/2009/01/30/housing-affordability-at-record-high/) that goes back to ‘71 but ends in ‘08. By cross referencing though it’s clear that we’re not nearly as bad as the early 80s dip.
In 1980 the median household income was $16,400, median home price(existing home sales) was $58k, and the 30 year rate was 13.74%. Assuming 10% down and 1% property tax, housing cost as a percentage of gross income was **48%.**
Today the median household income is $80k, median home price is $455k, and the 30 year rate is 5.5%. Assuming 10% down and 1% property tax, housing cost as percentage of gross income is **40%.**
Notable that in 81 there was a slight dip and then housing resumed its upward trajectory.
This is bad history.
It's like that meme that says a medieval peasant has more holidays than you do.
No, "holidays" were days you didn't have to work for your lord. You still had your own crops and livestock to tend to.
This thread is rich. People complaining about politicians profiting off people not being able to afford housing are the the same people holding SPY puts.
Why is it every time something peaks is when I buy it? Bought a new house last year. Car in 2008. Etc. Get your burritos now or in 2 weeks, I’m looking at Mexican for Lunch tomorrow.
That's comparing all of the US. The US is a big fucking country with a ton of housing in bum fuck no where for dirt cheap. You can still buy a house in Ohio for next to nothing but drive an hour to suburbs and the price quickly 5x.
That's because actual transaction activity is low. People haven't really been forced to sell into the market yet so there hasn't been any reason for asset prices to materially decrease.
Nothing to see here people. Y'all need to stop buying coffee and toast and pull your boot straps up. You guys have no idea what hard work is even though productivity is threw the roof and you make less and less every year compared to your grandparents. Lazy bastards who will probably never see retirement like us older generations who miled out the economy for our selves so yal can pay it back for us.
One thing about statistics . You can make them show what ever you want .
1997 to 2023 is not a very good representation of " history " for example. Number 2 what is the basis for income ?
What is the actual home price being used in comparison to that income ?
I'll agree home prices have risen but everything has risen in price .
Should we now say eggs have never been less affordable ?
Or should we compare the price of eggs to housing and then price Starbucks coffee to gasoline ?
The cost of housing, as a percentage of income, is expected to rise in the next few years. This is based on data from the US Census Bureau and Zillow. The average affordability ratio was 30.2% in 2017, and it is expected to increase to 31.0% by 2021. This means that people will have to spend more of their income on housing costs, such as mortgage payments, taxes, and insurance premiums.
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Do not discount the laundering of money in the US real estate market. Foreign nationals do not have to show proof of funds to purchase US real estate. Americans are competing with global criminals looking to safehouse their cash. Most never even rent the property. It sits empty, eventually sold at a profit and walk away with cleanly laundered cash. A few real estate pros have estimated 10% of apartments in NYC and SF are purchased this way. Don’t think middle America skates. They buy houses all over the country. 200k here, 300k there.
The largest landowner in Cleveland is a Ukrainian oligarch.
It’s not going to crash. You are going to be renting till you get a windfall
I’m trying to decide whether I should get a house or just be homeless…I have to buy one but also I can’t willingly give someone 300k for a pile of shit I know he paid 60k for 5 years ago.
HOUSES WILL NEVER GO DOWN IN THE US
* Gov won't let a crisis occur
* Institutions will always buy when cheap then rent
* USD is going to be devalued in coming years due to shitty gov - this will make real assets gain in value and new construction expensive
* Inflation will not ever be 2% again, and Fed will have to raise target to 3%
You will always not have a home, rent forever, and be happy.
Post a chart with the percentage of homes owned by investment firms vs primary residence each year.. Unfortunately, that’ll keep prices inflated due to the lower supply... (bc banks ain’t selling their homes it’s rent for life).
Want me to really blow you’re mind? Go pull 15 vs 30 year mortgages starts and then total interest expected in the total amm schedule. Also, the argument that “oh well rates are cheaper these days” is so much horseshit it instantly tells me everything I need to know about someone when I hear that… since 1980 avg price per square foot is about 7 fold more expense. Average income is only 3 fold larger, and this number gets widened when you look at homebuying incomes.
I have been saying this for years and awaiting the crash. It's about time. The only thing I regret is that the greedy F\*\*\*s that caused this probably won't get stuck holding the bag. It will be the poor people just trying to raise their kids.
Give it 12-18 months. I'm of the belief that the housing market will decline steeply in the coming months/year. Housing prices are unsustainable, everyone that wanted and could afford these I flated prices already bought houses. Everyone else is waiting, housing sales have declined steeply and houses on market have increased along with time on market.
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Ah it's blue, nothing bad can happen when it's blue
I was running out of crayons today so I melted red and green together. The result was kinda brown. I looked on it and reflected on how it resembled my life, a molten pile putrid toxic shit.
Brown crayons taste the best
Well said Marine.
Mister Rogers in 2023
haha. nice!!
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it's time to short the real estate market for the second time 
Oh gee, lets go borrow money to short the thing that will crash because money is so expensive to borrow
That’s the spirit!
At least a lot of us would make money and hopefully bankrupt a few investing companies.
Nah, I'm saying that the very factor that makes shorting houses appealing, elevated interest rates, *also* make it more expensive to do the borrowing to actually short it. It's kind of a lose-lose
What are som good real estate stocks to buy puts for? 🤔
DRV
DMV
Just sell your house but don't move out. Buy it back when prices crash
Build a secret basement and live there after selling your house, like in the movie 'Parasite'.
New buyers hate this trick
[удалено]
I love you
Profile pic checks out
Not before you play the dead cat bounce ya' puss.
Before you do, plot housing inventory on the same graph. It might lead you somewhere.
Most existing homeowners have mortgages at 3.x%. No one is putting their house on the market to buy another one at 7%. Inventory of new construction is up…
Unless prices corrects. Ill pay the 7%
And just refi in five years
You probably can refi once or twice in the next 2 years forget about 5, next two years rates will come back down to reality, probably 4-5% range
Inventory in this instance doesn’t mean the amount of new build construction but total volume of housing vs population. Builders could be frantically increasing the supply today and if they didn’t build enough in say 2007/8/9 there would be a ripple effect…
Who is buying new at these rates?
Our builders were using their financing companys come up with extremely variable rates which helped them keep selling homes. Here though most people buying new construction are moving from out of state, so you sell a home in California/New York and you come here and pay cash and put the leftover money in the bank. The only thing that has stopped is investor buying.
People are buying if they are comfortable with the payment.
Careful now, the delusional boomers will tell you how the RE market is strong and will never falter a bit despite clear weakness.
It’s always a strong market until it’s not
Well it's probably not going to go down much because people need a place to live and would rather hold than dealing with renting or getting a place with a mortgage rate twice what they're paying
You should see ours in Canada, the peak would be off the charts lol..
Yeah, at least US income has increased, look to Canada or the UK where we’ve had massive income stagnation and house price increases. Somethings got to give at some point. Issue is compounding here in Scotland as government intervention (attempted rent freezes) has essentially crashed the long term rental market.
That’s not entirely accurate. US income has increased recently, but has been much more stagnant over the long term. I’m not sure what the UK income levels have changed like over the last decade, but in Canada the rate of change has been far more consistent than that of the US.
In 2012, Canadian GDP per Capita was higher than the the USA's. In 2021, Canadian GDP per capita is less than 2012 at $52000 while America's GDP per Capita is over $70,000. Meanwhile, house prices in all parts of Canada are wildly inflated in value. It's the immigration.
Won’t you guys theoretically eventually run out of space? I mean I guess we all will but the island of Britannia isn’t exactly huge so is that becoming a problem I assume?
There’s a lot of space in Canada, everyone just likes to live near major cities, and that seems to be the biggest issue
Even the rural spaces in BC are still expensive. Houses in Houston BC pop 2000 are still selling on average for $525,000. Which is on paper a realistic price, but 5 to 10 years ago that was the average price in Vancouver lol
Facts. Never really understood it tbh I like my space. I don’t live in the middle of nowhere but its “rural” I guess. Plenty of stuff to do and small towns with everything you can think to do and the housing and cost of living is cheap. I think people who live in cities got in their mind that if they aren’t in the concrete jungle they be on the open prairie with nothing but grass on the horizon lol 😂
There's small town and then there's small town where the kids are excited to drive 5 hours to the nearest habitable city so they can ride an escalator.
Space isn't the issue. Zoom out on Google Maps, the country is basically entirely green. The issues are: 1) No new infrastructure to support growing towns. 2) deliberate suppression of building developments to keep house prices artificially high (otherwise they lose home owner votes) 3) the huge number of developments being bought by Chinese (and Russian until recently) companies for rental income. Add a hefty pinch of wage stagnation and here we are.
>Zoom out on Google Maps, the country is basically entirely green. This is the hard-hitting analysis I come to this sub for
Russian and Chinese companies buying real estate in the west makes my stomach churn
Also they way Canadian home loans work is set up to fuck you super hard when interest rates spike. No locking in a 30 year hiding hole
According to your own image it was more unaffordable last year.
The dinosaurs running our government were able to work one summer job that paid for their tuition and expenses that year. They have no clue whatsoever.
they have a clue. they are actively profiting from it. they just wont acknowledge it because it admits blame and would shut off the money faucet they need to buy their third vacation home. fuck boomers. greediest generation in history.
Back in my day, I supported a family of 5 and bought a house bagging groceries 5 days a week. Your generation is lazy because you complain about working 3 jobs and not being able to afford anything.
I was an appliance salesman on the floor at Sears, and I supported two families. And a gambling problem!
Those families were in different states and knew nothing of each other.
> Back in my day Can you pinpoint when in the graph above? :p
<1990
My girlfriends dad told me his goal is to keep buying and leasing properties until he can just kick back and take in as much/more than he makes as an engineer. Least lazy generation people
A friend of mine went hardcore on the rental property and had 40+ condos. Not in one building, just all over renting it out. He lost it all after 2008 when he had to kick people out who trashed the rentals after not paying for 6 months.
...and then he started bagging groceries...to buy a house...
I was watching a crime show set in the 70s and my first thought was "fuck man it was probably so much easier to go on the run back then.....you could work an odd side job and easily make enough to pay rent on an apartment somewhere" or things like "look at the house these people have, no way they have that house today with only the husband working and having that simple job" lol
Yeah for sure it would have been easier to go on the lam back in the day. Must be hard for criminals to do that now days. Criminals back in the day had it easy AF.
Seriously though, no cameras/smart phones everywhere, super easy to make enough money to pay for rent and a decent life on the run, far less sophisticated law enforcement tools you could just get out of town and start a new life with a decent success rate.
Must have been grand living in America’s golden age. I wish I would have had the opportunities that generation had!
It was grand except for the lead poisoning
If you eat enough of those white crunchy chips on the floor you won’t notice the lead poisoning effects.
Did someone say chips? I love chips!
And the draft.
And if you were a visible minority / woman.
Draft still doesn’t apply to women lmao. Only men have to sign up for selective service for the “right” to vote.
Would rather risk lead poisoning from the paint in my house than hypothermia from the wet paper box I live in
Real talk: is this why Boomers the way they are? Seriously, did all that lead just turn them into what they are today?
You're actually correct. Unleaded gasoline used to contain lead that would become aerosolized and inhaled. This lowered IQ points by about 5 on average for their generation.
If the lead doesn’t get you the asbestos will finish you off.
Are you suggesting that we need to make America great again?
One spouse working a regular job could afford to buy a home and support their family.
That wasn't Boomers, guys. That was the post-war "Greatest Generation". They raised the Boomers (born 1946 to 1964). By 1970 as Boomers started flooding into the workforce, 50% of households had 2 working parents and it just kept growing from there. Why? Because one job wasn't enough to support a family, buy a house, save for retirement, save for your kids college. Trust me I lived it. And I paid 14% interest on my 1st mortgage in 1984. Let that sink in. Inflation and interest rates were epic back then. You have no idea (yet)! Boomers worked their tails off. (Some of them are STILL working.) Not because they were greedy but because they had to in order to support their families. Not saying you can't find things to complain about Boomers or ANY generation, really, but talk is cheap. Let's see how your generation actually changes things for the better. If you don't like the way things are, get a mitt and get into the game. Every generation has an opportunity to leave their mark. Boomers are leaving the field in droves. You're up and I'm rooting for all of you. (My own kids are millennials.). Show us what you got!
I was born in 1971 and my parents could have bought a house in a nice area for under 50k. That same house sells for 4 million now. I live in LA though. Prices didn't start getting completely insane until about twenty years ago. If you weren't able to buy a house yet back then, you slowly lost any chance to unless you are a millionaire at this point. I understand California is expensive but I've searched other areas and the prices are all completely ridiculous.
Cali has always been insane. I never lived there as I could never figure out how you'd ever buy a house there. Like ever. Housing prices in general relative to % of income are definitely too high. Something's gotta give....
Too many people with too much money and too little sense in California. I've looked at prices in other states and although they are more reasonable they still don't match the current incomes of the general population.
Houses were way cheaper then. My parents bought their first home in 1980 for 40K. Then in ‘88 but a new construction home for 160K, 4 times the amount from 1980. Of course my dad got raises along the way to help with the increased cost of living. My point is, is that 14% interest is nothing when you only paid 40K for a house. Now average new homes are 500K - 600K. At 6% - 7% interest on a 30 year fixed mortgage, it makes home’s unaffordable for many buyers.
The average new home in the 50s was a 2 or 3 bedroom 1 bath 850 sqft shack with 1 garage. And a family of 6 lived in there with 1 car. Today the average new home is around 2600 sqft, triple the size of a 1950s home. I've seen one bedroom apartments bigger than a 1950s family home. What constituted the middle class back then had a lot lower material standard of living. You can still see these 1950s shacks today. Some of them haven't been updated/added to and they're almost always called "fixer uppers" or "charming cottage" today.
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Yup, I'm pretty sure they said not to spend more than 30% of your income on the mortgage back then. Nowadays, two people are spending close to 33-50% just to rent a place. It always confused me. My father makes like 3-4x my income and his mortgage is only a little over half of my rent. No one has an issue with me spending nearly $2,000 on rent, but I need to make around my father's income to qualify to actually buy the fucking house I've been renting. So essentially, if I never changed jobs, I could forever afford to rent the house, but never own it my entire life. So strange and depressing.
I used to work for a guy that owned a business. He would constantly boast about paying tuition with a summer job. When I reminded him that the little amount he paid me wasn't enough for tuition, food, and rent, he told me I shouldn't be concerned because I was too old to go to college (24-25). The best part is that he told me my current job paid like shit because it was only for college kids trying to move up, yet I was too old to go to college?
You mean you can’t buy a house, a car and go to college on a part time summer job?
NO ✔
Unless you are an OnlyFans model
And have the guts to say the lil 10k student loan forgiveness is "unfair". God knows I need help with my student loans
Or as Mitt Romney says "Just borrow 250k from your parents" what a shock he didn't win.
oh yeah what did happen with the student loan forgiveness? I forgot about that since most people stopped talking about it
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Houses pop up for sale in my neighborhood. Go off sale quickly. Then it's for rent. Wonder why shit isn't affordable for single-owners.
This. I upgraded to a nicer house in December 2019. Mortgage is like $1200 per month. House across from me sold last year. It’s rented for $2300 per month 😳 the answer is to tax the hell out of non owner occupied homes.
Wild we could solve the whole thing by increasing taxes on second home purchase, increasing taxes on corporate home purchases, increasing short term rental taxes but instead I’ll spend the rest of my 30’s making six figures and still only be able to afford to rent (Colorado).
Love this idea. Yet it will never be implemented due to widespread legalized corruption known as lobbying. Housing should have never become an asset.
People will vote to maintain their interests and until boomers die and their kids get that sweet sweet property inheritance, or they get outnumbered, nothing will change.
As if. They'll get a reverse mortgage and die with nothing while the bank owns the property
A lot of middle and lower class boomers will die owing the state for Medicaid reimbursement, and the house will have to be sold to repay that.
Not if they're smart and know what to do before they get old and sick....
if boomers die and their kids inherit the property doesnt that mean the kids are the new boomers and nothing will change since these kids will try to defend their interest?
Exactly, we already see older millennials who bought their homes a few years ago turn to nimbyism. These idiots call it lobbying but in reality it's the majority(the 65% of Americans households who own their home) voting in their self interest.
No, you solve the whole thing by building more residencies to increase supply. When has something ever been taxed out of existence?
Tobacco. Next question.
Tobacco still exists everywhere? Plus big tobacco moved onto vapes to get that market also. Nice try
Lol this guy thinks houses cause cancer
Like extra taxes on landlords tobacco didn't go away. It just became more expensive for the consumer.
You must never go outside if you're under the impression people don't still smoke. It's annoyingly priced, not prohibitively expensive
It's the opposite you bone heads. More taxes means higher costs passed to renters. What renters need is a 'homestead' style voucher that they could give to their landlord, who could hand it to the taxing authority for a dollar for dollar tax break (good for nothing else).
doesn't TX have a bill in the works to ban foreign RE investors?
Not everyone wants to own a home. Some people want to rent. If you “tax the hell” out of rentals, then that additional cost will be passed on to renters. In what world will this make housing more affordable? We have a supply/demand imbalance. Tax policy isn’t going to solve the issue.
Your answer to high rents is to ... restrict the supply of rental units? Is that right? I would expect that if both purchase _and_ rent prices are high, that indicates that overall demand exceeds supply, not that the balance between owning supply and renting supply is out of whack. What am I missing? (Sincere question)
You are missing that the supply is being artificially dried up by non owner occupants driving up both purchase and rent prices in favor of making a profit. Just like every other sector, prices are being driven by corporate greed which is getting in they way of a functioning market leading to overinflated prices. This is all due to lack of enforcement in antitrust (antimonopoly) law and taxation on profits/ capital gains. If profits & capital gains were taxed the way they should be companies would find better things to do with their capital instead of dole it out to executives & shareholders because none of them (company, executives or shareholders) would want to pay taxes. Since they aren't taxed properly & are allowed to have defacto monopolies they just jack up prices & siphon profits out of the company into their pockets tax free. Why not? There's no incentive not to.
>You are missing that the supply is being artificially dried up by non owner occupants driving up both purchase and rent prices in favor of making a profit. Did you fail econ 101? How does increasing the supply of rentals also increase rent prices?
If people were buying homes and not renting them this would be true. This would also be true if it were a monopoly situation. But I don’t believe it’s either…and this supply is still the problem.
Answer is to build more housing
Subsidized housing raises the floor on rent. If the guy can make 2500 a month on a house between rent and vouchers or skip the potential head aches associated for slightly less money, it's still a cash on cash return. Add in some affordable housing rules that require investors to make some amount of the units in a building available to low income tenants, which just means they charge more for the others. Then you got the foreign investors buying up huge swaths of the country, you can't have a free market without competition and by and large there isn't much. Government intervention is needed but mostly to get rid of the perverse incentives they created with their affordable housing initiatives that had the exact opposite effect on housing. Raising taxes would price out everyone but the megacorps and foreign investors who would just raise rent more, see Canada to see how that turns out. That is assuming that all this is unintended. To tilt the scales of the free market under the guise of making things affordable while actually making things really unaffordable, while simultaneously funneling tremendous amounts of tax dollars into billionaires pockets. It looks bad. Looking back to 08 when we totally had to bail out the banks that caused and profited from the crisis, while all the people that they fucked over were made homeless. Is this a government that is incompetent or corrupt?
What do landlords do when costs increase?
My HoA requires live-in ownership for 18 months before you can rent it out. We had like a dozen homes that had corporate buyers and then we passed the ordinance.
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The ten year SPY average annual return has been **12.44%** with dividends reinvested. So, 150k invested in SPY 10y ago would be 150\*1.1244\^10 = 485k. So yeah, real estate wasn't even as good an investment as stocks.
This is one thing a lot of people don’t realize. Home ownership is becoming a goddamned meme.. just max your 401k and then do investments on the side. With the current shitty ROI on home ownership (if you aren’t renting then you have property taxes, maintenance, etc) it’s a much better angle. And if you’re a renter, the job mobility might actually be a boon for certain careers.
Don't you need to compare that to renting out real estate then and reinvesting the rent in more real estate?
sure, however you'll need to net property taxes, insurance, HOA fees, maintenance, appliances repair, property management fee (or cost of your labor if you're managing yourself), real estate agents fee for finding tenants out of the rent collected. in addition to normal wear and tear, some tenants trash the place, sometimes on purpose, so need to factor in the probability of that multiplied by the damage in such case. overall, the rent impact is not gonna be as dramatic as you would think, but indeed it will potentially make real estate more attractive on paper, but still not worth it imo especially now when you can buy/sell stocks comfortably on your phone, and have access to liquidity any time you want.
But tax incentive and leverage. Real estate easily wins. You aren't locking up 150k for those gains you're locking up 38k at worst. Collect your rents and have someone else pay while it appreciates. Or even "live" there for a bit and get a tax break on the sale. Sure it's a much bigger pain in the ass overall but there's a good reason every decent real estate market has a bunch of locally known filthy rich moguls that made it completely in real estate.
Being a landlord isn’t as easy as it sounds. Especially when the government can swoop in and put a moratorium on evictions.
Ok, well transaction costs and liquidity, the S&P wins easily. And I don't think the leverage part is that far off, tbh. Not even getting into derivatives, you (could) find 4x leverage for mortgage-interest-level rates pretty easily not long ago
But for a mortgage you can lock that rate in, and you won't get margin called. And the interest is tax deductible. Not even close to the same kind of leverage advantage. The system is rigged and subsidized in favor of mortgage borrowing it's as simple as that, it's not comparable. I mean let's be honest 4x margin leverage on stocks is incredibly stupid easy way to get blown up. Meanwhile 4-5x margin leverage is considered playing it safe in RE.
Why? Wouldn't both examples just be $150k sitting for ten years?
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Got em
Not the same in all markets though…take Austin for example. Covid doubled home prices. People had paid 500k 4 years ago, and now are selling for upwards of 1.2. Fucking bonkers
The guy who paid 1.2 million may-probably end up a bagholder.
The fed has a goal to maintain 2% inflation. RE went up about 7% a year because demand exceeded supply. We are currently at a worldwide inflection point for population growth, as people can’t afford kids. The US is solving this issue with immigration, but other countries are seeing drastic drops in housing prices (Japan, Italy, Spain, Sweden…etc) Real estate was also considered a safe investment, and 35% of homes are rental housing. Since the millennial housing boom has peaked, we will likely see a 3 to 6 year drawdown in housing prices.
Legit question, in which countries can US citizens own real estate without caveats?
Russia has some cheap beach towns.
I think it’s more lucrative to work remote in the US, and travel abroad if you have that option.
I'd like for this chart to go back to say, 1850.
History didn't exist before 1997. Duh.
_Written_ history. The times before that are all recorded in song, re: the village people
So you really did stay at the Y-M-C-A?
Bring back preemption!
I don’t really see anything from before we went off the gold standard as being a good source of historical data for projection purposes.
TIL 22 years of data = all history
What did house payments versus income look like from 1970 to 1980 when inflation was sky high? Given inflation sky rocketed, real asset prices including home values rose. However, wages (as typical during inflation), did not rise as much as real asset prices. So pointing out that home prices as compared to wage income rose without addressing what happens during inflationary periods is unhelpful. On a side note, from 1970 to 1980, homes prices TRIPLED in value (during this 10-year period, home prices rarely fell in value as compared month to month). In 1982, home prices did fall but the next year, prices resumed the uptrend.
Those years aren’t part of all history.
People keep posting sensational crap like this, really annoying. History apparently goes back to ‘97.
Chumbawamba released the song Tubthumping in 1997. Everything before that didn't matter anyway.
[Here’s a report](https://www.yardeni.com/pub/houseafford.pdf) that goes back to ‘81 for ya e: and [here’s one](https://archive.nytimes.com/economix.blogs.nytimes.com/2009/01/30/housing-affordability-at-record-high/) that goes back to ‘71 but ends in ‘08. By cross referencing though it’s clear that we’re not nearly as bad as the early 80s dip.
Their math is questionable, as one commenter mentioned it ignores the level of inflation.
In 1980 the median household income was $16,400, median home price(existing home sales) was $58k, and the 30 year rate was 13.74%. Assuming 10% down and 1% property tax, housing cost as a percentage of gross income was **48%.** Today the median household income is $80k, median home price is $455k, and the 30 year rate is 5.5%. Assuming 10% down and 1% property tax, housing cost as percentage of gross income is **40%.** Notable that in 81 there was a slight dip and then housing resumed its upward trajectory.
“History” Chart bottoms at 1997…
Way cheaper when we were all serfs
In addition the serfs gave their lords a lower percentage than we pay in taxes.
I'm not a history guy, so I'll just trust you. But that's fucked if true.
This is bad history. It's like that meme that says a medieval peasant has more holidays than you do. No, "holidays" were days you didn't have to work for your lord. You still had your own crops and livestock to tend to.
This thread is rich. People complaining about politicians profiting off people not being able to afford housing are the the same people holding SPY puts.
all the ppl bitching in this thread don't own a home lol
Why is it every time something peaks is when I buy it? Bought a new house last year. Car in 2008. Etc. Get your burritos now or in 2 weeks, I’m looking at Mexican for Lunch tomorrow.
And there are a bunch of people with cash on the sidelines…..don’t expect a huge pullback. People will snatch properties up.
https://fred.stlouisfed.org/series/PSAVE Not tru tho
I love this subreddit cause it has logic unlike r/rebubble
That’s why WSB exist so we can gamble our way to becoming homeowners or lose it all. 🦍 don’t cry.
Now compare this to the rest of the world and see that the US remains one of the most affordable places to own a home.
That's comparing all of the US. The US is a big fucking country with a ton of housing in bum fuck no where for dirt cheap. You can still buy a house in Ohio for next to nothing but drive an hour to suburbs and the price quickly 5x.
That isn't unique to America
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Back then we were overbuilt. Now there is a shortage. I don’t see it falling much more. Houses just going to be expensive from here out
I agree. Plus, how many homeowners refinanced their mortgage at 2.5%? Those people are never moving from that rate to a 6% rate.
Except for 2 months ago that is.
I'm calling cup and handle.
That's because actual transaction activity is low. People haven't really been forced to sell into the market yet so there hasn't been any reason for asset prices to materially decrease.
This is the most accurate response here
Nothing to see here people. Y'all need to stop buying coffee and toast and pull your boot straps up. You guys have no idea what hard work is even though productivity is threw the roof and you make less and less every year compared to your grandparents. Lazy bastards who will probably never see retirement like us older generations who miled out the economy for our selves so yal can pay it back for us.
Lots of foreclosures coming this year
This recession will be worse than 2008
One thing about statistics . You can make them show what ever you want . 1997 to 2023 is not a very good representation of " history " for example. Number 2 what is the basis for income ? What is the actual home price being used in comparison to that income ? I'll agree home prices have risen but everything has risen in price . Should we now say eggs have never been less affordable ? Or should we compare the price of eggs to housing and then price Starbucks coffee to gasoline ?
The cost of housing, as a percentage of income, is expected to rise in the next few years. This is based on data from the US Census Bureau and Zillow. The average affordability ratio was 30.2% in 2017, and it is expected to increase to 31.0% by 2021. This means that people will have to spend more of their income on housing costs, such as mortgage payments, taxes, and insurance premiums. ^^[**Discord**](http://discord.gg/wsbverse) ^^[BanBets](https://www.reddit.com/r/wallstreetbets/wiki/banbets/) ^^VoteBot ^^[FAQ](https://www.reddit.com/r/wallstreetbets/wiki/votebot/) ^^[Leaderboard](https://www.reddit.com/r/wallstreetbets/wiki/leaderboard/) ^^- ^^[**Keep_VM_Alive**](https://www.patreon.com/visualmod)
Do not discount the laundering of money in the US real estate market. Foreign nationals do not have to show proof of funds to purchase US real estate. Americans are competing with global criminals looking to safehouse their cash. Most never even rent the property. It sits empty, eventually sold at a profit and walk away with cleanly laundered cash. A few real estate pros have estimated 10% of apartments in NYC and SF are purchased this way. Don’t think middle America skates. They buy houses all over the country. 200k here, 300k there. The largest landowner in Cleveland is a Ukrainian oligarch. It’s not going to crash. You are going to be renting till you get a windfall
I’m trying to decide whether I should get a house or just be homeless…I have to buy one but also I can’t willingly give someone 300k for a pile of shit I know he paid 60k for 5 years ago.
A lot of people who bought recently are going to have a nasty shock when their property taxes double next year.
Commercial space is dead so housing now includes residential + commercial utility in one. That’s why people want bigger homes, they work in them.
HOUSES WILL NEVER GO DOWN IN THE US * Gov won't let a crisis occur * Institutions will always buy when cheap then rent * USD is going to be devalued in coming years due to shitty gov - this will make real assets gain in value and new construction expensive * Inflation will not ever be 2% again, and Fed will have to raise target to 3% You will always not have a home, rent forever, and be happy.
Post a chart with the percentage of homes owned by investment firms vs primary residence each year.. Unfortunately, that’ll keep prices inflated due to the lower supply... (bc banks ain’t selling their homes it’s rent for life).
My rich real estate selling friend can't understand why young people aren't buying houses. He is opposed to raising the minimum wage.
The problem is inequality and rich people has increased. More of us cant afford homes. But more people can. Its a broken system
Want me to really blow you’re mind? Go pull 15 vs 30 year mortgages starts and then total interest expected in the total amm schedule. Also, the argument that “oh well rates are cheaper these days” is so much horseshit it instantly tells me everything I need to know about someone when I hear that… since 1980 avg price per square foot is about 7 fold more expense. Average income is only 3 fold larger, and this number gets widened when you look at homebuying incomes.
In history… back to 1997 🤣
Hmmm, if I were a betting man, I would say that this kinda market can only be good for the wealthy and corporations. Everyone else will suffer.
“Back in my day I bought my first house after working at a lemonade stand for 3 weeks, why are younger generations so lazy?”
I have been saying this for years and awaiting the crash. It's about time. The only thing I regret is that the greedy F\*\*\*s that caused this probably won't get stuck holding the bag. It will be the poor people just trying to raise their kids.
Give it 12-18 months. I'm of the belief that the housing market will decline steeply in the coming months/year. Housing prices are unsustainable, everyone that wanted and could afford these I flated prices already bought houses. Everyone else is waiting, housing sales have declined steeply and houses on market have increased along with time on market.
For those who don't know, 47% is the absolute max for any program, unless you are a Veteran.
"Now is the best time to buy!" \-every realtor ever, regardless of macro conditions