It's the Worst Time to Buy a Home in a Generation for Americans, US Survey Shows(bloomberg.com)
bloomberg.com
It's the Worst Time to Buy a Home in a Generation for Americans, US Survey Shows
https://www.bloomberg.com/news/articles/2022-11-11/us-consumers-see-worst-housing-market-conditions-in-a-generation
37 comments
>Something happened to the world economy after mid-2010s where demand for real estate grew like crazy
r > g and low interest rates.
The tax regime is configured to allow wealth to grow faster than the real economy.
r > g and low interest rates.
The tax regime is configured to allow wealth to grow faster than the real economy.
My personal conspiracy theory is a coordinated submarine RE investing strategy from ultralarge private accounts, designed to destabilize Western economies.
The "obvious" answer of "housing bubble rollover" is so much more boring, though...
The "obvious" answer of "housing bubble rollover" is so much more boring, though...
It's not any one things, it's a multitude of things, but most importantly low interest rates.
There are always so much talk of rates, economics, NIMBYism. Concerning housing prices.
How about that people are not handy anymore? The alternative to expensive professional construction have always been "I'll build it my self with my father's or brother's help". Most people can't do that anymore. The same thing with fixing cars.
There is a shortage of handy people is my take.
How about that people are not handy anymore? The alternative to expensive professional construction have always been "I'll build it my self with my father's or brother's help". Most people can't do that anymore. The same thing with fixing cars.
There is a shortage of handy people is my take.
Have you tried to fix anything lately? Between ultrasonic welding, firmware, the disappearance of spare parts, and the who-needs-leisure-time-work-until-you-die mentality, and a general total complexity explosion, fixing stuff got hard. Hell, I have products in my house that I literally designed -- I'm on the patent, I have the full electronic and mechanical CAD, I have as much of the code as anyone, I have the bloody design documents, and I can't fix them because the moment I open one to get access to the goodies, it'll never go back together again. (That's just cost-engineering plus IP54 at work, nothing nefarious.)
So don't tell me I'm not handy enough. It's simply not 1952 anymore.
So don't tell me I'm not handy enough. It's simply not 1952 anymore.
I usually tries to fix stuff. Just this summer I fixed the timing relay on my coffee machine. But as you note many times you just have to give up or not even bother trying.
However houses are still pieces of wood nailed together. Maintenance of cars are still mainly mechanical parts you can replace yourself.
> who-needs-leisure-time-work-until-you-die mentality
Everyone I knew or know in the older generation that built their own homes took time off or quit to build for some months. Maybe that is harder today.
However houses are still pieces of wood nailed together. Maintenance of cars are still mainly mechanical parts you can replace yourself.
> who-needs-leisure-time-work-until-you-die mentality
Everyone I knew or know in the older generation that built their own homes took time off or quit to build for some months. Maybe that is harder today.
Houses are pieces of wood nailed together in such a way that they meet building code
Ye you need to know what you are doing of course.
My point is that houses are not like electronics were ICs have become like unsolderable for DIY due too small size SMDs.
I could do what a carpenter does, if I just were competent. Which I am not.
My point is that houses are not like electronics were ICs have become like unsolderable for DIY due too small size SMDs.
I could do what a carpenter does, if I just were competent. Which I am not.
I feel the same. Yet I know a couple, music teacher and beauty therapist, who built 2 houses themselves.
How did they handle wiring and HVAC? The foundation and drain tile?
My understanding is that you can pull the wires your self but should not connect them without a pro for insurance reasons.
And the foundation you need excavators and trucks with filler material and maybe concrete so you need external help with that.
And the foundation you need excavators and trucks with filler material and maybe concrete so you need external help with that.
All of that is pretty simple if you try. Especially the Wiring. You just need someone licensed to come hook up your breaker box.
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Most household projects are not that complex, and can be YouTube’d for guidance. One can save lots of money renovating by him or herself.
It’s about choosing how you spend your time after work…Netflix vs. adding equity. Moreover, the physical nature of the work nicely offset the sedentary nature of working in tech.
It’s about choosing how you spend your time after work…Netflix vs. adding equity. Moreover, the physical nature of the work nicely offset the sedentary nature of working in tech.
Yeah, it would be interested to compare annual spend on professional services versus TV consumption. I think the average ammerican now spends more than 40 hours a week watching TV, and social media consumption is on top of that.
You're right, though as someone with basic hand tool skills but poor instincts it isn't always easy to tell which projects are that complex before I make a mess of it.
I suspect you’re lamenting appliance or electronic complexity versus building construction?
I had a LED light driver fail so I replaced the high-voltage capacitor and now it works fine.
Small victory.
Small victory.
>> There is a shortage of handy people is my take.
I don't think that. The housing prices are so high due "network effects". The land costs more than the house and everyone wants the same land parcel. I would definitely buy a land parcel and build a nice house but that parcel's almost 4 times more expensive than 2 bedroom flat so I stick to the overpriced 2 bedroom for now.
I don't think that. The housing prices are so high due "network effects". The land costs more than the house and everyone wants the same land parcel. I would definitely buy a land parcel and build a nice house but that parcel's almost 4 times more expensive than 2 bedroom flat so I stick to the overpriced 2 bedroom for now.
There’s also an explosion of building codes and inspection requirements that didn’t exist in the 50s.
The inspection requirements only exist if you pull a permit.
Harder to get away with if you’re building a whole house, but if you’re just DIY’ing something boring no one can see… you should consider your options.
Harder to get away with if you’re building a whole house, but if you’re just DIY’ing something boring no one can see… you should consider your options.
How about insurance? Can that mess you up since mortgage requires your house to be insured.
In 1970s Oregon, I knew four cases where a guy built a house for his family over a few years. They were all outside town. I haven't heard of such projects for a long time, but then I live in town and don't hang out much with that age group.
It’s illegal to do it yourself in many places.
In the US, it is not illegal to do work yourself anywhere. However, all work needs the proper permitting and inspections, which a layperson does not have experience doing.
So on top of learning how to do the work, you also have to learn how to do the paperwork, and know what will and will not pass inspection. At which point, many people decide they might as well hire a professional.
So on top of learning how to do the work, you also have to learn how to do the paperwork, and know what will and will not pass inspection. At which point, many people decide they might as well hire a professional.
Article appears to be paywalled, but as a real estate agent...I'd say "it depends." For example, I had a monied client reach out to me this morning to say they are going to sit tight for a year and plan to buy in 2023+... well, for that kind of client, in my market, now would be a great time to buy (assuming they have the money) because there's more inventory than anytime since 2019 and sellers are somewhat motivated by fear of the unknown. For middle-class / average income buyers, sure the interest rates are worse than they have been, but potentially better than they could be in the future. At the same time, I don't see house prices dropping in my market in real terms - so might as well buy now rather than buy at a $25-50K increase 12-18 months from now. I was warning a lot of buyers that our local market was going to squeeze the working class right out of the area, and that continues as a trend. Again, every market is going to have its nuances.
> as a real estate agent
> now would be a great time to buy
> might as well buy now
Don't you have to say that?
For you it's always a perfect time to buy (or sell if you're a seller's agent).
> now would be a great time to buy
> might as well buy now
Don't you have to say that?
For you it's always a perfect time to buy (or sell if you're a seller's agent).
There are a lot of really bad real estate agents, so I understand why you would feel this way. The good ones will act as trusted fiduciaries. Much of 2021 I was telling my investor clients to walk away from some of these houses that didn't make financial sense and to look in other places within our market. At the same time, I was advising my first-time buyers to get off the fence before rates went up and they got priced out of the market. Real estate is no different than any other asset class - there are going to be some products that make sense for some category of buyers, regardless of the bigger market picture. And, there are always going to be people who need to buy / sell for reasons where they don't get to choose their market (IE: mom passes away we need to sell her house, job change, divorce, etc) and it's my job to help get them the best possible outcome.
I'm guessing you are in the USA. How does one find an agent capable of giving more sophisticated advice on finances and the local market?
None of this is exactly rocket surgery, but here’s the gist of what I try to do when I need to refer a client to someone in another market…
Try to understand their business. Every agent should be able to explain their niche within a market and their unique value proposition. This is a straightforward way to separate the professional agent from the “accidental” agent. Speaking candidly, there are a lot of people who fall into the business chasing dollars who have a very limited range of skills. Unfortunately, you can make it in a lot of markets on personality, even if your clients are getting utterly screwed on all the things that actually count, IE: pricing, overall market analysis, negotiating, understanding local regulations (zoning, water, environmental, etc).
Listen to how they describe their market. I was talking to a “top performer” in my market the other day who was still regurgitating the same story from a year ago about “low inventory” when in fact there’s more inventory at every price point than at any time in the past three years. I’m certainly if I had decided to challenge their statements that they would have had no idea how many properties are on the market and that have taken price cuts in the past 30 days. A lot of those top performers are really good at churning deals rather than actually serving their clients. And, they may do a lot of business because they are willing to work for a low commission: if they won’t even fight for their own commission, why should you believe they are going to work hard at the negotiating table for you?
Finally, find someone who communicates with you in the way and at the pace you want. If you find it difficult to talk with them and to express what you need / get the info you need, it’s only going to get worse when you are in the middle of a transaction.
Hope that’s useful!
Try to understand their business. Every agent should be able to explain their niche within a market and their unique value proposition. This is a straightforward way to separate the professional agent from the “accidental” agent. Speaking candidly, there are a lot of people who fall into the business chasing dollars who have a very limited range of skills. Unfortunately, you can make it in a lot of markets on personality, even if your clients are getting utterly screwed on all the things that actually count, IE: pricing, overall market analysis, negotiating, understanding local regulations (zoning, water, environmental, etc).
Listen to how they describe their market. I was talking to a “top performer” in my market the other day who was still regurgitating the same story from a year ago about “low inventory” when in fact there’s more inventory at every price point than at any time in the past three years. I’m certainly if I had decided to challenge their statements that they would have had no idea how many properties are on the market and that have taken price cuts in the past 30 days. A lot of those top performers are really good at churning deals rather than actually serving their clients. And, they may do a lot of business because they are willing to work for a low commission: if they won’t even fight for their own commission, why should you believe they are going to work hard at the negotiating table for you?
Finally, find someone who communicates with you in the way and at the pace you want. If you find it difficult to talk with them and to express what you need / get the info you need, it’s only going to get worse when you are in the middle of a transaction.
Hope that’s useful!
I think the opposite, house prices will almost halve.
Completely depends on the market. A 45 minute drive from my locale in any direction is a totally different market, with differing prices, inventory, and local nuances. To the east - that area didn’t see prices increase much over the past few years. To the south - been a very steady but gradual increase. Locally, prices basically doubled in a three year span, but are now in a holding pattern. Your market is likely entirely different from mine and you could be completely right in your hypothesis.
This is my take. The fed seems interested in cutting housing prices, and I'm not one to bet against their ability to do so.
Good luck getting a bank loan for around half a million dollars to buy a three bedroom apartment in a country where the average income before taxes is well below €50k/year.
Something happened to the world economy after mid-2010s where demand for real estate grew like crazy as a kind of store of value/hoarding investment. The scapegoat keeps on shifting, from Airbnb to work-from-home to whatever lame excuse, but it's the same phenomenon everywhere.