Most homes for sale in 2023 were not affordable for a typical U.S. household(text.npr.org)
text.npr.org
Most homes for sale in 2023 were not affordable for a typical U.S. household
https://text.npr.org/1221480443
95 comments
If a bunch of butchers got together and lobbied to prevent any new butchers from opening up in the neighbourhood, we'd call it anti-competitive collusion. Yet it's apparently fine for a bunch of home-owners to get together and lobby to prevent any new home building in the neighbourhood. People with a vested interest in limiting housing supply (in order to increase the value of their own properties) should not be allowed any significant input into decisions regarding the construction of new housing.
> People with a vested interest in limiting housing supply (in order to increase the value of their own properties) should not be allowed any significant input into decisions regarding the construction of new housing
So if someone opposes a new housing development in an area where only well water is available because the local aquifer can barely support the existing houses in years of low rain, they don't get any significant input just because stopping the development would also raise the value of their house?
So if someone opposes a new housing development in an area where only well water is available because the local aquifer can barely support the existing houses in years of low rain, they don't get any significant input just because stopping the development would also raise the value of their house?
I don’t want to limit the housing supply around me to increase the value of my house. I want to limit the housing supply of my neighborhood to prevent it from becoming an unlivable hellscape.
Yeah, at this point I'm never going to move again, so the value of my house going up is not enticing to me (because it increases my taxes and I don't plan to sell). Nevertheless I still don't want a five story apartment complex to be built just south of my vegetable garden.
Are urban homes "unlivable hellscapes" now?
They are! Haven't you seen your two minutes of San Francisco hate on Fox News today, citizen? You'd best report to your local GOP town hall for reeducation at once!
Sometimes, yes. But there's no reason to strawman the parent - developers are not benevolent. They just want to meet demand, even in the cases where the demand is only because an area is desirable, not because the alternative is the streets. Even in cases where that demand can only be met by destroying communities full of existing human beings who have worked hard for decades to attain the simple dream of living in a middle class home in a reasonably nice environment.
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Managed methodical growth can be more liveable than suburban stroad hellscapes, with the advantage that children aren't forced to move far away or sacrifice their finances when they come of age.
Yes, NIMBYs tend to have creative rationalizations for their behaviors.
Hey, man, at least I have a back yard.
Well, what about your own dwelling. Each of your rooms can house one additional family. And yes, I am counting a living room and a dining room too:
Communal apartments (Russian singular: коммунальная квартира, romanized: kommunal'naya kvartira, colloquial: kommunalka) are apartments in which several unrelated persons or families live in isolated living rooms and share common areas such a kitchen, shower, and toilet.[1] They generally lack privacy.
Well, I’ve lived in a communalka without a shower, a toilet was outside. These are bourgeois luxuries, they increase price of the house.
Communal apartments (Russian singular: коммунальная квартира, romanized: kommunal'naya kvartira, colloquial: kommunalka) are apartments in which several unrelated persons or families live in isolated living rooms and share common areas such a kitchen, shower, and toilet.[1] They generally lack privacy.
Well, I’ve lived in a communalka without a shower, a toilet was outside. These are bourgeois luxuries, they increase price of the house.
> Well, what about your own dwelling. Each of your rooms can house one additional family. And yes, I am counting a living room and a dining room too:
You own your own house; you don't own the land around it, and you should have no right to tell other people what to do with that land.
You own your own house; you don't own the land around it, and you should have no right to tell other people what to do with that land.
> Each of your rooms can house one additional family. And yes, I am counting a living room and a dining room too
laughs in San Francisco
Who can afford not to have roommates living in a converted living room and in the dining room? I probably know a couple rich people who don't, but most people I can think of don't have the luxury of a dining room or a living room. Certainly not both!
laughs in San Francisco
Who can afford not to have roommates living in a converted living room and in the dining room? I probably know a couple rich people who don't, but most people I can think of don't have the luxury of a dining room or a living room. Certainly not both!
Right direction to go, comrades!
Now, start dismantling the shower and the toilet - save the Earth.
Now, start dismantling the shower and the toilet - save the Earth.
It's really rich being on HN having everyone seemingly not understand that non-exclusionary communities don't scale. You can't take a good neighborhood and make it bigger and keep the good, you just regress to the mean.
We all have watched the enshittification of everything in the pursuit of scale and profits from everything from social networks and subcultures to appliances but somehow forget that the high buy-in either in the form of investment in the community in early stages to the extremely high price in the later stages is what makes it work. In places where there is legitimately nowhere to start a new community sure, but the loudest complainers about housing affordability in my area ignore there there are sub $300k, $200k and even a few sub $100k houses right fucking next to the $600k houses. You could break one of their windows with a stray baseball they're so close. You just think that living there is beneath you.
If you don't have dollars you're supposed to pick somewhere cheap to live and put in the work instead to make it the next good neighborhood but seems like the people complaining want good cheap and easy.
We all have watched the enshittification of everything in the pursuit of scale and profits from everything from social networks and subcultures to appliances but somehow forget that the high buy-in either in the form of investment in the community in early stages to the extremely high price in the later stages is what makes it work. In places where there is legitimately nowhere to start a new community sure, but the loudest complainers about housing affordability in my area ignore there there are sub $300k, $200k and even a few sub $100k houses right fucking next to the $600k houses. You could break one of their windows with a stray baseball they're so close. You just think that living there is beneath you.
If you don't have dollars you're supposed to pick somewhere cheap to live and put in the work instead to make it the next good neighborhood but seems like the people complaining want good cheap and easy.
> You can't take a good neighborhood and make it bigger and keep the good
I suppose this is true, but I don’t feel like it contradicts the option of: instead of making a good neighborhood very large, building many small neighborhoods. This was the principle of the scaling of the Web back when it was agreed to be pretty good, and it is in a sense the principle of the scaling of the United States (and most governments). As an added bonus, most people would live closer to places to work and shop, since each neighborhood must necessarily have those, rather than being in the far-flung reaches of sprawl.
The only trick then, I guess, is the neighborhoods do need to be small.
I suppose this is true, but I don’t feel like it contradicts the option of: instead of making a good neighborhood very large, building many small neighborhoods. This was the principle of the scaling of the Web back when it was agreed to be pretty good, and it is in a sense the principle of the scaling of the United States (and most governments). As an added bonus, most people would live closer to places to work and shop, since each neighborhood must necessarily have those, rather than being in the far-flung reaches of sprawl.
The only trick then, I guess, is the neighborhoods do need to be small.
That's a false equivalency.
In a democracy, voters are free to vote themselves in to oblivion (ie price out their children) or profit off non-voters (ie those that want to move in).
In a democracy, voters are free to vote themselves in to oblivion (ie price out their children) or profit off non-voters (ie those that want to move in).
Why aren't butchers Ina democracy?
I smell hypocrisy and double standards
I smell hypocrisy and double standards
If real estate companies/landlords sneak in favorable legislation by buying favor with politicians, that would count as collusion. Same as butchers.
If the citizens of an area freely vote for legislation that aligns with their common good, perhaps over people who are not citizens of that area... how is that collusion in any sense of the word?
If my state votes for stringent data privacy regulations, is that "colluding" against foreign companies? What about banning types of mining, agriculture?
If the citizens of an area freely vote for legislation that aligns with their common good, perhaps over people who are not citizens of that area... how is that collusion in any sense of the word?
If my state votes for stringent data privacy regulations, is that "colluding" against foreign companies? What about banning types of mining, agriculture?
Could you please suggest any mechanism for limiting anybody’s input into decisions?
Remove zoning laws/building permits, so people can build what they want on the land they own (assuming it doesn't breach any federal safety regulations etc.).
Houses arent retail businesses. They are your home. The citizens of a community have an absolute right to control the direction of their community - and aspirational transplants have no right at all.
The future ….. indeed the present in many cities ……. is all housing is owned by the rich and mega corporate landlords and if you are not one of them already then forget ever owning.
> Future
Present.
Present.
This was literally the reason I became a landlord. All the houses on my street were being rented. Why work when I can get a management company that will give me 2.5x my mortgage each month so I can rent in a big city.
> Why work when I can get a management company that will give me 2.5x my mortgage each month
I don't believe this. What city and neighborhood?
It is very difficult to find a rental property you can buy and be slightly profitable, let alone 2.5x.
Where?
I don't believe this. What city and neighborhood?
It is very difficult to find a rental property you can buy and be slightly profitable, let alone 2.5x.
Where?
How do you feel about that choice, ethically?
Why would it feel any different than renting out any other piece of property, ethically? If I rent my car to somebody, is that unethical?
I'm talking about the "not working while living off the income of other people" aspect. Because when poor people do that they're called freeloaders and welfare queens.
So any passive income is unethical? Receiving interest from your bank deposits is something to be ashamed of?
Indeed, by this logic no one should be able to retire, as the primary means of doing so, using accumulated investments, exists due to others' continued work. Even social security payments are simply the current tax base funding retirees' spending.
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It all depends on what you think about capitalism, which is the social theory that the key determinant of what happens to resources is who owns them
If you are OK with that then living off rent is a natural conclusion
Me, I am not "anti capitalist" (a silly identity many of my comrades have adopted) but I believe capitalism should be an economic theory that society restricts to where it is useful and away from where it is harmful
If you are OK with that then living off rent is a natural conclusion
Me, I am not "anti capitalist" (a silly identity many of my comrades have adopted) but I believe capitalism should be an economic theory that society restricts to where it is useful and away from where it is harmful
> If I rent my car to somebody, is that unethical?
Possibly
If you find a car dependant market where you can rent clapped out bangers at high prices
I do not know what sort of land lord you are, but there are plenty that do exactly that
Possibly
If you find a car dependant market where you can rent clapped out bangers at high prices
I do not know what sort of land lord you are, but there are plenty that do exactly that
Well you know what they say, better to be capital than the opposite.
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So, feudalism then?
Yeah it's crazy out here. It looks like the low interest rates of 2020 seems to be the cause of the low availability and since those are fixed rates, it incentives people to not sell lowering houses on the market even more.
So build more housing.
Builders won't build at 7% interest rates ironically.
Real estate lobby hasnt/wont let that happen
My house has roughly doubled in value in the Phoenix area in the 5.5 years since we bought it. We couldn’t afford it today if we were buying new.
Perhaps the area is underzoned
Not really. The east side of the area where I live is bounded by mountains, so can’t really expand more. To the southeast they are putting in thousands of starter homes. I’m not sure where the water is going to come from.
The problem is twofold - one issue is there is a lot of the real estate tied up being used only during the cold weather months from snowbirds. The population goes up by roughly a third then. The other issue is folks moving here from other states, primarily California. The influx has greatly exceeded the rate of new construction.
The problem is twofold - one issue is there is a lot of the real estate tied up being used only during the cold weather months from snowbirds. The population goes up by roughly a third then. The other issue is folks moving here from other states, primarily California. The influx has greatly exceeded the rate of new construction.
By underzoned, I meant building up not out. Sprawl is not a long-term answer to any growth challenges.
The high interest rates make all the difference. In Germany the interest rate for a house loan quadrupled over the last 2 years. 2 years ago you had to pay 2k per month for a 500k loan, while 0.6k of that was interest. Now 2k per month became almost 4k for the same loan.
This already lead to a small drop in prizes at least.
This already lead to a small drop in prizes at least.
How timely as I just read this about the German market: https://wolfstreet.com/2023/12/24/qe-giveth-qt-taketh-away-g...
They're not affordable for FANG employees. According to levels.fyi an L5 at Google makes $349,163, of that they'll keep 60% after taxes so 209k. It sounds like a lot (and it is in comparison to people making less) but a 1bd apartment costs > $1 million almost anywhere near one of those jobs. You need to pay rent until you've saved $200k-$400k which will take 5-6yrs and then you buy a 1bed apartment and pay $7000-$9000 a month (apartment + hoa) (seen HOAs as much as $3k a month!).
AFAICT the only way they can do it is as a couple or down payments from family.
If you wonder why traffic is so bad, it's because the only places affordable are 90 minute commute
AFAICT the only way they can do it is as a couple or down payments from family.
If you wonder why traffic is so bad, it's because the only places affordable are 90 minute commute
A FAANG engineer with a take home pay of $200k/yr should be able to save, let's say, $50k/yr. that still leaves $150k/yr, or $12,500/month to spend on housing, doordash, groceries, entertainment, and other savings. Which should be plenty, but maybe I'm not spending enough on Doordash. After 4 years, they'll have $200k saved up.
Here's a million dollar, 1 bed condo, and its HOA is $600/month. I don't doubt that there are HOA's charging $3,000/mo, but that's not remotely normal. If you put $200k down, that's 20%, so you have a mortgage of $800k. At today's interest rates of 6.358% on a 30-fixed, that's $6,062+$600 HOA/month. Which is a lot higher than a couple years ago, but that's a whole other thing.
Since they're no longer saving, their take home of $209k - $6700*12, leaves them $128k/yr, or $10,700/month to pay for food and entertainment and savings. Again, maybe I'm not spending enough on entertainment, but $10k month seems a lot to me, enough to survive on, at least.
https://www.zillow.com/homedetails/400-Avila-St-APT-102-San-...
Of course this is San Francisco, and housing goes for over-list-price, so here's an $800k condo.
https://www.zillow.com/homedetails/417-Carl-St-San-Francisco...
Both of these are in reasonable neighborhoods, though everyone's got an opinion about which neighborhood is the best.
Here's a million dollar, 1 bed condo, and its HOA is $600/month. I don't doubt that there are HOA's charging $3,000/mo, but that's not remotely normal. If you put $200k down, that's 20%, so you have a mortgage of $800k. At today's interest rates of 6.358% on a 30-fixed, that's $6,062+$600 HOA/month. Which is a lot higher than a couple years ago, but that's a whole other thing.
Since they're no longer saving, their take home of $209k - $6700*12, leaves them $128k/yr, or $10,700/month to pay for food and entertainment and savings. Again, maybe I'm not spending enough on entertainment, but $10k month seems a lot to me, enough to survive on, at least.
https://www.zillow.com/homedetails/400-Avila-St-APT-102-San-...
Of course this is San Francisco, and housing goes for over-list-price, so here's an $800k condo.
https://www.zillow.com/homedetails/417-Carl-St-San-Francisco...
Both of these are in reasonable neighborhoods, though everyone's got an opinion about which neighborhood is the best.
You realize you're talking about a 1bedroom apartment, not a single family home. It shouldn't require an L5 job at FAANG to just barely be able to afford 1bedroom apartment.
L5 at google here, your numbers are a bit off. I’m in Seattle, so you can still get a one bedroom condo for $600k or so. HOA will top out at $1k, for a new place, it’s often much lower for those $600k places, like $300/month. I saved for my down payment while working for Microsoft in Beijing: rent is pretty cheap, even if a 1 bedroom apartment sells for $1m, you can rent it for less than a thousand a month. I did make less in China than what a level 64 would make in the states, but my expenses were pretty low.
I bought 3.5 years ago, today it would be much harder, I would have sell some stock to put more in a down payment to make my mortgage payment more reasonable. It also helps that my SO works as a designer for another FAANG.
I bought 3.5 years ago, today it would be much harder, I would have sell some stock to put more in a down payment to make my mortgage payment more reasonable. It also helps that my SO works as a designer for another FAANG.
> today it would be much harder,
> It also helps that my SO works as a designer for another FAANG.
Thanks for confirming my point :)
> It also helps that my SO works as a designer for another FAANG.
Thanks for confirming my point :)
Well this had to happen once. You can't increase home sizes indefinitely and expect them to stay affordable. I'm sure that a lot more families could afford 900 sqft homes/apartments.
Why is that? Why cannot dwellings become higher value and decrease in cost?
The market will always just prefer even more value and costs will rise? Somehow we’ve reached a weird equilibrium since the market still hasn’t crashed (yet). In contrast, Japan goes for relatively cheap structures since they will be torn down in 20-30 years, it definitely makes renovations easier when you just raise and build a new house.
Prices and sizes are completely unrelated.
Yes, seriously. Come check the 600 sqft, 80+ year old shitboxes in Los Angeles that sell for 800K+.
Does a 2,500 square foot new house in the same neighborhood typically cost more or less than the 600 square foot 80 year old one?
Almost no one builds new houses in Los Angeles, outside those in the wealthiest of neighborhoods, so I couldn’t tell you.
> Prices and sizes are completely unrelated.
Evidence please. Very cou ter intuitive
Evidence please. Very cou ter intuitive
For starters, prices are highly dependent on the area where homes are built, e.g. I could afford a significantly larger house if I moved 20Km away from where I am now.
Square footage price is thus set in accordance with the local market. The obvious issue here is then that someone has enough buying power to ransack the market, leaving most individual buyers behind.
If you were to build two or three homes in the place of a current one, that issue would remain.
Square footage price is thus set in accordance with the local market. The obvious issue here is then that someone has enough buying power to ransack the market, leaving most individual buyers behind.
If you were to build two or three homes in the place of a current one, that issue would remain.
Isn't this just moving the goalposts? Yeah, you could buy even cheaper and bigger home if you'd move to rural Afghanistan, what a surprise. Ceteris paribus, bigger size == bigger (total) price, there's no way around it.
I have started to see more cheaper builds pop up in my area and it totally makes sense. I suspect we will see a shift or at least some segment of builders starting to build these smaller less expensive homes.
1500sqft seems like a pretty obtainable size for the average American.
1500sqft seems like a pretty obtainable size for the average American.
I see responses saying that we need more housing, but does that really fix the problem? Landlords will keep buying up the available houses and renting them out as long as they can keep raising rents, which they can since... people can't afford to buy houses. It's not clear to me how building more houses changes anything.
Landlords do not have infinite capital, and there is not infinite demand by renters. As supply approaches or exceeds demand, rent-seekinf margins are forced down.
That does not happen until people are living in grinding poverty
We have seen that over and over
Housing in most western economies is where the market most obviously fails the people
We have seen that over and over
Housing in most western economies is where the market most obviously fails the people
The principle of supply and demand doesn’t just magically turn off when talking about the price of housing. It’s very clear that there is a shortage of housing in places people actually want to live, and this is a huge driver in the price of housing in those areas increasing.
If you raise the price of tea, at some point I'll stop buying tea. If you raise the price of housing, I don't stop needing a place to live. "Supply and demand" is the "friction-less, mass-less pulley" of econ: a simplistic principle for a hypothetical world.
It's simple, you will move, either voluntarily or be forced to via rising costs. I know many people who lived in high cost of living areas that now live in lower cost of living areas. Yes, they had to find new jobs and new friends, but that is really no different than any other time in human history.
This is not to say that we should not build more housing so as to increase supply and thus lower prices, of course.
This is not to say that we should not build more housing so as to increase supply and thus lower prices, of course.
You also need food to live, but the principles of supply and demand seem to hold quite well for such goods. You can go ahead and call these principles simplistic but it doesn’t mean they are wrong in broad terms.
The elephant in the (property market) room is demographics
With populations declining for the first time in centuries, everywhere, over the next few years there will be a surplus not a shortage of houses.
Not much good for current twenty/thirty somethings, they have been royally screwed by the greed head baby boomers.
But it will cause all sorts of unpredictable things to happen in the property market
Because of the blindness of capitalism the property market is a big chunk of the economy
Interesting times
With populations declining for the first time in centuries, everywhere, over the next few years there will be a surplus not a shortage of houses.
Not much good for current twenty/thirty somethings, they have been royally screwed by the greed head baby boomers.
But it will cause all sorts of unpredictable things to happen in the property market
Because of the blindness of capitalism the property market is a big chunk of the economy
Interesting times
US has a big net flow of immigration to replace lost population.
Surplus of houses is quite unlikely.
Surplus of houses is quite unlikely.
Build more houses then
Sure, but who can afford them? We're building a house right now... My god it is expensive.
Indeed. We also acquired a lot and are getting bids to build a modest 3 bedroom house for us and two kids. People saying “build more” seem to be under the impression that construction labor and materials are cheap and we’re just refusing to do it.
Single family housing is not the way that you’d build your way out of this. You need all sorts of housing, like the missing middle of affordable townhouse style units with one or two bedrooms and no onsite parking.
It’s going to take decades to get out of the system we’ve built for ourselves with sprawl and the automobile. Until it’s possible to build in volume and cheaply you won’t see prices go down because there so much pent up demand.
It’s going to take decades to get out of the system we’ve built for ourselves with sprawl and the automobile. Until it’s possible to build in volume and cheaply you won’t see prices go down because there so much pent up demand.
The market is not how you build your way out of this. You need state-backed construction on a postwar scale, bans on corporate investment in real estate, abolition of zoning, and myriad other interventions that are blocked at every step by people looking to profit off their neighbors being forced into the streets.
> state-backed construction on a postwar scale
One more innocent question: Should our state build enough houses just for existing population or for all South America population too?
One more innocent question: Should our state build enough houses just for existing population or for all South America population too?
You forgot one crucial step in that book: nationalize all the housing and pack more families into the existing units.
Pretty sure you can increase supply without having to resort to building shitty Khrushchevkas for everybody.
Shhh! I would pay to watch America moves this way.
I’ve lived in a country without sprawl and without the automobile. I’ll watch with great interest if this country moves in that direction.
The country as a whole is one thing, but San Francisco has been putting in a lot of time and money into creating bike-friendly infrastructure, and in some cases, succeeding. We'll have to see how the local culture adopts it, but, especially with ebikes, theres a future where the automobile's dominance wanes.
Don’t worry, after a couple of decades of spikes in homelessness, property crime, and every hospital worker, educator, and bus driver being driven out of cities, the housing will trickle down to those who can afford it. We just need to let the market do its job.
Urban SFH needs to be replaced with the missing middle of housing. 4-5 stories, larger mixed-use buildings
Building more SFH on the peripheries is fine for people who want that, but it's not part of the solution to lowering prices.
Building more SFH on the peripheries is fine for people who want that, but it's not part of the solution to lowering prices.
Anyone with enough money to do that is investing it into making the shortage profitable for them.
Where? Sure there is plenty of empty land in the USA but that’s just it: there’s nothing there so nobody wants to live there.
In these conversations, there is a lot of slipping back and forth between the idea of people being unable to have a home, and the idea of people being unable to have a home where they would like to. They are different problems, and, while I am not trying to minimize the latter, the former is both worse and more solvable, yet we spend most of the conversation getting into emotional arguments about the latter.
You realize there exists a third dimension, right? You can simply build higher.
Perhaps their owners at the time couldn’t afford them either? I wonder how many of them were subsequently foreclosed.