The Entry-Level House Has Become a Myth, Few Can Afford Them
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24 Comments
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1 year ago
When the sole and only purpose of all and every “government” and “law,” is to keep the nggas indentured, bent over and toiling for the benefit of connected backmarkers too incompetent to create a ham sandwich on their own; is it really all that surprising that what may be a step out of indentured servitude, is being made increasingly unavailable?
Reality is that that far and away most of those who are current “home owners” in San Francisco (perhaps including someone I know, depending on one’s perspective…), can’t create anything particularly useful. Never could. Hence totalitarian government preventing more competent people from competing with them in anything resembling a free market, would quickly ease all and any privilege their currently protected-from-competition status affords them. All they have, is bans on competitors’ entry; and a central bank force feeding wealth other people had to work for to them.
1 year ago
The United States (and the rest of the world) would be much better off if housing prices collapsed 50%, mortgage rates were 10%, interest on a T-bill was 7%, and housing prices increased at maybe 2%. If we had sound monetary policy this might be possible. The reason that the above scenario would be good is that young people could actually save for a home without the home price appreciating faster than they can save. With our current monetary policy interest rates are low and housing prices increase faster than either interest on savings or wages. Eventually there will either be a big crash in home prices or a big crash in the dollar.
1 year ago
Unfortunately there will also be a big crash in young people that can’t afford to make more.
1 year ago
good analysis. the post ww2 decades were the aberration, not the norm. in the 40s to 70s, the village idiot could drop out of HS and buy a house in his early 20s………being a knucklehead for the rest of his life. that was a unique time in world history. we are back to normal in this empire, that might seem depressing for middlebrows used to the tales of recent past. but alas it is not.
1 year ago
They’re not building them like they used to…. Mandated fees, architectural reviews, engineering, inspections, insulation, special windows, automatic bathroom fans, sprinkler systems, solar, materials restrictions, disposal restrictions, insurance, work rules, etc… The fixed costs layered on by government are a big entry barrier.
Now add inflated labor and materials costs. You can’t build cheap housing anymore.
But the only days when value is important is the day you buy and the day you sell (or die).
1 year ago
value is always important. It is PRICE that only matters when you buy or sell. That is why I am not worried if the neighbors rundown place down the street reduces the “market” price of my home and the taxes I get charged based on that lower “market” price. The value to me doesn’t change one bit
1 year ago
When I was young, ( Rather a very long time ago. ) a house was actually a home, not an investment vehicle. It is interesting how it has become, for many, the means to make some significant money. Unfortunately, the unintended societal consequence is now smacking us in the face.
If only we humans could accurately predict the entailment of our choices….
1 year ago
a house for dwelling is just consumption. like food and clothing. when one becomes a r/e investor for profits, the houses become your factory/farm, and the tenants your customers……..
1 year ago
It’s like they say location location. If one wants to live in one these sh*ithole cities then no there isn’t. I know you don’t like Illinois Mish but I live in Southern IL and work for a University and will be purchasing a nice 2000sf home for 125k. Taxes be damned this place is a paradise compared to Backwater Portland OR where I came from. I one wants live in a cracker box that cost 600k with junkies poopin in your front yard, then move to Portland.
1 year ago
At a glance, Fred housing inventories and real home prices tell us we’re repeating the ’08 scenario, until you glance at real wages relative to ’07 as well as job openings and unemployment.
Then minus the sub-prime loan/CDO problem of ’08.
There’s no question housing/real estate are going to slump, this slump is by Fed design, it’s intentional and we all know this.
According to the Fed’s dual mandate, we only have one problem right now, inflation, Employment’s far from a problem with 10mil job openings in the last JOLTS causing a problem with wage inflation.
I may be giving the Fed too much credit here (Insert “Kill the FED” euphemism here), but it seems like they know to look at the most immediately affected sectors to help forecast the effectiveness of current rates.
This is my inner contrarian talking, when everyone’s onboard the same thesis, herd mentality, I look for cracks, ’08 taught me that lesson.
1 year ago
bingo. today’s situation is more akin to post ww2 inflationary period of 1947 to 1949. jobs plentiful and pent up printing press money being spent after covid(insert ww2) lock down. this ain’t the 70s. prices could fall in r/e 50% and still be overvalued………for most.
1 year ago
They should not expect to purchase a home until he has made partner and she has a three-book contract.
Or they sell some Bitcoin and buy with cash.
1 year ago
Bitcoins are bright and shiny, don’t discount that valuable metric.
1 year ago
ha ha ha.
1 year ago
There are plenty of starter homes in Chicago, with some available for $1.
But there may be some expenses that go with that rock bottom price. Personal bodyguards, kevlar, bulletproof glass windows in the car, an armory and…property taxes.
1 year ago
You forgot the decontamination equipment and hazmat suits.
1 year ago
During every rally I have accumulated more puts. I have puts on Lennar, DR horton, Beazer, KB, and XHB to name a few all for January 2024 expiry. I have visited the website of all these home builders and they all have ‘one time incentives’ to clear out huge inventory which I suspect will turn into ‘many time incentives’ over the next 6 to 12 months. The incentives are often 30 to 50k or more, that should do wonders for balance sheets and cash flow statements.
JPOW won’t let me down next week 😉
I will live or die by these puts but you only live once.
1 year ago
Where I live there are lots of affordable starter homes. 2-3 BD 2 BA condos or townhomes built in the 80s with below average school systems for under $400k. Immigrants are fine with these, but for those who grew up in the US, it’s beneath them.
1 year ago
the native born amerikan middlebrow is a brat. for the past 75 years and getting worse. this is obvious. glad my village of brooklyn has 65% immigrant working population………..such better outlook on life.
1 year ago
Back in the 40s they didn’t call them starter homes. It was just their home for life. Today, everyone thinks their home purchase is an investment.
1 year ago
The banking mafia ran out of ideas how to make money. Then the idea came to push home as investment, and arrange for relevant legislature. Voila, here we are.
1 year ago
People who refuse to think for themselves get exactly what they deserve. We never learn. This need people have to follow others so they won’t have to be responsible for their own lives is the greatest cause of suffering that I know. If you give up your own power to submit to another, you toss your fate to the winds. And look at those they submit to. S&M ain’t got nothing on a statist slave.
1 year ago
Oops, wrong article, sorry
1 year ago
Watch DIY TV, A few 2×4’s, some plywood and – voila!