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Comment by jcomis | Hacker News Reader

I think the reality will set in soon on this once the CARES bonus UI is removed (and if it is not replaced) and the PPP loans run out. Right now everyone I know in real estate is still convinced it was just a minor blip and love to cite cherry picked stats about how a recovery is already under way.

Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs.

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Two things:

1. The consequences of having millions of unemployed people with bills to pay and no income are too much for a nation, let alone politicians in an election year. My bet is that the payments will be extended or replaced with something as the alternative is not viable.

2. WFH has already started normalizing, and will shortly become a differentiating perk offered by companies. I don't suspect that may of the people living in tech hubs would choose to continue doing so if they had the opportunity to live anywhere they wanted (of course while considering COL adjustment).

Cash strapped employers in high COL areas could end up lowering costs by just hiring remote workers from low COL areas who've just been laid off.

I wouldn't take #1 for granted. The Trump administration is still pushing ahead with the idea of limiting the ability of states to waive the work requirements of SNAP (food stamps), which seems like a bizarre thing to attempt at the moment.

If you're willing to halt people's food benefits during a historic recession, almost anything seem possible.

> Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs.

I've been noticing this as well (I can still find some of them on Airbnb actually).

I'm currently in the market for a house, but wondering if waiting a year might be a wise move..

I'm waiting a year, in the hopes that some 700k-range homes start popping up that aren't 100% dumpster fires.

I'm in the same boat and have decided to wait. It's really impossible to know though. Luckily I'm ok with staying in my rental for the time being.

Well if you think this is going to be a downturn, you should look at how other downturns in housing unfolded. Usually, house prices take a while to fall once things get bad. Usually, you start to see a lot of deals and properties selling way under asking before average listing prices drop. If we are going to get to that point, it certainly doesn't appear to have happened yet.

I'm starting to see this - of the 8 or so houses sold in Los Altos over the last month, one was 5% under asking and the other was 18% under asking. It's still pretty rare though.

More interesting is the huge hit to the volume of sales. Mountain View was turning over about 8 houses/month before COVID, but for each of the last 2 months, only 4 houses have sold, and 5 in March.

I think it'll be a while, and depend upon how the reopening goes, whether we get layoffs at major tech companies, and whether remote work becomes common.

If you're staying in the same market and you already own, then it doesn't matter much. What matters more is that your other investments are relatively outperforming the house (likely already true because of the Fed's money printer).

If you don't already own, waiting for a drop might be wise, but if you're going to sell stock to do it, you might wanna do it now. I'm looking at trading up to a new place right now and that's my plan.

If you're moving up in home value, it may be worth taking the loss on a smaller home to get a good price on a bigger on.

> if you're going to sell stock to do it, you might wanna do it now

Might be a wise move, but the current interest rates make it hard to pass up a mortgage..

Oh I'm assuming a mortgage is still involved. Buying a house purely with cash is a stupid move when the fed is handing out free money. Debt is a great tool if you use it correctly.

Doesn't "the Fed's money printer" inflate housing just as much as other assets?

Not without some substantial delay. The stock market and the housing market are definitely correlated, but not perfectly so.

With a lag, and it really depends on the area and how many people benefit from money printing. If the scheme is QE like in europe, the housing prices will not gain as much as the market prices in low to middle-class area.

Do you know when the mortgage payment forgiveness for publicly backed mortgages runs until? I heard it was 6 months or 1 year (not sure which). Do we expect a reckoning after this ie. if the economy is still suffering then

It's a year. If things are still bad then it's likely to be extended longer. Especially if the Dems win the election in the fall.

Not as if Republicans don't want the stock market to stay as high. Both parties will push for such a resolution.

SBA backed mortgage payment forgiveness is only for 6 months. Which program offers 1 years of mortgage payment forgiveness?

The CARES act.

Looking at the real estate data, prices haven't really dropped that much. 2020 started with a historically low inventory of houses for sale nationwide. During the virus lockdowns, both supply and demand dropped so prices remained relatively stable.

I don't think we are going to know the real impact on the housing market until the lockdowns end and people resume normal activities like buying and selling homes. Then we will see if the relationship between supply and demand shifts.

Personally, I think that if work from home continues for a large number of people, people who have families are going to want to get out of condos and apartments and into houses where they can have dedicated office space. I wouldn't be surprised if demand shifts away from places like San Francisco toward houses in the suburbs with 4 or more bedrooms.

There are a few reasons why home prices will take a while to shake out (if they do at all). The CARES act mortgage forbearance is likely preventing any panic selling at the moment. And home owners have a few other tools at their disposal to delay selling like taking in sub-tenants, refinancing, etc.. So I imagine most people selling right now are doing it because they want to, not because they have to. And the real estate agents all have an incentive to keep prices high, so buyers are probably getting the usual 'this is a great time to buy' spiel.

It took about 2 years for house prices to bottom in the 2008 recession. I think the big reason was that it took a while for the record number of foreclosures to work their way through the system. If we do see the housing market impacted due to COVID, I wouldn't be surprised if it took a similar amount of time. But I also think that a quick recovery could prevent or mitigate a downturn.

> Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs.

Wow. Does anyone have an estimate of the cost of living increase caused by Airbnb rentals?

specifically, it's the tourists causing the cost increase. airBnb is just the facilitator. if they weren't going to airbinb they would've gone to hotels or people renting out their apartments.

Conjecture. AirBnB's are generally below market rate for hotels which brings more people in than you'd have otherwise gotten.

This has not been true in any major market for years, once you factor in all the fees that AirBnB doesn't disclose until you book a listing.

Once fees are included, AirBnB is usually more expensive in markets like SF, LA, or NY for individual/couple listings than a comparably furnished hotel room (inclusive of fees).

Have you seen SF hotel rates during convention season? The most basic rooms go for $3-400. Have you tried to book a Paris hotel in summer? In my experience your statement is not true

Have you tried to book an AirBnb during a marathon? The most basic room goes for $200/night, before you add in the "cleaning" fees or the "service fees" or the other "fees" that hotels are required by law in their original quotes.

This is not true at all, I regularly rent Airbnbs in major American cities for less than a quarter of what a basic hotel room would cost in the same location. The AirBnbs are a lot larger and nicer too.

It gets even better when you split the cost with people. I can get a full, nice house in a great location in LA for a little over $200 a night all in and split it with 5 friends. I would have to get a hotel penthouse for the experience to be even close.

And yes, the fact that it's so cheap does significantly increase the appetite for weekend trips for people my age. The housing part of the trip goes from a major expense to almost an afterthought.

If they were going to hotels, they wouldn't cause rent increases in residential properties... that's kind of the point..

Really looking forward to overleveraged airbnbers, the kinds juggling 10 mortgages and causing housing shortages, to get blackswanned.

I wonder why people renting their cars on Turo(or buying cars to do so) aren't causing car shortages? Oh yeah, because there aren't the artificial constraints on supply there is on housing. Let's focus on the problem and not wish ill on those trying to provide a useful service to others.

It’s a service which even if being operated in compliance with local laws has a negative cost to the rest of the neighborhood through higher issues with noise, trash, parking, etc. There are reasons why hotels aren’t spread randomly around cities.

Living around people at any density has the same costs. Living in a city should have an implied contract that you will have these issues as costs, with numerous other things coming as benefits.

The issues of noise, trash, parking etc should be made to be internalized by those that bring the nuisance. There are noise laws, littering laws, and parking ordinances. Maybe adjustments are appropriate in some cases.

At the end of the day, anti-AirBnB laws are about control over your neighbor. The same things were said about home offices for years (and still are in some localities). The problem is, you can always point to antecdata to support your point, but we should be looking at individual violators of reasonable laws that uphold health and safety in a neighborhood - not using a blunt instrument to snuff out all new uses of property that come about because you don't like it.

> artificial constraints on supply there is on housing

I mean this sounds good and all, but in practice property owners are at the forefront of restrictive zoning regulations too.

And that is also wrong, and unjust in my opinion. When buying property, you gain a bundle of rights over the described property deeded to you. Not an infinite set of positive rights over the whole range of human activities that occur within some geographic radius around it.

Nope--they're taking units out of housing supply, demand remains the same, so prices adjust up.

> it's the tourists causing the cost increase

Ok, show me where the tourists do this without a landlord enabling it. If AirBnb didn't exist, would tourist just sleep in the park?

My girlfriend and I have been observing the same thing in the rental market. I also believe we’re seeing some local softness in the prices of homes, but I don’t have specific data to show it.

Agree, currently there's a lot of stimulus in the market and also the courts are not open so foreclosures and bankrupcies can't happen.

I am actually setting up a fund to buy distressed properties, if anybody is interested just hit me up (email in profile)

> CARES bonus UI is removed

California UI maxes out at $450 per week. This is the same amount as 2008. $1400 per month (take out taxes) won't really cover any rent situation in the Bay Area, and definitely not a $3500 nice-but-not-amazing apartment.

A friend saw 9 move-outs in his building last month, up from a norm of 1. All were AirBNBs.

What does that mean? The non-resident owner moved out their stuff?

My guess is the parent poster means residents are leaving. I know people who live in an apartment in Manhattan. The only way they can afford it is by renting out a room through AirBnB whenever they can. However, the pandemic+recession means much less demand for AirBnBs in Manhattan. On top of it, they have less work because their industry has effectively shut down from the pandemic. The result is that they can't afford Manhattan because the landlord refused to reduce rent, so they'll be moving out.

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