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Comment by tristor | Hacker News Reader

It's become basically impossible to buy a house as a normal person, even on a higher tech salary. In most markets around the US now, the expectation is that buyers will waive inspection requirements, make an offer as all-cash (e.g. pre-approved financing), with no contingencies (e.g. not based on sale of their previous home).

I'm currently trying to buy a different house, my older sister just bought a different farm, we both have had a horrible experience. My sister had multiple properties where her bid was beat out by someone offering $100k+ over ask, all-cash, mostly REITs and other types of corporate investors. This wasn't even in a city (farm obviously). I'm trying to find both a house and a place to rent, because my realtor/broker has advised me that I need to rent for at least a few months while I sell my existing house so I can buy with no contingencies, or I'll never get under contract. I finally found a proper spot for us to rent, was supposed to be available April 1st and was accepting leases starting March 15th according to the listing. Was just informed yesterday that the owner has already got it under application and has four other renters waiting in the wings.

This market is ridiculous if you actually need a place to live, and it's not even a matter of income. I'm in the top 1% of earners overall in the US, and I can't even close the deal on a place to live. I've had my current house for a bit over ten years, and it makes me almost want to give up and not move, although I must for family reasons. When I look into it, most of the properties being swept under me (and others) aren't even being bought by people, they're being bought by REITs or other investment vehicles, mostly by foreign money. You've also got companies like OpenDoor and Zillow scooping even high-earners trying to buy a place to live.

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> It's become basically impossible to buy a house as a normal person, even on a higher tech salary. In most markets around the US now, the expectation is that buyers will waive inspection requirements, make an offer as all-cash (e.g. pre-approved financing), with no contingencies (e.g. not based on sale of their previous home).

In some places that may be true, but I was able to get a home last January on a single relatively moderate-high tech salary, I have a friend that signed for a home on a single person decent salary as well near me, and my next door neighbors again single relatively decent tech salary just bought a new home elsewhere.

You may be right about places in like LA or Toronto or NYC, but to generalize that everywhere is a little absurd. I know that the market I fled in UT was that way, and things are getting pricier here in the neighborhood that I am living in, but we are definitely in the middle of a crazy bubble right now; however it won't last forever, things are going to pop eventually. There are good affordable places to live even if they aren't in CA. Much of the Midwest is great, I think part of the bump we are seeing is rise of remote work exacerbated an already existing bubble brought about by government subsidization as it allowed tech salaries to be redistributed geographically.

I do agree that part of the problem is large investment firms purchasing housing as an investment and an article the other day on here pointed out how they are able to take advantage of government subsidies to purchase more homes, but a bubble can't last forever it will pop, and I feel like the popping is going to come soon.

It's just more anecdata but I live in Western MA and this is exactly the situation we have out here: people are being pressured to waive inspection and to offer in cash and without contingencies. Honestly, it seems crazy risky to me to buy a home under those terms and I suspect that regular people simply end up renting.

> This market is ridiculous if you actually need a place to live, and it's not even a matter of income.

The US needs to make a policy decision: are houses investments or a way to nurture and grow the lower and middle class?

If it's the former, they can use tax policies to encourage the desired behavior. Tax every residential home (single family or condominium) at 10-30% of its total value per year, regardless of who owns it. Give a complete write off for your first home. Maybe give a partial write off for your second home. Make owners bear the cost of appraisals, and if appraisals aren't available, tax them at the most expensive 90th percentile.

But of course maybe the US decides homes are investments. Great for the wealthy, but the lower and middle classes are really going to get hurt. Birth rates will slip even further.

> But of course maybe the US decides homes are investments

They have. By not deciding, they have decided. It would be incredibly harmful to reverse course now. Typical US policy is to get backed into a corner until doing the right & obvious thing is incredibly difficult and practically impossible.

They're also welcome to change this decision at any time if enough of the electorate demands it, or if it becomes obvious it will lead to impacts to the policy stakeholders.

But we all know not to hold our breath for that to happen right

> The US needs to make a policy decision: are houses investments or a way to nurture and grow the lower and middle class?

They already have. home buyer loans are backed by the government. You can write off loan interest. Investors pay taxes on income from the investment (net rent and capital gains) ...

Also just like in education space the more the government subsidizes the pricing, the more it gets inflated. So more incentives will just lead to more demand and higher prices.

What we really need is more supply and elasticity. More houses, and more people willing to say "F--- this I'm moving to CheapTown"

> You can write off loan interest.

Which only matters if you somehow go above the crazy high $25k standard deduction.

I am fairly well off and have kids and student loan debt to write off interest on as well, but I've never broke $19k in write offs.

So, unless you have a business or something, the interest write off is kinda useless.

You must live in a low CoL state? I'm easily above that, 10k for state taxes and paying 20k in interest a year isn't that much.

> You must live in a low CoL state?

Ish...

2500 in property tax (house is >100yrs old), and 3.125% interest on a loan w/$285k left on the mortgage.

> 10k for state taxes

Are you saying you can write off your state taxes?

It's capped, but yeah. That's the SALT tax cap that has been a point of political contention.

> just like in education space the more the government subsidizes the pricing, the more it gets inflated.

People keep saying this, but I haven't seen any real evidence of that. In education or personal home ownership. Do you have any studies that actually show any causation, or is this all correlation?

I found your comment thoughtful, but it seems to me you meant “latter” rather than “former”? iirc hacker news let’s you edit a comment for up to an hour after posting.

Whoops, totally a slip of the mind. Missed the edit window by an hour, too. (IIRC, it's the two hour mark when you're locked from making edits.)

Wouldn't that tax proposal just increase rent for people who don't own their home (landlords pass on the costs) and not affect homeowners other than lowering the value of their home if they come to sell it (i.e. upside-down on mortgage).

Well they made an exception for the first building. In general if you construct laws such that the property tax is progressive on total assets then there is a pricing advantage for smaller landlords. They can charge lower rates, make more profit, etc.

> In most markets around the US now

Do you actually have any evidence this is true in "most" markets? It seems like only in a few markets around highly-desirable cities is this true. Farms don't sound like they're going to be representative of the types of housing that most people are looking for.

I'm 45 minutes south of Seattle and I purchased a large house with a backyard, recent-ish construction, no contingencies waived, for less than what a 500sqft loft is going for in Seattle.

Farms are also what investors are looking for, at least the types of farms this person seems to be talking about. "Farm" the land for 10-20 years, and then put in a development as the city grows out. These investors are betting that the land will be worth a lot more in a few years.

I put farm in quotes because they are intentionally mining the land of all long term fertility - not a problem as it won't be farmed in a few years anyway, but if you intended to farm for more than 10 years then proper care for the land will ensure better profits of the wrong run.

And on top of that farms get all kinds of tax advantages on top of real estate gets.

There's a reason Bill Gates is the nation's biggest farmer.

This explains why a half assed, poorly maintained, corn crop would randomly pop up in a lot between commercial buildings, across from where I used to live.

I live in a rural area (relatively speaking - town of about 1000 people) - around me if you don't show up to look at a house, ready to buy, and with no contingencies - you are not going to get a house. I know many folks near me who have listed their house, had 40 people show up the first day (open house) and sold it the next day, for cash, for 20% over the asking price - around me, those stories are very common.

I study the RE market in several places that I am connected to every day - I watch houses come on the market, and are under deposit within days. I feel really bad for young people looking to buy their first place (including my kids) - they can't pay cash, and they are on a budget - they have almost zero real options other than to continue to rent and wait for a RE crash. IMO, it's coming, but who knows when.

Is your rural town called Malibu or Santa Barbara?

And are you helping your kids?

I suddenly have "All the way to Tacoma" stuck in my head.

Home prices around where I am (LCOL area in MI) are creeping up, but not to the absurd degree they are in actually desirable places to live. That said, anywhere that's decent to live is getting slammed. For instance, sticking to MI, Grand Rapids and the Ann Arbor area are insane compared to where they were a few years ago.

The only reason there are any decently priced houses where I am is that a lot of them are over 100 years old and some of the school systems are so bad even our current asset bubble can't make families want to live there. (So no point in buying to rent out for twice the mortgage because no family is paying 2000/mo for a house in a school district with a math proficiency rate of 15%.)

For real. I bought my first house a few years ago. If I hadn't, I'd be fucked.

My friends who are double income but not tech are trying to buy a home now. Same experience as you. Cash offers always arrive and beat them.

I don't know how this ends but it's not going to be tenable for many folks to "live" in the USA as it stands.

It's also creating a situation where the actual quality/value of properties for price is completely out of whack. There are large swaths of the country where low-grade cookie cutter houses in the suburbs that are legitimately worth maybe $350k at the current inflation rate are asking for $850k+ and generally selling $100k+ over ask. I have a $1.25M budget for a house and I can't find anything that's not a trash heap I can afford, and I'm not even looking in a coastal area, this isn't the legendary market in California, this is in the middle of the US.

It astounds me that more homes weren't wiped out from the Northridge earthquake. A lot of the housing stock in California in particular is like rotting toothpicks on eroding sand for a foundation. At least the homes generally lack basements so they will only fall a few feet off the posts. This particular reddit users is a contractor that posts their typical finds from structural inspections. People are paying between 800k-5m for the homes featured, generally:

https://old.reddit.com/user/DMAS1638/submitted/

Where you see winters homes are generally even in worse shape. Basements are leaking and eroding your foundation. Roofs are leaking and rotting your studs. Poor insulation is costing you a lot more money than in California. Chances are your water mains and sewer situation, both from your parcel as well as the municipal lines on the street, are all approaching end of life. Right as climate change brings heavier rains and flooding that stresses infrastructure where there isn't money as it is to maintain it even for old climate projections.

It's a real concern of mine and it's driving me towards considering building a custom home, at this point it's almost cheaper to do, especially since much of the work I can do myself and already have the necessary skills and tools. It's really and truly absurd what people are being expected to pay in comparison to what they get... I feel like most of the houses in the US are actually unsafe to live in because they don't care in construction about efficiency, indoor air quality, or mitigating common environmental concerns in those areas like radon gas. The minimal building codes in the US are truly obscene, and yet these slapdash houses are now priced for 3-4x what they are actually "worth" given the inflation rate.

I have a 5 page document of bullet points making simple asks/requirements for a new home build, and most of them are focused on safety, reliability, and efficiency, and none of them would be done by default by any builder in the US, most are required by law in Europe. It's kind of nuts.

Would you be willing to share some of these requirements? I share your views on construction in the US, so I'm curious about some specific examples.

Sure, this is non-exhaustive of course, but here's a few of the items on the list I personally think are very important.

* Foundation footings set to bedrock and insulated above the freeze line

* Exterior walls framed in 2x6 or 2x8 studs w/ a preference for non-bridging stud products like t-studs

* Exterior continuous insulation

* Kitchen range hood needs to be externally ventilated with proper make-up air system

* Using an ERV (Energy Recovery Ventilator) with filtered intakes for doing fresh air distribution within the home

* No use of plastic flooring products (e.g. linoleum, vinyl, carpet, LVP, LVT, et al) which off-gas and spread plasticizers within the indoor envelope

* Consider use of alternative methods of framing vs stick framing, like using ICF (Insulated Concrete Forms)

* Natural gas on-demand hot water heaters w/ electric instant hot systems close to tap for showers

* Roof trusses and decking properly constructed to account for the weight of solar panels on the south-facing slope

* Split electrical paneling for high voltage (230V+) and low voltage (120V) circuits

* Post-meter paneling for breaking out to circuit panels w/ a space for setting up a transfer switch to support future grid-tied solar with battery backup

* All electric appliances w/ the exception of on-demand water heater and sealed gas fireplace, this provides a pathway for higher energy efficiency / lower carbon emissions by using solar

* All cabinet work should be hung using french cleats for durability

* Exterior door frames should be installed fully to the studs (e.g. use 3-4" long screws)

* Interior doors should be solid core

* All interior walls should contain sound-rated insulation to reduce noise pollution and improve climate zoning

* All interior walls should be boarded with sound-sealant and noise rated drywall-type products

* Subfloors should be insulated and there should be sound/thermal insulation underlayment below the flooring

* The final construction prior to drywall should be able to achieve a blower door test score of ACH50 1.5 or lower with the make-up air and flue vents closed.

Not all of these things would be required by code currently in Europe, but they're all good ideas for durability, efficiency, or safety. This is obviously with the intent to use rooftop solar power as well. If I do build a custom house, it'll be built to the Passivhaus standard.

Your list is a 100% match with my requirements list for my build in the Chicago area in 2018. Sounds like you may have also spent a lot of time on Green Building Advisor articles and forums.

Our biggest challenge was finding contractors willing to execute to plan. My wife and I ended up doing a lot of work ourselves especially around insulation details and HVAC systems.

Yes, I am a big fan of Green Building Advisor and I also watch a lot of building YouTubers, predominantly Matt Risinger's Build Show[1].

He has featured other builders and home owners who also have websites or channels, and there I've found more information. There was one chap in central Canada that built a ~5k sqft house that only needed around 1600W to heat in the winter in subzero temperatures. That's the type of energy efficiency we need in new home construction if we're ever going to make a dent in climate change.

[1]: https://buildshownetwork.com/

Some of these aren't realistic. All residential panels in the US are 240V or possibly a three phase variant in rural areas.

That's... not actually true at all. In fact, in large parts of the country it's /required by code/ to separate 240V and 120V circuits, such as in most of South Central Texas (pop ~5M or so). There are absolutely 120V panels, and they are commonplace.

I will agree, however, that in much of the Midwest and Northeast it's more common to see single-panel installations. Separating the panels is important for safety, though, and it also allows better circuit routing when running the electrical.

This is really interesting. It must be region-specific, because I'm in the northeast and have never seen or heard of this practice.

Residential power around here is delivered as 240V split phase. Meaning, the service entrance load center has a bus bar for each leg, and the neutral is 120V from either leg. So you can have 240V circuit breaker that spans both legs, or a 120V that uses one in combination with the neutral.

How does the arrangement you're describing work? I tried searching for 120V-only load centers, but wasn't really finding anything. Or, did you mean bridge together the two legs on a traditional load center and use it as a subpanel of the service entrance?

Yes, that's how it works. Residential panels technically aren't rated by voltage, they're rated by amperage and the number of breaker openings. What is generally done here in South Texas is that on the exterior next to the meter there is a small primary panel for all the 240V circuits, and off of that a 100A leg feeds a physically larger subpanel in the garage area that has both legs bridged, acting as a 100A subpanel for 120V circuits.

Personally, I think having the 240V circuit panel outside is dumb, and the amount of times I've seen my or other folks breakers fail due to weathering is pretty much the reason why. How I've seen this done on new builds where care was taken is that both panels are brought indoors and the only thing outside is a split out to a subpanel specifically for the A/C / heat pump unit. Everything else comes indoors, there is a smaller panel setup for 240V and a subpanel for 120V circuits.

Obviously as the power entering the home is 240V split phase, you must break out a subpanel for 120V only if that's your intention.

Hah, was happy to see this list as just built my home and did most of these. .8 ACH 50 on blower door!

That's fantastic, anything below a 1.0 is going to be exceptionally efficient. Did you also do rooftop solar as well?

Yes. We are not quite net zero given snowy winters in NH, but overall feels good.

We are on air sourced heat pumps. I think the US is really behind in thinking about creative geothermal like borehole heat pumps which act as a thermal battery (pump heat into ground in summer, extract it in winter.) They work but I can't imagine they are the best solution in my climate zone.

Also, for energy usage is seems appliances could use innovation. Why am I not recapturing the heat from my clothes dryer? Why do I have a separate refrigerator (heats house) and water heater (cools house) inside my house?

We tried a heat pump water heater but it was a total fail, as it is equivalent to putting an air conditioner inside your house. We had it in the ground floor of our walkout, which even in summer never breaks 70 degrees. Kids were complaining and actually turning the heat on...

> Foundation footings set to bedrock and insulated above the freeze line

Not knocking it, but is this normal for single family home construction? Is it possible with reasonable cost? Is it primarily for an earthquake-prone region? The idea is cool, but I thought only skyscrapers went down to bedrock.

The answers to your questions definitely vary by region. If you're building a house, one of the first things you should do is get a structural engineer's assessment of the lot before you plan the foundation, because soil type, bedrock depth, freeze lines, environmental concerns, etc. all affect this.

But yes, it's fairly common to do this if you care about structural integrity over the long term. In areas with soil type that support it, it's more common to do simple slab foundations without footings, but in most of the US footings are used and the foundation is built as part of a crawl space or basement. Sometimes excavation for a basement is deep enough to get below frost line, or to bedrock itself, it depends greatly on the region.

"Reasonable cost" is kind of a subjective thing, but I'd say starting with a a good foundation is a bare minimum of requirements for what would end up qualifying as "constructed properly", so at least as far as I'm concerned this is an absolute requirement.

I'm still confused. Basements go below frost line, sure, but bedrock can be hundreds of feet below the surface. I don't know of any home I've ever seen that has piles driven down to bedrock. Is this just a regional thing? What am I missing here?

Yes, bedrock can be many hundreds of feet below the surface, and in other areas bedrock can be pretty near to the surface. This is one reason why you should have a geologic and structural engineering report done on a plot before you build (and arguably before you buy the plot). Depth to bedrock greatly factors into the cost if you intend to have piles put in to support your foundation.

In some areas, it's not actually necessary to drive piles to bedrock to get similar stability, instead piles are driven to refusal at a calculated depth based on the expected foundation load. In the regions I'm planning to build though, bedrock is nearer to the surface (or in some cases exposed above the surface as an outcropping), which means that the proper way to do things is to drive piles to bedrock.

I am not a structural engineer, and I don't know what is necessary where you live, my list was made for my specific purposes and shared because it was asked, it's not an argument in favor of any specific structural techniques, you should speak to a structural engineer in your area.

Thanks, these are great.

> * Exterior door frames should be installed fully to the studs (e.g. use 3-4" long screws)

I'm almost scared to ask... how else would you install an exterior door?

This sounds like you have thought about it a lot. Assuming I live in a moderate climate, is there a version of your list for someone who prizes having the windows open as much as possible? Eg I'd like a house where the kitchen opens onto outdoor living space, and we keep those doors open almost all the time. In that context, I've always thought leaky old windows were a good thing, because they allow for fresh air. What am I missing? Are these sealed houses nice to live in or do they feel stale?

> Are these sealed houses nice to live in or do they feel stale?

These well sealed houses actually have /better/ indoor air quality than a typical house designed for cross-flow from open windows. The reason is that they use powered ventilation that essentially runs all the time, so you have constant fresh air entering the house and stale air leaving, and you have specifically designed and planned exhaust points. The bonus to it is that it's much more energy efficient because the ventilation can be done using energy recovery ventilators (ERVs) which equalize the temperature between indoor and outdoor air +/- 3F, greatly reducing the cost to maintain a set temperature indoors while getting fresh air from outside, and the air can be filtered through MERV16 / HEPA filtration, reducing dirt and allergen ingress.

If done properly, the absolute best indoor air quality is found in Passivhaus construction.

I'm in Colorado and in the Denver area, $600k will get you plenty of house.

My concern isn't square footage, it's safety, efficiency, and quality. Please point me to a place in the Denver metro where a properly built high-efficiency house (let's say blower door ACH50 1.5 or lower) can be purchased for $600k. I'll buy today.

You may want to consider realigning your expectations with reality. The reality is that if you have location flexibility, you can certainly find a nice house at a nice price in the USA. Your expectation that you can find a nice house with bleeding edge environmental efficiency is unrealistic. Maybe it shouldn't be, but that's life.

edited to add: the people who are really screwed are the people who need to work in a given location where housing prices are absurdly high and the housing stock is truly garbage. Silicon Valley and such.

I think there's a huge disconnect between you and the parent's definition of "nice house." Because it's kinda nuts that for $600k you can't buy small exceptionally-constructed house. In this market there is no way to find houses where you pay more to get build quality instead of bigger.

Yes, you understood my point exactly. I would happily pay $850k for a 1800sqft house that is constructed properly with efficiency in mind. I don't want to pay $850k for a trash quality 3500sqft McMansion, but that's what's on offer at that price.

I don't think my expectations are unrealistic, or perhaps it's better to say that our current reality is broken. I actually don't want a large house, it's wasted space that costs more money to build and consumes more environmental resources just to be a bigger pain to clean and maintain. My ideal home is less than 1800sqft, which is smaller than almost all new builds today because home building in the US is optimized on how quickly a house can be constructed and on square footage in the lot space so that they can get the highest ROI for the builder/developer.

Upthread somewhere I said my budget was $1.25M and I was having trouble finding houses that are even bordering on acceptable. I don't expect a house to exactly match my wants if it's not custom built for me, which is exactly why I'm resigned to likely needing to custom build (and surprised by how cheap it is compared to buying, when it used to be a luxury). The issue I have, and most people have, is that low-grade cookie cutter homes are MASSIVELY overpriced relative to their actual value as a place to live. Nobody in their right mind would be happy paying $850k+ for a KB Homes "starter home" in a suburb that cost less than $60k in materials to construct and was built to the absolute minimum standards they could get away with.

That is a massive budget, at least where I live (Southwest). You can get a nice place here, as long as you spend > 700k. Below that it definitely is trash heaps.

I'm really curious about opinions regarding "how this ends..."

Seems to me that, if current trends continue, home ownership will basically become extinct; everyone will become renters. Home ownership will take the same path as music over the last 20 years, where we used to "own" music (CDs), now we just "rent" music through streaming services like Spotify. But that's just my 2-cents. I'm curious about others' thoughts.

I don't see the analogy. I still own lots of music and don't rent it at all (unless you count listening to the radio). It hasn't gotten any more expensive to own music, either, digital tracks and CDs are still readily available and inexpensive.

The analogy imply that things are really good! The price of renting is so low, that even holding the price of purchasing constant people don't think it's enough savings to bother purchasing. People get to experience a wide variety of things, because the commitment is low. Multiple competing services aim to make consuming music (or housing) very easy.

The real analogy is furniture rentals for low income people. Paying 10x what something is worth for low quality alternatives and an inability to escape a cycle of being stuck renting when people want to buy.

I'm like you with music, but I feel obliged to point out that folks like us are outliers today. So the GP is correct in the sense that the majority of things are moving from ownership -> renting (though there'll always exist some die-hard holdouts).

Maybe, but economically music rental is nothing like housing rental. No one is renting music because they are unable to buy it or can't afford to.

You're right, and that is an important dimension to consider -- thanks for pointing it out!

I was coming from a perspective of ownership erosion, precipitated through the continuous encroachment of corporate rent-seeking behavior (because that leads to consistently growing revenue streams).

Will NIMBYs become an endangered species? A lot of regulations are aimed at keeping property values high with the idea that most (or at least a substantial portion of) voters own real estate and want it to appreciate. If we become a nation of renters with only a tiny minority owning real estate then who cares about keeping property values high anymore? It's not your problem! Your net worth will no longer be impacted by changes in the market value of the house you live in. Housing will be an expense, not an asset, and "the rent is too damn high!" might catch on.

It ends with a crash, like always. In 2008 home prices got cut in half. An REIT will overextend, miss loan payments and fail, flooding the market with homes, which will drop the market prices. This will cascade, taking out more REITs.

Failure would cause a house price crash you say? Sounds like "too big to fail".

Exactly. Marks said that a crash is often inaccurately thought to be caused by a valuation excess; except in reality, they're caused by credit excesses and a failure to meet obligations on said credit on a large scale.

If the housing markets crash, won’t the investors just buy at a discount?

The Case-Schiller Index is already over 7.0 and it usually has an asset crash after it crosses 6.0, it was at 6.3 in 2008.

REITs don't cary loans that are leins against the house. If they "miss loan payments" they'll still keep the homes.

They'll just get sold and transferred to another large REIT and the house will never hit the market.

The housing market isn't going to crash. I foresee something like Australia happening: the prices just continue to go up, for decades.

Then, 10 years on a revolution. This is the type of thing that will trigger massive civil unrest.

At a certain point, I'll quit my job and go on strike if I have to deal with endless annual rent raises, moving between apartments, annoying landlords, etc. Can't imagine I'm the only one.

> Seems to me that, if current trends continue, home ownership will basically become extinct; everyone will become renters.

Yes, this seems to be the trend. In fact, it's not just home ownership that is now more commonly being rented, even the cloths on people's backs is up for rent. Between the rent-seeking behavior happening globally and the gig economy, it's hard to feel optimistic about the future. There's of course that famous prediction from the World Economic Forum: https://www.independent.co.uk/money/why-you-ll-own-nothing-b...

Agreed. The future for the masses is "freedom" to be a wage slave to whatever corporation provides a "job". It's weird how dystopian fiction seemed outlandish to me around 10 years ago, but now seems pretty on target.

I'd love to be proven wrong, but as you say, the rent-seeking is too damn high. I live in the US at the moment, but definitely looking to leave to somewhere with an actual social safety net / infrastructure.

Nowhere is perfect, but damn if the USA isn't moving backwards. I imagine the top plan to just hide in their fortresses / go overseas if it goes to hell (as the dystopian fiction tried to foretell).

No need to imagine this, read up on New Zealand.

It ends with all homes being controlled and rents skyrocketing because they can make it as artificially scarce as they like and then god knows, squatting?

Sounds like Barcelona today.

It's not just in the USA. It's a global phenomena.

So on the one hand you've unaffordable homes/apartments, and on the other automation coming at full speed.

So much uncertainty and insecurity. I'm sure civil unrest is coming.

> You've also got companies like OpenDoor and Zillow scooping even high-earners trying to buy a place to live.

Zillow’s home-buying program called “Zillow Offers” has been shut down. They overpaid and had $400 million losses in 3 months

https://www.nytimes.com/2021/11/02/business/zillow-q3-earnin...

Yes, and in the interim, their behavior overpaying worsened the housing crisis and further inflated the assets in the markets they operated in. They absolutely did (and continue to) contribute to the problem.

Barely a drop in the bucket. But they did incur losses and are offloading their properties at losses. So wherever they did bid up properties, they are now providing discounts.

> "In most markets around the US now, the expectation is that buyers will waive inspection requirements, make an offer as all-cash (e.g. pre-approved financing), with no contingencies (e.g. not based on sale of their previous home)."

It's ridiculous trying to buy a house now is like it's buying from the Louis Vuitton store or trying to get into a fancy club - especially when the "thing" is a normal-ass house in the suburbs.

> It's become basically impossible to buy a house as a normal person, even on a higher tech salary.

In the highest demand cities. Move somewhere that is either 1) Building a crap ton or 2) in lower demand

Calgary (albeit Canada in this case, but [Canada is just as bad if not worse than the US with regards to housing](https://www.cbc.ca/news/business/crea-housing-december-1.631...) is a great example of a city like this. They aren't landlocked and so they can expand as they want. Also a decent sized city, and world class skiing within an hours drive.

My gut tells me people will then complain that the housing market in places like this are not worth buying into as houses are only increasing at the cost of inflation.

IMO Calgary has screwed itself over the long term: they’ve spread out from the city center to an absurd distance, and the cost of maintaining the infrastructure is going to be crippling fifty years from now. City taxes are going to be insane when the water, sewer, gas, and electric systems start to require repair and replacement.

Housing market in places like this are not worth buying because it regularly drops to -20C in the winter here and the economy is heavily reliant on one industry (oil) so even if you work in tech, you will dramatically feel the ebbs and tides of oil prices in the community around you

> because it regularly drops to -20C

Everywhere in Canada but Vancouver/Victoria have -20C in winter.

> the economy is heavily reliant on one industry (oil)

This is the real issue.

> Everywhere in Canada but Vancouver/Victoria have -20C in winter.

But it only happens for a couple days a year in Southern Ontario, even less common near a Great Lake

The complain people from Toronto/Vancouver have about Calgary is that it's Canada's red neck province, and also that there is nothing to do in the city. If you get a remote job, it's probably the most affordable place in canada not in the yukon to live.

There's so much to do if you live in Calgary!

Granted its been nearly a decade since I've been there, maybe covid broke it. But 17th ave, Stephen ave mall, kananaskis, banff, breweries, river bike paths, reasonable food scene (for it's size and not being on an ocean), go to Edmonton for the weekend (it's only a 3hr drive, or a short flight), sylvan lake day trip, lots of conventions/shows on the stampede grounds... THE STAMPEDE!

What is it you're looking for it doesnt have? (or what has change since I've been there?? )

I’ve never been there, I lived in Vancouver for 2.5 years then moved to the us, I couldn’t visit more of Canada since I couldn’t drive at the time.

The common complaint I saw at r/Vancouver and r/personalfinancecanada was that the food scene was lacking compared to those cities, and the conservative/redneckness of the city/province.

I hope you see the funny side of the complaint there's nothing to do there, while also never having been there. :)

Really encourage you to go. It's beautiful, and if you like hiking/mountains you have a "playground in your backyard". After moving to the bay area I was so spoilt and couldnt believe people would drive 3-8 hours (traffic) to Lake Tahoe, when I was used to 1.5 hours and sleeping in my own bed that night.

When you're born into a HCOL area, and all your friends and family are in a HCOL area, it's not exactly such an easy thing to just move out to some random cheaper place. For one, I don't even know where to look, there are too many choices and too many of them are shitty places to live. And that's to say nothing of having to start a brand new social life from scratch.

>And that's to say nothing of having to start a brand new social life from scratch.

Many of those who moved to that HCOL area did likewise--which probably contributes to it being a HCOL.

Not saying it's trivial but many people in the US move for all sorts of reasons including people who strictly speaking weren't "forced" to.

I cant think of a single market where lower percentile items are also high percentile quality[1]. Why should places to live be any different?

[1]: and when there is such a case people often play arbitrage or other economic games to close the gap quickly.

> Move somewhere..

let me translate..

"Quit your job and leave behind everyone you love"

Life is an economic game. You have to make the choices of what is most valuable and you cannot have, literally, it all.

as an immigrant to the US, i can share that it has been hard to do "leave behind everyone you love", but also I met new people I love as well.

People do move for jobs and leave where they grew up and much of their family lives all the time of course. And, at least for certain types of workers, living where you want to live with fewer job-related constraints is increasingly an option.

Agreed. Feels like my choices are "start a new life somewhere totally different" OR "rent forever". It definitely causes some cognitive dissonance when I weigh that tough choice against my relative well-paying tech job.

I mean that pretty much what every immigrant to the US ever did.

I find it silly that appraisal waivers are the norm now. It's like saying, "yes, I know I'm going to overpay for this house" before any negotiation even takes place

Imagine another buyer is in the identical situation to you, and you want to be the one that is selected to get the house.

Now image you missed out on ten houses you wanted to buy before this one, and are exhausted by all the effort.

Very true. We have faced this and we know friends across different cities facing the same issue. Houses in previously affordable neighborhoods are so expensive that even with 2 tech salaries people are barely able to afford. This is great for people who already have home whose prices have doubled but I cant imagine how anyone is able to afford a home let alone good homes near good schools (this may be specific to the US). I am personally really hoping for a real estate correction.

the last 2 years were the biggest wealth transfer in human history and a large chunk of the population begged the government to do it to them

I wonder what would happen if it caused a large enough vanlife bubble.

I’m truly not trying to be rude or snarky, but there are a massive number of people living out of cars/RVs/vans in California already. I don’t have a source for this, but I’ve lived in LA and the Bay over the last 3 years. You just gotta drive around.

The Instagram accounts with the $90k tricked-out sprinter vans are a vanishingly small fraction of that.

The “bubble” you’re describing is California’s homelessness crisis.

No worries mate. First I knew there was a homeless crysis, and the crazy housing (students living in cars) and quite a few vanlifer, but not the real extent (instragram and youtube are bad measures indeed). Second, I meant a larger bubble, something that would pull the rug under all the investors buying land and homes thinking people will just eat the costs.

The book Nomadland covers the roaming vanlife pre 2017 that was supplying a lot of seasonal workers to Amazon warehouses, forest service employees and farm workers. (recruiters for all those places targeted people living vanlife who could move and live close to the place of work.) There are several streets I commuted on in the peninsula area of San Jose/San Francisco where all of the parking is used by people living in cars and RVs since 2005 at least.

oh, I saw there was a movie but didn't know it was based on real life ..

I have not watched the movie but read reviews - they fictionalized and combined different aspects to make it filmable. The real writer embedded herself in vanlife for years and met a lot of different people across the USA who were living vanlife for one reason or another, so instead of focusing on one person's life per the movie as I understand it, the book spends time with different people for months, the audiobook was about ten hours with people and background stories about people and situations which might give a more comprehensive overview of what was happening at that time and now.

This doesn't mirror my experience looking at housing over the last year in a major metro. Houses are going quickly and for maybe 5 to 10 percent over asking, but that's about it.

You must be in an abnormally hot market. That sounds pretty awful.

The article says that only accounts for 1 in 7 homes though.

I don't get how people are still buying houses at these prices. Are they paying beyond their means? Wiping out their savings? Or what?

Pricing and other buying behaviour is set at the margins

Not at all. On a tech salary I see people buy homes all the time in Silicon Valley.

> My sister had multiple properties where her bid was beat out by someone offering $100k+ over ask

This really isn't bad, consider Toronto, Canada where house that's over 100 years old (tear downs) cost well over 1 million and increase in value by over $2000 a week, yeah you heard that right.

There are houses outside the city (almost anywhere in Southern Ontario)that were anywhere from 200k -400k pre pandemic that are now approaching 1-2 million. I have seen 50 year old 1200 sq/ft Condos in Toronto go from 300k pre pandemic to now 800k. I believe by the end of this year the average price of a house in Toronto Canada will be approaching 1.5 million plus and is probably on a trajectory of 3-5 million in the next 5-10 years. Before you say it can't keep going, it's been on this path for the last 15 years and is showing no sign of letting up.

Governments are bankrupt and can't raise interest rates meaningfully ever again.

I'm not sure you understand what I meant by someone offering $100k+ over ask. In the current market properties generally get listed and then are under contract in under 72 hours, which means in the market you're describing in GTA this would be like someone listening a property for $1.5M, expecting it to increase in value by (let's be generous) $10k in the 72 hours it takes to sell, and the bidders offer $1.7-$1.8M for that property. It's hard to express how much importance is also being put on these offers having NO clauses and being all-cash. It's just a straight, NSA cash offer, which is something investors can do with hedge fund / foreign money laundering capital, that someone who actually has to live in the place cannot. Personally, I will NEVER waive an inspection because I don't want my family's health put at risk.

I think he's implying that it means those houses are underpriced, to be snapped up at 100k over asking so easily.

By comparison, a GTA home with a sale price of 1.5M regularly sells for 1.5-1.6. But last year it would have only cost 1.2M (not joking, I've been watching that market for about 3 years). In Toronto, real estate is religion. It's how a significant fraction of the population accrues wealth. And owning a home is held as the highest ideal.

Also I agree, I would never waive an inspection.. but right now that's congruent with saying "I never want to buy a home".

Houses are frequently getting sold $300-400k above asking in the GTA, listers are intentionally low balling the asking price to strike bidding wars.

Usually what happens is a seller sets the house up for viewings which are so packed you only get 15 minutes. Then they take offers 2-3 days from the initial listing date, where you will compete with at least 10 other offers (usually a lot more) in a blind bid. There is not room for conditions like a home inspection and home inspectors are actually going out of business because of it.

> There is not room for conditions like a home inspection and home inspectors are actually going out of business because of it.

Wow, that is truly ridiculous. I guess as the saying goes, "it can always be worse". I'm glad I'm not trying to buy in GTA, at least. This is not a tenable and sustainable situation though, at some point people will be fed up enough it'll cause the break down of societies.

> This really isn't bad, consider Toronto, Canada where house that's over 100 years old (tear downs) cost well over 1 million and increase in value by over $2000 a week, yeah you heard that right.

How much of that is completely self-imposed with out of control immigration quotas and a lax policy on foreing money laundering? [0]

[0] https://en.wikipedia.org/wiki/Snow_washing

3 things I don't hear much about:

* Plenty of places in the Midwest (Arkansas and Kansas, for example) are depopulating. Affordable real estate exists there - https://www.arkansasonline.com/news/2021/oct/08/populations-...

* Mobile homes seem a not-great-but-doable alternative. Still money to be made, particularly if they have a "tiny home" vibe.

* Multi-generational mortgages. Again not great, but not everyone has access to $1-2MM.

> Multi-generational mortgages. Again not great, but not everyone has access to $1-2MM.

This sounds like literal debt slavery. I'm not sure this is even legal in the United States, and if it is, it shouldn't be. This is a type of financing that cannot be described in any other terms than being predatorily usurious.

I imagine you are getting downvoted because other users believe that you are proposing these as viable options. Mobile homes are not constructed to even the horrid minimal building codes that a free-standing structure must meet, so don't even remotely qualify as "efficient, reliable, and safe", and I've already said my piece about multi-generational mortgages.

So, why not the Midwest? I actually grew up in the Midwest and have nothing against it, in point of fact. I think a lot more people should move to the Midwest and that it has a lot to offer. For me, particularly, I am moving locations for family reasons, so the location I move to isn't so much my choice. If I had my choice, I'd actually really enjoy some places in the Midwest, in fact one of my favorite cities is KCMO and I also really enjoy parts of Arkansas. The reality though, is even in the Midwest the places that are actually nice to live and have real broadband Internet service cost quite a bit, maybe not $1M, but at least $450-500k for a decent house.

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