Homes Are Taking Longer to Sell | Hacker News Reader

Homes Are Taking Longer to Sell

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33 pointslatchkey39 comments

Yeah, no kidding. There is universal agreement among potential buyers that prices are too high and this is the worst moment in recorded American history to buy a home.

https://data.sca.isr.umich.edu/get-chart.php?y=2022&m=6&n=42...

Interest rates are the real cause IMO. Sadly, there are still a lot of rich people with money to burn on real estate, but the rates are now what is stopping them.

Prices would still be going up and up if The Fed didn’t jump in to hike rates.

That’s the point. Home prices are too high due to raised interest rates. They will come down to match the interest rates.

Raising the interest rates makes homes more expensive over the lifetime of the loan inclusive of interest. It does not however increase the principal cost of the home in fact it has the reverse effect.

People often budget the size of their loan based on the monthly payments. When interest rates go up, payments go up, size of loan goes down. Smaller size loan effectively lowers demand. Lower demand, home prices fall (or just rise slower).

I think we’re all saying the same thing.

More likely is they will grow more slowly rather than anything

Don’t expect anything near pre-covid prices anytime soon for the principal

That's such a simplistic view of the system. Tons of homes and real estate have been and are being purchased as investment to rent out. This combined with zoning and other restrictions on building new housing has severely restricted supply.

I'll be there are even more factors involved as well

Rental real estate is bad?

Rental properties increase the supply of homes to people who don't have the credit or income to own.

Homeowners freak out at someone buying a property to rent out because they don't want poor people around.

Same as with homeless shelters, addiction treatment centers, public housing...

Anybody who lives in a neighborhood of mostly homeowners I would expect has seen it firsthand. "Muh property values!" The lower the property values, the more paranoid people get.

Yes, landlords don't provide value. Rents capture most increases in wages while giving nothing of actual value back to the community. There was even a board member of a real estate investment firm discussing that it's a great time to press rents because they're at 97% capacity and people have nowhere else to go. That's disgusting behavior and not beneficial, it actively harms people.

Editing to add citation: https://www.bloomberg.com/graphics/2022-evictions-monarch-in...

If the big landlords were not in there it would just be more smaller landlords doing the same thing.

The only thing to be done if you dislike the power of landlords is to flood the market with supply, which should be policy in every jurisdiction in America, but isn't because the owners/landlords are in control of the policies.

Converting more properties to rentals is bad for rents?

Increasing the supply...of rental housing...makes the rental market worse for renters?

It doesn't provide value to NIMBYs who don't want those people in their neighborhoods.

I know whereof I speak because I live in a neighborhood, where most properties are not rented out, but they resemble apartments, and there was an ongoing soap opera about a vacant lot which was developed to be a rental property.

And there probably were unscrupulous things that went on, in terms of permits and zoning and stuff. There were allegations about a retaining wall not being properly constructed to prevent erosion.

But people are basically against it because it "looks different" and will bring lower class people in.

Personally, I don't care about property values because I'm not in the business of flipping houses, whereas I would rather not pay a lot of property taxes.

Do you rent or own your home?

You must have missed my point. The supply is restricted due to lobbying by home owners and landlord associations, this leaves people with no choice. If you watch the video on the article I cited you can see how the investment firms operate in their own words.

This restriction of supply takes housing off the market which raises prices on what's left due to actual humans who want to own a home have to pay more.

If the amount of actual people who want to own homes remains static and suddenly we have investors buying up a ton of homes reducing the supply, prices on the remaining homes shoots up.

This leaves people with little to no choice, if they were previously able to afford a home then they no longer can and are forced to rent. Is this good for renters? It's only good for the profits of investment firms.

> The supply is restricted due to lobbying by home owners and landlord associations

The supply of rentals is restricted due to lobbying by home owners. Not sure if you are agreeing.

Have you ever rented an apartment under your own name or had a mortgage?

Yes, land lords are quite literally rent-seeking. They don't provide any value to society and just leech off of people who are poorer than themselves. All rental housing property should be owned by non-profit organizations.

Have you experienced both being a renter and a homeowner? If you haven't, owning a home will open your eyes. Should, anyway.

The points being made in this thread seem to be flying over your head as your beat the drum of personal anecdote. That is not productive in a conversation about fixing a flawed system

Is ok as long as landlords are building new property and not competing with existing stock. Also leverage - if they are leveraged to the brim - they should go bust but that never happens.

>Is ok as long as landlords are building new property and not competing with existing stock

Think about the reasons why you rent an apartment.

One is that you can't get a mortgage.

Another is that you can't assume you will stay in the same place for a long time. Buying and selling real estate is extremely expensive.

Another is that you can't afford sudden large maintenance expenses like a new roof or whatever.

These are the biggest three that come to my mind.

If these reasons for renting apply, then anyone who converts a property to a rental is increasing the supply available to you. Even if it's not newly constructed.

And you can't get mortgage because... landlords with enormous leverage bid against each other, jack up rental costs and you are left with even less for mortgage.

I do like mobility tho - I've lived in 4 countries, 10+ properties, all rental. Unsure where is the right balance is tho. Banks in NZ won't let you develop property unless you already own land, so it's out or reach for first timers. IMO it's fair if we redirect investor capital into new developments.

I don’t see how this contradicts anything I said, if that’s what you’re alluding to.

Zoning laws would be part of increasing supply, for instance.

The govt has only focused on tweaking demand, not supply

You blamed interest rates in isolation

You said nothing about zoning

Also, zoning in its current form decreases supply so I have no idea where you get that from

What I was "alluding to" is stated plainly in my original comment, that your claim is extremely simplistic and that there are far more factors involved.

Ah yeah, sorry

I gave more details of my view in this other post very shortly after posting here

https://news.ycombinator.com/item?id=32218383

Was getting my two posts confused.

Higher interest rates make it easier to buy homes upfront for the rich because the mortgage financed competition is paying their money to the bank instead of on the house.

What is the context of the graph? I don't get it from the labels.

It's the fraction of survey respondents saying home prices are low, less the fraction saying prices are high. So 0 is a neutral market and it ranges over [-100,100].

The whole survey is highly informative. https://data.sca.isr.umich.edu/

In Homer's voice: The single worst moment in recorded American history so far :)

Jokes aside, it's quite anxiety inducing to watch home ownership slip further out of reach, even for a well-compensated tech worker.

No kidding. There is no such thing as timing the [housing] market. If you can afford it you should probably buy that house. Yes, probably you could get a better deal if your timing is perfect but... In 1, 5, 10 years from now it will not matter.

Most people who say that couple it with all sorts of biases about the right time to buy a home.

Question: is it unethical to own multiple homes and rent them out?

I have a coworker that decided to make an offer on a house but not make it contingent on selling their existing house. They are currently paying two mortgages and it seems like they'll sell their previous house for quite a bit less than what they expected.

Why didn't he sell and then rent something less comfortable (i.e. cheaper) for a while before going back into the market chain-free?

It can still be difficult to find what you're looking for (inventory is low), and with prices increasing as they had been up until very recently, you end up running the risk of not being able to find a replacement before you're priced out

It's not very practical nor is it inexpensive for most people to move all of their belongings into an apartment and storage unit, then move it out into a new home.

Could they rent it out?

The rents are not getting cheaper so I believe the sale prices won't go down either.

Rent competes with mortgage payments not housing prices. Interest rates are up so payments will go up unless prices come down.

Not sure how it is globally but in the US the logic here is that if the owner is paying a mortgage on the house, then the renter should cover that mortgage and then some for a profit. So that would imply the renter can afford the mortgage but potentially not the down payment -- of course there are many exceptions like people who want to rent for a short time to be in a particular neighborhood for their kids school or whatever. But I do wonder if there was some way to decouple this connection between mortgage payment per month vs. rent price. No idea on a solution. I wonder if somebody has built up a map that shows how many houses are rentals in a particular area vs. owner occupied -- might be interesting to understand that ratio vs. how housing prices trend.

Expanding on that logic a bit, you may be able to cover the mortgage from 5 or 10 years ago when the landlord bought the house, but not today. Or you may not want to lock yourself to one area for 5+ years, so you choose to rent instead of buy. Or you may not want the hassles of homeownership.

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