Hacker News Reader

Comment by ianai | Hacker News Reader

“”” Summary

The number of privately-owned housing units under construction in the US is at an all-time high of more than 1.7 million as price declines accelerate.

Who's going to buy all of these houses with mortgage rates of 7.3%? At current prices - people really can't, indicating the need for some serious price reductions. Housing demand is tanking while supply is about to soar. Real-time home prices are now falling at a faster rate than the 2008 housing crash.

This could be one of the biggest housing crashes in history. The Fed waited too long to hike rates during the boom and now needs home prices lower, so the cavalry won't be there to rescue with rate cuts this time. “””

Lots of great data presented here too.

View on HN

Are these houses mostly built to be sold on completion, or occupied by their current owners?

> Are these houses mostly built to be sold on completion, or occupied by their current owners?

In the US, only a minority of houses are build from the ground up by a specific person (custom houses).

Most houses are built like this: property developers buy a large plot of land, divide it into plots, and build a group of houses. From the moment they divide the land into plots, they pre-sell the houses. The earlier you buy in, the lower your price is.

Because of that, it's tricky to answer your question:

* Some of the houses may not be sold yet * Some of the houses may be under contract, but the buyer can back out by losing their down payment (especially in cases where they can't get financing - you can put a home under contract without the full financing secured) * Some of the houses may be fully sold, with the financing paperwork already secured

This way of building is also the root of urban sprawl, and all the infrastructure problems associated with it.

Right, but that sprawl is apparently what people want.

It is not typical in the US to raise a family in an apartment in a high density neighborhood.

There are exceptions, but typically only younger or lower income people live in apartments in the US. Pretty much everyone else aspires to have a house with a yard.

Better apartment architecture could go a ways towards ameliorating this, I suspect. But I’ve definitely not seen any.

On the margin, people prefer to live in the city than in the far suburbs. You can see this from the large price premium on houses in the city.

There are all sorts of legal impediments to infill development. Some people want one thing. Yes, plenty of people want suburban living. But there are enough exceptions that demand for city living is greater than supply more so than for suburban living.

> Right, but that sprawl is apparently what people want.

To be honest, I'm not sure this is exclusively the case. Older neighborhoods with more density and mixed use are so in demand they will sell for 2-10x as much as suburban counterparts. It's just that they are illegal and can't be built.

There seems to be an insane demand for mixed use and medium density housing that is close to services, jobs and transportation. Imagine, never having to commute again. Living next to a walking path that is quiet and well maintained where you can take your kids for a walk. Even better, a 5 minute walk away is a grocery store and an ice cream shop that your kids can walk to safely without ever crossing a dangerous road.

There is a demand, just no supply!

We have high crime and violence, and we try to insulate our families from that, as well as from druggies shitting on the sidewalks.

“This is all we sell, take it or leave it.” is not a confirmation of what the buyer wants.

Supply side reviewing past sale’s history and deciding to sell some twist on a past thing that sold creates an “take it or leave it, because we decided this was most likely to sell” market dictated by supply sides review of the past.

yes this is sprawl, its evil and unsustainable

Reply on news.ycombinator.com