Unfortunately housing will still not get cheaper because nearly the entire supply is locked into 30 year loans at near 0%, even a fool would starve, default their car note, and sell their every last valuable before giving that up.
Unfortunately we got lucky, the big players in REO weren't ready to 'close' that many packages last time. My first devops role was at a company that was working with big players to make sure next time this exact scenario presented itself the big guys will be able to deploy their cash to gobble these things up.
It is right that it is not likely a credit crisis that will be the trigger next time.
But it could be hyperinflation - which would de-facto crash the housing market.
Right now the PE value for the housing market is really high, and it is not likely to continue up forever.
Last year I built a house for ~30k shell, about ~60k with utilities and everything inside of it. My own labor.
Of course, there are only a handful of counties that will let you do that without licenses, or a building plan, or inspections at times that preclude holding a job. Because there is always some self-righteous actor, screaming at the rooftop that their neighbor is going to kill the whole neighborhood in a fire, no matter that housing has been virtually completely unregulated for owner/builders in my county for 2 decades and none of the hysteria people warned of came to fruition.
The plus is all these people screaming for expensive regulations are absolutely scared shitless of my area, and do not live here. Which is nirvana.
https://www.youtube.com/watch?v=r9j1Wz89vdc
Supposedly they don't need any permits. I didn't know there's something called roof grade spray foam.
Most people aren't building insanely stupid and dangerous homes because in most places they legally can't, and very few work specifically just in your county, so they just do what they mostly do, which is mostly safe and up to code. Maybe they cut a few corners. Probably a few weirdos doing entirely their own thing.
By the same token, if your weird neck of the woods made seatbelts non mandatory, it wouldn't mean everyone takes them off as they drive through, so the subsequent maintained levels of vehicular loss of life would say nothing about the increase of safety seatbelts provide. A few weirdos might be taking the belt off, though!
Still, it'd only take one weirdo's entirely preventable and lethal to their kids house fire/car crash to prove them idiotic and probably get the law changed.
I would posit one of the best things we could do to save children would be to completely deregulate the housing industry and eliminate trades licensing. This would not only enable housing accessibility but more money for education, healthcare, and good food for kids.
The next step up "problem" is that the income curve has flattened greatly in the last 75 years. So there are many more high earners mixed in that they are carrying "regular home" prices up with them.
In 1967 lower/middle/upper class ratio was 36%/54%/10%
In 2019 lower/middle/upper class ratio was 25%/41%/34%
The middle class is shrinking because people are getting richer, not poorer. That's the part you never hear people say. Probably because they don't even know it and just assume everyone is broke.
I can only imagine now, after the pandemic money shower (not stimulus checks), that this effect is even greater. Hell upper class might actually be at parity with middle class now.
Nah. Climate change is real, and humans can absolutely affect it.
Not enough good places to live? Make new ones. It takes decades or centuries but it can be done.
They're doing it wrong. I'll point to places adjacent to the sahara building a "green wall" which is turning parts of the sahara back to a savannah and replenishes the water table.
https://www.youtube.com/watch?v=xbBdIG--b58
Andrew Millison's youtube channel has several videos on the subject, and related subjects in other parts of the world too.
Pretty much all the good spots for cities have already been claimed, hundreds of years or even millennia ago. These are the spots people live in, and the spots people want to live in (as evidenced by ever increasing cost to live there).
Harbors? No. Trains and airplanes exist.
River ways? Los Angeles and California have demonstrated, with the LA river, that rivers can be constructed. Also, trains and airplanes exist. Wanna complain about no water? Well that's where land revitalization comes in.
Mine-able resources? Perhaps. There are lots (!) of resources in deserts that aren't mined. I also argue that food is basically a mine-able resource. I also argue that many resources can be imported instead. I also argue that plenty of people can work remotely without ever working a field or a mine.
That chart says it’s for households, not individuals so for the time scale shown (70s onwards) all you’re seeing is that 1 earner households became 2 earner households.
The stuff about upper class growing does not follow from that. Poor analysis.
In the locales where one has a decent chance of earning more than $100,000 (like the Bay Area) that income is significantly below poverty level, even as a household of one. That is definitely not "upper class" by any definition.
Put differently: this chart shows the average temperature of the patients in a hospital. You can't just show average income across all of the US without considering cost of living and pretend that this result means something.
On a price per square foot basis, home prices have been remarkably stable since 1960s. The share of income spent on housing has also remained remarkably stable. Though prices have ballooned, interest drops considerably, so monthly payments as share of income haven't changed that much.
The way things have gotten worse for people isn't so obvious. For one thing, people have many more choices to spend their money on, such as computers and college. That's created additional pressure on people without the cost of housing itself changing as much as people think, but its a problem someone from 1960 might roll their eyes at. (Hedonistic adaptation?) Then of course there's various income and geographical bifurcations. For example, you can choose to live someplace cheap, but then you're opting out of the highly dynamic and potentially highly lucrative portions of the economy. That's an opportunity cost, but not a literal cost if you're comparing to 1960s lifestyles.
I’m not sure that’s true, in fact I’m quite sure it’s not, but I’m willing to change my mind if you have a good source. In particular, home sizes have shrunk since 00 and prices have surely not gone down so it could only be true prior to then if at all.
Census and Statista have some data but this shows a decent chart: https://supplychenmanagement.com/2018/07/15/average-house-si...
https://www.census.gov/content/dam/Census/programs-surveys/a...
https://compasscaliforniablog.com/have-american-homes-change...
Note that the average square footage of news home in 1960s was 1200 sqf, but the average of a 1960s-era home today is 1500 because of additions.
Here are some articles with longer discussions:
https://moneywithkatie.com/blog/are-houses-more-expensive-or...
https://www.cato.org/blog/questioning-housing-crisis-crisis-...
If you don't trust the sources of those articles, note that I was skeptical, too (of similar articles I had read), which is why I went looking for primary sources.
There's a similar phenomenon with home ownership. The percentage of homeownership has only varied by a few percentage points over the past 60+ years. However, what has changed is the median age of homeowners: they tend to be older. In particular, younger people tend to wait longer to purchase a new home. Now, there's two ways to look at that: they wait longer because they need to spend more time saving money or they wait longer because they want to buy bigger homes or move into more exclusive neighborhoods. And those aren't mutually exclusive. But then there's also the demographic shift toward older Americans generally, which means younger people are competing with older people (with more savings) for homes.
The financial pressures are real, it's just that the sources of those pressures are much more complicated than in the popular discourse.
That is not a good thing for new buyers. It is fantastic for people who bought when prices were cheap and rates higher, because now they have a low mortgage and low rates (refinance). But new buyers must now find higher deposits and have no real hope of every paying their property off early because any over-payments make only small dents in the high prices.
That's what they told me when I bought my $250K condo in the early 2000's. Then in 2008 it was magically worth only $125K after being appraised a year earlier for 350K.
Never forget: "The market can remain irrational longer than you can remain solvent"
And what's it worth today? What is the average annual price appreciation since you bought it?
Watching "home value" month-to-month is pointless.
As far as your "month to month" comment - I'm not a real estate investor. Just a guy, with a growing family who went to sell his house in 2008 and was told it was worth less than half of what I paid. It was a setback, we survived, we were fortunate.
But it's very regional. Some areas will continue to see rising or stable prices.
I'd say that it changes the situation a little, but not everyone is able to work remote yet, so there's still the draw toward large city centers like you say. But personally I've met plenty of people who ditched their big city for the midwest as soon as they got approval to go remote. When their companies told them to go back to the office, they quit and found another job