Housing prices

jdog21 · Jun 9, 2017

Alot of you may be in a part of the country where housing prices dont flucuate that much but you still saw the rise of home prices in 06 and 07 and the fall in 09. In California this was greatly felt. Home prices trippled since 1997 and fell back down to that price in 09. Now prices are back up to their 07 highs and will conitinue slowly going up.

Prices are to the point were 80% of the population can not afford the home price. I ask what can be done about this?

Its the american dream to own a home and live there but sadly its become a money making scheme by the banks and investment source for the rich.

I propose there should be a law regulating the amount of different properties a person can own. Lets say 5. How would this effect our housing markets? Would it be for the better or worse?

I think it the prices would greatly fall and allow for more of our lower income to be able to afford a place to live. The economy may take a hit but if it were to recover then over all this would a great achievement.

Zalatix · Jun 9, 2017

jdog21 said:
Alot of you may be in a part of the country where housing prices dont flucuate that much but you still saw the rise of home prices in 06 and 07 and the fall in 09. In California this was greatly felt. Home prices trippled since 1997 and fell back down to that price in 09. Now prices are back up to their 07 highs and will conitinue slowly going up.

Prices are to the point were 80% of the population can not afford the home price. I ask what can be done about this?

Its the american dream to own a home and live there but sadly its become a money making scheme by the banks and investment source for the rich.

I propose there should be a law regulating the amount of different properties a person can own. Lets say 5. How would this effect our housing markets? Would it be for the better or worse?

I think it the prices would greatly fall and allow for more of our lower income to be able to afford a place to live. The economy may take a hit but if it were to recover then over all this would a great achievement.

Prices are going to go up perpetually, this time.

The problem is the growing population, for one, and furthermore, the flood of housing speculators who are outbidding everyone else with cash. This means no subprime crash is going to rein them in. The wealthy are buying 2 and 3 homes, often vacation homes that aren't up for rent.

https://www.wsj.com/articles/investors-with-cash-edging-out-first-time-home-buyers-1455656617
https://www.inman.com/2017/06/07/from-this-moment-on-nothing-will-be-the-same-in-real-estate/
Why Real Estate Investors Beat Out First-Time Home Buyers | realtor.com®

And this is also happening in the UK:
https://www.ft.com/content/807ea5ee-34a4-11e7-99bd-13beb0903fa3

Then there are the many rich foreign investors who are buying homes for themselves and their college-bound kids: again, these homes aren't going up for rent.

https://www.washingtonpost.com/real...ab3cba-7441-11e6-8149-b8d05321db62_story.html
http://www.marketwatch.com/story/foreign-investors-pose-threat-to-residential-real-estate-2015-06-15
https://www.forbes.com/sites/sarahs...-s-real-estate-are-going-strong/#24eb38891e60
https://www.bloomberg.com/news/arti...t-path-revealed-for-chinese-billions-overseas

One sad anecdote: I divested from the market a few years ago (we had two homes, one more than anyone needs) and you know what people were starting to do? Sending us freaking BEGGING letters making their case for why I should consider their offer over someone else's. I've never seen that before. I kid you not, the cover letter even came with a picture of the family. This is how evil the housing market has become because it's so crazy competitive. My Realtor said that this was a universal thing by then. I don't even know how these are NOT a violation of the Fair Housing Act, but Realtors are actually trained experts at offer letters because it's such a common practice. I never read those letters: tradition and fair housing principles say to consider the offer and the terms of the offer, and that's it.

Crovax · Jun 9, 2017

Zalatix said:
Prices are going to go up perpetually, this time.

The problem is the growing population, for one, and furthermore, the flood of housing speculators who are outbidding everyone else with cash. This means no subprime crash is going to rein them in. The wealthy are buying 2 and 3 homes, often vacation homes that aren't up for rent.

https://www.wsj.com/articles/investors-with-cash-edging-out-first-time-home-buyers-1455656617
https://www.inman.com/2017/06/07/from-this-moment-on-nothing-will-be-the-same-in-real-estate/
Why Real Estate Investors Beat Out First-Time Home Buyers | realtor.com®

And this is also happening in the UK:
https://www.ft.com/content/807ea5ee-34a4-11e7-99bd-13beb0903fa3

Then there are the many rich foreign investors who are buying homes for themselves and their college-bound kids: again, these homes aren't going up for rent.

https://www.washingtonpost.com/real...ab3cba-7441-11e6-8149-b8d05321db62_story.html
http://www.marketwatch.com/story/foreign-investors-pose-threat-to-residential-real-estate-2015-06-15
https://www.forbes.com/sites/sarahs...-s-real-estate-are-going-strong/#24eb38891e60
https://www.bloomberg.com/news/arti...t-path-revealed-for-chinese-billions-overseas

One sad anecdote: I divested from the market a few years ago (we had two homes, one more than anyone needs) and you know what people were starting to do? Sending us freaking BEGGING letters making their case for why I should consider their offer over someone else's. I've never seen that before. I kid you not, the cover letter even came with a picture of the family. This is how evil the housing market has become because it's so crazy competitive. My Realtor said that this was a universal thing by then. I don't even know how these are NOT a violation of the Fair Housing Act, but Realtors are actually trained experts at offer letters because it's such a common practice. I never read those letters: tradition and fair housing principles say to consider the offer and the terms of the offer, and that's it.

Down here prices are crazy but people aren't really getting the high prices. Once in a while someone sell thier house for an outrageous price and everyone else thinks they can get that. I've been looking to buy recently and the market is full of homes that have been on the market for over a year and are still priced 100k too high.

holbritter · Jun 9, 2017

jdog21 said:
Alot of you may be in a part of the country where housing prices dont flucuate that much but you still saw the rise of home prices in 06 and 07 and the fall in 09. In California this was greatly felt. Home prices trippled since 1997 and fell back down to that price in 09. Now prices are back up to their 07 highs and will conitinue slowly going up.

Prices are to the point were 80% of the population can not afford the home price. I ask what can be done about this?

Its the american dream to own a home and live there but sadly its become a money making scheme by the banks and investment source for the rich.

I propose there should be a law regulating the amount of different properties a person can own. Lets say 5. How would this effect our housing markets? Would it be for the better or worse?

I think it the prices would greatly fall and allow for more of our lower income to be able to afford a place to live. The economy may take a hit but if it were to recover then over all this would a great achievement.

Absolutely not. That's a big step down a slippery slide.

Zalatix · Jun 9, 2017

holbritter said:
Absolutely not. That's a big step down a slippery slide.

Oh well. I'll take that slippery slope over 25% jumps in homelessness like Los Angeles is experiencing.

jdog21 · Jun 9, 2017

Zalatix said:
Prices are going to go up perpetually, this time.

The problem is the growing population, for one, and furthermore, the flood of housing speculators who are outbidding everyone else with cash. This means no subprime crash is going to rein them in. The wealthy are buying 2 and 3 homes, often vacation homes that aren't up for rent.

I do understand the availabilty factor for pricing but as im sure you already noticed that the increase in prices of homes has no correlation with population increasing, or else you would see a slow and steady increase.
I understand the desire for the rich to own vacation homes and homes in differnt regions and for them to buy homes for their kids. But this can have a government cap. No one needs more then 4 homes and if they wanted their kids to own a home they could give them money and they could buy themselves that same home. Having a cap would reduce the amount of people who buy homes to be property land lords and investment portfolios. Which would increase the supply of available homes. Driving down home prices to a much more manigable level.
The aspect of letting foreigners who are not american citizens and do not reside in the country to own property seem like scam to drive prices upwards for the rich who own the properties to begin with. I personally do not like this but dont really have a good answer on how to fix this.

jdog21 · Jun 9, 2017

holbritter said:
Absolutely not. That's a big step down a slippery slide.

What slippery slope do u speak of?

The fact that home ownership rate for occupied housing is 67% (people who own the home their living in)
The vacancy rate is 7% (homes not for sale that have no one living in them)
The homeowner vacancy rate of 1.2% (Homes currently for sale)
The rental vacancy rate is 7% (rental properties with no renters)

Thats 14% of homes not having a person in them. Also 33% of the homes are either a vacation 2nd or 3rd home or a rental property. These numbers dont inlcude townhomes or appartments. Just single family homes. 67% home ownership is very low even for the US. The country can do better then this.

holbritter · Jun 9, 2017

Zalatix said:
Oh well. I'll take that slippery slope over 25% jumps in homelessness like Los Angeles is experiencing.

There are just too many people in the large metro areas of the country. It's not going to get any better unless people start spreading out, and that will not happen until jobs are brought back to those areas, and that will not happen if we "globalize" our economy.

jdog21 · Jun 9, 2017

Crovax said:
Down here prices are crazy but people aren't really getting the high prices. Once in a while someone sell thier house for an outrageous price and everyone else thinks they can get that. I've been looking to buy recently and the market is full of homes that have been on the market for over a year and are still priced 100k too high.

I agree & im also seeing the same trend. My questions goes to the fact prices are still exstremly high. Home prices should still be around their lows in 2009 imo. But the market manipulation has created another bubble and the way the system is set up we will continue to go threw bubbles. When housing should be a stabled price commodity.

jdog21 · Jun 9, 2017

holbritter said:
There are just too many people in the large metro areas of the country. It's not going to get any better unless people start spreading out, and that will not happen until jobs are brought back to those areas, and that will not happen if we "globalize" our economy.

Foriegners buying homes as investments equals to about 5% of all transactions. That amount can greatly affect the housing prices. These are homes that could have been purchased by citizens and families in the US.

joG · Jun 9, 2017

jdog21 said:
Alot of you may be in a part of the country where housing prices dont flucuate that much but you still saw the rise of home prices in 06 and 07 and the fall in 09. In California this was greatly felt. Home prices trippled since 1997 and fell back down to that price in 09. Now prices are back up to their 07 highs and will conitinue slowly going up.

Prices are to the point were 80% of the population can not afford the home price. I ask what can be done about this?

Its the american dream to own a home and live there but sadly its become a money making scheme by the banks and investment source for the rich.

I propose there should be a law regulating the amount of different properties a person can own. Lets say 5. How would this effect our housing markets? Would it be for the better or worse?

I think it the prices would greatly fall and allow for more of our lower income to be able to afford a place to live. The economy may take a hit but if it were to recover then over all this would a great achievement.

How do you mean that people "can't afford" to buy a house? Could you be more precise?

Crovax · Jun 9, 2017

holbritter said:
There are just too many people in the large metro areas of the country. It's not going to get any better unless people start spreading out, and that will not happen until jobs are brought back to those areas, and that will not happen if we "globalize" our economy.

It's more like the opposite. I live in a rural area but the housing prices are too high I'm actually thinking about changing my commute from 5 mins to an hour to get a house for about $150k less in the suburbs

jdog21 · Jun 9, 2017

joG said:
How do you mean that people "can't afford" to buy a house? Could you be more precise?

The median home price in CA is $500,000 but the median income in CA is $61,000
Monthly home payment of $3,200 with an income of $5,100 thats 63% of your income going towards housing. Banks wont lend you money if that ratio is above 28%

Zalatix · Jun 9, 2017

jdog21 said:
I do understand the availabilty factor for pricing but as im sure you already noticed that the increase in prices of homes has no correlation with population increasing, or else you would see a slow and steady increase.

Except that the population increase was only one factor that I mentioned. I mentioned other issues, too.

I understand the desire for the rich to own vacation homes and homes in differnt regions and for them to buy homes for their kids. But this can have a government cap. No one needs more then 4 homes and if they wanted their kids to own a home they could give them money and they could buy themselves that same home. Having a cap would reduce the amount of people who buy homes to be property land lords and investment portfolios. Which would increase the supply of available homes. Driving down home prices to a much more manigable level.
The aspect of letting foreigners who are not american citizens and do not reside in the country to own property seem like scam to drive prices upwards for the rich who own the properties to begin with. I personally do not like this but dont really have a good answer on how to fix this.

That's easy - if you're a non citizen who buys residential properties here, you get assessed a yuuuge tax to cover affordable housing programs for the citizens who can't afford rent or housing. If the Feds won't do it, then the states can. What's not easy is mustering the hairy balls to pass such a law over the objections of the rich and their not-yet-rich (and not ever going to be rich) rural American Conservative minions.

Zalatix · Jun 9, 2017

holbritter said:
There are just too many people in the large metro areas of the country. It's not going to get any better unless people start spreading out, and that will not happen until jobs are brought back to those areas, and that will not happen if we "globalize" our economy.

Spreading out? You mean into the RURAL areas? That's feasible if you're white, Christian, rich, and cis hetero. For anyone else the rural areas are very, very bad news: that's Trump country out there, politically and culturally. Plus the rural areas are losing jobs because cities are more cost-effective to manage. Employers want to go where the population - and infrastructure - are. No company wants to rely on well water and septic tanks.

joG · Jun 9, 2017

jdog21 said:
The median home price in CA is $500,000 but the median income in CA is $61,000
Monthly home payment of $3,200 with an income of $5,100 thats 63% of your income going towards housing. Banks wont lend you money if that ratio is above 28%

That only means you have to save at first and buy a somewhat below median quality/size/location home. But those numbers you mention are probably better than those faced by Brits in London or Germans in Munich.

jdog21 · Jun 9, 2017

Zalatix said:
Except that the population increase was only one factor that I mentioned. I mentioned other issues, too.

That's easy - if you're a non citizen who buys residential properties here, you get assessed a yuuuge tax to cover affordable housing programs for the citizens who can't afford rent or housing. If the Feds won't do it, then the states can. What's not easy is mustering the hairy balls to pass such a law over the objections of the rich and their not-yet-rich (and not ever going to be rich) rural American Conservative minions.

There is already a federal law that requires all foreign property owners who sell a home that the income is subject to capital gains tax. Which only applies to citizens if the income they make off the sell is more then 250k

jdog21 · Jun 9, 2017

joG said:
That only means you have to save at first and buy a somewhat below median quality/size/location home. But those numbers you mention are probably better than those faced by Brits in London or Germans in Munich.

According to CA assioaction of realtors only 11% of the people living in San Francisco can afford the Median priced home for sell. Not to mention that that 11% would have to come in with 20% down payment, have a near perfect credit score and have no debt to speak of, no credit cards, no car payments, no alomony, no child support, ect.
https://www.nar.realtor/topics/hous...ef_combine=field_publish_timestamp_value DESC

PeteEU · Jun 9, 2017

It comes down to greed. You see it in Europe as well.

House building companies dont want to build affordable homes, but go after the high end market. That means that not only will the amount of houses be limited, but they will be expensive.

Frankly without massive government intervention into the market, and more affordable homes being build, the current situation will just continue and spread. The more popular an area is with workers, the faster the housing prices will rise.

joG · Jun 9, 2017

jdog21 said:
According to CA assioaction of realtors only 11% of the people living in San Francisco can afford the Median priced home for sell. Not to mention that that 11% would have to come in with 20% down payment, have a near perfect credit score and have no debt to speak of, no credit cards, no car payments, no alomony, no child support, ect.
https://www.nar.realtor/topics/hous...ef_combine=field_publish_timestamp_value DESC

And....? I don't really see the general problem. Of course it can be unpleasant for people that haven't put their act together yet. But isn't that the way societies work? I don't see any realistic alternative.

Zalatix · Jun 9, 2017

jdog21 said:
There is already a federal law that requires all foreign property owners who sell a home that the income is subject to capital gains tax. Which only applies to citizens if the income they make off the sell is more then 250k

Good point. Where's the law that hits them up front, when they buy the home? Also, capital gains taxes are lower than wage taxes, are they not? Or at least it seemed that way to me when we sold our nonresident home. I was actually floored at how little we had to pay.

joG said:
And....? I don't really see the general problem. Of course it can be unpleasant for people that haven't put their act together yet. But isn't that the way societies work? I don't see any realistic alternative.

Define "put their act together". Do you even realize what the median home price is in San Francisco? According to Zillow the median price for a home there is over ONE MILLION dollars! The median income there is roughly $77K. Banks will not lend to you unless your mortage is under 28% of your income, so with the median income being ~$77K there your mortgage must be ~$22K or less per year or ~$1800 per month.

So tell me how do you even get a loan for a $1.1 million home that comes out to $1800 a month?

No one can "put their act together" with an income of $77K and be eligible for a bank loan unless they get a higher paying job - which is rare, so unless you win the game of musical chairs you're not going to qualify no matter how hard you try.

Perhaps by "get your act together" you meant rob a bank? I could see your argument being valid here - hacking someone's bank account is a skill that anyone can learn, after all. :roll:

joG said:
That only means you have to save at first and buy a somewhat below median quality/size/location home. But those numbers you mention are probably better than those faced by Brits in London or Germans in Munich.

Good luck with that. In California you will surely get outbid by a foreigner with more cash on hand than the value of your loan.

holbritter · Jun 9, 2017

Crovax said:
It's more like the opposite. I live in a rural area but the housing prices are too high I'm actually thinking about changing my commute from 5 mins to an hour to get a house for about $150k less in the suburbs

Yeah, it would definitely differ based on your location. It's the opposite where I am.

holbritter · Jun 9, 2017

jdog21 said:
What slippery slope do u speak of?

The fact that home ownership rate for occupied housing is 67% (people who own the home their living in)
The vacancy rate is 7% (homes not for sale that have no one living in them)
The homeowner vacancy rate of 1.2% (Homes currently for sale)
The rental vacancy rate is 7% (rental properties with no renters)

Thats 14% of homes not having a person in them. Also 33% of the homes are either a vacation 2nd or 3rd home or a rental property. These numbers dont inlcude townhomes or appartments. Just single family homes. 67% home ownership is very low even for the US. The country can do better then this.

The slippery slope of government telling me what I can or cannot purchase. If I want to own 12 houses, that's my right. Not that I could ever do that or want to.

Zalatix · Jun 9, 2017

holbritter said:
The slippery slope of government telling me what I can or cannot purchase.

Good. Because other people's right not to be homeless trumps your right to own 12 houses. Human life over money, I say. In fact I favor making it so that no one can own a house they do not reside in.

holbritter · Jun 9, 2017

jdog21 said:
Foriegners buying homes as investments equals to about 5% of all transactions. That amount can greatly affect the housing prices. These are homes that could have been purchased by citizens and families in the US.

They wouldn't be available for foreigners to purchase if the jobs were there to attract US citizens. The foreigners are not buying those houses anyway. They are buying where the demand is.