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Sure, but the point of cooling the economy is to decrease demand and thereby create lower prices. So in that regard it has not worked. In most markets home prices are as high as ever. Same with goods and services.Quote:
Originally Posted by Dantheman
Aren't towns taking steps to deal with STR's where the owner does not also live, a permanent full time resident can rent a suite or whatever but they can't run half a doz of them or even rent a vaca property
2-3%?! That's cute! Nearly Gypsum numbers there. Winter Park and Breck are 70-80%.
Attachment 495563
From the excellent report here:
https://www.nwccog.org/wp-content/up...ort_FF_web.pdf
The soft landing everyone was hoping for has happened. Slow the economy too fast and it craters into a recession. Don't slow it enough and inflation stays high and people suffer. We had to hit a middle ground, which we seem to have done, thankfully. America came out of covid WAAAAAAY better off than any other major economy.Quote:
Originally Posted by yeahman
Increasing supply creates other intractable messes, such as water, emergency services, schools, hospitals, police, waste treatment, county services, traffic, pollution, and crime. It’s all a balance.Quote:
Originally Posted by yeahman
Hence, the job of City/County Planners, and School/Park/Traffic/Utility/etc impact fees associated with new development. As you say, lots of shit is needed to support more housing.Quote:
Originally Posted by rideit
Yeah but higher rates have mostly succeeded in choking off supply by stranding everybody in place, tethered to their low rate. Low inventory = high prices, the opposite outcome from what the fed intended. So how do we get out of it now? Only way is to increase supply of living units, which for the most part hasn't happened fast enough. NIMBYism, regulatory environment, hell even high rates to finance building projects have all contributed. I can't see any way out, and I wouldn't be so quick to say the soft landing is a done deal. Something has to break to reset this mess.Quote:
Originally Posted by californiagrown
My fiancée just sold her Front Range CO townhouse. It was on the market for about a month before getting a full price offer +50% from 2019.
It had been cash flowing as a rental but she was tired of dealing with it.
Well no. The point was to reign in inflation, which it’s done, not to dump us into deflation.Quote:
Originally Posted by yeahman
Housing is just one part of the economy. Its a lot better to strand people in place because of higher rates, than it is to force people out of their homes because the economy cratered and we have a 15% unemployment rate. Its a fuckload worse to force people out of their homes than it is to make it harder for people to buy new homes.Quote:
Originally Posted by yeahman
What the fed was staring down in Spring 2020 was the fundamental collapse of the world economy... they NEEDED to give the economy a big push to keep it from stalling out and cratering. And then, once they were sure the economy was back running again, they needed a way to slowly cool it down to avoid runaway inflation (which is why the interest rate hikes were implemented), while not stalling out the economy again... it was an incredibly fine line to tread, and as it stands right now with wages rising and prices stabilizing it sure seems jiffy puff soft.
I do agree with you that what we need to do now (and should have been doing for years prior) is focus on building up the housing supply, and it needs to be built up in affordable price ranges. ALL of the housing being built near me (given its wealthy seattle) is starting at 1mil or above. The cheapest new townhomes are 750k+. Thats ridiculous. We need actual starter homes being built- 1800sf 3x2s and 2x1.5s with low end finishings on 6000sf lots, and going for $400-500k.
Builders aren’t gonna be interested (right now) in that return without subsidies.
Right.Quote:
Originally Posted by Mustonen
Inflation ex-shelter over the past year is 2.13%, so right about target.
Housing inflation has remained high but an issue with housing is that more supply is needed but the high rates are a barrier to building more. Hopefully rates will get cut soon now that goods and services inflation is back to normal.
Right, and why would they be? It is just as much of a PITA to permit and build a $500k house as it is a $1.5mil house, but the 20% ROI is a lot more on the $1.5mil house.Quote:
Originally Posted by rideit
We need to make it easier to build small/cheap housing so it can be a volume play for developers. We need to make it 3x as hard to build and permit a $1.5mil house as it is to build a $500k house. I would say we should incentivize cheaper houses, but that just means subsidies which is a political hot potato. HOWEVER, if we de-incentivize new homes for the rich and wealthy, maybe more builders will turn to cheaper houses. Any house valued at over $1mil gets put to the back of the permitting pile, and has to pay fees up the wazoo, while houses valued under $500k get fastracked review timelines, inspection scheduling, waived fees, etc.
Something risky that might work as well is creating an incentive or way for builders to receive construction loans prior to permits. Right now, most larger construction loans are tied to the issuance of permits- the initial cash outlay for consultants and permit fees is provided by the developer... if they were able to use loans to pay for that (as risky as it may be), more projects could get built.
L.A. accidentally created a boom of ‘low-income’ housing construction (low-income here being less than $100k if I remember).Quote:
Originally Posted by californiagrown
Two policy changes triggered it: allowing more unit density if the construction is designated 100% low income, and fast-tracking permitting for low-income construction (six months guaranteed instead of the more typical ~5 years for new apartments.)
Those two changes were enough to get builders to change their plans from luxury apartments, no subsidies required - so much so that the mayor is apparently panicked about all the new construction and trying to rein it in some.
To clarify, LA is earmarking these "affordable units" for folks making less than $100k/year. Unclear what the actual cost of the units are, but it appears that the boom is mostly rental apartments, not owned apartments or houses. That said, it does show that developers will take a volume play if it makes as much sense as a luxury/high end play.Quote:
Originally Posted by J. Barron DeJong
You know what they say, "If you have to ask what the price is, you didn't do your DD."Quote:
Originally Posted by Foggy_Goggles
Since ya'll went macro econ, some things to think about.
Supply side - Hard dollar build costs are frequently more expensive that many understand. Cost of labor, 2x4s, energy code compliance, infrastructure and so on precludes what many consider affordable. Think 2bd/2ba apartments at $3k a month plus utilities. Inexpensive 1bd/1ba multi family at $2k month. Developers come to the table with these spreadsheets and they get lit up. "OK, fuck it, I'll build but $1million condos".
Living wage job - it seems the conversation always comes back to the cost of housing versus why can't people afford it. "The government" is +/- 30% of GDP. Lead by example. $75k to start for essential or career type jobs. Send the tax payers the bill.
Flat demand curve in desirable locations - income disparity is so high and the wealthy effect has been cranking for decade. There is infinite demand for $500k second homes.
Public Housing Policy - should not support second homes and STRs.
Interest Rates - Put your subsidy here. With all the talk about the printing press and manipulated rates, don't forget this option. Loan programs for qualifying individuals the 10yr minus something.
But all politically unpopular so we will just keep pointing fingers and fucking ourselves in the ass.
This should be a big one. Second homes that are not longterm rentals should be heavily taxed to subsidize the construction of new housing stock. I would like to see it in the form of a big tax that goes into a fund meant to subsidize the payment of Impact Fees that affordable projects need to pay.Quote:
Originally Posted by Foggy_Goggles
My opinion is that government and landlord, developer, builder, Realtor doesn't have a great track recorder. Nor does, on a large scale, picking winners via an "affordable process".
And, almost by definition, a large percent of voters will have a hit to their equity by any solution.
Sent from my Turbo 850 Flatbrimed Highhorse
There are now 481,000 new homes for sale in the US, the highest inventory since January 2008.
And ~30 million more people.
does that mean 481000 people " know what they have got " ?Quote:
Originally Posted by 4matic
when will some of them blink
For the first time since June 2021, it is now CHEAPER to buy a new house than an existing house.
The median new home is selling for $417,400 while the median existing house is for $419,300.
New as in new constructionQuote:
Originally Posted by XXX-er
Builders still moving dirt for 100’s of new home lots around here.