Real Estate Crash thread

[liv2ski]

Ya, I don't feel bad for any of those Bay area H1B visa hacks from India I do loans for. Both husband and wife work, combined income of $300k is not unusual, tons of cash in the bank, likely own rentals as they have moved up, drive old cars and live waaaaay below their means. Dumb ass crackers could learn a lot from them.

[Toadman]

Bend just changed the zone restrictions to allow residential on commercial zoned property. Now, if only they could find builders willing to give up building 7 figure homes to build low income housing. I know there are a few out there building these tiny little 600 sq foot townhomes. But those go for like $300k...

This http://https://www.treehugger.com/hi...-homes-4858265 is outdated. Building material prices sky rocketed and they had to charge about $50k more. Nice looking places, but the price per sq foot is ridiculous when you calculate what you are actually getting for your money.

[MakersTeleMark]

https://www.hcn.org/issues/53.2/indi...housing-market

[Danno]

Bend just changed the zone restrictions to allow residential on commercial zoned property.

maybe I am missing something here or maybe my understanding is faulty, but I always thought zoning went from most restrictive to lease restrictive, such that you couldn't build a commercial building on something zoned residential, but you could always build a residence on something zoned commercial (but generally wouldn't want to because commercially zoned property is more profitable as commercial property).

[MakersTeleMark]

maybe I am missing something here or maybe my understanding is faulty, but I always thought zoning went from most restrictive to lease restrictive, such that you couldn't build a commercial building on something zoned residential, but you could always build a residence on something zoned commercial (but generally wouldn't want to because commercially zoned property is more profitable as commercial property).

Nope.

[Name Redacted]

maybe I am missing something here or maybe my understanding is faulty, but I always thought zoning went from most restrictive to lease restrictive, such that you couldn't build a commercial building on something zoned residential, but you could always build a residence on something zoned commercial (but generally wouldn't want to because commercially zoned property is more profitable as commercial property).

I think that is Boulder specific.

[Mazderati]

Zoning in most places I've lived has generally been set up as Danno describes; residential allowed in commercial but commercial not allowed in residential. Whether that's the norm or the exception, I don't know.

[Shredhead]

It varies by local. City council has a ton of power.
Ours rezoned a ski slope from Ski Area to lodging, fuckers.

[californiagrown]

Zoning in most places I've lived has generally been set up as Danno describes; residential allowed in commercial but commercial not allowed in residential. Whether that's the norm or the exception, I don't know.

Not the case where I am. The way developers get around it is to throw retail on ground floor and 4stories of resi above w/ 2 stories undergroundparking. Hence the classic 5 over 2 mixed used development.

[glademaster]

It varies by local. City council has a ton of power.
Ours rezoned a ski slope from Ski Area to lodging, fuckers.

In no small part due to the town being a Home Rule Municipality. Where I was working previously in another state, city council didn't have a whole lot of power to do anything unless it aligned with the county's growth and expansion plans.

I know nobody reads my posts, so I'll fling some shit at the wall and see if it sticks. I think another factor driving the ever increasing price of housing is that it is the only context in which families are willing to give their kids significant amounts of money. I can only speak for my experience and that of a small number of people I know well enough to discuss financial matters with, so my evidence is anecdotal only, but it's certainly something that applies in my instance.

If I asked my dad for a several thousand dollar loan to start a business, or invest in one, or something like that, he would tell me to get bent and go to a bank, without hesitation. But I asked him for help with the down payment on a house, he would have no qualms about giving me that much larger sum of money. So for (some, not all) people in that position, the most viable avenue to achieving financial stability/wealth is through home ownership.

This is driving a multi-generational spike in housing prices (i.e. Xers and Millenials buying expensive homes with Boomer money), and I'm not sure what the solution is until there is a cultural shift away from the notion that the only acceptable form of financial gift to give someone is money for a real estate purchase.

[zion zig zag]

My parents gave me their old mattress when I bought my first house.

[californiagrown]

In no small part due to the town being a Home Rule Municipality. Where I was working previously in another state, city council didn't have a whole lot of power to do anything unless it aligned with the county's growth and expansion plans.

I know nobody reads my posts, so I'll fling some shit at the wall and see if it sticks. I think another factor driving the ever increasing price of housing is that it is the only context in which families are willing to give their kids significant amounts of money. I can only speak for my experience and that of a small number of people I know well enough to discuss financial matters with, so my evidence is anecdotal only, but it's certainly something that applies in my instance.

If I asked my dad for a several thousand dollar loan to start a business, or invest in one, or something like that, he would tell me to get bent and go to a bank, without hesitation. But I asked him for help with the down payment on a house, he would have no qualms about giving me that much larger sum of money. So for (some, not all) people in that position, the most viable avenue to achieving financial stability/wealth is through home ownership.

This is driving a multi-generational spike in housing prices (i.e. Xers and Millenials buying expensive homes with Boomer money), and I'm not sure what the solution is until there is a cultural shift away from the notion that the only acceptable form of financial gift to give someone is money for a real estate purchase.

That is in large part because real estate is seen as a MUCH lower risk investment than the business that junior wants to start (especially when junior is only 10 years removed from the idiocy of their teenage years which the parents oversaw). My FIL gave his nephew around 20k to start start his coffee shop in 2017. The coffee shop is still in the process of being remodeled and has yet to serve a customer. If my FIL wants to give me 20k, ill put it towards remodeling my house so when he stays with us its a better experience for him... and that 20k will return 2x on the investment in the increased home value. Id also put him and his extensive collection of tools to work on the remodel as he personally remodeled and flipped numerous houses during my wife's childhood- id just be the unskilled grunt laborer.

As has been said before, there are plenty of affordable places to live. But none of those places are where i WANT to live. Im lucky (and worked my ass off) to allow myself an opportunity to live where i want to, not where i have to.

[schuss]

That is in large part because real estate is seen as a MUCH lower risk investment than the business that junior wants to start (especially when junior is only 10 years removed from the idiocy of their teenage years which the parents oversaw). My FIL gave his nephew around 20k to start start his coffee shop in 2017. The coffee shop is still in the process of being remodeled and has yet to serve a customer. If my FIL wants to give me 20k, ill put it towards remodeling my house so when he stays with us its a better experience for him... and that 20k will return 2x on the investment in the increased home value. Id also put him and his extensive collection of tools to work on the remodel as he personally remodeled and flipped numerous houses during my wife's childhood- id just be the unskilled grunt laborer.

As has been said before, there are plenty of affordable places to live. But none of those places are where i WANT to live. Im lucky (and worked my ass off) to allow myself an opportunity to live where i want to, not where i have to.

To layer on top of that - many high paying jobs now offer location flexibility they didn't previously, so you have well-heeled buyers suddenly popping up in markets that previously only saw those income levels for retirees. So for desirable spots, instead of competing against local employers/market, suddenly you have an influx of folks at the high end who work for large corporations/consultancies/tech co's/themselves where previously it was only a small population of local business owners/hospital execs etc. in that space.

[glademaster]

That is in large part because real estate is seen as a MUCH lower risk investment than the business that junior wants to start (especially when junior is only 10 years removed from the idiocy of their teenage years which the parents oversaw). My FIL gave his nephew around 20k to start start his coffee shop in 2017. The coffee shop is still in the process of being remodeled and has yet to serve a customer. If my FIL wants to give me 20k, ill put it towards remodeling my house so when he stays with us its a better experience for him... and that 20k will return 2x on the investment in the increased home value. Id also put him and his extensive collection of tools to work on the remodel as he personally remodeled and flipped numerous houses during my wife's childhood- id just be the unskilled grunt laborer.

As has been said before, there are plenty of affordable places to live. But none of those places are where i WANT to live. Im lucky (and worked my ass off) to allow myself an opportunity to live where i want to, not where i have to.

Fair points generally, although IME you rarely ever recoup the costs of home improvement projects when it comes time to sell the place. Also, in-laws aren't family.

Also, a $20K remodel of a coffee shop only buys you an average espresso machine and a couple grab bars to make the bathroom ADA compliant.

My dad has also been explicitly forbidden from handling any tools beyond a manual screwdriver, a 6 foot step ladder and sandpaper (he's an eye surgeon and my mom is neurotic) , so he's not helping me with shit except financially.

[Toadman]

Not the case where I am. The way developers get around it is to throw retail on ground floor and 4stories of resi above w/ 2 stories undergroundparking. Hence the classic 5 over 2 mixed used development.

There's quite a bit of that here. But the city council in all their wisdom and a few donations from developers pretty much change the zoning laws to suit the developers.

So, take an area zoned R4, and then change the zoning restriction to put up multi-dwelling units and change codes for infrastructure.

Around here the developers run the town. Sure, you can say your piece for 2 minutes in front of a mic and then the rezoned development gets rubber stamped. I'm sure most towns and cities are that way. Building fees and permit fee, increase tax dollars and jobs is what it's all about.

Well off single family home owners have zero power in this town. Zero.

[Toadman]

In no small part due to the town being a Home Rule Municipality. Where I was working previously in another state, city council didn't have a whole lot of power to do anything unless it aligned with the county's growth and expansion plans.

I know nobody reads my posts, so I'll fling some shit at the wall and see if it sticks. I think another factor driving the ever increasing price of housing is that it is the only context in which families are willing to give their kids significant amounts of money. I can only speak for my experience and that of a small number of people I know well enough to discuss financial matters with, so my evidence is anecdotal only, but it's certainly something that applies in my instance.

If I asked my dad for a several thousand dollar loan to start a business, or invest in one, or something like that, he would tell me to get bent and go to a bank, without hesitation. But I asked him for help with the down payment on a house, he would have no qualms about giving me that much larger sum of money. So for (some, not all) people in that position, the most viable avenue to achieving financial stability/wealth is through home ownership.

This is driving a multi-generational spike in housing prices (i.e. Xers and Millenials buying expensive homes with Boomer money), and I'm not sure what the solution is until there is a cultural shift away from the notion that the only acceptable form of financial gift to give someone is money for a real estate purchase.

Only skimmed you post, so forgive me for my take on housing prices going up.

#1) Price of land is going up. (They ain't building more of it.)
#2) Cost of labor
#3) Cost of materials - Just look at the LBS-F charts the past 12 months. (Lumber Commodity futures index) Also, Trump did no one a favor in the building industry with his tariffs.
#4) Greedy city councils jacking up building permit fees.

Then there's this thing called supply and demand. There's more demand than supply. No one wants to build low profit margin, low income housing. Why would any developer want to waste precious resources on low profit margin housing? This is America, home of the capitalist, land of opportunity. And opportunity requires hard work. (Okay, a little luck doesn't hurt either.) So, good luck.

[Hopeless Sinner]

But I asked him for help with the down payment on a house, he would have no qualms about giving me that much larger sum of money. So for (some, not all) people in that position, the most viable avenue to achieving financial stability/wealth is through home ownership.

This is driving a multi-generational spike in housing prices (i.e. Xers and Millenials buying expensive homes with Boomer money), and I'm not sure what the solution is until there is a cultural shift away from the notion that the only acceptable form of financial gift to give someone is money for a real estate purchase.

Those are pretty relevant points. My daughter as a young school teacher can't afford rent in the big city so we help her out. I presume someday we'll be giving her money towards a down payment for housing once she decides on a long term job location. But my parents gave us money for a down payment so nothing new there and a younger boomer such as myself faced what we thought were incredibly high sales prices plus interest rates in the 8-10% range, iirc. Fortunately we didn't get caught in the last bubble.

[neufox47]

As some others have said,when comparing the house of a “middle class” family in the 50s or 80s, you have to consider what was acceptable then. A 2,000 sq ft house with 2 bedrooms was huge in 1950, a good sized home to raise your family in 1980, and now a house that needs an addition and at least 1 more bathroom in 2021.


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[Benny Profane]

Yeah... if you want a bunch of soft, squishy kids in society.

Ski towns need seasonal workers.

[schuss]

As some others have said,when comparing the house of a “middle class” family in the 50s or 80s, you have to consider what was acceptable then. A 2,000 sq ft house with 2 bedrooms was huge in 1950, a good sized home to raise your family in 1980, and now a house that needs an addition and at least 1 more bathroom in 2021.


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I don't think this is necessarily true, as many of the expensive areas see low sqft stuff still go for big money. Go look at 1500-1600 sqft places in Boston area - not cheap.
I remember my buddy sold his apartment in Brookline for like 800k. It was maybe 1200 sqft in a terrible 2 floor layout. This is just a "people are entitled" argument. Most new home construction I see is larger because smaller or more affordable housing is rarely prioritized or subsidized and developers make way more off the mcmansions, so that's what they build.

[VTeton]

I don't think this is necessarily true, as many of the expensive areas see low sqft stuff still go for big money. Go look at 1500-1600 sqft places in Boston area - not cheap.
I remember my buddy sold his apartment in Brookline for like 800k. It was maybe 1200 sqft in a terrible 2 floor layout. This is just a "people are entitled" argument. Most new home construction I see is larger because smaller or more affordable housing is rarely prioritized or subsidized and developers make way more off the mcmansions, so that's what they build.

When you are paying 500k-1Mil for the lot, not profitable to build a 1,500 sq ft house. My builder is doing a new 5 lot subdivision and he's starting at 2M and going up from there. Lots are 10k sq ft and it's not a top 20 town in mass.

4k sq ft min house. Probably be about 5k sq ft each when done.

[Dromond]

Expectations of the middle class family home have definitely risen. When looking at 2BR houses built in the 50s it becomes clear than bunk beds used to be much more popular than they are today. I think things like quality schools make a bigger difference to people's future success than a spacious home, yet it seems that in many areas, getting the former nearly requires the latter.

Here in Seattle at least everything is covered in SF homes leaving little available space for multi-family housing outside of some mixed use and commercial areas. Another path to more affordable housing is to just make it feasible/cheaper for people to commute to less dense/expensive areas without clogging the highways, burning tons of gas, etc.

[schuss]

When you are paying 500k-1Mil for the lot, not profitable to build a 1,500 sq ft house. My builder is doing a new 5 lot subdivision and he's starting at 2M and going up from there. Lots are 10k sq ft and it's not a top 20 town in mass.

4k sq ft min house. Probably be about 5k sq ft each when done.

Exactly - without municipal or above intervention - developers are not going to build small houses. Leaves too much money on the table.

[neufox47]

I don't think this is necessarily true, as many of the expensive areas see low sqft stuff still go for big money. Go look at 1500-1600 sqft places in Boston area - not cheap.
I remember my buddy sold his apartment in Brookline for like 800k. It was maybe 1200 sqft in a terrible 2 floor layout. This is just a "people are entitled" argument. Most new home construction I see is larger because smaller or more affordable housing is rarely prioritized or subsidized and developers make way more off the mcmansions, so that's what they build.

Sure that’s true in a few metropolises, but the overall trend is still for houses to be almost 3 times the average today as in 1950.

Just one example of this, many other sources are available.

https://patch.com/pennsylvania/helle...ht-fit-in-2012

[sirbumpsalot]

Sure that’s true in a few metropolises, but the overall trend is still for houses to be almost 3 times the average today as in 1950.

Just one example of this, many other sources are available.

https://patch.com/pennsylvania/helle...ht-fit-in-2012

you can get a 1500sqft house now...they are called condos and townhouses. Otherwise buy a plot and have a builder build one...or buy a tiny home and tow it there?