Housing is Unaffordable for Young People

[Joe Flacco]

I heard some neighborhoods in Virginia are expensive due to DC employment. Must be high paying government jobs.
Reminds me of my daughter telling me of someone she knew there. He said when his father retired, he finally admitted to the family that he worked for the CIA.

I wouldn't say government jobs are high paying but are not bad by mid-career. Two fed household in 30's or 40's might be around $300k per year combined.

The expensive neighborhoods are mostly lawyers and corporate executives. Expensive neighborhoods are the same kind of people you see in other cities with expensive neighborhoods.

 

[The Bob]

I have no idea what your point you are trying to make as your statement makes no sense and you are obviously without a clue.... the rate of population growth in the 1950's was substantially higher than it is in the the 2000's, not that it matters when doing a comparison of the per capita real GDP growth.

Due me (and yourself) a huge favor...place a piece of legal or letter size paper on a table or desk in front of you and take a pencil or pen and draw the smallest possible dot on that price of paper. Now, look very hard at that dot and realize that the dot accurately represents your level of knowledge on economic matters and compare that to the rest of the paper, which accurately represents my level of economic knowledge in comparison and then stop bothering me with your nonsense as I am sick of dealing with your profound and close-minded ignorance.

Wow, that's pretty low. Joe is one of the smarter posters on this board. His arguments are not without merit.

 

[CGinMN]

I think rents have to catch up, and prices can't get too out of line until they do. Median home price doubled from 1982 to 1995, but the cost of ownership stayed the same because rates were moving down 18% to 7%. Rates are already sub 7% and might not get to sub 5% for awhile, so think it is possible things might stay more or less stable for the next decade.

 

[Joe Flacco]

Wow, that's pretty low. Joe is one of the smarter posters on this board. His arguments are not without merit.

Thank you, Bob.

I'm definitely not smarter. I just spend a lot of time looking at stuff.

 

[Surf Cat]

All of this arguing about various statistics sounds like a group of economists and I think we all know how often and how accurate economists generally are...somewhere less credible than your average, long-term weather forecast.

Lol....agree. lots of bureaucracy and corruption in the way as well.

Back to the OP...bottom line is that house prices are going to have to fall. Question is when and by how much? We're starting to see it here; how long until it spreads across the US. Lennar, DR Horton, et.al. will have to find a way to accept less than their current 30-35% profit. They can't make the houses much cheaper (in quality) than they currently build; its got to come from somewhere. One thing we are seeing is more duplex 'patio homes' and attached townhomes to try to keep the prices lower. 10-12 units/acre instead of 3-4.

I'm actually quite surprised that modular, Factory Built Homes (no, not mobile homes) are not more popular. Aside from the "customization" of a stick built home, modular homes craned onto a laser measured foundation are superior in the time it takes to build being that they're built indoors in a factory, cost 30 to 40% less than onsite stick built, more environmentally friendly, craned into place with a roof in 24 to 48 hours.

Pacific Palisades could be rebuilt in half the time with modular homes.

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[timd354]

Some places are declining. Like Austin. The rate of decline after the initial decline in 2023 has slowed to a point you could say it is stable to declining. But the downward pressure on prices probably continue until the inventory starts going down.

We have been monitoring Austin closely and it most certainly has had a correction and I can confirm that the rate of decline has moderated over the past 6 months, although home prices there still appear to be declining based on the data we see. However, net domestic in-migration and non-farm job growth remain very strong and the consumer growth rate is 2x the national average, all of which indcate that future hosuing demand in Austin should be better than in most areas and will eventually absorb the inventory, which currently is at a still fairly low 3.6 months of low pet the latest Texas A&M Real Estate Center data. My personal view is that Austin is likely at or near the bottom of the current correction, but only time will tell.

 

[Fernando]

Lol....agree. lots of bureaucracy and corruption in the way as well.


I'm actually quite surprised that modular, Factory Built Homes (no, not mobile homes) are not more popular. Aside from the "customization" of a stick built home, modular homes craned onto a laser measured foundation are superior in the time it takes to build being that they're built indoors in a factory, cost 30 to 40% less than onsite stick built, more environmentally friendly, craned into place with a roof in 24 to 48 hours.

Pacific Palisades could be rebuilt in half the time with modular homes.

Modern Prefab Homes - A Database of Prefab Home Builders & Designers

Search for modern prefab and modular homes with our catalog-style database of modern prefab homes with images, plans, pricing, availability, and specs.

modernprefabs.com

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Does Fannie lend to modular homes? If so, should be more popular.

 

[Joe Flacco]

We have been monitoring Austin closely and it most certainly has had a correction and I can confirm that the rate of decline has moderated over the past 6 months, although home prices there still appear to be declining based on the data we see. However, net domestic in-migration and non-farm job growth remain very strong and the consumer growth rate is 2x the national average, all of which indcate that future hosuing demand in Austin should be better than in most areas and will eventually absorb the inventory, which currently is at a still fairly low 3.6 months of low pet the latest Texas A&M Real Estate Center data. My personal view is that Austin is likely at or near the bottom of the current correction, but only time will tell.

I'm limited Redfin data but inventory is still going up. It spiked in 2022, flattened out in 2023, and started continuing higher in 2024. 2025 is starting 7% higher than last year. There is no evidence of demand meeting supply right now.

 

[timd354]

Now, on to inflation-indexed wages. You mock it as wage and price controls, but that’s just lazy. Countries like Germany and Switzerland successfully used wage indexing and productivity-linked agreements to stabilize their economies without mass unemployment.

Laughable that you being up Switzerland when you have been arguing about the conduct of greedy bankers. It is pretty easy to keep unemployment low and incomes high when your country allowed its banks to keep the treausre that the Nazi looted from Jews all over Europe and whose bank secrecy laws allowed it to attracted huge amounts of capital from illicit soruces that could be laundered through Swiss banks with inpunity and which Swiss bankers were happy to lend back out to the rest of the world to collect more banking fee and interest income and to fund numerous insurers and reinsurers to extract more fees from the rest of the world.

 

[timd354]

Laughable that you bring up Switzerland when you have been arguing about the conduct of greedy bankers. It is pretty easy to keep unemployment low and incomes high when your country allowed its banks to keep the treausre that the Nazi looted from Jews all over Europe and whose bank secrecy laws allowed it to attracted huge amounts of capital from illicit soruces that could be laundered through Swiss banks with inpunity and which Swiss bankers were happy to lend back out to the rest of the world to collect more banking fee and interest income and to fund numerous insurers and reinsurers to extract more fees from the rest of the world.