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There is clearly demand but builders aren't building. Look at metros across America. Metros like Nashville, Austin, Denver all have housing price indexes higher than pre-2008 and most metros are approaching that peak, but builders are taking a slow and steady approach to building.
I grew up in Naples, FL during the housing boom of the 2000s. Back then you saw new housing being built EVERYWHERE. I moved back to Naples a year and a half ago and prices for the time period are now back to early-mid 2000s level. I saw zero new sub-divisions being built and witnessed one, just one, apartment complex being constructed. The demand IS THERE. Because everyone my age (late 20s) is struggling to find affordable living situations. What I currently pay in rent with a roommate is more than what my relatives paid for a two-bedroom apartment in the late 90s. The retirees are struggling too but they have cheaper options still available in retirement communities.
Builders just aren't building and our politicians need to start addressing this. Some of you might get a cheap condominium complex plopped next to your house and that's just the way it is. We all need someplace to live.
: smack::s mack::sm ack::sma ck::smac k::smack :
Politicians 'need' to address only incumbent residents who vote - nobody else. The vast majority of municipalities have a heavy voting majority of homeowners. Rent-seeking homeowners benefit from insufficient supply which inflates home prices and rents.
Ok, seeing that I renovate and build homes for a living, I'll give a real explanation for the lack of new housing.
First, increase in population vs. stagnant affordable homebuilding
Affordable housing starts have been way down since the crash. It has been a risky business as of late. Most builders are only building luxury homes that will return the highest profit.
Our government has basically opened the doors to the world to buy property. Not only that, we now have a 10 year "come and go" visa agreement with China. So, these people don't even have to be residents here anymore, but can live here for 10 years if they'd like. This is really putting a strain on already overcrowded places like NY, LA, and San Francisco.
Second, government intervention
In some states, like Michigan, it's easy to get a contractor's license. You take a 3 week course, pass an exam, and boom, you can start a business in construction.
In other states, normally extremely liberal states like CA, it literally takes less time to become a doctor than it does to start your own business as a contractor. They want 4-5 years experience as a foreman or journeyman before you can take the state licensing exam. It normally takes 3-5 years experience to become a foreman(if you reach it at all, there's normally extreme nepotism in family-construction businesses).
Then they want you to go through this long vetting process where there's no clear requirements for selection to be a contractor. There is a board that decides yes or no. They can deny you for whatever reason they see fit.
We're talking about construction here. You're going to learn most everything you need to learn to in 2 years of on-the-job experience and much less if you're intelligent.
Third, NIMBYs
Marin Co, CA is a great example of this. They're liberal as hell, but not too long ago, they fought George Lucas tooth and nail when he wanted to build affordable housing in Marin. These people want the problem to be fixed, as long as it is fixed near the other plebs.
Permit issuance is also a huge problem. Say you want to build affordable housing at a local city council meeting and you'll likely face a lot of opposition.
Liberals: "Affordable housing!" "Open immigration!" "Tax businesses!" "More government oversight!"
Everyone else: "Who's going to build affordable housing to support both the increasing poor class and all the immigrants you want to let in?"
Liberals: Silence.
I've been asking for some time - even started a thread here which got zero replies - how can liberals and the media be unable to make a connection between illegal immigration and unaffordable housing?
Liberals have zero moral right to support open borders and amnesty and then complain about a lack of affordable housing.
Ok, seeing that I renovate and build homes for a living, I'll give a real explanation for the lack of new housing.
First, increase in population vs. stagnant affordable homebuilding
Affordable housing starts have been way down since the crash. It has been a risky business as of late. Most builders are only building luxury homes that will return the highest profit.
Our government has basically opened the doors to the world to buy property. Not only that, we now have a 10 year "come and go" visa agreement with China. So, these people don't even have to be residents here anymore, but can live here for 10 years if they'd like. This is really putting a strain on already overcrowded places like NY, LA, and San Francisco.
Second, government intervention
In some states, like Michigan, it's easy to get a contractor's license. You take a 3 week course, pass an exam, and boom, you can start a business in construction.
In other states, normally extremely liberal states like CA, it literally takes less time to become a doctor than it does to start your own business as a contractor. They want 4-5 years experience as a foreman or journeyman before you can take the state licensing exam. It normally takes 3-5 years experience to become a foreman(if you reach it at all, there's normally extreme nepotism in family-construction businesses).
Then they want you to go through this long vetting process where there's no clear requirements for selection to be a contractor. Just some board that decides yes or no. They can deny you for whatever reason they see fit.
We're talking about construction here. You're going to learn most everything you need to learn to in 2 years of on-the-job experience and much less if you're intelligent.
Third, NIMBYs
Marin Co, CA is a great example of this. They're liberal as hell, but not too long ago, they fought George Lucas tooth and nail when he wanted to build affordable housing in Marin. These people want the problem to be fixed, as long as it is fixed near the other plebs.
New construction is booming in Portland and in many other metros. Unfortunately, in the absence of 'inclusionary zoning' mandates, none of this new for-profit construction is affordable to residents below the local median income.
Lopsided Housing Rebound Leaves Millions of People Out in the Cold
...most of the price gains, economists said, stem from a lack of fresh supply rather than a surge of buyers.
The pace of new home construction remains at levels typically associated with recessions, while the homeownership rate in the second quarter was at its lowest point since the Census Bureau began tracking quarterly data in 1965 and the share of first-time home purchases remains mired near three-decade lows.
The lopsided recovery has shut out millions of aspiring homeowners who have been forced to rent because of damaged credit, swelling student loans, tough credit standards and a dearth of affordable homes, economists said.
In all, some 200,000 to 300,000 fewer U.S. households are purchasing a new home each year than would during normal market conditions, estimates Ken Rosen, chairman of the Fisher Center of Real Estate and Urban Economics at the University of California at Berkeley.
Did you disagree with the opinions stated in the article you linked? I'd say they were pretty spot on. There was an over reaction to the real estate bust that resulted in overly tight credit standards locking out many potential buyers and builders still recovering from the excesses of the bust.
From the linked article.
The main reason, they say: mortgage availability. Lenders chastened by the financial crisis have been fearful of making loans to borrowers with dings on their credit, student debt or credit-card bills, or younger buyers with shorter credit histories.
[..]
Even as first-time buyers have started returning to the market, many builders have been slow to respond. Building lower-priced homes means finding cheaper land, and that tends to be farther away from job centers on the suburban fringes.
Those areas were the hardest hit during the housing bust, and many investors have been hesitant to encourage builders to return. As a result, builders have tended to focus on ever-dwindling and increasingly expensive land in core areas, pushing up the prices.
>>>> You got it. I might add that many home buyers buy houses to make apartments and rent them through government assisted housing. More poor people doesn't make for a strong economy although the very richest will still benefit. Its only a matter of time until the government stops paying and then we'll have many people working low paying jobs just like we did over a hundred years ago. Which is what they want.
That will never happen on a scale sufficient to make housing affordable to those without government assistance, because NIMBY-minded homeowners will revise zoning to put a stop to it when it becomes inconvenient for them.
New ghettos will have to be created for poor people so that the non-poor won't have to live with them.
It is more realistic to think it will be a long time until recovery happens. You want home prices to go up and have demand for new houses? then we need the jobs and wages to pay for them.
The reason home prices have climbed is because there is a shortage of new home starts, and existing home sales have been gobbled up by investment groups and added to the rental market. Interest rates are at historic lows, so shouldn't we be having an RE boom? Rents have grown to nearly double (on average) of what an actual loan for the same property would be... are you saying people would rather pay twice as much in rent than own their own home?
Look... it has been 8 years (that would be almost a decade) since the crash. First time buyers (21-30 yoa) would have not been a part of those who were "bit".
These are dismal numbers no matter how you speculate it, and that's really what many of you are doing... speculation.
Quote:
Originally Posted by WilliamSmyth
Did you disagree with the opinions stated in the article you linked? I'd say they were pretty spot on. There was an over reaction to the real estate bust that resulted in overly tight credit standards locking out many potential buyers and builders still recovering from the excesses of the bust.
As do I, and that's why I linked the article... because it's spot on, but also highlights just how bad the economy actually is.
The reason home prices have climbed is because there is a shortage of new home starts, and existing home sales have been gobbled up by investment groups and added to the rental market. This is why rents have grown to nearly double (on average) of what an actual loan for the same property would be.
Look... it has been 8 years (that would be almost a decade) since the crash. First time buyers (21-30 yoa) would have not been a part of those who were "bit".
These are dismal numbers no matter how you speculate it, and that's really what many of you are doing... speculation.
Correct. First you over build then you under build. But we currently have the same number of jobs as at the peak of the last bubble and the one before that one. Growth real growth is not expected. Contraction is.
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