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Old 05-05-2019, 03:23 PM
 
103 posts, read 31,347 times
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It's a chicken-or-egg question. We all know the reason why housing is expensive is because the high-paying jobs are concentrated in a few trendy areas. At the same time, we know that many Millenials want to live in these trendy areas. If Google built an office in Flint, MI, it couldn't attract employees because they don't want to live somewhere "boring." They'd rather live in a 380-sqft studio costing $2400/month within walking distance of doggie daycare and vegan donut shops.
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Old 05-05-2019, 03:34 PM
 
3,199 posts, read 1,095,115 times
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Quote:
Originally Posted by wallbuilder View Post
It's a chicken-or-egg question. We all know the reason why housing is expensive is because the high-paying jobs are concentrated in a few trendy areas. At the same time, we know that many Millenials want to live in these trendy areas. If Google built an office in Flint, MI, it couldn't attract employees because they don't want to live somewhere "boring." They'd rather live in a 380-sqft studio costing $2400/month within walking distance of doggie daycare and vegan donut shops.
I don't buy the bolded for a minute. If the job pays well and is with a good company, the young people will come. The amenities and quality of life improvements that make the city less "boring" will then quickly follow.

The real problem is that the executives don't want to live in these fledgling cities and play savior. When companies are looking to relocate their HQ, they almost always choose a city where the CEO already has a home or where they have some type of personal connection.
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Old 05-05-2019, 05:40 PM
 
Location: Planet earth
3,277 posts, read 1,301,767 times
Reputation: 1099
The cost of homes is directly related to government interference with the market. The interference caused a major shortage in housing due to many more people qualifying for home loans, people that normally wouldn't qualify, which is a basic supply and demand equation in economics. Additionally, many areas in highly desirable areas of California and other States interfered with the market by severely limiting new home construction, adding a much higher impact. Again this is supply and demand economics.

Here is a Forbes link to my first assertion. https://www.forbes.com/2009/02/13/ho...ard_pinto.html

Also a Forbes article to back up my latter assertion. https://www.forbes.com/sites/chuckde...s-and-poverty/

Government intervention in the market is almost NEVER the solution. In almost every case, government intervention in the market is the problem especially when it comes to economics.


But then again, that's just MY opinion, for what it's worth.
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Old 05-05-2019, 05:51 PM
 
1,679 posts, read 575,936 times
Reputation: 1291
The problem with housing prices are that building and land use regulations are hyper local. So there is no national solution, for better or for worse.

The only short term solution is to move somewhere else. Pay will be lower, but you'll probably bank more unless you're super talented and in-demand in an expensive city.
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Old 05-06-2019, 05:33 AM
Status: ""a mind that understands science"" (set 7 days ago)
 
18,789 posts, read 12,116,788 times
Reputation: 10232
Quote:
Originally Posted by wallbuilder View Post
It's a chicken-or-egg question. We all know the reason why housing is expensive is because the high-paying jobs are concentrated in a few trendy areas. At the same time, we know that many Millenials want to live in these trendy areas. If Google built an office in Flint, MI, it couldn't attract employees because they don't want to live somewhere "boring." They'd rather live in a 380-sqft studio costing $2400/month within walking distance of doggie daycare and vegan donut shops.
A good example is Wells Fargo in SF, vs Des Moines, IA.

SF has always been a far more desirable location for employees. However, the cost of housing has shifted interest, in that growth of employment in Des Moines has exceeded SF for that company.

It is a trade off. Locations which are geographically desirable (usually for weather) and have more high paying jobs will have higher housing costs. Different people have different values; some with families will choose locations which are safe (in which to raise kids) and housing is affordable. New graduates will tend to choose the more "exciting" urban locations.

Supply and demand
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Old 05-06-2019, 06:06 AM
 
Location: Charleston, SC
4,851 posts, read 3,632,178 times
Reputation: 3917
Quote:
Originally Posted by wallbuilder View Post
It's a chicken-or-egg question. We all know the reason why housing is expensive is because the high-paying jobs are concentrated in a few trendy areas. At the same time, we know that many Millenials want to live in these trendy areas. If Google built an office in Flint, MI, it couldn't attract employees because they don't want to live somewhere "boring." They'd rather live in a 380-sqft studio costing $2400/month within walking distance of doggie daycare and vegan donut shops.
I don't see much in real estate that warrants a "trendy millennials" discussion here in Charleston, SC. The prices here have been steadily climbing for about 11 years and it's not being driven by trendy millennials.

Granted we have some areas that would be considered trendy, but what I see (in one of the hottest markets in the US for real estate) is: 1) A large exodus of old home owner folks from other areas of the country. Top 5 places I personally see the most relocation to Charleston is OH, PA, NJ, FL, and VA. 2) Investors, a lot, and I mean A LOT of play money out there buying up everything cheap and raising the prices once rehabbed.
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Old 05-06-2019, 06:09 AM
 
26,184 posts, read 8,913,327 times
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I would ague that housing is not "the major economic issue of today."

Having a job is.

Without a job people are not going to be in the market to buy a house. They more likely would be in the market for a tent to erect in the public square.

I bought my first house 50 years ago and like millions of people I'm not in the market for a house today and won't be in the foreseeable future.

Housing is important, no doubt about it, but not "the" most important issue for millions of people. Even many young people today don't want to buy a house and be tied down in one location.

https://www.mymove.com/buying-sellin...-renting-works

https://www.vox.com/the-goods/2018/1...ns-rent-burden

https://www.cnbc.com/2018/07/09/thes...uy-houses.html
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Old 05-06-2019, 06:20 AM
 
Location: Barrington
45,588 posts, read 33,860,209 times
Reputation: 15159
Quote:
Originally Posted by KS_Referee View Post
The cost of homes is directly related to government interference with the market. The interference caused a major shortage in housing due to many more people qualifying for home loans, people that normally wouldn't qualify, which is a basic supply and demand equation in economics. Additionally, many areas in highly desirable areas of California and other States interfered with the market by severely limiting new home construction, adding a much higher impact. Again this is supply and demand economics.

Here is a Forbes link to my first assertion. https://www.forbes.com/2009/02/13/ho...ard_pinto.html

Also a Forbes article to back up my latter assertion. https://www.forbes.com/sites/chuckde...s-and-poverty/

Government intervention in the market is almost NEVER the solution. In almost every case, government intervention in the market is the problem especially when it comes to economics.


But then again, that's just MY opinion, for what it's worth.
FNMA and FHLMC market share substantially declined as the housing bubble inflated. This happened because nearly half of new mortgages and home equity loans did not meet the government sponsored agency’s
requirements.

Instead, orininators sold who loans directly to Wall Street, who in turn slices/ diced and repackaged pieces into PRIVTE LABLE SECURITIES. The independent credit rating agencies assigned some of these securities, investment grade ratings. This opened the door to the most conservative investors, public and private pension/ retirement funds, insurance companies and foreign investment banks. This was the free market.

Where the federal government made it worse was when the SEC relaxed net capital rules for the fab five, Legman Bros, Bear Stearns, Morgan Stanley, Merrill Lynch and Goldman Sachs. This enabled these select investment bankers to increase their leverage. The lack of regulation enabled these investment banks to take on more debt.
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Old 05-06-2019, 06:28 AM
 
Location: Boston
7,551 posts, read 2,201,185 times
Reputation: 5366
housing is like the game of Monopoly, depends on which side of the board you want to live on.
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Old 05-06-2019, 06:44 AM
 
Location: Barrington
45,588 posts, read 33,860,209 times
Reputation: 15159
Quote:
Originally Posted by phma View Post
I would ague that housing is not "the major economic issue of today."

Having a job is.

Without a job people are not going to be in the market to buy a house. They more likely would be in the market for a tent to erect in the public square.

I bought my first house 50 years ago and like millions of people I'm not in the market for a house today and won't be in the foreseeable future.

Housing is important, no doubt about it, but not "the" most important issue for millions of people. Even many young people today don't want to buy a house and be tied down in one location.

https://www.mymove.com/buying-sellin...-renting-works

https://www.vox.com/the-goods/2018/1...ns-rent-burden

https://www.cnbc.com/2018/07/09/thes...uy-houses.html
Many major urban areas are experiencing condominium de conversion wave back to rental units. This phenomena is directly related to a lack of interest in home ownership on the part of the millennial generation and that these 40-60 year old buildings tend to be in need of major capital improvements- too often Special Assessments.

The whole ( building) is worth much more than the sum of its parts { units). No shortage of investors are big into rental housing.

The deconversion phenomena has not put a damper on new condo developments in desirable neighborhoods with amenities not found in older, more affordable condos.
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