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Old 05-12-2022, 11:08 AM
 
5,907 posts, read 4,442,588 times
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Quote:
Originally Posted by Wolverine607 View Post
Exactly. The government was a bunch of buffoons' saying how home prices needed to recover when they in reality did not in 2009-2012 as they were fair valued. They should have encouraged massive building to keep prices stable in 2012 when it became clear there was a shortage of homes. Instead the government cheered on as if it was a recovery when prices started to rise at absurdly fast rates starting late 2012 to early 2013!!

When will the government and society get it through their heads that $110K to $140K for a small starter home in a good neighborhood of a major metro area is not a depressed price, but rather fair value. If the prices of such homes were $60K to $70K, then a skyrocket to $120K would be welcome as $60K to $70K is a depressed price of starter home. Not $110K to $140K. The government and realtors want us to think anything less than $200K is an undervalued price for even a starter condo which is disgusting!! $200K is even pushing it as insanely high price for starter home let alone a condo!! Nevermind the horribly high prices way above $200K for such home today which is exosphere outrageous!! $200K was bad enough already!!
It sounds like you think your opinion is fair value and don’t even understand what the term is.

If thousands of people in these metro markets are paying this price because they personally value home ownership for a variety of reasons, then that is the fair market value of a starter home.
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Old 05-12-2022, 11:10 AM
 
7,906 posts, read 3,879,821 times
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Quote:
Originally Posted by WRM20 View Post
There has not been any refusal to allow drilling in the US, especially on private land. Oil companies are just not jumping in to drill wells that would be uneconomic if the Saudis crank up production again. Shareholders won't stand for anther beating like oil companies had a few years ago. There are also supply chain issues that make increasing drilling quickly difficult, and a shortage of oilfield workers, as a number of them have moved on to industries that don't have severe boom/bust cycles.
Oil exploration is financed via capital markets. Oil exploration companies go to major banks & Wall Street financiers asking for funding to drill for oil & gas.

The Progressive Wing of the dominant political party has informed banks and Wall Street that they don't want those projects funded. If the banks & Wall Street ignore this political guidance, they are assured that every federal regulator known to mankind will give each of them a never-ending colonoscopy with no Propofol.
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Old 05-12-2022, 11:13 AM
 
956 posts, read 512,053 times
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Quote:
Originally Posted by Missmycountry View Post
This is an excellent post! We have become greedy and “gotta have the big house” NOW! We have very young couples purchasing homes around us in the mid $500’s. Their FIRST homes. I know what their professions are and can’t figure it out. Are they one medical disaster or layoff away from being in trouble?
Yes exactly. The fact that people are actually spending over $500K on first homes is alarming. And sad reality is, that price is actually a small starter home these days in many markets and not just Los Angeles, Seattle, New York City, Washington DC, or Boston let alone the Bay area either anymore. Those metros a starter home is looking closer to $650K to $900K or more.

Areas like Denver, Utah, Portland starter homes are going for that much. Even Miami and Phoenix are around $400K or more.

And even in the areas closer to national average, it is like $250K to $300K or maybe more. And $500K is a somewhat larger McMansion type home.

It should be more like national average where small starter homes are $110K to $140K and larger 2000+ square feet homes are like $200K to $300Ks instead of the absurdly high $250K to $300K for small starter homes and like $500Ks for 2000 plus square foot larger homes.
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Old 05-12-2022, 11:16 AM
 
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Quote:
Originally Posted by Wolverine607 View Post
Dude are you serious?? We have been in a housing crisis since 2014 or maybe even since 2013 even.
Incorrect. There is no housing crisis.


Quote:
Originally Posted by Wolverine607 View Post
Inventory shortages and prices going up at outrageous rates making it super expensive because of lack of homes available.
Buyers set prices, not sellers. Sellers can ask for the moon, but only Buyers decide what they will pay. Buyers are offering prices that you deem super expensive, but those buyers find affordable.

Quote:
Originally Posted by Wolverine607 View Post
2008 was so much better times for housing market than today!! That is a fact!!
Incorrect.

Quote:
Originally Posted by Wolverine607 View Post
And prices were NOT undervalued from late 2008 through early 2012. They were fair market value. That is a fact!!!
Finally, a correct statement. Prices were not undervalued then, just as they are not overvalued today.
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Old 05-12-2022, 11:16 AM
 
5,907 posts, read 4,442,588 times
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Why would the prices in highly desirable metros have “average” prices that are dragged down by hundreds/thousands of different housing markets in totally unrelated areas?

Also, when you’ve sold your own houses, do you seek to sell them lower than what you can get and instead sell them in that lower range? Do you build or rehab properties and sell them at this price point? Or do you just want 1 sided economics?
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Old 05-12-2022, 11:17 AM
 
30,198 posts, read 11,850,700 times
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Quote:
Originally Posted by WRM20 View Post
How would the Fed encouraged massive building of homes and apartments. In many cases, that's more a local zoning regulation issue than anything. In areas that have geographical constraints on expansion, like the Bay Area, large portions of LA, etc, allowing multi-family housing to be built pretty much anywhere would have made housing cheaper, especially for renters. However, all of the single family home owners that might be affected would go nuts with protests about "you are going to destroy my neighborhood".
I agree that areas in California for example lack available land and many residents have the NIMBY mentality. You can't do much about that. However the country at large and even inland California there is plenty of land. You set up enterprise zones or huge tax breaks and tax credits to get builders to go to these areas as well as businesses. As the baseball movie once said. Build it and they will come. You offer say 3br track homes for 100K and easy qualify as well as lots of new jobs. People will flood there and pressure will come off of places like coastal california. They could also give big tax breaks for modular homes that can be built off side and moved there. Make the homes solar powered. Use whatever tax breaks needed to hit that price point.

Post WW2 the federal government put restrictions on non residential housing construction and required lumber to be prioritized for home construction. There was an understanding that there would be a massive housing shortage if this was not done.

Some here talk about how the great economists should not be criticized by neophytes like myself. How come no one saw this housing crisis coming? Low interest rates alone were going to push prices way up. And a lack of building made it much worse.
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Old 05-12-2022, 11:19 AM
 
7,906 posts, read 3,879,821 times
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Quote:
Originally Posted by C2BP View Post
I kept telling everyone here...
Wait. You've been telling people here something?
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Old 05-12-2022, 11:22 AM
 
30,198 posts, read 11,850,700 times
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Quote:
Originally Posted by WRM20 View Post
I don't think your $110k to $140k price is realistic for even smaller starter homes. It is nearly impossible to build a house for that price in any major metro area. We live in a 1400 sq ft house built in the early 50's in Central Houston. Replacing the structure with a similar one would cost close to $200 per sq ft. Cutting a bunch of corners might get us down to $175 per sq ft. That's still $240k, and doesn't include the land, which for us is worth $1.4 million per acre.

It could be done if it was subsidized with tax breaks and incentives. And newer ways of building homes.


https://ssir.org/articles/entry/inno...housing_crisis

Entekra, located in California and focused on off-site framing, focuses on increasing home building productivity and reducing time and costs. Stick-built framing of a typical 2,500-square-foot house generally takes a crew of five workers about 15 days (71 man-days) to complete, but with Entekra’s Fully Integrated Off-Site Solution (FIOSS) and a crane, the framing can be accomplished in just four days by a crew of four (14 man-days). This represents a productivity increase of more than 500 percent and reduces total build time by an average of 30+ days, with estimated savings for each house up to $25,000. FIOSS also contributes to a reduction in errors and reduces on site skilled labor needs.
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Old 05-12-2022, 11:22 AM
 
956 posts, read 512,053 times
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Quote:
Originally Posted by Thatsright19 View Post
It sounds like you think your opinion is fair value and don’t even understand what the term is.

If thousands of people in these metro markets are paying this price because they personally value home ownership for a variety of reasons, then that is the fair market value of a starter home.
Well they do not have a choice and want to own a home so have to pay insanely high prices. And the greedy local zoners and Federal reserve driving dow interest rates has contributed to these insanely high prices.

If interest rates were actually normal and the old rule of 20% down minimum still applied and builders built homes at a normal rate, small starter homes would be $110K to $140K in good neighborhoods of most major metro areas.

Instead we get absurdly low interest rates and lack of building punishing responsible savers who want to work their tail off for large down payment or to pay cash for such home in many years. Now that is an impossibility for anyone living with their parents saving money like mad unless they want to live with them for 20 years instead of 8 to 10 years. And even at $110K to $140K still a very rough goal to make let alone today's prices.
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Old 05-12-2022, 11:26 AM
 
30,198 posts, read 11,850,700 times
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Quote:
Originally Posted by Mikala43 View Post
Hm. I would say our Federal Gov allowed it. You want to see CRAZY inflation? Don't allow that trade with China. /lol

People are "the US needs to make all this crap we buy from China!!!!" I can tell you, the price would be so high if the US made it all, then no one could afford it, and it just wouldn't be bought.

I DO think we should insure our capabilities for important things like meds and food. Heck, I don't think China should own so much of our food processing.

I know some people like more government control on what people can and cannot do, but we ARE a country of freedoms, so when we want to buy stuff cheaper from other countries, we do. Definitely pros- and cons-.
Look how much iPhones and Nike's are. Manufacturing went to China to increase profits not necessarily to make things cheaper. There are cheap items we could not make here at that price. But below is a alternative.

A little off topic. We should have and still can use latin america as our base for making items China makes. Central and South America could have had those factories. They have some now but a fraction of what is in China. And it would have helped with immigration. Most immigrants come here for work. Provide a good job that is still way lower in labor costs than the USA and most will stay in their country. You diversify with a couple dozen countries and don't have a situation that one massive country controls your destiny.


Other alternative is robotics.
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