Rents are up 40% in some cities, forcing millions to find another place to live (suspect, border)
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We are turning into Europe where fewer and fewer are having kids, and many wait until theri later 30's to do so.
I track population demographics, and locations that have seen sudden dramatic increases in housing prices and rental properties generally experience a plunge in birth rates a number of years after. Idaho is going through the same demographic transition now, Boise median house value has passed $450K and increasing with rents going up. Idaho has long been known as a low wage state, but WFH has led to a huge influx of people from other areas that are able to take their incomes from high COL areas to new locations, changing things dramatically- just like many other areas.
It would also help if we weren’t competing with the Chinese for our own building materials. It would help if they didn’t build entire cities and just abandon them, brand new buildings no one ever moved into.
Read this article on the numerous factors impacting lumber prices, as most supply the US gets comes from Canada:
If you were a landord that was renting to a deadbeat tenant who wasnt paying and was being protected for 1+ years by the gov't due to Covid legislation, you'd feel quite different.
Not that this situation made up most of the rentals, but it would cause an upward spike from a few landlords who are now able to evict, and try to recoupt some of their lost rental income.
I would agree with you if it was local to an area in a city or neighborhood, but what we are seeing is City Wide increases regardless of socio-economic status or who was paying. It's just Landlords following the market trends so I am not demonizing landlords here, I think most (some will not) renting a place out will rent at the high end of what the market dictates they can rent for. I think we agree in that area.
What people don't understand is why such a fast increase in rate and why is it seemingly across the nation. There is data showing these increases started 1-2 years before Covid in many regions including mine, Florida but now it is booming, higher and higher.
The other question is how are people affording the rent? The answers to that question can shed light on how impactful the rate increases have been on those that must pay it. Rent is rising well above wages so what is the impact overall when housing exceeds 50% of income for large swaths of a city?
I also worry about the huge loans being taken out by buyers for homes that have quickly spiked in cost. This looks like 2007 again from the buyer's perspective. If we see a big dip in home values then we might see people bailing out of underwater homes again. It may not disrupt the banking industry but having all those foreclosures and former homeowners now entering the high priced renters market won't help.
Rents actually held up and remained high post-2008 due to the influx of new displaced renters in many areas hit hard by foreclosures, again Florida was one such state.
Perhaps the future of buying a home will be a young person or young couple going in together with parents and buying a nice home that all of them pay and share expenses for. This is certainly doable with many newer homes being 3,000+ sq ft.
This could of course mean the young couple has no kids or perhaps 1 at most.
The future of renting near a top-25 metro will be single people living with a roommate or two or three.
If you want to buy or rent by yourself you will go 1 hour plus outside of major metros.
I transferred out of N. CA 20 years ago to the Portland Metro Area. I rented a one bedroom, 750 sq. ft. apartment for six months while I looked for a house. The rent was $500; the same apartment now rents a minimum of $1,350. House was $200,000; now $600,000 (both went up roughly 3x in 20 years). Property taxes have doubled. Insurance has almost tripled.
After the real estate market softens up a bit (or crashes) it's a good time to commit yourself to homeownership (if I only knew how much work and expense it is). I calculated that you pretty much need to be rich to rent forever; so, I bought.
The governments are to blame for this. They created the virus, allowed it to become a pandemic, reacted poorly to the pandemic, destroyed small businesses, forced price controls and moratoriums on landlords, let BlackRock buy up the market...
The governments are to blame for this. All of it.
Congress approved Real Estate Investment Trusts ( REITS) in 1960 to give all investors, especially small investors the opportunity to buy income producing property.
Look through Blackrock and other similar business models to the beneficial owners, public and private pension plans, insurance companies, mutual funds, etc.
There are two sides to a real estate trade, a buyer and a seller. Some seem to want government to prevent a seller from selling to the highest bidder.
In northern Nevada real estate and rent is skyrocketing. Luckily I own because I couldn’t afford to rent. Some people’s rent here went up 500/month in one year.
Obviously more than enough people are ready, willing and able to pay the higher rents.
That may be a factor, but it also doesn't solve the main issue of 10-15 years of massive underbuilding of houses and apartments after the Great Recession. Zoning modifications of all types at the county and city level to allow for the construction of more smaller sqft houses commonly built in the early to mid 20th century would do wonders for supply and prices.
The value of the home should be 2.5 times the value of the land. Cheap "affordable" homes are a non-starter in any desirable zip code.
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