Higher rates are likely to flatten out the home value trajectory by reducing demand, but it doesn't solve the supply problem. The combination of nimbyism and the changing middle class income distribution (a growing class of high earners in knowledge industries, while blue collar work is seeing real incomes squeezed) had resulted in a home construction market catering largely to luxury markets. 

There just isn't money in building affordable housing when the demand for higher end housing is relatively high. It's easier to get approved by zoning boards, less community obstruction, and more comfortable margins. 

If we had higher bandwidth in home construction (maybe some willing and able workers eager to take blue collar jobs that Americans won't that magically appear at our border .... ) it might help increase home construction to help alleviate supply issues. Though right now the supply chain is also strained so it wouldn't provide immediate help.

I guess the boomers just have to die off faster for more inventory.

8 minutes ago, JohnSnowsHair said:

Higher rates are likely to flatten out the home value trajectory by reducing demand, but it doesn't solve the supply problem. The combination of nimbyism and the changing middle class income distribution (a growing class of high earners in knowledge industries, while blue collar work is seeing real incomes squeezed) had resulted in a home construction market catering largely to luxury markets. 

There just isn't money in building affordable housing when the demand for higher end housing is relatively high. It's easier to get approved by zoning boards, less community obstruction, and more comfortable margins. 

If we had higher bandwidth in home construction (maybe some willing and able workers eager to take blue collar jobs that Americans won't that magically appear at our border .... ) it might help increase home construction to help alleviate supply issues. Though right now the supply chain is also strained so it wouldn't provide immediate help.

I guess the boomers just have to die off faster for more inventory.

The bigger issue is that typical starter homes just aren’t profitable with construction costs where they are. Home builders (as a general rule) can’t turn a buck building 3br houses for people making 50-70k. Larger luxury homes are the only way for builders to turn a profit, so that’s what gets built.

1 hour ago, greenskeeper said:

This in my opinion is the wild card and could replace the financial (bank) comparison to 2008... hopefully it's not worse.

Total crypto capitalization is what — about $1T?

Even if it all goes to zero, I don’t think that causes a major widespread crash. The exposure at the institutional level with leverage just isn’t there. A lot of dumb people would lose money, but it’s not a contagion.

19 minutes ago, JohnSnowsHair said:

Higher rates are likely to flatten out the home value trajectory by reducing demand, but it doesn't solve the supply problem. The combination of nimbyism and the changing middle class income distribution (a growing class of high earners in knowledge industries, while blue collar work is seeing real incomes squeezed) had resulted in a home construction market catering largely to luxury markets. 

There just isn't money in building affordable housing when the demand for higher end housing is relatively high. It's easier to get approved by zoning boards, less community obstruction, and more comfortable margins. 

If we had higher bandwidth in home construction (maybe some willing and able workers eager to take blue collar jobs that Americans won't that magically appear at our border .... ) it might help increase home construction to help alleviate supply issues. Though right now the supply chain is also strained so it wouldn't provide immediate help.

I guess the boomers just have to die off faster for more inventory.

That where the the volume will come from. Demographic shifts not new inventory. At least at lower prices points

17 hours ago, TEW said:

The bigger issue is that typical starter homes just aren’t profitable with construction costs where they are. Home builders (as a general rule) can’t turn a buck building 3br houses for people making 50-70k. Larger luxury homes are the only way for builders to turn a profit, so that’s what gets built.

Yeah, I mean, I kinda said that in my long winded post. 

There just isn't money in building affordable housing when the demand for higher end housing is relatively high. It's easier to get approved by zoning boards, less community obstruction, and more comfortable margins.

18 hours ago, JohnSnowsHair said:

Higher rates are likely to flatten out the home value trajectory by reducing demand, but it doesn't solve the supply problem. The combination of nimbyism and the changing middle class income distribution (a growing class of high earners in knowledge industries, while blue collar work is seeing real incomes squeezed) had resulted in a home construction market catering largely to luxury markets. 

There just isn't money in building affordable housing when the demand for higher end housing is relatively high. It's easier to get approved by zoning boards, less community obstruction, and more comfortable margins. 

If we had higher bandwidth in home construction (maybe some willing and able workers eager to take blue collar jobs that Americans won't that magically appear at our border .... ) it might help increase home construction to help alleviate supply issues. Though right now the supply chain is also strained so it wouldn't provide immediate help.

I guess the boomers just have to die off faster for more inventory.

All good points except that you want me to die sooner. 😉

Dunno if it has been discussed, but a TURRBULL trend for millennials and late-bloomin' X-ers is that investors (solo and firms) are gobbling up single family houses for rentals. The upshot of this is that it makes home ownership less approachable than in the past and prolly drives rents higher too.

I have invested in a bunch of real estate partnerships that buy B grade older mom-n-pop-run apartment complexes in hot markets (Austin, Dallas, Phoenix). They bring professional management, spruce em up, and then jack up rates to reflect the market. Limited partners like me get a nice stipend (throws off about 8%) and then a chunk of the profits when the whole investment is sold in 3-5 years.  We doubled our money on the first investment, getting into Austin apartments just before the market took off. Now that it's harder to afford a home, apartments should still do well. So it's great investment for wealthy boomers like me, but it drives up rent for working class ppl.

Bottom line, the core strength of the middle class has been home ownership, but that seems poised to change.

17 hours ago, TEW said:

Total crypto capitalization is what — about $1T?

Even if it all goes to zero, I don’t think that causes a major widespread crash. The exposure at the institutional level with leverage just isn’t there. A lot of dumb people would lose money, but it’s not a contagion.

That sounds right.  But some of those people are homeowners who may have to bail when crypto tanks

18 minutes ago, JohnSnowsHair said:

Yeah, I mean, I kinda said that in my long winded post. 

There just isn't money in building affordable housing when the demand for higher end housing is relatively high. It's easier to get approved by zoning boards, less community obstruction, and more comfortable margins.

There is NO margin in entry level housing. It simply doesn’t exist. The input costs are greater than mid 5 digit earners can afford. That’s it. That’s the issue. Doesn’t have anything to do with demand for luxury housing or zoning or anything. They simply don’t work mathematically.

1 hour ago, TEW said:

There is NO margin in entry level housing. It simply doesn’t exist. The input costs are greater than mid 5 digit earners can afford. That’s it. That’s the issue. Doesn’t have anything to do with demand for luxury housing or zoning or anything. They simply don’t work mathematically.

If 1. labor costs can be pushed down by making use of workers from our southern neighbors and 2. supply costs normalize, there may be a margin there. But yes right now as it stands it's not profitable. 

Still would need to get over the NIMBYism, as desirable communities tend to push back against anything that might mean "more poors"

1 hour ago, JohnSnowsHair said:

If 1. labor costs can be pushed down by making use of workers from our southern neighbors and 2. supply costs normalize, there may be a margin there. But yes right now as it stands it's not profitable. 

Still would need to get over the NIMBYism, as desirable communities tend to push back against anything that might mean "more poors"

Poor people don’t buy houses and you don’t put entry level housing in "desirable” communities. You put entry level housing in mediocre communities because it’s a mediocre product for mediocre income.

Median household income is about $70K, not exactly poor even if they’re not living the high life. Bottom line is that land prices and material prices are just too expensive. That’s the problem. No need for immigration, but nice try.

3 hours ago, JohnSnowsHair said:

If 1. labor costs can be pushed down by making use of workers from our southern neighbors and 2. supply costs normalize, there may be a margin there. But yes right now as it stands it's not profitable. 

Still would need to get over the NIMBYism, as desirable communities tend to push back against anything that might mean "more poors"

FTR, my community of 1500 homes near Austin is still being built out. Not many of the workers speak English, but damn they work hard and fast. America is missing SUCH an opportunity to improve lives on both sides of the border. We NEED cheap Chinese goods, we NEED cheap Mexican labor, and it's all WIN-WIN. My God Trump is an idiot.

5 hours ago, JohnSnowsHair said:

If 1. labor costs can be pushed down by making use of workers from our southern neighbors and 2. supply costs normalize, there may be a margin there. But yes right now as it stands it's not profitable. 

Still would need to get over the NIMBYism, as desirable communities tend to push back against anything that might mean "more poors"

Of course they do. That why you pay more. You dont want those kids in the schools dragging them down. You dont want the poors ruining nice areas?? Imagine that. Therr are plenty of ishy rich neighbors too

35 minutes ago, ToastJenkins said:

Of course they do. That why you pay more. You dont want those kids in the schools dragging them down. You dont want the poors ruining nice areas?? Imagine that. Therr are plenty of ishy rich neighbors too

Exactly.

Nice areas are nice because they have good, responsible people who don’t commit crimes, make good money, and upkeep their property and community.

These are the behaviors that the brokies are either unwilling or unable to do. All they do is drag the area down to their level, which is exactly why "desirable” areas are desirable in the first place: they don’t have a bunch of brokies.

No one wants section 8 housing near their neighborhood because section 8 housing means section 8 people and section 8 problems.

There is no magic dirt. You can’t just plop a bunch of low income people in a nice area and expect the area to continue to be nice.

"Starter homes” and "affordable housing” aren’t meant to be in "nice” areas. A nice area by definition is above average while starter homes and affordable housing are by definition below average.

My point was listening impediments to increasing the supply of affordable housing. The shifting wealth distribution is creating a new social class and the market has no incentive right now to be catering to them.

Paul Pelosi, House Speaker Nancy Pelosi's husband, made a stock purchase of over $1 million in a computer chip company just weeks before a potential vote in congress which would give a massive subsidy to the industry.

*Shockyface

On 7/17/2022 at 1:15 PM, lynched1 said:

Paul Pelosi, House Speaker Nancy Pelosi's husband, made a stock purchase of over $1 million in a computer chip company just weeks before a potential vote in congress which would give a massive subsidy to the industry.

*Shockyface

Shocking

I probably should have done this much sooner but I've been thinking I should find a different exchange to buy stock... I've been using Robinhood and I do really like the app itself I'm just not sure how much I trust the company itself... 

 

Do any of you have any suggestions for a good exchange? A few things I would like to find in an exchange are... 

Automatic dividend reinvestment 

Automatic investment where you can link your bank account to buy specific amounts of stock on a weekly basis 

No or at least low trading fees... 

I was leaning towards fidelity... I believe I should be able to transfer my portfolio to a new exchange as well and Robinhood charges 75 dollars to transfer 

On 6/26/2022 at 4:09 PM, JohnSnowsHair said:

Higher rates are likely to flatten out the home value trajectory by reducing demand, but it doesn't solve the supply problem. The combination of nimbyism and the changing middle class income distribution (a growing class of high earners in knowledge industries, while blue collar work is seeing real incomes squeezed) had resulted in a home construction market catering largely to luxury markets. 

There just isn't money in building affordable housing when the demand for higher end housing is relatively high. It's easier to get approved by zoning boards, less community obstruction, and more comfortable margins. 

If we had higher bandwidth in home construction (maybe some willing and able workers eager to take blue collar jobs that Americans won't that magically appear at our border .... ) it might help increase home construction to help alleviate supply issues. Though right now the supply chain is also strained so it wouldn't provide immediate help.

I guess the boomers just have to die off faster for more inventory.

The last part is the real fix. Demographic shift

Big pre-market bounce this morning, pretty much across the board.

40 minutes ago, we_gotta_believe said:

Big pre-market bounce this morning, pretty much across the board.

CPI drop the biggest driver.

On 11/10/2022 at 5:10 AM, Aspiritfall said:

I probably should have done this much sooner but I've been thinking I should find a different exchange to buy stock... I've been using Robinhood and I do really like the app itself I'm just not sure how much I trust the company itself... 

 

Do any of you have any suggestions for a good exchange? A few things I would like to find in an exchange are... 

Automatic dividend reinvestment 

Automatic investment where you can link your bank account to buy specific amounts of stock on a weekly basis 

No or at least low trading fees... 

I was leaning towards fidelity... I believe I should be able to transfer my portfolio to a new exchange as well and Robinhood charges 75 dollars to transfer 

I use Fidelity mostly b/c that's where my 401k is already. It's easy to open a brokerage account with them and easy to link your bank account so you can move money around. 

On 6/27/2022 at 3:55 PM, TomatoPie said:

FTR, my community of 1500 homes near Austin is still being built out. Not many of the workers speak English, but damn they work hard and fast. America is missing SUCH an opportunity to improve lives on both sides of the border. We NEED cheap Chinese goods, we NEED cheap Mexican labor, and it's all WIN-WIN. My God Trump is an idiot.

So for the record your good with exploiting culturally illiterate, minorities of questionable immigration status to suppress the cost of housing to be purchased by people who's wages are also being suppressed.

56 minutes ago, lynched1 said:

So for the record your good with exploiting culturally illiterate, minorities of questionable immigration status to suppress the cost of housing to be purchased by people who's wages are also being suppressed.

Don't cut yourself in that edge Bernie.

23 minutes ago, JohnSnowsHair said:

Don't cut yourself in that edge Bernie.

I'm good with sharp edges Nancy. Thanks for your concern.

7 hours ago, lynched1 said:

I'm good with sharp edges Nancy. Thanks for your concern.

Yeah, ok. Stick with butter knives Bernie Bro.