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re: The Atlantic: the great affordability crisis breaking America
Posted on 2/10/20 at 9:42 am to BobBoucher
Posted on 2/10/20 at 9:42 am to BobBoucher
quote:
The free market will force this problem to get sorted out when no one can afford to live there and companies have to relocate.
It's a self correcting issue that won't be allowed to self correct. That's the tragedy of highly regulated markets.
For now, there are no buyers in these luxury markets on the coasts. The international money that was pouring into these markets from prior years are not there anymore. In other words, there are a ton of bagholders for the time being. The inventory levels are high and without downward pricing pressures, they will continue to climb, correcting the issue at hand.
0
Posted on 2/10/20 at 9:43 am to SDVTiger
quote:
How are taxes irrelevant in this discussion
Let me be clear then
Things like state income taxes have a negligible effect on real estate market evaluations
It's a blip on the radar
Do you think real estate in CA is higher because of state income taxes?
Posted on 2/10/20 at 9:44 am to The Pirate King
quote:
And what do New York, Boston, Seattle, and San Francisco have in common? Liberal hotbeds with liberal leaders and ridiculous taxes...but the author fails to address that.
San Francisco is the only one I'll blame in that regard - mostly because of their relentlessly hypocritical NIMBYism. But come on - NYC is expensive because of liberal politicians?
Posted on 2/10/20 at 9:45 am to The Pirate King
quote:Honest question as I'm not very well versed on all of this...why is this a crisis?
The price of housing represents the most acute part of this crisis. In metro areas such as the Bay Area, Seattle, and Boston, severe supply shortages have led to soaring prices—millions of low- and middle-income families are no longer able to purchase centrally located homes.
It's supply/demand, and if a bunch of folks are willing to pay $1mil for that 1400 sq ft home then that's the market rate on that home. Middle income families aren't supposed to be able to afford to live in every single location, that's life.
quote:If houses are going for $1.6mil, that means there are enough people to pay $1.6mil for these houses, on average. If not, the price would drop.
The median asking price for a single-family home in San Francisco has reached $1.6 million; even with today’s low interest rates, that would require a monthly mortgage payment of roughly $6,000, assuming that a family puts down the standard 20 percent. In Manhattan, listings for sale now ask an average of nearly $1,800 per square foot. The housing cost crises in the Bay Area and New York might be the country’s most obscene.
What am I missing?
Posted on 2/10/20 at 9:47 am to Big Scrub TX
quote:
But come on - NYC is expensive because of liberal politicians?
Ever hear of rent control?
Posted on 2/10/20 at 9:48 am to Powerman
quote:What skills are there literally only opportunities in the few biggest markets?
To where there is no opportunity for your skills?
There are opportunities in other places. You also don't have to live right in the heart of the city. Commute, drive 1-2 hours if you have to, millions of people do just that.
Posted on 2/10/20 at 9:48 am to DallasTiger11
quote:
This is not a free market problem and telling people to “just move” is quite ignorant.
Ignorant? It’s happening naturally. We see people adjusting as there is a mass exodus from Ny and Cali to places like Texas and Fla.
Companies are following suit. Market demand will adjust prices eventually.
Posted on 2/10/20 at 9:48 am to The Pirate King
quote:
And what do New York, Boston, Seattle, and San Francisco have in common? Liberal hotbeds with liberal leaders and ridiculous taxes...but the author fails to address that.
There is a housing affordability crisis nationwide, though. Housing price growth and rental rates have far outpaced wage growth for far too long. Wages have been sideways or even stagnant under previous administrations while housing has shifted into a bit of another bubble. There are reasons families are living together longer and movements like tiny houses are growing in popularity. People aren't making those choices because they want to.
I have been in RE for 20 years dealing with all facets of real estate and without a doubt in my mind, we will see a major correction soon. The Mortgage Bankers Association predicts 2020 will see a cooling off at the very least.
Posted on 2/10/20 at 9:49 am to Powerman
quote:
Maybe ask yourself what % of the population lives in these 10 cities?
The worst percentage
Posted on 2/10/20 at 9:50 am to Bard
quote:
This is why it boggles my mind that a Google, Apple, etc doesn't move to more rural areas with lower taxes.
It shouldn't boggle your mind. It's incredibly hard to recruit talent to "flyover country," especially tech talent. The infrastructure requirements for those companies means that they need elite educational institutions nearby, travel accommodations, and ease of access to partners and suppliers. Most of "flyover" country has incredibly poor travel infrastructure, and no supply of talent from elite universities, most of which are already situated by metropolitan areas anyway.
Posted on 2/10/20 at 9:50 am to shel311
quote:
What am I missing?
You're not missing anything. This is some angry liberal that feels entitled to cheap housing in his location of choice.
Posted on 2/10/20 at 9:51 am to Powerman
Honest to God question, isn’t this sentiment only applicable to tech workers?
Posted on 2/10/20 at 9:53 am to shel311
quote:
You also don't have to live right in the heart of the city. Commute, drive 1-2 hours if you have to, millions of people do just that.
I am 100% in agreement with you here
The idea that you can just displace yourself from an entire MSA or region is what is absurd
Posted on 2/10/20 at 9:55 am to The Pirate King
Yet somehow illegals come here in droves making less than minimum wage and are able to find housing in Los Angeles
Posted on 2/10/20 at 9:55 am to stout
quote:
There is a housing affordability crisis nationwide, though. Housing price growth and rental rates have far outpaced wage growth for far too long. Wages have been sideways or even stagnant under previous administrations while housing has shifted into a bit of another bubble.
Mostly due to government intervention in markets, wether from the fiscal end or the monetary end. It's always funny how people think they can have it both ways when "no free lunch" has always been true.
Posted on 2/10/20 at 9:57 am to Powerman
quote:
It's not just the taxes. Come on man. Taxes are almost irrelevant in this discussion.
It's certainly not just taxes. But taxes+regulation is a huge part of the crises in these cities.
California is hard to do business in, hard to build in, hard to employ in, etc. All of this trickles down. Obviously there are some first level impacts on construction and land use and the like. But then there are the secondary impacts of having to up salaries to keep people in-state, as well as the increased tolerance for overextending onesself to remain in California (or wherever).
There are effects felt outside of these places too. In Dallas, people coming from California will pay top dollar for average homes, some because they're well-to-do, but many because they're simply accustomed to sinking a huge share of their income into housing.
Posted on 2/10/20 at 10:00 am to teke184
quote:
How is this a national crisis if the problem is in about 10 major cities?
Because to a writer for The Atlantic, those 10 major cities are all that really matter, the rest of the country be damned.
Posted on 2/10/20 at 10:01 am to wutangfinancial
(no message)
This post was edited on 2/10/20 at 11:04 am
Posted on 2/10/20 at 10:02 am to cahoots
quote:
It's not just people wanting swanky digs in NYC or LA.
Geographically, Housng is affordable in the US. In just a handful of cities it Is not.
Posted on 2/10/20 at 10:04 am to Bard
(no message)
This post was edited on 2/10/20 at 11:04 am
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