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[EuchreJack]

What is the crisis? What are the factors going into it? How does rentals vs. owned properties factor into this?

The biggest factors today are:
1) Homes are not affordable for people.
2) Everyone that was going to consolidate has done so.
3) Interest rates are increasing.
4) Due to supply shortages, new building is down.

...there, I contributed something maybe worth reading.

[McTraveller]

Like all things real-estate, the housing "crisis" is specific to location, location, location.

Push your local areas to allow high-density housing.  Push local areas to frown upon national or regional developers/builders (Pulte, Singh, Toll Brothers etc.) from throwing up their cookie-cutter subdivisions with starting prices over half a million dollars.

I have my own personal bias against not liking high-density housing, but I also recognize that high-density housing is way more efficient in terms of resource usage than single-family homes.  And all-else equal, if you can make the same profit building a 20-unit apartment or condo you could as building 5 homes, each apartment/condo unit should be priced way less than the 5 homes and improve affordability.

That's not even getting into predatory practices and regulatory capture.

EDIT: I do question the complaints about "affordability" though; but this is me and my bias against people who refuse to budget and make long term plans, including potential short-term sacrifices like living with roommates to pool resources and cut costs to start building savings. I think hyper-individualism is a large contributor to make things "impossible" for so many people.  Sure, if you give yourself unworkable constraints, it's going to be difficult...  only very rarely are people legitimately stuck in situations where there is no way out.

[Great Order]

The US also has the whole missing middle issue, which leads to enormous suburbs and heavily built up urban centres with no in between and exacerbates the housing pressure in urbanised areas.

[Telgin]

EDIT: I do question the complaints about "affordability" though; but this is me and my bias against people who refuse to budget and make long term plans, including potential short-term sacrifices like living with roommates to pool resources and cut costs to start building savings. I think hyper-individualism is a large contributor to make things "impossible" for so many people.  Sure, if you give yourself unworkable constraints, it's going to be difficult...  only very rarely are people legitimately stuck in situations where there is no way out.

It's probably true that people could do more like this, but I also don't blame people for being bitter that they have to do it so much more than previous generations.  There's probably a big psychological discussion to be had here that I don't know enough about to contribute to, but I wouldn't be surprised if the situation is functionally impossible for a lot people even if it's not literally so.

On the other side, housing prices really have skyrocketed for no good reason.  I get mail and spam calls constantly from different real estate firms wanting to buy my house regardless of its current state because they can flip it for even more money.  The value has gone up like 30% in the past few years and it sure isn't because my house is 30% better than it was before.

Does 30% make a real difference on something like a mortgage?  Maybe not as much as it sounds like since you can probably get loans for 50+ years these days to deal with the insanity, but it's going to feel like a big obstacle.

But I don't know.  I do think that individualism is an issue in general for the US, but that's again a big discussion that goes well beyond just this.

[MorleyDev]

It's not just an American problem. The two-bedroom terraced house I grew up in as a child in the UK in 1993 cost my mother £20,000 to buy. We moved out and upsized when my sister was born, and that same house nowadays is on the market for £200,000.

Shit be fucked.

[MrRoboto75]

Roommates worked out horribly for me in college.  It's not an option.

[MorleyDev]

A house near me recently went on sale for £250,000 with it's description as "a perfect first time buyer home".

First time buyer. Quarter of a million pounds.

Yeah, nooooooo.

[EuchreJack]

The thing about affordability is people have gotten slammed by the inflation train. Someone saving for a home purchase had the goalposts moved on them due to inflation.

[Frumple]

General inflation (also wages, basically fucking everything, etc.) has been wildly outpaced by housing cost increases, last I noticed. Whatever effect it's having on the housing situation is minor, and far, far less impactful than... all the other horseshit going on.

Also it's not really a "location, location, location" thing. Housing costs are up basically everywhere in excess of other cost increases, wages, again more or less everything, location just effects how badly. Shitholes that literally don't have utility services are somehow managing to price people out that used to live there, from what I understand. It's pretty messed up.

[McTraveller]

I had to look at the data in my locale:

My house price has appreciated about 66% in 8 years; that works out to a little over 6% a year.  My household income has increased by about 75% in those same 8 years.  So "location location location" does indeed matter, when you include personal situation as part of "location".

Now minimum wage - I think that has not fared as well.  Let me check... 8 years ago federal minimum wage was $7.25.  It's now $15, so just over doubling (!) in the past 8 years, which is more than my local housing cost increases! I'm surprised by this actually, I didn't realize that was the case.

So I'm guessing perhaps people are either in non-average scenarios or they are not actually looking at the real numbers and are just "feeling" their way through situations.  I mean yeah it sucks when gasoline and food prices go up... I think it's also the psychological phenomenon that we don't remember when our income went up 10% as "strongly" as we remember prices going up 10%.

[MorleyDev]

I think you need to go back to pre-2008 for the idea of what people are comparing now against in terms of expectations from what they should be able to get in purchasing power from a housing market. That's 'parents' vs current 'young' people looking to buy homes in terms of purchasing ages. Housing markets have been an ever growing shitshow for first-time buyers for awhile now.

So looking at the numbers in the USA, in 2000 the median house price in the USA was $119,600, now it's $428,700. Minimum wage then was $5.15, so that's a 3x increase in MW and a 4x increase in House Price. Not factoring in that in 2000 0% deposits on a mortgage were much more commonly accepted by banks, so you didn't need to save what in the USA is on average a 6% deposit ($25,722) saved up to even get your foot in the door. But even then a 6% deposit on is $7,176 vs $25,722.

Also MW may have risen, but when you look at average gross salary in the USA that has risen a much less impressive-seeming $42,148 in 2000 to $53,490 in 2022.

[Lidku]

Stop making suburbs.

[nenjin]

Also MW may have risen, but when you look at average gross salary in the USA that has risen a much less impressive-seeming $42,148 in 2000 to $53,490 in 2022.

I.e the shrinking middle.

I think it's just the conglomerates buying up properties. Whether to rent rather than sell, or just to control the supply. I wouldn't doubt there's plenty of collusion to further drive up prices. And then you have the second tier of individuals or small groups doing the same in their local areas. The value of homes have shot up because there's more money to be made, not because the homes are better. Two different groups of friends of mine both started getting into realestate at the same time, looking at properties to buy, renovate and rent. One of them followed through.

EDIT: I do question the complaints about "affordability" though; but this is me and my bias against people who refuse to budget and make long term plans, including potential short-term sacrifices like living with roommates to pool resources and cut costs to start building savings. I think hyper-individualism is a large contributor to make things "impossible" for so many people.  Sure, if you give yourself unworkable constraints, it's going to be difficult...  only very rarely are people legitimately stuck in situations where there is no way out.

One reason people say affordability is an issue is the reality of being house-poor. Yeah, you own a house. And it takes most of your money and budgeting just to afford to live there. And that leaves you vulnerable to house repairs, catastrophes, rising property taxes, etc....Is a house worth having if you can't actually live comfortably there? "oh well you should just budget better or live within your means." I.e, you're too poor to live comfortably if you want to own a home.

I have my own personal bias against not liking high-density housing, but I also recognize that high-density housing is way more efficient in terms of resource usage than single-family homes.  And all-else equal, if you can make the same profit building a 20-unit apartment or condo you could as building 5 homes, each apartment/condo unit should be priced way less than the 5 homes and improve affordability.

I think it's easy to say once you're out. I'm at the stage in my life where I'm ready for no more high density housing, and some privacy and space. My situation isn't like most people's and I'm just hesitant to move because the market is so hot and I don't feel like being knifed in the kidneys by interest rates. But if someone was like "hey, you should just live in an apartment for the rest of your life because it's more efficient" I wouldn't take it kindly.

Yeah, in a perfect world we'd live in super efficient Dwarf Fortress dormitories. But no one actually wants that unless its a necessity. (I'm thinking of Japan.) People tend to associate MUDs (Multi-Unit Dwellings) or MUHs (Multi-Unit Housing) with poverty. (MUDs run the gamut from massive slum buildings to fancy condos with a small number of units.) Privacy and space is associated with privilege.

I agree with the sentiment ("Gee it'd be nice if people stopped driving gas-guzzling, vision-obscuring mega trucks.") but that ain't gonna happen until necessity makes it happen. I'd rather wonder what % of what first time home owners are seeing is due to just naked, unrestrained greed and collusion. I'd like to know what reality looks like with that reduced in the equation. Because just gobbling up property to sit on just drives everyone else's prices up as they look at home sale data and go "the market's hot!" But it's kind of a paper tiger. A lot of those isn't reflecting American home ownership, it's reflecting American resource consolidation.

But ya know. As was just shown, when Mitch McConnell went to college it cost him $2500 of today's dollars. Everything isn't just more expensive, it's unreasonably expensive.

[McTraveller]

This conversation has a decidedly negative tone.

What positive actions can be made here?  Does it have to rely on government action ("external force") or is there any opportunity for community-building grass-roots action?  Complaining never helped solve a situation, unless it's complaining to people in power so much they take action just to get the complaints to stop.

I'm pretty sure nobody here is a policy maker, so complaining here is... not fruitful once we get past the venting stage.

[EuchreJack]

Do More Habitat for Humanity?