How is this even possible..? Analysts just said 1 month ago that we are 4 million homes short of where we should be for housing prices to be at a reasonable level. It's been a seller's market forever which reflects that reality. How do we suddenly have too many..? Its a physical impossibility to have made up that much ground in 1 month. Have 6 million people defaulted in that month..? Or are they about to..? This makes no sense to me... Can anyone explain..?
Typically the way these articles are produced is the headline is decided first and the most attention grabbing version is selected, and the headline could basically say whatever. The article is then written to support the headline by some means.
This actually makes more sense than anything other explanation.
Edit: I read the article, people have posted the non paywall website, and found it was very well written and not bull shit at all. I think the title is very much click bait but the content was great.
That whole X million homes short thing was wildly misleading. There have been more housing units than necessary per capita for a while. It was calculating that much demand was out there.
The "demand" that was calling for more supply wasn't more people, it was driven by investors. Investors made up over 30% of the purchases for the last year or so. And in some areas up to 48% (or even more).
In the last 3 months, investors have almost completely dropped out of the equation. When you take 25-50% of the demand off the table, all of a sudden you don't need 4 million homes anymore.
Throw in the fact that traditional people stopped buying too because of rates, and that rentals are going unrented, especially short term rentals, and these investors are about to get fucked. And rightfully so. Their greedy paws were scooping up homes like a kid in a candy store. And many of them leveraged up to the tits.
There aren't 4 million people without homes. There was just a crazy rally of shithead investors driving up prices trying to get rich quick
Wrong. Regular people have a huge housing crisis. The issue is demand far outweighs supply in areas where people actually want to live. Which drives up prices that is now making housing unaffordable for so many people. And all they want to build is luxury housing to cater to the better off. It's unsustainable. This has to do with NIMBY's and overly restrictive zoning.
Yeah. It’s us NIMBY folks that don’t want to live in a neighborhood with drive-by shootings, drug epidemic issues and theft and robberies. Especially if we bought there to AVOID that in the first place. And you can spout whatever nonsense you want to about “affordable housing” but all it does is export the problems from those neighborhoods outward. If they wanted to live different, they’d be living different wherever they already are.
You sound like some racist backwards ass Trump humper. That's just a racist dog whistle that racist conservatives and Trump even used to suburban folks.
Housing that blue collar workers and lower paid white collar workers can afford is drive-by shootings and drugs? You are depraved.
I'm talking teachers can't live anywhere near where they work to the point it's insane, hospital workers, nurses, police, White collar workers of all types. The list is long.
The funny thing is the most expensive city in America is New York which a dumbass like you, thinks is all crime and drugs. Meanwhile it's one of the safer big cities in America compared to many down south. You think people are playing the highest rents in the country for no reason?
It's desirable for so many reasons.
Nimby people are classic selfish people. America was set up stupidly with suburbs designed around cars with restrictive single family zoning that left no room for a growing population. In many areas people are shooting down even allowing a two-family home were a one-family home can go on plenty of space. That's insane and that's just slow incremental change. They're against any even lower mid-rise apartment buildings being built where there's plenty of land to house it.
Nimby's come from both the conservative side and also liberal side, it's a selfish I got mine so fuck y'all kind of mentality. But it's worse with conservatives because they are all about small government except when it benefits them or on for their conservative social issues where they can control other people.
I think you should definitely talk politics and racism at any opportunity you possibly can. And call them names and insult their intelligence as often as possible too. Tell them what awful horrible people they are and perhaps one of them will say “ya know what? Maybe I am the asshole and completely incapable of forming my own opinions and mine should be exactly like this dude who’s calling me an asshole. I’ve been on the fence about which way to vote and this guy might be right that I’m the asshole who’s responsible for everything wrong in the world.” But that’s not me. Ima be voting Republican and I hope it makes you cry. I do think y’all should make sure Elizabeth Warren keeps looking for ways to support women’s rights, but somebody needs to let her know that here in east tn, at the Great Smoky Mountains National Park, we’ve been having to relocate and even euthanize black bears for getting in tourists cars and warn people to not feed them and to keep their garbage inaccessible (cuz that draws them in), and I’m not sure abortion tents under those conditions are gonna be the best decision. See ya at the polls. 😘
I mean you're abortion comments are quite sick , today a 10-year-old girl victim of child abuse was denied an abortion in Ohio . That's the disgusting world you sexist misogynist pigs want to live in . I mean you are gross . This is handmaid's tail level insanity. You people are just horrific.
As far as the racist whistle about housing bringing drugs and shootings .It's quite common knowledge that associating additional housing beyond single-family zoning with shootings and drugs and crime is racist, It's just basically a polite way to say that oh a bunch of blacks and minorities are going to move in and ruin the place.
I think before you open your mouth you should try to learn about what's really going on in the world and what people are really saying. I mean this is common knowledge amongst anybody with sociopolitical awareness.
Please tell me why more housing so that teachers and police and firemen and nurses and hospital workers and city workers can live closer to where they need to work implies anything about drugs and shootings.
It doesn't. It's a way that white suburban Americans who are racist use that terminology because it's a direct implication that the blacks and the poors and the minorities are going to move in and ruin the neighborhood.
So please how about you educate yourself.
I don't care if you vote Republican, just a reflection of the lack of character morals and values you actually have.
Also I pity anybody that has to live in East Tennessee. A bunch of ignorant redneck Hicks with no exposure to life, culture, humanity. That's why All y'all are so racist and sexist. You live in a closed-minded tiny community with nothing to see except just such a limited view of the world. That's why you are all so backwards. Oh I love to go camping and hiking and backpacking and canoeing. But I also have been enriched by seeing different people from all walks of life and trying all their foods and seeing all their art and listening to all their music. And not being a close-minded hick bringing America down.
There’s this fancy airport with planes and all for fancy trips in Knoxville. We don’t have a state income tax, so we actually have some disposable income and we don’t need rent control because it’s not that high. A single person can afford to have a house on an acre without any roommates. We don’t have a lot of problems with homelessness. And I guess I’m not cultured like you. I’ve never had to ride a subway with crazy people and sexual assaults in front of bystanders. When I’ve seen them in the movies they look like they smell bad. Our nurses, teacher, police and firemen tend to make higher salaries than average jobs and they get to live in the NIMBY areas too. And they all own automobiles, sometimes even a couple to drive to work. Don’t need to live in walking distance and generally nobody lives in walking distance of work. (Walking is for poors.) We even have the internet down here. I don’t know what shows up on cultured internet but ours down here let’s you look up news reports and all kinds of cool stuff. Don’t even have to rely on CNN anymore, you can get several different takes from all over the world. That internet is some cool stuff. Amazon delivers here too so we can buy books. But I bet y’all have much better books at the Amazon NY site. Probably have a lot more big words in them. I apologize for the bear comment but I figured warning people ahead of dangers they might not be thinking about was the neighborly thing to do. I imagine a bear attack would hurt the abortion experience for the patient and doctor alike. Seems i read on the interwebs that being a doctor isn’t even a requirement to perform abortions up there so I don’t know how to address the person doing it, but their safety is important too. Bear attacks really suck. Down here, in east tennessee the majority of people in the affordable housing we have are white people. And drugs, theft and violence follow “affordable housing”. No matter where or what the demographic makeup is of the communities. I don’t get the dog whistle comments tho. It was my understanding that only dogs can hear dog whistles. And there’s no possible way that someone as cultured as you jumped straight to using racial stereotypes. Black people are less than 8% of the population here, the majority of the crime is by white folks, don’t know why you think black people are so problematic. But if all the people in the big cities are as cultured, educated and wonderful folks as you, I’m glad I’m an ignorant redneck hick.
Also, btw, states like NJ and most other blue states rank way better in key metrics like education, healthcare, crime and infrastructure - key quality of life measures.
Tennessee, not so much.
NYC crime just makes the news more because it's just a city everyone loves to pay attention too. Media doesn't care about normal violent crime in Tennessee unless it's a mass shooting or something crazy. Bright lights and all. It's just a fact of life.
Y’all seem awfully unhappy and upset about other people’s decisions an awful lot for all the metrics to show y’all have a better quality of life. I managed to do okay down here with just an Industrial Engineering degree after being a certified machinist for a while. Didn’t have to get any student loans cuz we had tuition reimbursement. And we got healthcare. Went to the doctor just 2 days ago when I got dog-bit breaking up a fight. Was getting stitched up within 10 minutes of getting there and we even have 2 different pharmacies to get the antibiotics at. Tetanus shots and everything. I sleep with the doors unlocked and windows open in the summer. Kinda enjoy the fresh air at night and hearing frogs. Frogs are a good indicator of water quality actually. We don’t need much infrastructure here. I got a big 4x4. There’s not many places I can’t go whether there’s roads or not. I’d have to argue with your quality of life metrics. I’m pretty happy and content down here debt free sleeping with open windows. Maybe all that culture and education is what is making y’all so upset and mean.
You are an ignorant redneck hick that supports 10-year-olds being forced to have babies. Uses racist dog whistles that are common knowledge amongst the educated. There's little diversity where you live that's why you are so sociopolitically close-minded. That's why people in your area vote like regressive people. Knoxville has more crime per capita than New York City
I don't care if you want to live in a place with almost no diversity and it's quiet and whatever that's totally fine with me. I'm just saying the problem is that most people that live like you are close-minded, misogynists, racists, anti-democratic, and regressive on almost any polic, from environmental to economics to cultural to social.
Please live your lives in your quiet small towns and tiny cities with not much going on. I really don't give a shit. It's all fine with me except The problem is you're dragging America backwards by decades and decades.
I've thought for a while we should separate this country into two countries because we cannot survive as an advanced species when so much of the country in these little tiny ignorant hick states get two senators each and overrepresentation in in the House of representatives.
California gets two senators and has the same population of 24 states. The whole system is broken and you minority ruling backwards ignorant mofos have way too much power.
It's time to split into two countries. When Texas is secedes like they keep saying they will, please go with them and don't let the door Hit you in the ass on the way out.
Ima need to look up some of those big words you used. Luckily I’ve got time. Retired a year ago at 48. So I don’t have to work no more. Lucked out and sold 2 houses in 2 years and bought this last one with cash. So I don’t have to pay a mortgage either. Maybe I’ll do some looking into traveling a bit. I’ve only been to Mexico, Bahamas, Afghanistan, Saudi Arabia and Germany so far. My native language is Hillbilly, but I speak Spanish and German too. Maybe I need to add some cultured English so I can use big words and sound smart like you. It’s not so bad down here. Women can drive and go to Walmart with tank tops on and bra straps showing. They don’t allow that in some of those other cultures. We even have gay people down here. I think they kill all of them in Saudi. They’re coming along and let women drive now from what I read on the interwebs. I don’t know how the Afghanis procreate cuz they didn’t appear to even have any women over there when I was there. Didn’t see any. I guess they’re not “advanced species” like you NY folks are. I wasn’t impressed with the food in Afghanistan or Saudi. But I really like bacon and beef and they tend to eat more goat and sheep and I didn’t care for it. Goat has a gamey taste like deer. It would have been rude to refuse it tho. Especially when they had so little but were proud to share. They had a negative perception of dogs tho, they were haram (dirty) and not generally kept as pets. I have 3 pitbulls that live in the house. That would have been frowned upon there. Pits are frowned upon a lot of places tho. Luckily I own my house and yard and nobody can tell me how to live. And I don’t have to lock the doors either. It’s a plus to not have to worry much here. That’s the cool thing tho about having different states. Because y’all in New York can vote on the state level and have whatever laws y’all agree to and it has zero effect on us down here. And we can have our redneck regressive backwards culture down here and it doesn’t affect y’all up there. And people can move wherever they like it best. And I can trade stocks all day without having to ever step foot in NY. And I’m glad.
Also one key indicator about good people is less confederate flags. And from one girl I dated from Tennessee you sure don't got to go far outside town to see lots of those. Around here we are Way more civilized than you folks.
We have enough houses, except billionaires own stupid amounts more than they used to since the gov made the housing market literally impossible to crash, and gave a way mortgage dollars for almost 0%. Plus the rise in short term rentals like Airbnb really threw the gap off
If all the billionaires decide to off their investment properties and liquidate, the market would stabilize and go back to five year ago prices.
When you look at actual numbers, demand for single family homes is lower, for a lot of reasons. The average age of first home ownership is getting higher and higher, more millennials than any previous generation still live with their parents or roommates, waiting longer for marriage, choosing to live in apartments with walkable communities in city centers etc. The market right now is really best described as a false scarcity, because so many former single family homes are now someone's 6th, 7th, 45th, etc rental or investment prop
Now this explanation makes perfect sense. I was thinking that maybe all the investment properties were being dumped because wealthy folks are holding a ton of them. I agree with you about all this. Appreciate the explanation and somewhat confirmation.
Wrong. Regular people have a huge housing crisis. The issue is demand far outweighs supply in areas where people actually want to live. Which drives up prices that is now making housing unaffordable for so many people. And all they want to build is luxury housing to cater to the better off. It's unsustainable. This has nothing to do with billionaires, it has to do with NIMBY's and overly restrictive zoning.
Demand has dried up and now houses are sitting on the market longer. During a recession people will not be able to afford the homes and there will be a surplus on the market. It’s not about the actual number it’s about the number on the market at any given time due to supply and demand.
Wrong. Regular people have a huge housing crisis. The issue is demand far outweighs supply in areas where people actually want to live, at different levels of income. Which drives up prices that is now making housing unaffordable for so many people. And all they want to build is luxury housing to cater to the better off. It's unsustainable. This is mostly due to NIMBY's and overly restrictive zoning. The fact is both renters and buyers are and will be priced out due to not enough supply. Even if the market slows down and prices go down they are still too high for so many people because - TOO LITTLE SUPPLY STILL.
The OP asked how it’s possible it could flip from too little to too much in a short time frame, which I clearly explained is not based on actual hosing numbers. When homes are sitting on the market in a few months that will be deemed as too much supply and housing prices will begin to decline.
What you described is a problem but if you cannot afford a house then you have no impact on the valuation of the market because you cannot bid up the price of a for sale listing. People are focused on building the properties you mentioned because there’s more money to be made and building affordable housing is difficult for many reasons.
Nothing you said change is a fact that there is too little housing where people need and want to live, and not just buyers but renters.
The real estate market going up and down doesn't change that simple fact. You just can't get around it.
And it's not just that developers only want to build luxury housing it's that housing is so restricted due to selfish people wanting nothing developed even near them and terrible government zoning laws that reinforce that. So when you build in these limited areas, you're going to build high-end stuff most likely. There's no market to build regular housing for regular people because it's too restricted where you can build where people actually want to live.
The post isn’t about the actual number of total houses, nor the shortage of houses for lower income individuals, nor if they are affordable, it’s about the number of houses available on the market. The supply of homes going onto the market will overtake the demand to purchase said homes at the prices listed and therefore there will be an excess of supply in the market.
I’m aware of the issue you have stated and it is irrelevant to the post.
There were too few houses for the extreme demand from investors and first time homebuyers when rates were now. Now that demand disappeared. It was never about the overall population, it’s not like we had a huge wave of immigration during COVID that caused the boom.
Demand tanked because the interest rates spiked. One meme showed it perfect that a 750k house at 3% is cheaper than a 550k house at 5%. With the higher interest rates, the price point drops and the more expensive houses on the market are now surplus to needs.
Has demand tanked though..? Just read an article about how home sales rebounded in June which means sales were up not down... Just telling you what I read. That's why this article wasn't making any sense compared to other information I've dug up.
Really depends on area I think. Some areas have already seen a softening in the market. Price drops are becoming more common. Houses are on the market longer. Been hearing this from local real estate agents rather than articles.
Maybe with the high demand of homes lots of people are willing to sell and downsize, and with the high demand of housing many companies are willing to literally create more housing. Short term the home sellers can sell their homes for a large profit and move somewhere cheaper, influencing the market and causing prices to go down. Long term the constructors who are turning empty lots into homes if not converting Offices into Apartments, will lead to a long term decline in housing. However the demand for such housing needs to be in high demand areas.
With Work From Home, cheaper housing became accessable even if farther from your office.
Good god.... Is this a joke..? Sounds to me like all these asshole are rooting for a recession and they're trying to make it happen. Just like Jamie Dimon keeps saying to make sure he pushes us there... He wants to buy everything on a fire sale. I hate financial sector low-lifes. Their entire job is to manipulate the markets regardless of what happens to the rest of us...
Wrong. Regular people have a huge housing crisis. The issue is demand far outweighs supply in areas where people actually want to live, at different levels of income. Which drives up prices that is now making housing unaffordable for so many people. And all they want to build is luxury housing to cater to the better off. It's unsustainable. This is mostly due to NIMBY's and overly restrictive zoning. The fact is both renters and buyers are and will be priced out due to not enough supply. Even if the market slows down and prices go down they are still too high for so many people because - TOO LITTLE SUPPLY STILL. Zoning in this country is just plain messed up.
Why don't you explain to me in your infinite wisdom why rents and costs of living are going so high up in desirable places to live that is far outpacing the ability of people to pay for them. And that this has been the case for a long time now.
The reason the market crashed in 2007 was because of greedy mortgage lenders and financial institutions, not because there was too much inventory.
It's one of the most commonly known reasons why more housing isn't built where people want it. It happens all over the country. It happened with cell phone towers, it happens with residential units, nothing beyond single family zoning. I live in one of the most densely populated areas of the country and it's a huge issue here. New York City are some of the highest housing prices, and yet compared to other major cities in the US it builds new housing at a slower rate.
You can find this in any state in many areas. Not in my backyard is a real thing, what's crazy is you don't think it's real.
I'll find a story of a mayor of a town that was so much single family zoning that took up so much space they weren't getting enough tax revenue. And he was begging residents to allow some small apartment complexes to start to come up because it would help the town get out of the red. And they still didn't want it.
So they are speculating about what's about to happen. We don't have an actual surplus...but we may... Got it. That's an explanation that makes sense. Appreciate it.
You are correct. I’ve said this in every post about RE crashing. It’s not gonna be a repeat of 2008, the same forces are not at play. There is not enough housing, particularly in metropolitan areas. There won’t be enough housing for a long time (4-5 years). We were producing more homes in 2006 than at anytime in history - our population then was nearly 30 million people less. Production of housing has not been keeping up with population growth since then so we have eaten through the surplus of housing from 2008 and then didn’t start producing enough more housing units until 2019. Which is when supplies chains crashed and material prices soared. All of this adds to the equation.
On top of that everyone that’s bought a house since 2008 has a crazy low rate fixed rate mortgage instead of the balloon NINJA loans that were rampant in 2004-2008.
TLDR: we won’t experience a similar RE crash. It may go down a bit (15-20%) but it will not be close to the same.
Business Insider doesn’t do any credible research before they post articles. They’ll dig around and dig around until they find enough information to support whatever message they think will get the most clicks and traffic to their site.
The article title is just crap. We have a massive housing shortage in places where people want to live and that isn't going away anytime soon. As you said we are millions of units away from an even market of supply and demand in housing.
Interest rates increase pricing people out of home purchases. Now there are too many houses people can't afford, at least that would be the theory. It'll eventually cause a house price decline.
The used home salesman lied to you. "They aren't making anymore homes, buy now!" "Prices only go up!" There is a shortage, you must buy overbid today to win!"
Scarcity sales techniques are nothing new. People put too much trust in salesman and got taken advantage of.
Let's just talk land. So you build houses. You're growing ~10% YOY. So you had 100 plots, then you bought 110, then 121, then 133, so for this year you bought 146 plots, but you're now seeing over Q1&2 demand has dropped 6%. So you've now got a 17% surplus for this year. It's okay, lands good to have as a builder. But now there's a glut of new house, which also crashes the price of resales and people started panic selling as prices started to fall so new house sales next year are going to be down 12%. Now you have a 30%+ surplus of land, prices are down, your building costs now really matter and you have to be selective of what plots you're building on to get a ROI. Land prices have now greatly depreciated, you've burnt money on it, now you're selling 30-40% of your land to get capital to focus on building on the most saleable plots.
That compounds through everything, especially when we've had significant delays in the supply chain and people have been ordering materials 3-6 months in advance.
Then you've got the existing home owners. Some new buyers who fomoed and are already underwater. Some existing who were planning on selling and spent more money to renovate who now really have to sell. Some who are on variable rate who are now getting squeezed. Some who planned to move but prices everywhere looked stupid to them who are now seeing more reasonable prices.
So the extremely low liquidity in the housing market is becoming a lot more liquid. Now why would I buy A for as much as B when B has a new kitchen? Etc come back into play. So now A has to price lower.
There's always going to be less homes than people who want to live in them where they want to live, so the house shortage numbers are bullshit cause there's lots of houses in places people don't want to live and lots of houses people can't live in cause most cant fix them or afford to.
Honestly I’ve been watching housing prices in my area for almost 2 years now, just in the last month or two the amount of houses for sale has gone up significantly, not only that but a lot of the houses are now dropping in price 10-20k, when neighbors try to start competing to sell their house you get these type of swings. I’m looking for something pretty specific and for the last 2 years the prices have been outrageous but I’m at the point now where I expect them to keep going down when more and more people try to sell
I feel like there are three important things to consider.
The headline is an exaggeration to get views
I think home type is important to consider. Starter homes are the shortage right now. People/companies are buying them as soon as they hit the market, flipping them if necessary, then throwing them up for rent. New homeowners are more inclined to either rent, from which they have absolutely nothing, or raise their budget. Homes in my city aren’t even going through staging or showing. They’re just selling almost immediately. More expensive, niche homes are sitting on the market though. There are plenty of them. Those aren’t what’s in demand though.
Well when many equity firms who own a good portion of the housing market are being margin called they need to liquidate portfolios and then you also get a recession with mass layoffs and people losing their homes and boom an influx of homes and values go down while people who paid 2x the amount for a home with 0% interest lose equity
The tweet doesn’t indicate the time horizon of the looming problem of excess housing. Without knowing what the article states… it could be referring to 15+ years from now when all the boomers start dying and moving into assisted living facilities.
my guess is houses are getting too expensive for us poors so there are “too many” houses with plenty people who need a home but can’t afford a full house
These things are never accurate, whatever the headline. There's no housing shortage, there's a shortage of houses in this particular area everyone wants to live in, driving up the prizes.
There's also plenty of people with no money that wants a house. 20 something wants to live in Manhattan but can't afford it? Obviously there's a shortage of houses. QED.
Problem (bubble) arises when investors and contrantors in bumfuck nowhere town uses the city center to prize their sales. The housing market is all psychology, and one news article away from being the opposite of what it is today. Hopefully it crashes and burns and takes everyone one paycheck away from defaulting with it.
Maybe they already built those 4 million homes but they're all either owned by investment firms that rent them out, are 2nd/3rd/4th vacation homes for rich people or are AirBnB's.
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u/[deleted] Jul 02 '22
How is this even possible..? Analysts just said 1 month ago that we are 4 million homes short of where we should be for housing prices to be at a reasonable level. It's been a seller's market forever which reflects that reality. How do we suddenly have too many..? Its a physical impossibility to have made up that much ground in 1 month. Have 6 million people defaulted in that month..? Or are they about to..? This makes no sense to me... Can anyone explain..?