May272016
Potential homebuyers feel no urgency, no fear of being priced out
If new mortgage rules will prevent housing bubbles, prudent fence-sitters have no urgency to buy for fear of being priced out of the housing market.
Fence-sitters are potential homebuyers who for a variety of reasons are not ready to buy today — they could buy, and they may buy in the not-too-distant future, but for now, they contentedly rent and watch the market. Fence-sitters don’t buy for a number of reasons:
- they are unsure about their jobs,
- they want the flexibility to move,
- they recoil against high house prices,
- they worry about future resale value,
- they can’t find the right property,
- they just aren’t ready.
The real estate industry hates homebuying fence-sitters. The goal of most realtor advertising is to knock people off the fence and generate urgency to buy homes — real or imagined.
realtors, loan officers, homebuilders earn income only when a transaction occurs, and they don’t care whether or not buyers are ready to buy, nor do they care if buyers sustain ownership. Transactions create income; therefore, the real estate industry wants more transactions, irrespective of how this may impact anyone else. Though this may sound harsh, based on the behavior of everyone in the real estate industry a decade ago, It’s obvious the real estate industry will sell homebuyers down the river for a quick buck.
In the past realtors were able to create false urgency by scaring fence-sitters with the possibility of being priced out of the real estate market forever. The housing bust appears to have rendered this bullshit realtor ploy permanently impotent.
In the past, there was a grain of truth in realtors fear-mongering about being priced out forever — it was possible to be priced out for a very long time. For those who turned away from the market bubble in 2004, it took five years for prices to become reasonable, and it took another three years for prices to finally become truly affordable and for prices to bottom. Five to eight years is a long time to wait out a correction.
The housing market finds stability after a bust (it’s happened three times in California) by retreating to safe mortgage loan products like the 30-year fixed-rate mortgage. After the market stabilized from the previous busts and began to heat up, affordability became a problem, so lenders offered unstable affordability products like interest-only mortgage, adjustable-rate mortgages, and the most toxic of all, negative amortization mortgages. This went on until lenders realized these unstable mortgage products cause borrowers to default, so they tightened credit.
Without lenders to inflate the bubble with affordability products, house prices crash, and the cycle begins all over again — at least until legislators passed the Dodd-Frank financial reform law and implemented new mortgage standards. As long as these rules remain in place, we should enjoy boring but stable house prices.
Rest easy, my friend.
With new mortgage regulations in place preventing the proliferation of toxic mortgage products, buyers no longer need to fear being priced out. House prices stabilized at prices affordable by local incomes, and these prices won’t move higher unless incomes go up or mortgage rates go down. A buyer three years from now will be limited to putting 31% of their income toward housing costs just like they are today.
For me personally, caps on debt-to-income ratios and banned affordability products gives me peace-of-mind that the window of opportunity for home ownership under stable loan terms will not close again. It removes the false urgency from the market that used to force prudent buyers to participate only when lenders weren’t inflating another housing bubble, and I think that’s great. It’s a fifth trait of the new normal in the US housing market.
Today’s housing market: Boring, and thriving?
May 9, 2016
Zillow CEO Spencer Rascoff discusses how the real estate market has changed since the housing crash and the different economic factors affecting homebuyers and renters today.
Rascoff sees current national conditions as steady and “boring” — in a good way.
[listing mls=”OC16107805″]
It appears that an inflationary cycle is starting. One inflation gets going, it can run for a long time. Not purchasing a property during an inflationary cycle is a financial misstep.
Really? Inflation? Please cite your data sources.
The CPI won’t show it…
… but if you look at rents, healthcare, education… high quality food…. everything you need… the items that make up most of your income… inflation is very high in desirable areas
A higher cost of goods is a symptom of dollar inflation, but it’s certainly possible to have certain categories increase in cost without any inflation at all. Each of the things you list suffers from various levels of fixed supply meeting more intense demand. Hence it can’t be concluded that inflation is the sole cause when many other categories are steady or declining in price.
it doesn’t matter what the reason is…. inflation is simply the increase of nominal prices
all the goods you need to live a good life have increased dramatically in desirable areas
with the exception of gasoline and cheap TVs etc from china
The things you cite are not evidence of an inflationary cycle. There are very good reasons that the costs of those things are rising.
Tell that to the person who in 2010 had $2000 rent and now pays $2800 in rent… and the person who in 2010 paid $200/mo for family health care and now pays $500/mo… and the person who would pay $12K in CA tuition and now pays $18K… and on and on and on
One big lesson I have learned in life is how mob physiology can change direction 180 degrees in a fraction of time.
In abstract is there really much difference between a Black Friday riot at Target store where supposedly civilized shoppers trample over each other and crazed bidding wars for real estate?
“…mob physiology can change direction 180 degrees in a fraction of time.”
Are you saying a zombie apocalypse is heading our way?
Not at all. All mob actions eventually burn themselves out due to lack of fuel. In the case of real estate, the mob simply runs out of fuel (money).
In the case of the mob at Target, fuel runs out in hours or even minutes. In the case of real estate, it appears the fuel will take decades to run out.
“This sucker could go down” — George W. Bush
Did you mean mob psychology instead of mob physiology? I’ve seen mob physiology change rapidly, buy only in the movies. If that’s happening at Target, I need to change my shopping plans…
Oops… That’s what happens when your trying to type, eat breakfast and get some real work done at the office.
Probably was thinking of “Walmartians”
https://beartales.me/2016/01/30/walmartians-january-2016-edition/
I am surprised, and a bit dismayed, that the foolish beliefs of the housing mania are coming back. All it would take is for lenders to throw a little fuel on the fire to cause the psychology to change completely and everyone will conveniently forget the difficult lessons of the housing bubble.
Don’t sound so shocked, this is a recurring theme in California… it will happen again and again… and again… the way I see it is we have 2-3 years to let this baby run to the top of the peak
It’s easy to see how this could happen too. With stocks showing lackluster returns for the past 18 months, all it would take is a bear market and the Fed would retreat on rates and send them even lower. This would have the dual effect of making houses more “affordable” on a monthly payment basis, and making them seem like the only good investment in town as RE prices catch fire while the stock market tanks. It’s very easy to see how a speculative frenzy could take hold under these circumstances.
The last bust was so bad, and the foolish beliefs so thoroughly discredited, I hoped people might actually learn something this time. We live in an information age. Apparently, not much of that information is actually being absorbed and put to good use.
More proof that places like SF/SV, LA/OC, are in essence, nothing more than ornamented ‘halfway houses’ for people addicted to deception. jussay’n 😉
To be addicted to deception, people must want to play along. The notion that all someone has to do is buy a house and all their financial limitations are removed is very enticing. It takes an act of willful self-deception to believe it and act on it like everyone did 10 years ago.
It feels strange to talk about the housing mania and realize it was 10 years ago.
How else could you describe the “gentrification” of LA’s formerly lower priced neighborhoods.
There is no way these home buyers are seeing the current neighborhood, but an imaginary future neighborhood that justifies the pricing in their mind.
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Chase quietly launches its own 3% down mortgage lending program
Prospective homebuyers, especially first-time homebuyers who are struggling to save up for a down payment, have a new, and significant, outlet that they can now turn to when seeking a low down payment mortgage — JPMorgan Chase.
Earlier this year, Bank of America announced plans to begin offering a 3% down mortgage lending program that did not involve the Federal Housing Administration, important considering how many lenders have recently run afoul of the federal government for the participation in FHA lending.
Bank of America’s program requires as little as 3% down and requires no mortgage insurance. Bank of America partnered with Self-Help Ventures Fund and Freddie Mac to offer the loan program, which also requires a minimum FICO score of 660.
And earlier Thursday, Wells Fargo rolled out its own 3% down lending program, partnering with Fannie Mae and Self-Help, with the aim of offering consumers lower out-of-pocket costs, expanding the lender’s credit criteria and pushing homebuyer education to help more first-time homebuyers and low- to moderate-income families achieve “sustainable homeownership.”
Wells Fargo’s program requires a 620 FICO score, but Greg Gwizdz, executive vice president of national retail sales with Wells Fargo, said that the FICO score is only a small portion of the loan’s underwriting standards.
While Wells Fargo’s announcement was made on a large scale, JPMorgan Chase launched its own 3% down mortgage program, albeit much more quietly.
Chase’s 3% down mortgage program was actually spotted by mortgage industry insider Rob Chrisman, who revealed details of the program on Thursday.
No Relief in Sight for Minimum-Wage Renters
Simply raising the minimum wage won’t be enough to solve the country’s affordable housing crisis for low-income renters.
Even in cities that have raised the hourly minimum wage, the amount earned continues to fall well short of what is needed to afford an apartment, according to a report to be released Wednesday by the National Low Income Housing Coalition.
In Emeryville, Calif., which has one of the highest minimum wages in the country at $14.44, or the equivalent of earning about $30,000 a year, renters would still need to earn nearly $32 an hour working full time to afford a typical one-bedroom apartment. It would take more than $40 an hour to afford a two-bedroom unit, according to the report.
In Chicago, where the minimum wage is now $10, workers would still need to earn $19.25 an hour to afford a one-bedroom apartment and $22.62 for a two-bedroom, according to the report.
The report, which the group releases annually, shows that while the rental market overall is starting to cool, there is little relief in sight for low-income renters.
A family would need to earn $20.30 an hour working full time to afford a typical two-bedroom apartment in the U.S., compared to $19.35 last year. That is the equivalent of working 2.8 full-time jobs at minimum wage.
There is no state in the country in which a minimum-wage worker can afford a two-bedroom apartment.
Repeat after me: Minimum wage is not a living wage. The math doesn’t work, and it never can.
Let’s review: labor rates are set by the value of the labor, and the number of available workers with that skill set. At one end of the spectrum you have high value skills possessed by only a handful of individuals (professional sports for example). At the other end you have no value skills possessed by everyone. Minimum wage laws say that an employer has to pay an employee a certain amount even though the value of the services is less than the value of the pay. Raising the amount of the pay doesn’t raise the value of the services.
Before society used money, people bartered for the value of their goods and services. A chicken was traded for a shirt, or a pig was traded for dental work. Several cows might need to be traded for a horse and plow. The point is that the value of the goods had to equal the value of the services rendered. If not, then no deal was made.
In order for a minimum wage to equal a living wage, the value of the services performed by the minimum wage earner have to equal the value received. One of two things happens, either the value received by the minimum wage earner is more than the value of their work, or, only workers that can provide a value equal to the cost of minimal living will be employed at all.
Either the minimum wage earner is cheating the rest of society by receiving more value than he/she has earned. Or, the rest of society says we won’t pay you anything until the value you provide equals what we pay you. The former is fundamentally unfair to society and the latter is unfair to low-skill workers, since it deprives them of the opportunity to improve their skills by learning on-the-job skills and raising the value of their services.
Minimum wage is one area where I don’t believe free markets have the answer.
Everything you stated is true, but should desperation compel people to work for less than what they need to cover their basic needs? This becomes an issue or morality as well as markets.
A livable minimum wage would also create more demand for goods and services, which in turn would create greater demand for labor to produce those goods and services and more profit for the companies supplying same. I believe it was Henry Ford who championed the idea that paying a livable wage created more customers for his own business. He viewed it as a virtuous circle.
California’s experiment with a higher minimum wage may shed some light on this issue. I’m afraid most of the benefit of raising minimum wage in California will accrue to landlords due to our bad housing policies that restrict supply, but some amount of the increase should go toward goods and services, which should boost the economy for everyone. We will see.
Price controls of any kind always fail. This includes the minimum wage because what happens is compelling businesses to pay above market wages causes them to react through a combination of less hiring and charging higher prices. Those businesses that aren’t able to pass along the increased costs will go out of business, leading to more unemployment. The price increases affect everybody but hit those making the minimum wage hardest as they are forced to pay higher prices for the basic necessities of life. Hurting small businesses also hurts poor people as often times their best opportunities are starting businesses of their own. It makes it harder for them to start businesses and expand them due to unreasonable labor costs.
Framing it as a moral issue is novel when you consider all of this.
The argument that rising minimum wage leads to unemployment is a mainstay of conservative ideology. Unfortunately, there is little or no evidence it actually works in real life as it does in theory.
Barry Ritholtz has been writing about the experiment with a higher minimum wage in Seattle: https://www.bloomberg.com/view/articles/2016-03-04/we-ll-find-out-soon-if-minimum-wages-kill-jobs
https://www.bloomberg.com/view/articles/2013-12-17/the-minimum-wage-and-mcdonald-s-welfare
P.S. Nobody is arguing that business owners can’t do what they want. If it is in the best interests of modern business owners to pay a certain wage, they will do it. Using Henry Ford’s choices within the context of a free market as a reason to abandon the free market is twisted.
I don’t think we need to abandon the free market, but when we get to the bottom of the free market for labor, other considerations come into play.
“…but should desperation compel people to work for less than what they need to cover their basic needs?”
Yes. Next question. As they work they will build a skill set that will allow them to earn more money and then cover their basic needs. They will also learn financial skills as they manage their tight budget. Minimum wage is a starting wage, not a lifetime wage.
Besides, increasing wages to cover basic needs only makes basic needs more expensive. Price is set by supply and demand. Increasing demand without increasing supply makes prices remain unaffordable.
Ford motor company was the Apple of its day. It’s easy to have generous compensation packages when you enjoy their market share, pricing power, and profitability. When you are running a restaurant that operates on thin margins, and has to compete with 100 other restaurants in a 5 mile radius, paying your employees 50% more may drive you out of business. The virtuous circle soon becomes a death spiral.
Besides, minimum wage earners don’t earn minimum wage. Once you consider all the government benefits they receive, they more than double their salaries. Many two-income households can’t afford to earn more than minimum wage or they will start to lose benefits. I wonder what will happen when all the families no longer qualify for SNAP, Section 8 housing etc.? Will they raise the poverty guidelines to compensate?
Don’t forget on top of the government benefits available to minimum-wage earners, the wage probably triples, really. Once combining the employer’s payroll, FICA, unemployment and other miscellaneous state/local taxes, plus insurance premiums for Worker’s Comp, General Liability, Employment Practices, etc that are based upon the wage amounts paid to each employee– you’re doubling the real cost of the wage again right there.
If someone has the self respect to work rather than merely collect welfare or resort to crime, then I think they should have a reasonable expectation that work will compensate them enough to provide food and shelter.
http://ochousingnews.g.corvida.com/what-is-the-minimum-level-of-housing-quality-people-are-entitled-to/
Remember, there are people who don’t have the capability of expanding their skill set to earn more than minimum wage. Some people are fortunate to hold down jobs. Forcing them to live in poverty just to motivate others doesn’t feel right to me.
Increasing wages to cover basic needs creates additional demand. The market will respond to additional demand by providing additional supply — unless we’re talking about California houses where the government won’t let them.
Your example of the restaurant is exactly why there must be a uniform minimum wage. No one restaurant can raise wages due to competition, but if all restaurants had to pay more for labor, it keeps the playing field level. Will we have fewer restaurants? Maybe. But then again, if a business can’t provide a minimum standard of living to its employees, is that business truly economically viable, and do we really need it?
When you are at minimum wage every sing dollar goes to either rent or is run through the 9.5% sales tax.
Minimum wage increasing to $15 / hour is going to be an amazing benefit to landloards.
Now 4 minimum wage earners at $60/hour can afford $3000/month in rent.
Rent increases are going to keep-on-a-coming in SoCal
After half the companies go out of business, rent will still be $1500/mo. Sales tax revenue will drop too.
Half the companies go out of business??
LOL, silly you,… we will just be paying more money, and we will deal with it
Notice they don’t list the cost of the apartments used in the study, or the cost of apartments from a reasonably commutable distance. It’s very easy to manipulate these types of statistics to tell the pro-minimum wage story while obscuring the facts, so this type of “report” has all the credibility of a typical NAR release. It’s driven by a highly biased agenda.
“Labor rates are set by the value of the labor”
In what world do you live in?
Breakout for the U.S. housing market?
Bullish nonsense from a single data point
When steering through an economic recovery that has been defined by fits and starts and lackluster performance, what everyone searches for are clear signs of a break from that trend.
It’s fair to say U.S. pending home sales in April blew the roof off.
Even the most optimistic forecast was more than a country mile short of the 5.1% rise in a key index measuring the number of contracts for houses soon to be sold.
This sudden spike in the index to its highest in more than a decade is significant for several reasons.
First, throughout this entire recovery, a breakout of this magnitude in any set of data has been extremely rare.
But not only has this surge in pending home sales blown away all expectations, it’s taking place in a part of the economy that was the epicenter of the financial crisis, smoldering nearly a decade ago and then exploding into a financial fireball with the collapse of Lehman Brothers in September 2008.
Crucially, this is a major improvement in a measure of actual turnover in the housing market rather than an average asset price, which of course can fluctuate wildly based on very few transactions whether that be a house, a share, a bond, an exchange rate.
An increase in the number of homes changing hands is critical for economic growth because with each sale to a new buyer, large purchases necessarily follow: refrigerators, furniture, all sorts of other household goods and services.
It’s not only pending home sales that are looking a lot better. New home sales also jumped in April by their biggest amount in nearly a quarter century to an 8-year high.
http://blogs.reuters.com/macroscope/files/2016/05/US-new-home-sales-614×359.png
When the financial crisis and the Great Recession took the U.S. economy in a choke-hold, many of the smartest thinkers at the time said the real measure of recovery would be when the housing market took off once again.
Looking at the chart, it is clear, on this measure at least, that housing activity since the crisis has been hesitant and fitful, despite more than half a decade of near-zero interest rates. It’s also clear the latest surge is more of the kind we saw when the market was booming before the financial crisis.
As ever, it would be foolish to take just small set of data and extrapolate from that the state of an entire economy.
But policymakers at the Federal Reserve, who have been exceptionally vocal in the past few weeks about the prospect of another interest rate rise by July, will welcome these numbers.
Bears are prone to extrapolate single data points into doom & gloom narratives, but it’s exceedingly difficult to spin it to fit their narrative when such a strong bullish data point is released. Their only hope is that it gets revised down.
My first reaction is that I hope this spells an increase in business for homebuilders, but the trend was not up prior to this reading.
The April new home sales were up double digits, but when you factor in the 16% margin of error, it’s hard to derive any meaning from that report.
Good for Wealthy Homeowners, Bad for Education
Like apple pie and sending your kids to college, owning one’s own home has become part of the definition of the American dream. Federal, state and local governments provide billions of dollars of subsidies for home ownership every year, and politicians routinely offer plans to promote greater homeownership.
Yet Americans’ romance with homeownership is more dysfunctional than we may realize. Economists have argued our fixation on home ownership leads Americans to concentrate too much of their wealth in a single, depreciating asset and slows economic recoveries by lowering workers’ mobility. Less recognized, however, are the ways that public policies designed to promote homeownership may actually undermine efforts to improve public education.
Analysts have noted that our primary public policy tool for homeownership – the mortgage interest deduction – actually exacerbates economic inequality rather than promoting opportunity. More than three-quarters of the benefits go to households earning more than $100,000, and nearly half of homeowners with mortgages get no benefits at all.
Rather than making houses more affordable for moderate and low-income families, the mortgage interest deduction has simply made it easier for people to buy more expensive houses. From 1973 to 2013, the size of the average American home rose more than 60 percent, even as families grew smaller. Bigger homes consume both more energy, harming the environment, and more of the typical family’s resources – part of the reason that middle class families feel increasingly strapped. The median home sale price in January 2010 was 4.41 times median annual earnings that year, up from 3.15 in 1975.
The mortgage deduction also contributes to inequitable access and outcomes in public education. Income segregation – both in housing and in schools – has risen significantly in the past 25 years. New research from University of Southern California sociologist Ann Owens shows that this increase in residential segregation has been driven almost entirely by wealthy parents opting to purchase homes in expensive neighborhoods with good schools.
As wealthy families bid up the cost of homes near the best schools, those same neighborhoods and schools become increasingly out of reach for moderate- and lower-income families, concentrating them in communities with poorer schools and higher concentrations of poverty.
I don’t even know where to begin with this article.
First of all, the MID benefits higher-income homeowners over lower-income homeowners because the standard deduction preferentially benefits lower-income taxpayers. If the standard deduction was eliminated, then lower-income homeowners would also benefit from the MID. They don’t benefit right now because the standard deduction is substantially higher than any amount of MID deduction they would get based on the loan value they could qualify for. Correct the error of the standard deduction and they we can talk about the error of the MID.
Second, rates averaged 9.05% for a 30yrFRM in 1975 vs. 4.69% in 2010. “The median home sale price in January 2010 was 4.41 times median annual earnings that year, up from 3.15 in 1975”, because financing costs fell by half. This has nothing to do with the MID. In fact, the effect of the MID is less since interest is a lower portion of the payment when rates fall. A lower interest payment equals lower deduction.
Schools get equal per-pupil-hour funding from the State of California. So the claim that rich folks buy into good schools and keep all the poor folk from getting good educations is hogwash. Schools in expensive areas outperform schools in lower price areas for one reason: the wealthy areas are wealthy because the parents see the value of education. They make their children put in the hours to excel. The parents are also wealthy, in part, because they are smart. Their children are also smart. The combination of hard work, valuing education, and natural ability result in higher scores on standardized tests.
You’ve got to love the new PC terminology creeping up: “Income segregation”. If you move away from a poor area to get your kids a better education, you are now a segregationist.
I hadn’t heard that one.
“How dare you take your high income so far away. We have to spend 30 minutes driving, sneak into a gated community where we are constantly profiled, then break into your house, and then drive 30 minutes back again. It would be a lot more convenient if you still lived next door. And my kid can’t take your kid’s lunch money at school, copy off his test, or force him to do his homework anymore. How is my kid going to get a good job if he doesn’t graduate? And, he’s starving! Stop being so selfish.”
And if you move *into* a poor area you’re a gentrifier. You can’t win, so the only winning move is not to play.
+1
To add to Russ’ point above… Public schools with higher percentages of low-income and special needs children actually get HIGHER overall per-pupil funding from the state due to subsidies and grants. So schools in lower-priced housing areas should actually be funded “better”, thus in theory providing a “better” quality education. But in reality, it doesn’t actually work out that way… contrast the quality of education from say, SAUSD vs. IUSD. For all the reasons Russ mentioned, and probably some others I’m not thinking of.
The arguments in the article about how the HMID merely inflates house prices in neighborhoods of high wage earners is true. As Russ pointed out, the stuff about keeping out the lower income families is nonsense.
Also, the idea that test scores reflect the quality of the education is a tenuous connection at best. Mostly, test scores are determined by where high wage earners live.
For example, in Orange County 15 years ago, the San Clemente schools were not very highly rated. Starting in the early 2000s, the population of San Clemente swelled with numerous large new home developments that were purchased by high wage earners priced out of other areas in Orange County. Now, if you look at test scores in San Clemente, the schools rate very high. Realistically, did the quality of education in San Clemente change over the last 15 years, or did the quality of families and students change? I think it’s the latter.
Once a school district is noted for having high test scores, it becomes a magnate for other high wage earning families looking for a better education. This becomes a self-fueling process. Perhaps as high wage earners move in the school districts gain more funding and education does improve, but only marginally.
In short, the schools with the best test scores are the schools with the highest concentration of high wage earning families. It has little to do with the quality of education provided by the system or the teachers.
NLIHC Report, Housing Out Of Reach For The Poor: There’s An Easy Solution To This
If something is too expensive for people to be able to afford it there are two easy solutions to hand. The first is that those people simply do not get whatever it is. I am fortunate in my work and my income but that Bentley is still well out of reach: I’ll simply have to do without. When it comes to housing of course that is not an acceptable option. We don’t all need to have a mansion to live in but in a rich country basic to reasonable shelter for all is something that we think is possible. In which case the second solution comes into play. We should increase the supply of whatever it is, in this case housing, and the price will decline. This economics stuff really does work: increased supply leads to reduced price. We thus need to look at what is reducing the supply of housing, increasing the price above, what we consider a reasonable level. Once we’ve done that then we can go fix the problem.
Firstly, in some areas, it’s just not the price of building that is the major problem. It’s the price of the land which you may build upon that is. That is, zoning is the problem. The answer to which is to relax zoning and thus make land which you may build upon cheaper.
Secondly, it’s also true that low cost housing is not usually something that was built as low cost housing. Instead, it tends to be old housing that is low cost. New places are quite expensive: it’s as they age that they become cheaper. And no, this isn’t because old places are not maintained and so on. Rather, it’s because as we’ve generally been getting richer we’ve ended up taking some of that new wealth as larger houses. Old houses tend to be smaller and thus cheaper than what people look for in a new build today.
That then means that we don’t actually need to subsidise the building of low income housing today. Instead we can just let rip with building the sort of housing that higher income people want today. Higher income people will move into this larger and more desirable housing, vacating the older buildings they currently inhabit, leaving that to decline in price and be this generation’s affordable housing.
In the economic jargon, housing is fungible, or at least substituitable. We don’t have to build low cost housing in order to increase the supply of low cost housing. We only have to build more housing to do so. And that is something that will be achieved in many areas simply by relaxing zoning regulations and just allowing people to build more housing.
This is a delightful example of it not being necessary for government to do more in order to solve a problem. Rather, our solution is for government to do less to solve this problem.
People have definitely been priced out.
We were far below rental parity back in 2010…. now we are just at rental parity.
You are correct though, if they can rent the home they can buy it now. That’s a good thing.
Yes, people have been priced out, and they will remain priced out until we have sufficient supply to meet the demand. If you have 100 jobs and 50 houses, either some people will do without, or they will double and triple up to find shelter. Either way, everyone will bid up prices until the lowest wage earners can’t afford anything, which is where we are in California.
If you build too much the desirable areas aren’t desirable anymore.
A good case study is the current high rises in SF. They helped the median dropped for the first time. The high rise prices are cratering.
Unfortunately they are cratering from the $1.3M level to the $900-$1M level. Not exactly affordable.
Go to SF and see them…. there are cranes everywhere.. it’s a disaster
Oh… you say you want a classic Edwardian, Victorian… a painted lady… those prices are up up UP… with 10-20 offers closing above asking
We’ve covered Donald Trump extensively on this blog, but there is another phenomenon that is only now getting attention. The Libertarian candidate, Gary Johnson, is polling 10% in nationwide surveys vs. Trump and Hillary. With the increased media exposure this is creating, it’s possible that his percentage will get a bump. If he can sustain polling of 15% or higher over a certain period of time, we may have a Libertarian candidate on the debate stage for the first time ever.
Pay Attention To Libertarian Gary Johnson; He’s Pulling 10 Percent vs. Trump And Clinton
Gary Johnson might be on the verge of becoming a household name.
At the moment, he’s probably most often confused with that plumber who fixed your running toilet last month or your spouse’s weird friend from work who keeps calling the landline, but he’s neither — he’s the former governor of New Mexico, likely Libertarian candidate for president, and he’s polling at 10 percent in two recently released national polls against Hillary Clinton and Donald Trump.
A Morning Consult survey published Tuesday and found Clinton getting 38 percent of the vote, Trump 35 and Johnson 10, with 17 percent undecided. A Fox News poll conducted from May 14-17 showed Trump leading over Clinton, 42 percent to 39 percent, but Johnson at 10 percent as well. Lest you think this is some fluky May development, a Monmouth University survey conducted in mid-March — while the political universe was still busy wringing its hands over the Republican nomination — found that in a three-way race, Clinton would get 42 percent, Trump 34 percent and Johnson 11 percent.
Given that Trump and Clinton are sporting historically high negative ratings, Johnson’s polling makes a fair bit of sense; Gary Johnson is neither Donald Trump nor Hillary Clinton. He might not win a state, but he could make some noise.
Given that this is 2016, no result should be ruled out.
Apparently, he is the recipient of the “both candidates suck” attitude among the voters. We’ve never had two nominees with such high negatives before.
And thus you reveal your bias IR.