Which for probably 70-80% of people, especially young couple with or considering children, are the top two things they care about if not the only two things.
Yeah even our best realtor, who I actually liked and thought he did a good job (see other comment here) spent probably 1/3 of his total time on our purchase just hanging out or also walking around an open house. Such a waste IMO.
I've yet to hear anyone say why "build more" isn't a valid answer to lowering the cost of housing. Even if new builds stay at exactly the same price they're at today, the price of older homes will decrease as supply increases.
And I don't just mean in this thread, I mean ever. It's always hand-wavey "it doesn't work like that" when the evidence suggests that it does.
The underlying issue is that converting single-family suburbia to medium-density multifamily ‘ruins the neighborhood’, and cities don’t have the courage to eminent domain homes and replace them with apartment buildings themselves, so they outsource the housing function to the Free* Market, which is most definitely not interested in terminating the SFH market. Between the profitless-ness of apartments for the real estate industry and the use of suburbia zoning to discriminate since the early 20th century (nowadays in the guise of HOAs), the problem to solve isn’t in housing or urban planning, it’s in dethroning capitalism and classism. That’s why no explanation presents itself for why more housing isn’t a good idea: it’s a fine idea, but the U.S. ethos of ‘fuck you, got mine’ takes precedence, and it’s uncouth to say that out loud here.
I asked why "build more" isn't a valid answer and your response is that we need to dethrone capitalism and Reddit-tier nonsense about HOAs?
Why is your solution "put 3 families in this single-family home" and not "build more single-family homes?" If the market isn't "interested" in "terminating" single-family homes what makes you think it would be a good thing to do so, other than the fact that it would hurt a cohort of people you seem to hate?
If you got rid of height caps, minimum lot sizes, and loosened zoning capitalist developers you hate so much would jump at the chance to build medium (and even high!) density housing. No need to have the government steal homes from people to do it.
If we're talking about home prices why are you talking about apartments? There are a lot of costs associated with apartment buildings that simply don't exist for SFH and MFH builds.
Indeed, there's an entirely separate, far more strict building code for apartments than for single-family detached housing.
This was an explicit goal of the designers of the early building code split: make single family homes as cheap as possible, and apartments as expensive as possible.
There is a difference between "forced to pay a fee" and "forced to pay an inflated fee." The GP said it's not about being forced to pay a particular commission, which is the first one, which is accurate.
It is "work" in the sense that you can be busy doing things. Nothing is difficult by any reasonable sense of the word. All the realtors I know who are actually successful are constantly busy, constantly taking phone calls or responding to texts, there's very little downtime. I'm sure there's some nuance to it, and it probably helps to be in the business for a long time, but it's a backup job for 99% of people for a reason.
I've bought and sold a handful of properties in a couple states through my life and have dealt with probably 2 dozen realtors in some professional capacity, and only 1 has been what I would call "good" and that was basically just him giving us insight into the market, being willing to tell us not to buy a house because it wouldn't fit our needs 5 years in the future, etc. Basically just willing to sacrifice a faster or larger commission to get us what we wanted rather than just closing a deal ASAP, which IMO should be the minimum and not the mark of a "good" realtor.
What's your definition of normal? 300 years ago you'd just set up on a chunk of land and build your own house. I'm not saying that's preferable to today but the actual financial cost was comparatively extremely little.
I bet there is a middle ground where we could relax or eliminate a lot of building restrictions and NIMBY policies to ease the upward pressure or even exert some downward pressure on home prices. We're also fighting against 6-7% interest rates after an extensive period of 2-3%.
To the extent that an organization can understand anything, this one understands economics just enough to argue for policies that will get its members more money, and argue against policies that won't. Real estate is the quintessential stay-at-home-mom backup job so it's no surprise by and large they are not known for having a nuanced and academic understanding of economic theory.
They want wages to go up so that home prices go up even more, and their members make even more money for doing basically nothing most of the time.
> it's no surprise by and large they are not known for having a nuanced and academic understanding of economic theory
The folks I’ve worked with have been as dedicated to their career path as anyone, and while their expertise and skill varies that isn’t different than any job. I understand your point, but your (mis?)characterization hits me as a little biased and shallow.
They're intentionally focusing on only one half of the equation because the other half is partly their fault, and addressing it hurts their members.
They either don't understand that addressing wages without supply simply increases prices, or they do understand and don't care because it's good for their pocketbook. Which one's worse?
The article does, agreed. But I don’t think it was written by actual realtors. It’s the product of an organization that is representing them poorly, or so it appears.
This is at least 80% of the problem. The system is behaving exactly as you'd expect it to with even an Econ 102-level understanding. New supply isn't being built, or is being severely hamstrung, and more people want the supply and are willing to sacrifice (often too much) to get it. Add in rent-seeking behavior, both figuratively and literally, and prices quickly double in even mediocre areas with minimal long-term prospects for growth.
Relaxed zoning requirements for SFH and MFH buildings, relaxed or eliminated height restrictions for high rise density projects in urban areas, eliminating rent control, and a laundry list of other things would help alleviate the upward pressure.
Even if new stock were built, new homes in Houston start around $300k for a 3/2 configuration, but those are bought up nearly instantly because not many are built, and the remaining stock are $400-700k.
I grew up with 6 family members in a 3/2 house that was 1250sqft. Houses today start at 2000+ square feet in the USA. We DON'T need that. On top of that, there is very limited stock of homes for people who no longer have kids.
Every type of manufacturing in the US has gone toward lower throughput, higher price. Luxury apartments, 2500 square foot houses with no yard, $50k for a car. And it is because we are all comparing ourselves to each other and wanting to appear like we can afford this lifestyle, and its finally breaking. But it was allowed to go this way, because it was working. Pricing out the bottom 25% didn't negatively affect the profitability of the companies making these items, in fact, it made them more profit.
The answer is still build more (which you basically admit yourself in your first sentence).
Homes skew larger and more expensive precisely because it's so hard to build them so developers need to make more money from each one. The fixed costs per unit are too high, so the ones that need to be lowered or eliminated should be. That will incentive building more units not just more expensive units. You'd see a lot more 1200sqft new builds if it was more economically viable and developers could make a profit on a $125k home instead of needing $400k.
> You'd see a lot more 1200sqft new builds if it was more economically viable and developers could make a profit on a $125k home instead of needing $400k.
You do see them, but they are factory built. I could have a $75k manufactured home dropped onto a $20k slab, with $15k utility hookup, and have 3 beds and 2 baths and 1200sqft. It is viable outside of HOAs and "master planned communities" but it is hard to find places in the US that allow this in a "desirable" area.
I agree we need more, but we need smaller too. My parents right now have a 3600 sqft house they will die in, and can't maintain because they are in/approaching their 70s. They built it in 2008 for around $190k when there were still 2 kids at home, my grandmother still lived there, and my sister had a baby on the way.
Now their home is valued at $750k according to the county (after fighting and revising it down from $800k), and if it weren't for all the homestead exemptions and senior rates and whatever other tax breaks they were given, their property taxes would be over $25k/yr.
They've actually tried to sell it a number of times, but 0 bites even discounting it down to $500k, because the town they are in has no comps (single level 4 bed, 4bath on 3 acres).
Build Moar seems to be too simplistic. There's just too much demand and too much investment capital seeking profit. No matter how much you build, most of the housing supply is going to get sponged up by investors, landlords, and private equity, and the price isn't going to go down. You'd probably have to 4X to 5X the current housing supply to make a dent in prices.
>You'd probably have to 4X to 5X the current housing supply to make a dent in prices.
Not at all. The important thing here is that price is set on the margin. Relatively modest supply increases can have outsized price effects. As an example, consider rents in Austin - something like 30% housing stock increase led to 16% drop in median rent, all while Austin simultaneously had massive in-migration, i.e., rents fell despite demand surging.
As another example of margin behavior: vacancy rates matter a lot, a modest vacancy rate increase can crater rents, which we see in the CRE market.
When investors buy housing they almost always rent it out, increasing the supply of rentals and decreasing rent prices relative to the alternative universe in which no new housing is built.
It's interesting to say something sounds simplistic when your argument is basically "I feel like __________" and in fact the evidence shows exactly the opposite.
Building new housing stock drives down the price of older, more beat up housing. So new housing being more expensive is fine, expected, and helps a ton still.
> And it is because we are all comparing ourselves to each other and wanting to appear
No. No no no! It's because capitalism rations by price and weights by wealth. Once inequality cooks up enough the whims of the wealthy outweigh the needs of the poor.
It is not the strength of those whims that squishes the poor, it is the strength of those whims multiplied by relative wealth that squishes the poor. The whims did not grow out of control. The multiplier did. Extreme inequality is the problem.
Which for probably 70-80% of people, especially young couple with or considering children, are the top two things they care about if not the only two things.
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