Will houses ever become affordable again?

[Anonymous]

Anonymous wrote:Boomers are responsible for most of the home purchases since COVID. They are the ones with the cash, they are a big generation. Some are downsizing. But many of them are just adding to their RE portfolio without shedding properties - adding a vacation home, building their new construction "dream home," or simply up-sizing to something nicer. They also are severely tax adverse and don't want to sell if it incurs a big tax bill.

In short, lots of housing is effectively locked up by high rates, rich Boomers who loathe taxes, or professional investors crowding out owner-occupants.

The only way to "unlock" housing is through policy change or a major recession.

Well, the boomers will die off, so the supply will come back on the market. It may take 10 or 20 years though.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, as the Boomers start to move into care homes and die, lots more will become available, and there won’t be such intense competition.

Nope. We will just pass our primary home on to our kids in a trust & they will continue to lease our rental real estate to you losers.
Sucks to be you huh?

How does the trust work?

[Anonymous]

Anonymous wrote:I kinda feel like we’ll have to keep any houses we inherit to pass on to our own kids. Stinks, as I don’t want to be a landlord, but I also don’t want my kids to be renters forever. In the European country that DH is from, the family house passes on to the oldest DC. As an American, this doesn’t sit well with me, so I don’t know what else to do.

Redevelop the property.

[Anonymous]

Anonymous wrote:Yes, as the Boomers start to move into care homes and die, lots more will become available, and there won’t be such intense competition.

Hahahahaha. The boomers in my neighborhood are selling the same house we bought for $750K pre-covid for $1.25 Million (the last houses were $1, $1.1, $1.2, $1.25, I imagine the next one will be $1.3).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Boomers are responsible for most of the home purchases since COVID. They are the ones with the cash, they are a big generation. Some are downsizing. But many of them are just adding to their RE portfolio without shedding properties - adding a vacation home, building their new construction "dream home," or simply up-sizing to something nicer. They also are severely tax adverse and don't want to sell if it incurs a big tax bill.

In short, lots of housing is effectively locked up by high rates, rich Boomers who loathe taxes, or professional investors crowding out owner-occupants.

The only way to "unlock" housing is through policy change or a major recession.

This is my parents. They own multiple homes. There's one they really should sell but they won't because they don't want to pay taxes on the gains, even though those taxes would not be particularly large relative to the sale or their worth. They just hate the idea.

Another factor in their thinking is that for their generation, real estate has been THE way to get wealthy. My parents didn't go to college, they don't own stock, etc but property values have absolutely skyrocketed during their lifetime. It's difficult for them to let go of what they see as a source of wealth and security. I won't see that kind of gain and so my attitude toward real estate is different.

I think of that Gerald O’Hara quote, and sympathize: “Land is the only thing in the world worth working for, worth fighting for, worth dying for—because it's the only thing that lasts.”

[Anonymous]

Literally yesterday I was reading another thread where people were pontificating that we wouldn’t see any appreciation in house prices for about ten years. Which is it, DCUM!?

[Anonymous]

Anonymous wrote:

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Anonymous wrote:Our only true hope is if Biden is reelected. And even then it would require an enormous number of stimulus check sent to undo the rapid increase in prices. I have serious doubts that Congress has the fortitude to pass this.

Although I also do hope Biden gets reelected, honestly I don't think stimulus checks and pumping more money into the economy will solve the problem, hell I would argue that caused the problem in the first place.

During the pandemic, not only did the government pumped a lot of money into the economy. First of all the COVID stimulus checks, which rather than targeting those who lost their job, just gave everyone $$. Then they paused student loan payments (for far too long, I would argue the pause was unnecessary for most people). Last the foreclosure (and eviction I guess) moratoriums also ensured that supply stayed low. And last (granted this is out of the executive office's control), FED rates were kept low for far too long (making mortgages much cheaper than they should be, causing house prices to increase, and also causing the inflation in other sectors).

We don't need to government artificially pumping more money in, this will only make the problem worse.

If you look at the underlying components contributing the most to inflation today, it's housing and insurance. And the insurance portion is driven by the fact that natural disasters are becoming more frequent/severe and the cost to rebuild is so high (due to the high cost of real estate).

We are going to be stuck in this cycle for a while, until either more supply is quickly added (would require something like a Manhattan Project for housing) or we get a real recession with lots of widespread pain that forces the hand of investors to dump supply on the market.

Agreed either some increase in supply (through a government intervention providing incentives to build) or some form of a moderate recession that forces people to sell.

I guess another possibility is (and I do not know how realistic this is) is if Trump wins the next election (god I really hope he wont) and then moves certain federal agencies outside the DMV area. If those jobs move/leave the area, I could see it having a dent in the DMV market as well (increased supply and reduced demand). There are around 374k federal government employees in the DMV area (https://fred.stlouisfed.org/series/SMU11479009091000001SA) which is a significant number. A reduction in that could have some serious (negative imo) ripple effects for the area.

He'll be gutting/eliminating agencies.

Dude is not getting elected, sorry. If Jan 6th never happened it probably would have been a cakewalk to winning, but it did, and moderates are hard passing on any MAGA candidate. Better start planning for a Biden term.

Are you one of those people who was convinced Hilary was going to win?

[Anonymous]

Anonymous wrote:Literally yesterday I was reading another thread where people were pontificating that we wouldn’t see any appreciation in house prices for about ten years. Which is it, DCUM!?

That was on dcum?

[Anonymous]

Anonymous wrote:Boomers are responsible for most of the home purchases since COVID. They are the ones with the cash, they are a big generation. Some are downsizing. But many of them are just adding to their RE portfolio without shedding properties - adding a vacation home, building their new construction "dream home," or simply up-sizing to something nicer. They also are severely tax adverse and don't want to sell if it incurs a big tax bill.

In short, lots of housing is effectively locked up by high rates, rich Boomers who loathe taxes, or professional investors crowding out owner-occupants.

The only way to "unlock" housing is through policy change or a major recession.

We experienced SO much of this when in the market for turnkey, close-in 3,4BR/2.5+BA houses. Things were being snapped up left and right by “downsizing” boomers (so insulting!) offering all cash or way above list. We knew to avoid the obvious areas where we’d be outbid by all-cash, no-contingency developers, but weren’t anticipating the boomer effect (“to be closer to [rich!] grandkids”).

We were close-in before but ended up way outside the beltway with a little too much house and some land, which I think was why we were only competing with other families, no boomers skewing things for us.

[Anonymous]

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:If we build more housing. Basically the great recession killed housing starts and they have never gotten back to where they were.

That won't affect the prices because if you build it, they will come. So many people want to live here, they just keep packing them in. Increasing supply from an economic principle should lower price but in reality for real estate in the DMV that won't happen and hasn't happened because more and more people just keep moving here. So more demand with more supply.

That was part of the missing middle argument, that home ownership is like a property ladder and in order to make those apartments and homes more affordable at the bottom of the ladder, we needed to increase supply in the middle and people move up the ladder, freeing cheaper housing, stabilizing prices. But that assumes a limited demand. In reality, there is just too much demand and it keeps increasing. Hence you can keep building gigantic $2 million duplexes and THs and people will STILL buy them. Prices will never go down here.

Prices will stabilize with more supply IF you sharply tax investment properties/2nd homes. The issue is that people retain their cheap condo/starter home on the bottom of the ladder and rent it out. You need to force that supply back into the ownership market for the virtuous cycle to continue. Also need to ban LLC's from owning SFHs, townhouses, and individual condo units. If big money corporates like Blackrock want to own RE, they need to build or purchase large multifamily developments to rent out.

None of those things are going to happen in government. Stop with the fairytales.

Not sure why not. So many jurisdictions claim to have housing shortages and instead of dumb proposals like missing middle or thrive 2050, they could just dramatically increase property tax rates on investment properties and the housing supply would dramatically increase overnight. Kind of baffling actually except that no one actually really cares about housing shortages and instead the goal is to make developers rich.

I don’t think you have thought this through at all. If you suddenly pull that many rentals from the market then rents will soar. It’s already very difficult for families to find larger rentals so that would be a bad thing for our community. Small landlords with a rental are not the same as “developers” and are also not getting rich.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If we build more housing. Basically the great recession killed housing starts and they have never gotten back to where they were.

That won't affect the prices because if you build it, they will come. So many people want to live here, they just keep packing them in. Increasing supply from an economic principle should lower price but in reality for real estate in the DMV that won't happen and hasn't happened because more and more people just keep moving here. So more demand with more supply.

That was part of the missing middle argument, that home ownership is like a property ladder and in order to make those apartments and homes more affordable at the bottom of the ladder, we needed to increase supply in the middle and people move up the ladder, freeing cheaper housing, stabilizing prices. But that assumes a limited demand. In reality, there is just too much demand and it keeps increasing. Hence you can keep building gigantic $2 million duplexes and THs and people will STILL buy them. Prices will never go down here.

Prices will stabilize with more supply IF you sharply tax investment properties/2nd homes. The issue is that people retain their cheap condo/starter home on the bottom of the ladder and rent it out. You need to force that supply back into the ownership market for the virtuous cycle to continue. Also need to ban LLC's from owning SFHs, townhouses, and individual condo units. If big money corporates like Blackrock want to own RE, they need to build or purchase large multifamily developments to rent out.

None of those things are going to happen in government. Stop with the fairytales.

Not sure why not. So many jurisdictions claim to have housing shortages and instead of dumb proposals like missing middle or thrive 2050, they could just dramatically increase property tax rates on investment properties and the housing supply would dramatically increase overnight. Kind of baffling actually except that no one actually really cares about housing shortages and instead the goal is to make developers rich.

I don’t think you have thought this through at all. If you suddenly pull that many rentals from the market then rents will soar. It’s already very difficult for families to find larger rentals so that would be a bad thing for our community. Small landlords with a rental are not the same as “developers” and are also not getting rich.

Cities won’t do this because they actually love high property values that generate large amounts of property taxes. They would rather give a voucher than see lots more supply on the market and lower prices.

[Anonymous]

Anonymous wrote:Our only true hope is if Biden is reelected. And even then it would require an enormous number of stimulus check sent to undo the rapid increase in prices. I have serious doubts that Congress has the fortitude to pass this.

Biden has done very little... you give him far to much credit.

[Anonymous]

The answer is still no. Stop asking again in new threads.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, as the Boomers start to move into care homes and die, lots more will become available, and there won’t be such intense competition.

It is actually lazy Gen Z men who won’t launch many are saying will cause a 20 percent correction in around 10 years

The “launch” trendy word is tired.

So how are NASA and Musk suppose to get their rockets to outer space?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our only true hope is if Biden is reelected. And even then it would require an enormous number of stimulus check sent to undo the rapid increase in prices. I have serious doubts that Congress has the fortitude to pass this.

Although I also do hope Biden gets reelected, honestly I don't think stimulus checks and pumping more money into the economy will solve the problem, hell I would argue that caused the problem in the first place.

During the pandemic, not only did the government pumped a lot of money into the economy. First of all the COVID stimulus checks, which rather than targeting those who lost their job, just gave everyone $$. Then they paused student loan payments (for far too long, I would argue the pause was unnecessary for most people). Last the foreclosure (and eviction I guess) moratoriums also ensured that supply stayed low. And last (granted this is out of the executive office's control), FED rates were kept low for far too long (making mortgages much cheaper than they should be, causing house prices to increase, and also causing the inflation in other sectors).

We don't need to government artificially pumping more money in, this will only make the problem worse.

Do you think Biden or any politician cares? They just want to be re-elected.