WSJ: rapidly growing mismatch between the price of available housing inventory and demand

[Anonymous]

https://www.wsj.com/articles/buying-a-home-will-be-harder-than-ever-this-spring-1491048002?mod=trending_now_1

One could argue that this is a bubble in the making.

[Anonymous]

Pay wall - sum it up

[Anonymous]

Key sentences from the article:

"“We think that 2017 will be the fastest market” since the peak of the last housing boom in 2006, said Nela Richardson, chief economist at Redfin. So far this year, homes are selling an average of eight days faster than last year.

It isn’t just hot spots like Seattle and Denver that are seeing scarce supplies of homes for sale but also sleepier locales like Minneapolis, Cleveland, Nashville, Tenn., Tampa, Fla., and Louisville, Ky."

[Anonymous]

So far this is matching our experience looking in the NoVA suburbs.

[Anonymous]

Something has to change soon, right?

[Anonymous]

Yeah I've wondered about this too. Many people buy and build HUGE houses, but don't really want them. I have a 3500 sq ft house, but would have preferred 2500 for instance. I just wanted 4 bedrooms (3 and a office really) and a large family room/kitchen. Not easy to find! Builders are not building what people want, but are instead building what will profit them. There is a disincentive to build small-medium sized family homes. They make the most money off the big houses.

My starter "house" was a condo, just like the majority of the people I know. Sure the HOA fees suck, but it's the easiest way to get on the property ladder. Townhouses were about 200k more than my condo and houses were about 400k more.

[Anonymous]

Anonymous wrote:Yeah I've wondered about this too. Many people buy and build HUGE houses, but don't really want them. I have a 3500 sq ft house, but would have preferred 2500 for instance. I just wanted 4 bedrooms (3 and a office really) and a large family room/kitchen. Not easy to find! Builders are not building what people want, but are instead building what will profit them. There is a disincentive to build small-medium sized family homes. They make the most money off the big houses.

My starter "house" was a condo, just like the majority of the people I know. Sure the HOA fees suck, but it's the easiest way to get on the property ladder. Townhouses were about 200k more than my condo and houses were about 400k more.

Yes. This is happening in our close-in NoVa neighborhood. All of the knock-down new homes have at least 6 bedrooms--and as many bathrooms. For a family of 4, that size is way more than we would ever need and would require down-sizing in 7 years when we are empty-nesters.

We went in one yesterday and would have been more than happy with just 2 of the 4 floors which were enormous themselves.

[Anonymous]

We need to expand affordable housing, increase density by changing zoning laws, in places that increase accessibility to transit. And yet instead, all the new developments seem to be either giant mcmansions way far out there, or giant new 1-bedroom apartment buildings in urban neighborhoods.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yeah I've wondered about this too. Many people buy and build HUGE houses, but don't really want them. I have a 3500 sq ft house, but would have preferred 2500 for instance. I just wanted 4 bedrooms (3 and a office really) and a large family room/kitchen. Not easy to find! Builders are not building what people want, but are instead building what will profit them. There is a disincentive to build small-medium sized family homes. They make the most money off the big houses.

My starter "house" was a condo, just like the majority of the people I know. Sure the HOA fees suck, but it's the easiest way to get on the property ladder. Townhouses were about 200k more than my condo and houses were about 400k more.

Yes. This is happening in our close-in NoVa neighborhood. All of the knock-down new homes have at least 6 bedrooms--and as many bathrooms. For a family of 4, that size is way more than we would ever need and would require down-sizing in 7 years when we are empty-nesters.

We went in one yesterday and would have been more than happy with just 2 of the 4 floors which were enormous themselves.

It's because the banks won't loan them the money if they're only building a 4 bedroom house. They won't have enough equity once they're done for the mortgage.

[Anonymous]

Anonymous wrote:We need to expand affordable housing, increase density by changing zoning laws, in places that increase accessibility to transit. And yet instead, all the new developments seem to be either giant mcmansions way far out there, or giant new 1-bedroom apartment buildings in urban neighborhoods.

It's not even a matter of zoning- it's the size of the house and the price. Houses are too big and prices too high. A 500k, 1500 sq ft house is demolished for a 1.5 million 5000 sq ft house for instance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We need to expand affordable housing, increase density by changing zoning laws, in places that increase accessibility to transit. And yet instead, all the new developments seem to be either giant mcmansions way far out there, or giant new 1-bedroom apartment buildings in urban neighborhoods.

It's not even a matter of zoning- it's the size of the house and the price. Houses are too big and prices too high. A 500k, 1500 sq ft house is demolished for a 1.5 million 5000 sq ft house for instance.

The parallel dynamic in urban areas (like Trinidad in DC) is that houses are being flipped and marked up too much. $500k rowhouse being gutted and sold for $750k (and you can't even send your kid to the schools!)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We need to expand affordable housing, increase density by changing zoning laws, in places that increase accessibility to transit. And yet instead, all the new developments seem to be either giant mcmansions way far out there, or giant new 1-bedroom apartment buildings in urban neighborhoods.

It's not even a matter of zoning- it's the size of the house and the price. Houses are too big and prices too high. A 500k, 1500 sq ft house is demolished for a 1.5 million 5000 sq ft house for instance.

The parallel dynamic in urban areas (like Trinidad in DC) is that houses are being flipped and marked up too much. $500k rowhouse being gutted and sold for $750k (and you can't even send your kid to the schools!)

It's not too much, if people are paying it. Homes sell for what they are worth.

[Anonymous]

Anonymous wrote:We need to expand affordable housing, increase density by changing zoning laws, in places that increase accessibility to transit. And yet instead, all the new developments seem to be either giant mcmansions way far out there, or giant new 1-bedroom apartment buildings in urban neighborhoods.

The giant fat McMansions are also replacing old housing stock close-in. There is going to be a glut of 6+bedroom Craftsman houses all over the area with a 'dated' look in 7-10 years. These are going for $1.6-$2.5 million around us--but they are all very similar. I just don't see a market for all of these very gigantic houses down the road.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We need to expand affordable housing, increase density by changing zoning laws, in places that increase accessibility to transit. And yet instead, all the new developments seem to be either giant mcmansions way far out there, or giant new 1-bedroom apartment buildings in urban neighborhoods.

The giant fat McMansions are also replacing old housing stock close-in. There is going to be a glut of 6+bedroom Craftsman houses all over the area with a 'dated' look in 7-10 years. These are going for $1.6-$2.5 million around us--but they are all very similar. I just don't see a market for all of these very gigantic houses down the road.

+1.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We need to expand affordable housing, increase density by changing zoning laws, in places that increase accessibility to transit. And yet instead, all the new developments seem to be either giant mcmansions way far out there, or giant new 1-bedroom apartment buildings in urban neighborhoods.

It's not even a matter of zoning- it's the size of the house and the price. Houses are too big and prices too high. A 500k, 1500 sq ft house is demolished for a 1.5 million 5000 sq ft house for instance.

The parallel dynamic in urban areas (like Trinidad in DC) is that houses are being flipped and marked up too much. $500k rowhouse being gutted and sold for $750k (and you can't even send your kid to the schools!)

It's not too much, if people are paying it. Homes sell for what they are worth.

Did you read the article?