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.

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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 PP but i agree it's unlikely to occur. I also agree it would actually be a big and very beneficial step if it did.

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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.

I'm curious because if you look at the Trump years, housing was more affordable and inflation was extremely low, so why would you pick Biden if you want more affordability because it's under Biden that housing became extremely unaffordable. I'm not excusing Trump as I don't like the man, but it's denial to pretend the economy wasn't great for his tenure and real wages were outpacing inflation, until COVID hit and distorted everything but he wasn't responsible for COVID.

Our current situation is 100% related to how we reacted to COVID with massive stimulus infusion and sending interest rates to record lows that lasted through 2022. Most people with mortgages have extremely low interest rates by now, meaning they have golden handcuffs and can't sell to trade up as people normally do, restricting the supply of housing. Then sharply higher interest rates in a short period has made housing even more unaffordable. On top of this is enduring inflation that is turning out not to be transitionary.

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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.

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How do you not understand this? Every capital city or assimilated has real estate prices that don't go down. Everywhere in the world.

Well I have certainly seen threads on this board of people sharing how much of a loss they have taken on real estate previously. Seems to show that it does sometimes go down

Anonymous wrote:The only way is to buy further out (loudon county) and then move closer and closer into dc by upgrading as you build wealth. There’s no way to get an expensive house without a high income.

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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.

I hear this a lot but I would love to see a deep dive, with supporting numbers, on who owns what in America. I've also heard the problem is foreign investors.

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.

Anonymous wrote:I have to admit that I did not predict prices would continue to increase even with the sharp increase in mortgage rates. It makes sense that people don’t want to sell and take on a higher rate now, but I am curious if others honestly saw that coming? Unfortunately, I didn’t!