Discussion thread - housing market

[pixy0stix]

For the people that have been here a while, remember when the board used to go back and fourth about owning vs renting in the real estate market? There was always a strong contingent that would lobby for the "not everyone wants to be a homeowner" pro-rental argument, and the other faction that would look at the housing markets and "real estate as profit" for companies and worry about the long term effects. And now Millennials can't buy a house.

I'm not saying that the "not everyone wants to own a house" people were wrong. It's just a very weird feeling to reminisce on past debates and being alive long enough to see the consequences of schools of thought at the time.

ETA link for substance - www.cnbc.com/2023/02/21/how-wall-street-bought-single-family-homes-and-put-them-up-for-rent.html

[loira]

The housing market in Canada is particularly bad right now and I think it will only get worse.

www.nationalobserver.com/2023/04/13/opinion/we-are-all-blame-canada-brutal-housing-market

[Poeticxpassion]

We want to sell so badly right now. The question is where are we going to go.

[Velar Fricative]

Every time I say to myself that I just can't fathom sustaining this kind of market, I get proven wrong. It's bad out there. If I were entering the real estate market right now I'd probably have to move to, like, PA while commuting to NYC to be able to afford anything. We went the "starter home" route but even the traditional starter homes around here (co-ops and condos) are ridiculous now. I do know a few people trying to enter the market that were saving as much as they could and waited until they were finally making solid incomes...but now those incomes get you a closet now.

And yes, many homes are being sold for $$$ and immediately being rented out for astronomical prices because they know people are stuck. But if you want a decent commute and/or have other important reasons to stay put as closely as possible, you're just stuck paying those rents. And there goes any opportunity to save up for a down payment for these ever-increasing home prices. There is absolutely nothing wrong with renting but when the market is so saturated with willing buyers who just get beaten out of every offer by people/companies paying cash sight unseen and waiving inspections, that's a serious problem. Environmentally, that's contributing to even more sprawl, horrible traffic at the same time that mass transit options are either not growing or are decreasing, not to mention people having to move to neighborhoods that were previously rendered undesirable/uninsurable due to natural disasters or ongoing flooding, etc.

I don't know what the solution is.

[chickadee77]

May 31, 2023 21:38:23 GMT -5 loira said:

The housing market in Canada is particularly bad right now and I think it will only get worse.

www.nationalobserver.com/2023/04/13/opinion/we-are-all-blame-canada-brutal-housing-market

Tell me about it *groan* - Ontario is charging 25% tax for anyone not yet a PR to buy (I understand the logic, but ouch for those of us that aren't quite there yet). We're just hoping the rebate process is smooth

[Velar Fricative]

May 31, 2023 21:38:23 GMT -5 loira said:

The housing market in Canada is particularly bad right now and I think it will only get worse.

www.nationalobserver.com/2023/04/13/opinion/we-are-all-blame-canada-brutal-housing-market

I didn't notice this much in Montreal which is the Canadian city we've been visiting most recently, but when we were last in Toronto in 2016 it was incredible just how much construction of high-rises were happening there. Pretty crazy to say that as a New Yorker, but the scale of construction in Toronto still looked jaw-dropping. Somehow I don't think those luxury apartments are fixing many housing problems though...(Just like they aren't doing so here.)

I haven't been to Vancouver in over 10 years though, but I know it's ridiculously expensive there too. 

[Velar Fricative]

Also, more than 1 in 4 American homeowners are house poor (>30% of their monthly income goes towards all housing costs - the study nor the article never say otherwise so I assume that's gross income since net varies so considerably).

Like, duh. That number will rise in the coming years.

[mrsd2006]

Jun 1, 2023 7:45:15 GMT -5 chickadee77 said:

May 31, 2023 21:38:23 GMT -5 loira said:

The housing market in Canada is particularly bad right now and I think it will only get worse.

www.nationalobserver.com/2023/04/13/opinion/we-are-all-blame-canada-brutal-housing-market

Tell me about it *groan* - Ontario is charging 25% tax for anyone not yet a PR to buy (I understand the logic, but ouch for those of us that aren't quite there yet). We're just hoping the rebate process is smooth

What is a "PR"? 

And it's not just primary houses, it's second houses as well. Where we have a cabin, the prices have doubled or more. There's a 768 sq foot cabin (2/1) that just sold- listing was $394K but not sure the flnal price. It sold 12/30/21 for $150k, and sold again 5/30/22 (5 months later!) for $365k. That's insane. And it's happened all over this neighborhood. And now our property taxes are skyrocketing. 

[audette]

Jun 1, 2023 9:38:03 GMT -5 mrsd2006 said:

Jun 1, 2023 7:45:15 GMT -5 chickadee77 said:

Tell me about it *groan* - Ontario is charging 25% tax for anyone not yet a PR to buy (I understand the logic, but ouch for those of us that aren't quite there yet). We're just hoping the rebate process is smooth

What is a "PR"? 

And it's not just primary houses, it's second houses as well. Where we have a cabin, the prices have doubled or more. There's a 768 sq foot cabin (2/1) that just sold- listing was $394K but not sure the flnal price. It sold 12/30/21 for $150k, and sold again 5/30/22 (5 months later!) for $365k. That's insane. And it's happened all over this neighborhood. And now our property taxes are skyrocketing. 

PR likely means Permanent Resident, in this context.

[hermione]

I still think there are a fair number of people who don't want to own a home. I work with several people aged 28- 40. About half of them have no desire to ever own a home. The reasons vary but as a person who has both a roofer and a plumber coming today, I get it.

[mrsslocombe]

We do own our apartment (co-op). But have no desire ever to have a house. We have to manage a lot for my in-law's 3,000 sqft house in PA and it's a nightmare. Our maintenance fees are insane because we live in a full service community but it's worth it to just be able to call management if there's any issue whatsoever and they deal with it. Plus not being responsible for lawn care, the roof, heating, etc.

Also we are paying more in mortgage + maintenance than we did as renters, NYC is the rare place where a lot of times it IS cheaper to rent.

[bee20]

This topic is weird.

I'm someone who bought in my early 20s (thanks obama) and while I love my low mortgage payment, it limited both career movement and dating options in my 20s. Just because the market has went insane doesn't mean people who continued to rent made the "wrong" choice for their life. There are so many factors that could be causing someone to be trying to buy a house in 2023, other than "thought they were sooo smart 10 year ago". We need to fix the housing crisis, not crow about how I got mine.

[krystee]

I am worried that in a decade or two, home ownership won’t even be a thing for individuals, and renting from corporations is just what you’ll have to do.

We make a substantially above average income for our area, and in a real estate update I got today listing average sale prices for the quarter, we could not comfortably afford the average house price at current interest rate levels.

[Jalapeñomel]

Jun 1, 2023 10:11:57 GMT -5 mrsslocombe said:

We do own our apartment (co-op). But have no desire ever to have a house. We have to manage a lot for my in-law's 3,000 sqft house in PA and it's a nightmare. Our maintenance fees are insane because we live in a full service community but it's worth it to just be able to call management if there's any issue whatsoever and they deal with it. Plus not being responsible for lawn care, the roof, heating, etc.

Also we are paying more in mortgage + maintenance than we did as renters, NYC is the rare place where a lot of times it IS cheaper to rent.

I find the co-op situation here mindboggling...I don't quite understand why this exists. I had never heard of it before I moved here. 

[Jalapeñomel]

Jun 1, 2023 11:06:43 GMT -5 krystee said:

I am worried that in a decade or two, home ownership won’t even be a thing for individuals, and renting from corporations is just what you’ll have to do.

We make a substantially above average income for our area, and in a real estate update I got today listing average sale prices for the quarter, we could not comfortably afford the average house price at current interest rate levels.

I think this will be especially true in cities/suburbs of cities. 

[plutosmoon]

As a current househunter of almost 2 years, I'm seeing the strong effects of investors in my community.

I live in the Northern Berkshires, a prime location for short term rentals during both the summer and winter. I'm not sure if national investment companies are buying up homes, or it's more regional and local companies. We also have a large contingent of people purchasing vacation home who are opting for the historically lower income cities and towns and far outpricing the locals.

I rent, I want to own. I used to own, but was forced to sell my home in early 2021 due to my divorce. I bought my house, a 1950s 3 bedroom 2 bath ranch, finished basement, around 1700 square feet, in 2018 for $193,000. I sold it in early 2021 for $230,000. I recently offered $240,000 on a 1100 sq. foot 3 bed/1 bath ranch and was outbid, it was outdated and had no appliances, 6 other offers were made. Another house I put in an offer almost 20k over asking and lost because someone put in a offer with no inspection or financing contingencies, likely an investor, that house had at least 5 offers. Houses that sold just a year ago for 250,000 are now back on the market for 300,000. There are a total of 3 open rentals in the entire city all renting for an average of $1800/month, two years ago they would have rented in the 1000-1200 range. The per capita income in my city is $31,000, over 70% of our kids qualify for free lunch, local aren't buying 300,000+ houses, they can barely afford to rent here anymore. Investors are buying houses and not even putting them into our local rental market. I make more than the average area income and I will pay more than 30% of my gross income on a house payment once I find something.

I read an article in our local paper about cash buyers pushing out younger home buyers, which I was going to link, but it's now trapped behind a paywall.

[pixy0stix]

Jun 1, 2023 10:57:28 GMT -5 bee20 said:

This topic is weird.

I'm someone who bought in my early 20s (thanks obama) and while I love my low mortgage payment, it limited both career movement and dating options in my 20s. Just because the market has went insane doesn't mean people who continued to rent made the "wrong" choice for their life. There are so many factors that could be causing someone to be trying to buy a house in 2023, other than "thought they were sooo smart 10 year ago". We need to fix the housing crisis, not crow about how I got mine.

That's not what I'm saying at all. The discussion 10 years ago wasn't at all worried about corporations coming in and buying housing wholesale and pushing out "regular" homeowners. In fact, a bunch of people welcomed it saying that it's what was needed to help fix the housing crisis then (creating a mobile market and more availability). And frankly, that was the gist of most of the housing industry at the time. Coming out of the recession people were looking at real estate as an investment and a money making opportunity.

There are a lot of issues tied into the housing/real estate industry that we've kicked the can down the road and now we're in a bigger mess:
- Red lining and institutionalized racism regarding mortgage loans
- Short term rental markets and how they've decimated housing availability (including long term rentals)
- Real estate as generational wealth and how that plays in our society as a huge cornerstone to the first bullet, not to mention how it ties to our economy as a whole
- Basic morality of tying so much wealth into what should be a fundamental right (aka being able to afford a roof over your house whether you rent or own)
- Rising costs in even the rental market as people now have to compete to find affordable housing of any sort

Being able to discuss how it went wrong is in no way "crowing about how I got mine". It's looking at how we (general) caused and continue to cause the problem.

[bugandbibs]

A trend that I am noticing in my area is homes going back to generational ownership. Adult children moving into their parent's house when they die/move into an elder home situation. Or in some cases, grandparents selling to their millennial grandchildren. For many, this is their first time owning a home. Or selling a house between siblings.

I don't know how regional this is, but housing has long been an issue in my area even before this due to urban growth boundaries and housing shortages. My peers haven't been able to duplicate the wealth accumulation of their parents for a variety of reasons and housing is a huge issue. Another factor in this type of house selling may be race- many of my friends are 1st and 2nd generation American born and in general family homes are cultural for a lot of us.

[Saudade]

I live in an area that is having a housing crisis. There is a severe lack of inventory, both rental and owned. A lot of the available units are snatched up for short term rentals. There are several secondary education facilities that increase the long term rentals. Apartments are so expensive here and are rented by room, not unit. Even if I wanted to rent, it would have been cost prohibitive. The monthly rent was 50% more than my mortgage is. We had to live with my parents for 6 months while house hunting. When I found a house, they offered to pay cash for it because there was no way I was going to be able to get the house. There were over 20 offers on it in 24 hours. This allows me to then get the mortgage and buy it from my parents.

The city I live in has huge disparities, almost cutting down the middle of the town. Many people have been fighting the short term rental issue and trying to increase the availability of safe, affordable units. It's not a quick fix though. It's also difficult because the town has geographical barriers that make urban spread impossible.

[aprilsails]

It is absolutely wild and it is not going to be resolved in my area for a very long time, if ever. Immigration has put so much pressure on housing stock and there is always someone who has the money to pay (cash sales or investment companies). I’m worried about people’s financial futures in a big way. Particularly since financial health plays such a huge role in overall stress, education outcomes, better opportunities, etc. If housing drains all the money away, what are people left with?

[emilyj]

My H and I just got new jobs, and thus are about to move for those. As sellers, we benefitted immensely from this market. We are in a housing crisis in our current town - lack of inventory, investors coming in and snatching up property and houses, and a huge buyer demand.

It obviously did not translate into benefitting as buyers in our new market. We had a long talk about possibly renting, but even with getting a new higher interest rate, the rental prices for what we would need were bananas - higher than a mortgage. I finally decided that I wasn't willing to piss away a year renting when a house payment would be cheaper, even with so many factors not favoring a buyer.

[icedcoffee]

Jun 1, 2023 11:35:50 GMT -5 bugandbibs said:

A trend that I am noticing in my area is homes going back to generational ownership.

I've noticed this a bit too.  In fact, our boomer neighbor just sold to his millenial kid.  My parent's boomer neighbor also sold to her millenial kid.  Both for a bit under market, but definitely not one of those $1 transfer type situations.  I assume they chose to do it because the market is just too competitive otherwise and both parents with nice family sized homes they no longer needed.

Then the boomers take the proceeds and buy a smaller condo or moved into second homes they already owned.

[Velar Fricative]

Rents seem to be rising more than home prices are, at least in my area. People are just getting squeezed no matter what they want or need to do. Even if people prefer to rent, at some point these landlords (which aren't the landlords of yore anymore, i.e. not individuals) are just increasing and increasing because they know someone will always pay more. Or, that's how they feel - there certainly is a limit.

[pixy0stix]

Jun 1, 2023 11:55:06 GMT -5 icedcoffee said:

Jun 1, 2023 11:35:50 GMT -5 bugandbibs said:

A trend that I am noticing in my area is homes going back to generational ownership.

I've noticed this a bit too.  In fact, our boomer neighbor just sold to his millenial kid.  My parent's boomer neighbor also sold to her millenial kid.  Both for a bit under market, but definitely not one of those $1 transfer type situations.  I assume they chose to do it because the market is just too competitive otherwise and both parents with nice family sized homes they no longer needed.

Then the boomers take the proceeds and buy a smaller condo or moved into second homes they already owned.

This is happening in my neighborhood - Boomer parents bought a second house in the neighborhood to turn into a rental (did an off market deal with the kids who inherited the house when the original owners died). It's been a rental for about a year, and now the boomers are selling it to one of their kids. I know for a fact this wasn't their original plan. They were hoping to keep it as a rental for retirement income.

[Velar Fricative]

Jun 1, 2023 11:35:50 GMT -5 bugandbibs said:

A trend that I am noticing in my area is homes going back to generational ownership. Adult children moving into their parent's house when they die/move into an elder home situation. Or in some cases, grandparents selling to their millennial grandchildren. For many, this is their first time owning a home. Or selling a house between siblings.

I don't know how regional this is, but housing has long been an issue in my area even before this due to urban growth boundaries and housing shortages. My peers haven't been able to duplicate the wealth accumulation of their parents for a variety of reasons and housing is a huge issue. Another factor in this type of house selling may be race- many of my friends are 1st and 2nd generation American born and in general family homes are cultural for a lot of us.

This is totally happening more here. We have a decent amount of two-family homes and it's becoming more common for a set of downsizing parents to buy with their adult children. The adult children need their parents to be able to enter a market and the parents want their children close for assistance as they age. Win-win (if they all get along lol). 

And then again, multigenerational homes have always been a thing, especially among immigrant and/or non-white Americans. Now younger people who didn't live in such a living situation growing up and likely seeing the benefits of multigenerational living because they're basically being forced to due to rising home/rent costs. 

[bee20]

pixy0stix, it may be different markets, when I bought 10 years ago there was already discussion of businesses coming in with all cash offers and I ended up buying a new construction and waiting 6 months for the build because I couldn't stomach buying a house with no inspection and nobody would wait for one on an existing home.

An older article (Toronto, not my metro, but I remember similar articles): torontolife.com/real-estate/real-estate-mania/

I'm sad to see this has spread to basically everywhere in the US and Canada, but it doesn't feel "new" to me. Glad we agree it's a systemic issue, I hear many people who own saying others shouldn't have waited since it's been hot so long, and that seems incredibly unfair.

[bee20]

Multi-generational housing is great, until you are gay and your parents disagree with your "lifestyle". I lived in the midwest for a few years and the amount of conformity enforced by multi-generational family relationships was shocking coming from the west coast where everyone's family lives out of state and people are free to live their lives with occasional snide remarks at thanksgiving. There are certainly benefits if your family is great, but I for one am glad I could afford to live under my own roof.

[mrsukyankee]

The only way my H bought his first flat in London was by living at home until 30 plus a loan from his dad on top of the mortgage. Due to the increase in it's price plus me moving in so we could save on the rent payment I wasn't making each month, we were able to buy a fixer upper in a "less desirable" area (it was perfectly fine). We only afforded this house due to my MIL selling her house and us selling our house, plus our savings. We're now saving to afford the taxes once my MIL passes so we can keep the house. I rented up until I moved in with him at 37 and don't imagine I would have purchased anything if we weren't together. London is definitely more a rental city than an owner city but at least corporations haven't entirely taken over (due to tax issues). I was fine with renting and I'm fine with owning. And I recognise that I was lucky with everything around my situation.

Note - the average property price for a sold property in the last 12 years in Greater London was £739,000 (or so). The average salary is definitely not enough to buy for that (I think it's around £40,000).

[sonrisa]

Jun 1, 2023 11:35:50 GMT -5 bugandbibs said:

A trend that I am noticing in my area is homes going back to generational ownership. 

This was a big thing in CA for a few decades because of sky rocketing prices and Prop 13. In 2020 voters passed a new proposition that make it much more expensive to do this. So I'm seeing a move away from the transfer side of this (living together for caretaking/saving $ is still a thing, but it is less advantageous to sell from parent to child than it had been).  

[savan]

This is a big thing in my neighborhood and immediate area. We’ve always had a lot of renters in our neighborhood but the houses were owned by individuals who had moved out at some point. When prices went way up, a lot of those owners took advantage and sold their rentals. Those houses we bought by corporations and are often rented out by individual room. We also have some permanent airbnbs now.

Young families are totally priced out now. I know we never could have purchased our house at the current prices. It’s having a big impact on the school district. Enrollment has dropped so low that they want to close multiple elementary schools and one of the middle schools. The parents are naturally in an uproar over losing their neighborhood schools but there isn’t an easy solution. They can’t afford to staff half empty schools.