The fact that there is already an excessive amount of demand awaiting its absorption, despite how everyone is frightened and calling the crash, is another reason why it is less likely to occur that way. 2008 saw no one, at least not the broad public, making this forecast, as I'll explain below. The ownership rate was noted to have peaked in 2004 in the other comment. Having previously peaked in the second quarter of 2020, we are currently at the median level. Between 2008 and 2012, it dropped by 3%, and by the second quarter of 2020, it had dropped from 68 to 65.
You're not doing anything wrong; the problem is that you don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.
@@hasede-lg9hj Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
I won't pretend to know everything, though. Her name is Melissa Rose Francks but I won't say anything more. Most likely, you can find her basic information online; you are welcome to do further study.
Yeah; Sprawling out more, and building more McMansions isn’t going to solve the problem of affordable housing! I’d love to see this channel cover this a bit too.
@@ericlotze7724 They are not valid in the sense that they give people the wrong priorities. People need to go after local governments blocking construction, not investors who rent out buildings.
There are a lot of good 3 bed 2 bath 1970s homes in my town, but at least half of them are investor owned. The reason young couples/families can’t buy a house is because they’re forced to rent the houses they should be buying. We NEED laws limiting the extent to which housing can be an investment. Something like higher taxes on second and third homes, no homes owned by corporations, ANYTHING to help families buy a home, stop renting, and start living the American dream.
I am living this crisis. Those of us that are clinging to the bottom rungs realize the problems are complete lack of affordable, and safe homes. The homes are there, but never affordable for the very poor.
@@strayiggytv how exactly? The conclusion of the video is that the houses are there - they’re just out of reach - and building more is not going to change the rigged system ,which allows investors hoard the housing to themselves for profiteering. I think that a the mark, in my honest opinion. Namaste
I think we have the same problem in Europe. We've been told there is a shortage, but the new houses and apartments are built mostly by developers and sold for big money. Seems like it's just a business for rich companies, which can become richer.
I mean tbf Europe's problem is that no one wants to move back into the villages, so they're turning the different neighborhoods into micro villages. The America's problem is that the "affordable" units are mostly in places like Iowa where no one lives.
You do understand how supply and demand works? A high level of supply by definition means low housing prices. Low supply (housing shortage) means high prices. If you are seeing new housing sell for big money, the fact of economics means there is a housing shortage.
My town is not very big but has a university, so a lot of students need homes. We have small "mountains" surrounding the town, so you cant build everywhere. Yet, a certain amount of houses are empty because investors just buy and sell it over and over to make money. A large number of the population here is leftist, so they started spraying the houses that are empty for a long time with "vacant house" to show others how many homes are uninhabited. They even squatted some houses out of protest, some even succesfully in the long run.
@@Inspectorzinn2 Unusually not the case in NYC. Very low retail occupancy rate but prices still high. Also actual square footage is much less than advertised with an odd system including pillars, stairs within the calculations.
Very interesting video. One thing did stick out to me. The assumption that because people aren't getting room mates there is no housing crisis. Unfortunately many landlords simply put restrictions on room mates, because they make more money from many single occupancy units than single units being maximized. If I could have more room mates I would, but my landlord is always searching for a breaches contract to justify an eviction. Simply put many folks may need room mates but not be allowed, skewing the data.
yep, I'm not allowed to have roommates. All of us with housing vouchers are not allowed. Close to half of us with vouchers are homeless because the voucher price is too low for the inflated housing market.
It's not always the landlord. When I was in grad school, the town I lived in had hard limits on how many unrelated people could live in a single housing unit where an apartment counts as one unit.
Yes, even for families some landlords will not accept a large family for a small space. I once looked at a 2 bedroom with my husband and the guy showing the property remarked that a couple with 3 kids was interested in the space but the landlord didn't think the space was appropriate for that many people. Completely insane. I have no idea where landlords like that think young families are supposed to go.
I think it’s also important to remember that many of the homes that come up for sale are bought by “investors” and turned into rentals. This could be a housing rental or it could be something like a VRBO. These ARE the affordable homes and they’re being snapped up by those who already have homes. It’s sad that first time home buyers are losing out on the opportunity to own a home because of this. And I think builders concentrate on higher priced homes instead affordable.
@@j.g.3293 Yep. Because reducing the rent on any property reduces the value of their entire portfolio of properties. This is what happens when economic incentives are misaligned with societal objectives.
I am a construction worker in the last 2 years I have noticed that many of the new houses that are under construction are being rented before their construction finishes, it is something new for me to see this kind of horrible thing, big conpanies buy them and they just want to rent leaving buyers without cash to buy that house.
Everyone wants affordable housing until they can afford one. Then they want housing to increase in price to 'protect their investment'. We have met the enemy, and they are us.
Agreed. It's mostly the banks using the "Your house is an investment and your retirement" excuse to continue to trick people into paying them interest payments for 30 years. The cost of maintainance, emergencies, interst paid over the whole loan and other problems that happen to a house do not imply investment at all. For a $330K home, you pay exactly $330K in interest over 30 years with current 5.5% interest. So you have to hope that your home doubles in value just to break even. Homes are not investments, they are money pits that you almost never get your money back from.
Sounds too socialist. Not sure if you are aware but the USA allows way toooo many foreigners to buy real estate. Non Americans are allowed to buy. There are many countries that don’t allow this. These countries make you become a citizen before you purchase. So if anyone to blame it’s the laws of the country. If you want to get into the rental market buy rental properties I guess.
I read in a news article that in Canada, 30% of homes are owned by investors (individuals and companies). Companies have all sorts of sly ways to oust their tenants or jack up rents, and the small scale investors shrug their shoulders and crank up rent, saying that it’s “the going rate”. Using “renovictions” and other means to move out their tenants who are paying reasonable rents. Shelter is being used as a money making game. My unpopular opinion is there there should be a cap on how many properties an individual can have their name on. (For example: 3) And tough controls on investment companies.
Canadian property is being bought from overseas, Russia, China, Mexican Drug Cartells etc,, they are putting there money into HARD assets for Long term security. These are not investors looking to make a killing by jacking prices, though that is the result. They are looking to hide there wealth. They can afford to let the hones sit vacant for 10 years or more.. this is long term weath planning
We need to incentivize home buyers who are actually going to live in the homes. Where I live most home owners own 3+ homes, because if you can afford 100k+ down payment you can afford a few 30k+ down payments and essentially build equity for free.
there kinda is and investers just use them too. you get a lower interest rate, property tax and capital gains tax when you live in the house for the first 2-3 years.... but after that, its better to refi the equity out to buy a 2nd house, rent the 1st one and able to tax right off the whole of the 1st house. Add the exchange of equity with out being taxed and interest rates are so low, and investors just keep rolling with more and more houses.
@@cetriyasArtnComicsChannel I know about that, and it's bad but I don't think it's the majority of these cases. Flippers are frustrating, especially when they do BS work just to inflate prices and not value, but I'm more worried about people buying dozens of homes which is really hard to do 2-3 years at a time.
@that2guy I’ve been house hunting and can’t tell you how many places I’ve seen that have almost a 50% increase in price when all the flipper did was repaint
@@j.g.3293 The only solution is to move on and keep looking. The problem is people pay the inflated price which just perpetuates the cycle. One house where I live has been resold at three times in five years, each time with only minor changes eg repainting. It's a case of musical chairs and one day some sucker will get caught when the music stops. It happened in 2008/9 and it will happen again.
480 Sq. Ft. (studio) apartment in Phoenix has increased 60% since Feb 2020. Mold exposure / Sick Building Syndrome has bankrupted me and I can't live in HUD apartments because most places older than 5 years have a history of leaks inside walls --> mold. I live in daily terror of being homeless at 62. Too sick to live in my car. Houses being built these days are extremely poor quality. Poor craftsmanship, cheap materials. It's pathetic.
Have an air quality test performed before occupying a place. Some home inspection companies offer this service, and there are also businesses that specialize just in air quality testing. An air quality test will measure the levels of different molds inside the home vs outside the home. It will also tell you the types of mold found, which is helpful if you know which kinds are a problem for you. If mold levels are significantly elevated inside by comparison to the outside, there is likely a mold problem. The test will either justify further action to remediate, or give you reasonable confidence that you are safe to live there.
@@dylankmorgan thank you but I've been at this for 8 years and learned a lot. Air tests prove nothing. Inspection needs to include visual inspection for water damage, swab testing inside walls, under floor (it often rains on new construction then they apply a moisture barrier that traps the fungus under the flooring. Even 5% humidity in AZ will continue to feed the fungus). Building materials are left out in the rain. Improper ventilation, toxic glues and paints, plumbing that's inaccessible making it impossible to monitor for leaks, condensation on pipes that lie right next to fiberglass insulation, moisture accumulation near dryer vent, drains that cannot be seen. Leaks under toilets and windowsills, near chimneys and skylights where flashing wasn't installed properly. Rising damp due to improper moisture barriers under foundation and slab, poor (if any) exterior drainage, builds at the bottom of hills. I could write for days.
Same here but thankfully I am not as sick as you are, and i am staying in my home even though I am allergic to the mold inside. I hope my health hods out in other ways, we can hardly make ends meet, and I need to hold down a decent job. Those are definitely in short supply. Lousy ones abound. Harassment low pay, random firing when there are too many workers etc. .
"Houses being built these days are extremely poor quality. Poor craftsmanship, cheap materials. It's pathetic." ---- I would like to see what Belinda has to say about the quality of new home construction, or maybe she already addressed it?
@@2ndChanceAtLife wait so your saying phx can still feed the mold when it has been 109 out. I think you have been living with this for too long and can't get a real grasp of what is going in in your body. Wish ya luck
Very informative. My husband and I are holding off on having kids because of insecure housing. Our landlord told us they had “different plans for the unit” and not renewing our lease at the end of the year, and are letting us brake the lease if we find something because of how competitive renting is. (We live in a very small mountain town) we have been looking for four months and still nothing. Not a single new listing. We are going to have to move, its fucking heartbreaking.
My mountain town in Colorado has been building apartments, one such building by a local church to increase affordable housing. But there's a lot of demand by students here, so prices stay high so far.
You're one of my favorite content creators. Your knowledge is incredible, what really stands out is your ability to distill complex subjects down to understandable concepts.
I was watching a news show from New Zealand a couple of weeks ago. The simplified version was that the cost of housing means that only those with enough cash to practically buy homes outright can buy a home. And these people are the corporate buyers, the big investors. Your regular Kiwi is locked out of the housing market. Meanwhile, in Canada, because of a death in the family, I am set to inherit a quarter of my uncle's house value when it sells. A few months ago it would have sold for a good amount, enough to put down a 50% deposit on a house of my own (I rent in a slum, basically, and was hoping to buy something small and cheap). But now housing prices are dropping due to increased mortgage rates -my uncle's house will sell for much less than it would have three months ago. That would still enable me to put a good deposit on a house since any house I was looking at would also be dropping in price. However, the increasing mortgage rates mean that I (a disabled pensioner) cannot afford a mortgage today, whereas three months ago I could have. And mortgage rates are expected to increase by 30% over the next five years. Even if I were inherit a similar amount from another relative, this situation has meant I will never have my own home. Housing and other human needs should never be the source of speculation. Human _needs_ like shelter, water, and clean air, should never be allowed to be bought and sold in the markets. I know that where's there's need, there's opportunity for profit. But to take advantage of that (and to allow it continue) is morally corrupt.
Apparently all these companies actually want that Cyberpunk future that was being pushed so heavily in the 80s. The only difference is now they're actually doing it.
The "reset button" is a land value tax. There isn't a problem with housing and construction, there is a land allocation problem. Taxing the land forces users to use land efficiently, and pays for government spending that would otherwise come from taxes on labour and capital.
And not only that but simplifying the tax code, do more for eco-sustainability than an EV in every garage, and reduce corruption. I figure it might happen in a 100 years.
Baloney, all residential property tax should be abolished, and exorbitant fees , the hidden taxes, should be abolished. The federal income tax ammendment should also be repealed.
A property tax already exists in the US. and it is terrifying ‘efficient’ at causing people, especially poor and elderly people, to lose their homes. It is also very ‘efficient’ at converting wilderness and farmland into strip malls and subdivisions. I don’t argue against the necessity of property taxes to fund services, but in my lifetime I’ve seen it have devastating drawbacks for people and the environment
You genuinely try to understand what is happening with housing. But there is a lot missing from your analysis. New Houses built does not equal New houses available: examples: 800 homes lost to wild fire, 400 new homes built == 400 families homeless. One old apartment building with 120 units demolished, new building built with amenities and only 80 units. This shows up as 880 new starts, but it isn’t, it is a net loss of 440 units. Population growth in the US is still over 1/2 %. That means you need on average 2 millionish NEW living places each year. US housing starts are currently in the 1.5 million range. That’s not new inventory.
Your math is off. I think you missed her excellent points about household density as well as the historical permit ratios. Using available official 2020 data.. 331 million Americans times population growth rate (0.49%) = 1.62 million. Then you must divide that number by the number of persons per household (declining and currently at 2.49). This gives us ~651k new housing units per year needed for population growth (at 2020 growth rates - it's even worse more recently). Curiously this number is right around where the market bottomed during the last crash. Probably not a coincidence. Then factor in demolished/destroyed houses as you noted (Census Bureau estimates vary based on years, natural disasters, etc. but it's around 3.1 per 1,000 households). So ~133 million households (331 million Americans / persons per household @ 2.49). Then divide by 1000 = 133,000. Then multiply by the obsolesce factor of 3.1 = ~418k new units. That gives us a total of a little over 1 million units per year needed to stay even. The market has definitely built more than enough houses to cover this, even accounting for the "underbuilding" it did right after the last crash and there was already even an oversupply going into that crash. If this math is too much to follow, another way to look at it is as exactly as she has pointed out - the persons per household ratio. It's declining. Meaning. We have more than enough roofs to put over everyone's heads. There is NO shortage. The shortages only begin when real estate speculators enter the picture. Speculators who are twice as active now as they were during the peak of the last bubble...
@@dancox3251 You use persons per household as an argument for why there isn't a shortage, but did you check to make sure that its not just due to people becoming homeless?
@@jacobsharf8173 Per Census definition of 'household': "A household includes all the persons who occupy a housing unit as their usual place of residence. A housing unit is a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or if vacant, is intended for occupancy) as separate living quarters." Homelessness is only around ~0.2% of the population, so it's unlikely to have much of a major influence either way on this metric. But let's see if we can make a guess.. For context, there are +16 million vacant homes and +600k homeless. All of the homeless could easily be housed in a fraction of the number of vacant homes we have. These vacant homes don't show up as households. Let's say we moved all of the homeless into these vacant houses (thus creating +600k new households). Since the majority of homeless are single persons, then this would likely send the persons-per-household metric even further DOWN. We have plenty of houses but at the same time homelessness is getting worse (I assume this is your point). This happens every time they send home prices spiraling out of control. There are too many people consuming more than 1 house. 2nd homes were popular in the last bubble and now they're on to 3rd, 4th and 5th homes as all of the wealth continues to be concentrated into fewer and fewer hands.
@@dancox3251 One thing you are missing is that the Feds have zero idea how many people are actually entering our country every single year. They can guess, but it is only a guess, and there is every incentive to underestimate. I'm pro-immigration, but we have to be honest about it.
Okay this is a misuse of data. First, in the 10 years after the 2005-2008 housing bubble, there were 50% fewer homes built (about 5 million homes) than the 10 years before the bubble. She shows those numbers at minute 3:45. HOWEVER.. Since 2008 the TOTAL population of the US has grown by 20 million people. Just because population growth has slowed that doesn’t mean it stopped. Also Millennials are buying homes later in life and they are just now getting into the housing market. Also the pandemic messed up lots of supply chains for wood, windows, wall board, appliances etc. Many builders are sold out for 2022 and 6 months into 2023, with 1 year waits for houses to be built. The FED raising interest rates, and talks of a recession are slowing demand but that just means that rental prices will go up. This shortage will last at least 3 years.
I see a lot of empty homes where I'm at, even rental properties are sitting vacant because middle and lower classes can no longer afford what they cost or what they charge for rent. Covid destroyed my business took my home and now I'm living with family, I really don't believe there's a housing shortage though there is a crisis
There are other factors at work as well. In Canada the single biggest driver of housing prices has been international investors. Those investors are NOT price sensitive. Part of that is because they are buying “residence”min Canada, not real-estate. Part of that is money laundering, real estate is a great money laundering system. Is there a housing shortage? Partly yes. Rental property demand in my city is around -10%. Thats right, 10% lack of rental properties. The largest driver of that has been a lack of new rental housing, for over 30 years no new apartment buildings have been permitted, only replacements. Lots of new single family homes, but all of those are bigger and bigger homes: in 1990 1800ft2, now 3500ft2, with many new developments pushing 4000+. The price of a detached home has risen from 150k to over 1 million. So yes, there is a real housing crisis across the board (rental, ownership, apartments, condo). But not from a basic lack of structures. Rather from a complete lack of balance in inventory.
I think the figures you cite are a bit misleading. The housing shortage isn't national, it's local. Many parts of the country have housing surpluses, such as the Rust Belt. However, the cities with the strongest economies have massive shortages relative to demand.
Because investment firms are buying the houses. I tried to buy an abandoned house and couldn't get the bank to come down. It ended up being sold to Berkshire Hathaway I think(didn't know they bought houses). It's a partially induced "shortage" because of investor demand raising prices and reducing supply at a particular price point. I believe this same thing is happening with cars.
Exactly, plenty of land in the middle of nowhere to build on, you could build thousands of houses no problem. But in cities where jobs are, land is finite resource. There is no land to build houses on hence high prices and housing shortage.
@@Inspectorzinn2The lack of land isn't the root problem: it's strict low density zoning that is so widespread in American cities. You don't have to build houses. You can also build apartment buildings, but that's illegal due to zoning.
@@TheTokkin True, but high density housing has it's own issues.High density housing costs 50 to 66% more per square foot to construct. Their is also the increased strain on infrastructure like power, water, sewage that requires significant capital expenditure to upgrade. Not to mention, roads, parking, and congestion, mass transit issues. I would say land is the root problem. High density housing is a solution to that problem but an expensive one. But yeah, zoning/building laws are definitely the issue. At the very least, let existing single family homes build ADUs, add an addition story, reduce the ridiculous front setback requirement of 15+ feet so structures can be built and rented out. It won't solve the home ownership issues but at least drop rents due to increased supply.
Your report is not only Not conspiratorial, it is dead accurate. Thank you for bringing up the media bias on how we are covering and talking about this issue.
the one thing she does not include is the foreign speculators that buy up houses and then take them off the market. they are not included in the graphs she uses. this artificially decreases the supply side which drives up prices also. ever see rows of rotting houses falling down unattended? prolly owned by a Chinese company subsidiary.
It's completely factually inaccurate actually. Persons per household is actually going up in the US, which is SHOCKING because it was on a downward trend for 161 years STRAIGHT! Every single metric for housing abundance is going the wrong way! houses on the market, down! Vacancy rates, down! Number of 25-34 year olds living with parents, up (it's DOUBLE what it was 70 years ago)! Freddie Mac did a housing unit inventory and found that 29 states had a substantial deficit, and of the rest on 7 states had a safe surplus of housing units. The rate of childbirth isn't too low to justify housing development rates, rather it is housing development rates that are suppressing the birthrate!
I am also an architect working in New York City. What you did not discuss was the discrepancy between units and where those units exist. If we have any hope for a sustainable future, the suburbanization of america needs to stop and be reversed. vacant units in the middle of nowhere might be nice, but those forced to live in them will have much lower quality of life than their urban counterparts and be emitting far more CO2 per capita. What we do have is a urban housing shortage, which YES, means we need more housing in urban areas.
Yes a common mistake is to look at the country as a whole, not individual areas, especially in America, empty houses in West Virginia does nothing to solve the housing shortage in the Bay Area.
4:13 The problem with this graph is that, when you have a baby, that baby does not need a house, it needs a house in 20-30 years. Therefore overlaying these graphs does paint a wrong picture. 5:18 I'd expect the same argument applies here: The number of people per home will rise when children don't move out, but instead stay, marry and have kids themselves. 8:30 Sidenote: You can see the increased demand by looking at the vacancy rates that have gone down, especially since 2008: 3->1 % for Homeowners and 11->6 % for Rentals I wholeheartedly agree with the conclusion!
Glad someone else caught these oversights. Also important to know the avg dependant age in a household, which I suspect once was children but now leans towards young adults & even elderly who can't live independently on SS checks anymore. There's a reason new home builders are offering more floorplans & options/considerations for multi-generational buyers. Same applies to poorer areas... drive down any street & count functional vehicles against bedrooms.
It also ignored that 10 year span there where there was HUGE deficit of houses to poulation. as those people are growing older they are going to need the housing that just wont be there. currently were in a "catch up period". 2009 was almost triple the recommended. That one year alone covers more houses missing than the 2017-2020 "surplus"
What I am seeing where I live are gigantic houses selling for over 500k. Condos in the 400s. The only people who get tiny homes are the homeless and even those are shut down due to violence and crime. There is a huge difference between the over paid tech employees and the average person. There is a long waiting list for "affordable housing". They say we will build affordable housing, but they build everything except that and they get away with not building the affordable housing they were required to build along with everything else. I consider myself fortunate to live in an apartment built in '61. It's not particularly energy efficient, but rents for half what luxury apartments are going for in the area. There's no marble countertops, no dishwasher, no garbage disposal, no HOA, no central heating, no garage. All I need is basic shelter, but somehow all they seem to build is huge luxury houses that are not affordable. Oh, I forgot communities need to have a higher class of residents to keep property values up. An unspoken cast system of haves and have nots. Forget low income housing "affordable housing". Those people are weird. Can't have those.
My wife and I are trying to buy a house and we sent a letter with an offer explaining that we were a family who intended to live there full time. Our realtor told us she wouldn't send that letter because it was a, "love letter" and violated the Fair Housing Act, according to her realtor group. This was news to me so I did some research. Turns out there is absolutely NO legal precedent of a seller being sued for violation of FHA over a love letter, and the only case was a Federal judge in Or shooting down a proposed law to make them illegal. As I did more research on the subject I found what I can only assume is the source of this misinformation, which appears to be a Zillow article. So one of only thing we have in our court to compete with cash-up-front property investors, the fact that nobody wants to sell their house to a bank, is something housing investors are attacking with phony BS about how you're racist if you want to sell your house to a family instead of a bank. I wish I was making this up.
So when i sold my house i was told something similar about it being illegal or against the realtor code or some shit., BUT it was still done, i received two letters from the 48 hour showing, and to be honest, the winner was tied with the highest offer and they left a letter and they were basically in the same situation i was when i first bought the home as a first home buyer, a modest 2bed 1bath house. You couple looking to start their lives and a family and wanted a good starter home. They work from time to time, but as long as its neutral and doesnt include race, religion, etc then generally you cant be sued, and on top of that, so much stuff is hush hush, unless one realtor tells another that a lover letter was given then its hard to prove you lost out to a love letter. But small 2bd 1bath homes are soooooo rare now it seems, they dont build them, they are cheaper than renting and you get so much space, but builders dont build them because there is no money to be made according to a developer i spoke to a few years ago.
@@josephescott3263 You hit on exactly the crux of why this is all bullshit. No buyer will ever know they lost out on a bid over a love letter unless the seller's realtor breaches their professional conduct and blabs about it, or the seller outright finds this rejected buyer then tells them, "I didn't sell my house to you because you mentioned you were a black Muslim in your letter." That'll never happen and if it does there are bigger problems at hand than the letter. The whole thing is total and complete fabricated horse shite, made up by property investors to give them more advantage over real people.
We have commoditized a basic human need to the nth degree. It is like taking air, food, and water and turning them into a diamond or precious metals industry.
I live in the San Francisco area. We have a major issue with people not having homes to stay in. We also have a major issue with empty housing units... market rate units... Even the 'affordable' units that we have had to fight our government to provide... those units are middle class priced.... Thank you for bringing people's attention to this LIE....
Market rate housing in high tech is 'rich rate'. If you aren't tech salary range, they might as well not exist. Supply & demand don't work like it should when the owners can afford to, and would rather, leave them empty than reduce the prices.
TLDR: It's an affordability crisis. Denialism in America runs deep. Just read the comments section. I'm sure the same people would say the same thing on the Titanic... The solution? Build more non-market housing. Period.
@@spacetoast7783 The government would build it because it is not in the public interest of a city to have people sleeping in the streets. Unfortunately public built homes get politicized.
@@spacetoast7783 Basic human dignity, to resolve the issues of tent-cities in urban areas, to give people a baseline to fall to if they lose their job and need to re-enter the workforce. The fact that you had to ask that question shows how the abstraction of money removes us from the physical realities it is supposed to serve as a medium to.
A) who is blaming construction companies? The problem is what, where, and how much is being built. That's not up to construction companies. B) Population growth changes are irrelevant at this time scale. Permits also aren't issued evenly in all areas - the housing crisis is localized. C) Demand subsidies do drive up prices, but that is compatible with there ALSO being a housing shortage. It's not a reason why there isn't a housing shortage. D) What does the work-from-home bit have to do with anything? If anything, you make the point that there aren't enough units available where people want to live...which is exactly what the housing shortage problem is?
vox is like amazon...pretend to be woke so u can distract from the real issues. amazon shuts down those unions crazy fast and the irony is that most of their workers are poc
Prioritizing careers over children sounds so harsh. Why not phrase it "it's too frickin expensive to have a kid so people are waiting longer"? Even if house prices do crash there's nothing stopping investment firms, corporations, and rich landlords from just buying the dip and continuing to leech off of our labor. Oh, and jacking up the interest rates will only harm those of us who can't just drop $300k or more to buy a house outright, while doing nothing to stop said corporations and investment firms.
Belinda, Your presentation is quite detailed and informative. However, it seems to lack a conclusion. Perhaps your intention was for the viewers to add their conclusions to the comments? Thank you for taking the time to research and report the data and facts that you've found. I have been watching real estate prices escalate rapidly and am very concerned about the inflationary results on our economy, as well as the personal stress it places on families. I hear stories of people having to move "back home" with their parents, and stories of parents needing to move in with their adult children. It seems to be the case of the "rich getting richer" and everyone else feeling the squeeze. In my opinion, most of these problems stem from a government that is failing the people.
The conclusion is that we're heading towards another housing bubble due to oversupply and overvalue (not enough affordable homes). If you're asking for a solution, the first thing I'd say is regulation on speculative real estate purchases. If you're not moving into the home you're buying, then by law you should be considered only if no one makes an offer who is moving in. And there should be a grace period to give these actual homebuyers enough opportunity to participate.
@@NickCombs hmm that’s an interesting idea but the issue is homeowners generally don’t want govt telling them what to do with buying or selling their properties. Builders are usually suppose to reserve a small percentage of their development which is for a low income family. Those get taken rather quickly. I dunno. I’ve been doing mortgage loans for 5 years and I’m just totally clueless on what to do. Any idea is usually squashed with the law. I would say the best thing is for families to move to a more affordable area. Out of state if they have to.
I think homeowners could come out ahead overall. They are usually homebuyers at the same time, remember. But also consider that more accessibility drives demand. So we could see an increase in actual homebuyers reentering the market. Right now, mostly just those who have been saving up for a long time or are forced to move are actively looking to buy because there's so little opportunity. The opposition is mostly going to come from Blackstone and other companies who buy up residential real estate to flip. I of course didn't define these regs exhaustively, so we could be thinking about different ideas. I'm thinking after 48 hours with no move-in offers at or above appraised value, homeowners are free to sell to who they want. Two days isn't a lot of time, but it's way better than the current auto-buy paradigm.
@@NickCombs my understanding of contract law is once a buyer puts in an offer the contract is accepted by the seller if they agree to terms. So your idea won’t work. You’re not required to disclose if it’s an investment property. Also the only entity that would know that it’s an investment would be a lender unless they pay cash. As a seller, they will always prefer cash buyers. It’s just the reality. FHA/VA are great loans for first time homebuyers. Of course it’s important to go where borrowers can afford. The help is there y’all.
Nobody is trying to fix the root problems we have in this country. Everyone is trying to make enough money so that the problems don't apply to them anymore
Thank you for illustrating the problem. It totally starts with the concentration of the media not allowing one unkind word about certain businesses in favor of others. It certainly gets worse that markets aren't responding to their pressures in ways they need to be solved. R1 Zoning and an obsession with two generation houses left us with this mess. Smacking the problem with 20 story yuppie fishtanks isn't the best solution, but it *is* a solution if that allows for single family homes to be owner occupied and not rented. Making rental units specifically to be rental units has long been neglected and needs to be a part of the conversation. Especially if America won't build rent-to-own houses.
In the US, we're very individualistic, that's probably why we're not sharing housing with 4-5 people at the same rates in other places. We consider it shameful for adult children to still live with their parents or middle-aged people to still need roommates.
@@mynameisas2248The enemy is still greedy housing developers and near non-existent taxes for corporations holding hundreds of homes. Sometimes it's just not possible to do multi-generational living, especially if you want to pursue a certain career, or if honestly your family dynamic is very toxic.
Been desperately trying to find rental housing within even an hour drive (which would add 400$+ a month to costs for gas) of a new job starting next month. Most apartments supposedly available are not actually available, and the competition for the ones that do legitimately exist is so insane that I have had no luck. Affordable housing has a 3-year waitlist in the area, and the few apartment complexes that have affordable rent (not formal affordable housing, but just rent that is less than 2K a month) have 2+ year waitlists. Everything else is "luxury" rentals for 3000-6000 a month.
That sucks, affordable housing is available in my area but investors and coastal migrants have been offering cash and scooping them up, out bidding people that really need them, the avg wage in the middle of the country where i am is not much, and now with the coastal people migrating away from there for numerous reasons have put avg people in a bad position where they cant reasonably afford a home.
If you can't find a place to live, you ought to move to another to see or state..... there are still better places to live . You can find another job easier than a house. Go somewhere else.
I find the whole palava of Housing Crisis a bit ridiculous. There's been a real housing Crysis post war and the Soviets solved it by building tons of blocks of flats, which solved the problem. I lived in one of those, and they did their job brilliantly, cheap to put up, effective, lasted for years, and are still there in my hometown with extra modern insulation nowadays, transforming it from the ugly concrete block into modern looking block of flats. Why the hell are we building so many "detached" houses and then claiming there's a housing Crysis? It's a business problem, not a "real" problem.
I agree with you some what, but this "Crisis" is government made. Most places have rules that stop multi family buildings or height limits so you can't build large apartments and so on. Zone regulation are another side of it, a lot of land is straight zoned for single family homes. We need to push back on a lot of the red tape and out right block of much needed building to fix this.
Commy blocks are not and have never been safe or "nice" to live in. The conditions are very cramped and things like cave ins, broken pipes, and weather realated failures happen constantly making it very unsafe for the vast amount of people you can technically cram in there. Your anecdotal account doesn't override the huge amount of data there is on these types of buildings. Do some research cuz you don't seem to understand the reality of the situation and why these are not a feizable option for USA
It's because owners of single family homes show up to vote, and they vote to not have any competition. They're using the government to extract money from renters.
We built them because, at least in America, people overwhelmingly prefer single family detached dwellings, especially when it comes to raising children. Surveys consistently show SFDD are the most desirable form of housing, with more than 85% of millenials indicating they prefer it over multifamily housing. Obviously it's unsustainable as the population keeps growing but it's really not a "mystery" why developers are building what people want.
The government, through inflation and regulation, are to blame! Buying a house in 1920 would only take 3 years of the median US workers salary. Now, it takes around 7 in most cities. In New Zealand it takes almost 30 years of median salary in many cities. In 1920, about 30% of US citizens worked on farms, and now it is about 1%. We are insanely more productive, and only the deflationary effect of improved technology has managed to somewhat balance out government printing more money, but not completely. A can of Campbell's Condensed Tomato Soup was $0.10 in 1920, and now it's $2.92. In 1920 there were nearly zero HOAs, building codes, local councils, regulators. I'm not sure the precise number of new regulations in construction, but in finance, there used to be 10 new financial regulations per day in 2004, and now there are 185 new regulations per day across 750 different regulators. 185 new regulations every single day! Every single regulation is a cost that consumers, including homeowners, must pay.
We do need regulation reform, but there also have seen huge growth in financialization where back in the day workers could save to pay for their home, now they must get a mortgage. There are more middlemen taking a cut of that home sale. We need to relax some regs and impose other regs on profit taking activities.
@@beedebawng2556 Voting is a sham lol. You vote for, how many, 600 people? Including president, senators, assembly members, state and local reps. There are 19 million public employees in US. I didn't vote for those 19 million people. I didn't get to vote to pay their $1 trillion worth of salaries. 1/6th of them earn over $100k. There are Baywatch LA lifeguards earning $400k, and public transit BART janitors earning $220k. I didn't vote for any of that, and I never would.
Great video, well presented with factual data. Artificially low interest rates over the last 30 years are a big part of the problem. The prime rate should never drop below 2%.
I'll go point by point on why I think this video gets a lot of things wrong: 1. While population growth has continued to decline nationwide, housing is not a nationwide problem, it's a city wide problem. In rust belt cities, homes are cheap and plentiful, while in NIMBY-prone west coast cities, they are expensive and scarce. If a million people move from Chicago to LA, then LA will have a one million home shortage, but the national population hasn't changed at all. The plentiful housing in Chicago can't just be shipped to LA, so the solution is to build homes where they're needed. 2. Yes, there are fewer people per unit. That's part of the problem. People want smaller households, and they're willing to pay extra for the privilege. This means that, even with a declining population, overall housing demand is still increasing. Unless you want to ban people from living alone, the only solution to this is to build more housing. 3. It's highly misleading to list Blackrock as the 'second largest investor' in Comcast, because they only own about 4% of Comcast stock. Nowhere near a controlling majority. This is true of every media outlet that they "control". That is to say, they do not control them in any meaningful way. 4. The quote makes perfect sense. Investors only invest because they know that the value of homes will go up due to scarcity. If we built enough homes to meet demand, then the prices would stop rising, and investors would find somewhere else to invest. Raising interest rates would also lower the value of homes, that's true, but it will also have a severely damaging effect on the economy, so (looking at housing in isolation) building homes is a far superior option to raising interest rates. 5. The only reason that moving from LA to Denver is a problem is because there isn't enough housing. If Denver built enough homes, then prices would not rise significantly, and if LA built enough homes, then people wouldn't be moving in the first place.
My thoughts exactly. There's a lot wrong with this video, and if you follow urban planning at all, #4 should make perfect sense. I really hope a correction to this video is made, or at least I hope they take it down.
The tough reality that a lot of places in the US (and Canada) will have to reckon with is that our typical approach to development doesn't scale well economically & environmentally. It exacerbates unsustainable land use, carbon emissions, traffic congestion, and car usage (a very expensive form of transportation, particularly considering infrastructure costs). It creates communities that inherently skew consumer habits in favor of major companies at the detriment of local businesses. And most relevant to this video, it (NIMBYism) restricts land in urban areas which drives up land value, requiring developers to resort to "luxury" pricing for high-density projects to make a good margin. We're facing a severe shortage of medium & high-density development, and a lot of the new housing construction we're seeing (sprawl) is kicking the can down the road to perpetuate our problems into the future.
@@reiddickson It's going to be really hard to fix, too, because once homeowners get used to the value of their home going up year after year, they're _really_ not going to want the prices to go down, and homeowners are the exact sort of people to vote in local/citywide elections. So most local governments don't even really want housing costs to decrease, at least not significantly.
This big shuffle of the "remote worker" trend is socio-economically very painful for all - directly or indirectly. The Mismatch portion of this video is probably the most important. Ultimately, either people need enough money to buy or rent in their current/preferred area where they have a support network *or* a big, damn, compelling reason to go elsewhere (and probably money to move).
I have had real estate agents cold call me over the past 10 months or so practically begging me to have some houses ready to go for them. My area in SE Missouri is still very limited on available houses. *I totally acknowledge this is anecdotal.
This is the exact problem in Canada, and particularly Vancouver. The tidal wave of offshore money has locked up huge swaths of real estate from being used as actual dwellings. So the problem is that municipalities have a functional shortage and have to continue to build. In Vancouver particularly, new units tend to be in dense "minicities" while giant chunks of the city are still zoned as single detached, because that's the most valuable to the "investors."
I agree it definitely needs to be easier to build housing types other than single detached homes, but as to your first point, I believe Vancouver has a pretty low vacancy rate.
@@TheSharkasmCrew If I'm honest, City of Vancouver is also notoriously bad for NIMBYism and glacially slow approvals. Some of its surrounding sububrbs are ahead of the game in terms of development and urban planning, but the problem in general for Vancouver is that as more housing gets built, more of it gets locked up as investment properties. There are some things that are done to try to alleviate that, like vacancy taxes, but Vancouver is also notorious for being grossly out of whack for affordability, where the average rent/housing cost is way out of line with what people actually earn here.
in 2016 Vancouver introduced a 15% tax on foreign buyers who don't use the home as their primary residence. This has had effect on housing prices but it's calculated in the 2-4 percent rage.
My city is full of new luxury apartments that are at 60-70% vacancy judging by their websites. No one with an average income can afford to life there and the 3 story 1920s walkup I live in is illegal to build with current zoning laws. But cost less to maintain per unit than a skyscraper and blends in well next to single family houses. And the worst part is the old affordable apartments aren't accessible no ramps, no elevators. If you have a mobility disability then you're screwed if you're not making 6 figures.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
One strategy for protecting against a recession is to buy equities. Investors, especially during a recession, need to know where and how to put money in order to make money while avoiding inflation.
It has never been easier to understand how to build your money than it is right now, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investtments, in my opinion, are complex.
Working with a Financial Advisor to help guide you on your wealth-building journey if you're just starting out is a wonderful way to get started and thats how i was able to accrued good gains . They helps to manage investment overall risk profile , prevent permanent loss of capital consider maintaining a broad diversification of your investments that reflects your personal risk tolerance, time horizon, and the nature of your financial goal
@@kenanporubsky2122 My advisor is ‘’Catherine Morrison Evans’’ she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
Finally! Thank you for your uncommon sense on this matter. I read a brief article explaining the culpability of gentrification and NIMBY restrictions towards affordable housing in the current crisis. Your video fills in the missing pieces. I'm headed to your Patreon link right now.
The "supply" is being hoarded by one investor that has like 5 properties. More than one property in the hands of one person adds up quick! Keep apartments in complexes where they belong and get rent out of single family homes!
Thank you for talking about this. I certainly wish the comfortable and privileged cared, because it isn't just corporate greed that is a problem. It is disgusting.
5-8 roommates in a single family home is an unacceptable decline in the standards of living for Americans, and is also the reality for many people in the Bay Area and New York. “It’s not a real housing crisis until cohabitation is at the same levels of the developing world” is insane
Pointing to a lack of roommates isn't a smoking gun. A lot of the people who are unable to find housing right now are full grown adults, couples, and families who can't or don't feel comfortable taking roommates. More and more we're seeing people unable to buy homes and being stuck in rentals longer, when they would normally have been in a home. It's not young renters, it's full grown adults who are middle aged or approaching middle age, have kids, live in a tiny apartment, are married, etc. Those are not the kind of situations where roommates really makes much sense or is even viable. Also, you don't seem to address the issue that construction isn't addressing AFFORDABLE housing. People build luxury housing to make money, but the 'market' for apartments, condos and homes that are affordable to the average person is basically ignored. In that sense we DO need more construction, but in the right areas to address the housing issues for everyday Americans and the lower class/poor.
Basically houses are just holders of value like a physical NFTs. They aren't useful for their actual purpose anymore because investors are just using them to hold and build value.
Instead of building new homes why aren't people or companies fixing existing homes? You can drive past a huge area of homes that are falling apart and dilapidated and yet another home gets built...
This was an interesting video to think about and I appreciated the evidence presented to support the conclusion of the video. I think this video is both correct and incorrect in it's analysis. I agree that it's not the case that the US as a whole has housing shortages if you look at the total amount of houses built. The issue is the migration patterns in the US. People want to live in Cities and a lot of our Cities don't have the housing capacity to handle the increased demand. This is presented in two different ways. The soaring prices in cities (like San Francisco in this video) that people want to live in and the plummeting occupation rate in small towns in the US. As two examples Seattle has had an occupation rate between 2% and 1% for almost 10 years now. You generally need 5% of homes to be unoccupied for prices to stabilize in a market. Whereas the small town in Washington State like Aberdeen have seen very little rise in their housing costs because they have basically no out of state migration and an occupancy rate that ranges from 4-10 percent in the last 10 years. I haven't done a city by city analysis of the united states so I can't say this definitively. But I would bet that if you did an analysis of the occupancy rates of all towns less than 80,000 people (limit picked randomly) you'd find an average occupancy rate that's quite large (5-15 percent) and the average city will be under 5%.
I agree. Much of Belinda's analysis in her videos is spot-on, but this one felt off the mark. Given the surge in single-person households among younger generations, and the decline in the number of children per household, permit-to-population and people per unit ratios are no longer at historical norms, and as such these historical numbers are no longer relevant. 'No money down' and 'easy qualification' mortgages haven't been available since the 2008 recession. It's a secondary issue, but her comment about companies 'realizing they can pay less' for remote workers doesn't fly at all. Labor is a market just like any other, and companies compete for talent. Unless all large companies work together as an oligarcy, they cannot simply index salary to local cost of living. Demand for information works is simply too high. The WFH movement has begun to and will continue to completely and permanently shake-up the labor market for high-skill information workers. Companies who want to offer them less will do without.
y'all seem to have left out the part where Blackrock has bought everything. And that 5% unoccupied it thing is just grotesque. The should not even be a thing as a 'Housing Market' because for there to be a market there must by definition be those that go without. What I'm saying it that if you like there to exist a housing market you by definition support homelessness.
@@blazor907 your claim that for there to be a market for something there must be people going without is hyperbolic, isn't it? You're essentially implying that any good that supports a human need should exist outside of a marketplace and associated economic forces, which suggests you're ultimately against property ownership, and in favour of ...what?
I've also noticed a huge trend in folks moving from small town USA to the Big Cities. Some of this is out of preference and yet some of it is out of need. There is declining opportunity in small-town USA. The kind of jobs that pay you enough money to actually be able to buy a house/start a family/live the American dream are moving out of towns and into Big Cities. You are almost forced to move out of smaller towns if you want to find a good job. Businesses are leaving, jobs are leaving, tax money is leaving. That leaves you in a city where the education system becomes increasingly poor while crime, poverty, drug use, homelessness and more are all issues that are growing. Then those folks who can leave, do. Sure there is remote work now, but remote work is more available for white collar jobs. What about the blue collar workers? They can't telecommute to work. Blue collar jobs that pay a living wage are disappearing. Even if you have the privilege of a remote job, maybe there isn't great WIFI connection in many small towns to give you the option to live and work there with a decent paying job. I would prefer to live in a more rural place than a Big City but I have migrated from Topeka, KS to the KC Metro. My company (one of the best paying companies in Topeka) had an M&A and a lot of the good jobs went to KC. The workforce and the company itself was a huge contributor to economic stability in the city. The M&A had a huge trickle-down effect contributing other businesses in the area (downtown) closing and thus more job loss. Also, the culture and operations of my company (from an employee perspective) really went down hill after the M&A. So I almost needed to come to KC where the other good jobs are in order to have quality of life. So sure, the houses in the rural places are more available and more affordable compared to big cities but not for the people who live in the area. Masses of people aren't just all of a sudden deciding to live in the city because it tickles their fancy. The true story of all (voluntary) people migration is that people follow opportunity and the chance to live the best possible quality of life that they can.
This video is kind of bizarre. It's extremely focused on personal home ownership when the majority of the housing crisis (though certainly not all of it) is in dense urban centers where the majority of units (and desired units) are apartment rentals. Not to mention, investors buy houses because they can rent them out for high prices, and they can rent them out for high prices because there aren't enough houses in the places where people want to live. If there wasn't a housing crisis, investors couldn't charge high rent, and investors wouldn't pay high prices for buildings, and in turn people could afford to buy homes to live in. Investor owned houses don't disappear from the housing supply. Just because there's too much development in (relatively) low demand places (arterial exurbs) doesn't mean that we shouldn't be developing in places with high demand (dense urban centers, walkable communities along public transit, etc).
Thanks for enlightenment! Would add many boomer friends, acquaintances own 2 3 4 5 and in one case 6 homes. Homes sit empty much of the time. We live in Ohio. State policies subsidizes hundreds of thousands of out of state homes. Stay in your Florida home for five months and one day pay $0 Ohio income tax. In addition during the time in Florida Ohio loses many millions in sales tax, gas tax. Another phenomenon with this group is they have construction projects going on at multiple homes tying up needed labor. They also overbuild as they keep up with the Joneses which exacerbates material shortage and cost. Finally millions of condos sit empty 50 weeks out of year. Irrational irresponsible
Breaking down the facts, debunking the myths, and getting to the truth. Thank you for bringing some clarity to this discussion! The housing crisis is the result of market manipulation by immoral speculators. it is disgraceful.
This video felt like a knee jerk defense of the construction industry, and given the amount of reporters and experts claiming a shortage this topic really deserved a more in depth review. We may have enough houses in sheer numbers but the US does not have the right kind of housing in the places people need it. People shouldnt have to move across the country to afford rent. A house is a maintenance money pit, the only reason its currently profitable for Blackrock is that the supply shortage is increasing rents. While private equity isnt helping buyers, this isnt going to be solved until we relax local regulations to allow for more dense or mid-sized buildings.
I enjoy your videos even when I am not 100% in agreement with your analysis. I agree that there is not a shortage and that there is a surplus of investors for profits and Airbnb's. This has led to the emptying of the inhabitants of cities that had vibrant communities such as London and Vancouver and starting to happen in Montreal. I moved to a small town because I could no longer afford either the rents or the houses in the big city. I am very curious for you to talk about the fraudulent "companies that claim to be the solution to homelessness and lack of affordable housing". Please tell us more. Who are they and how are they fraudulent. Thank you!
I cannot find the name of the builder, but they charged LA $1M per homeless person. A homeless person could live a pretty nice live style on $1M. The city should have just given them the money.
Or, there’s a complete lack of paying people a sufficient wage to live on, not just barely survive by… and, I agree that there is over production of homes.
Great video, no one seems to be talking about birth rates. The other thing I would love for you to discuss are regulatory barriers (costs) to affordable housing. We left an area (WA) where a building permit could cost 20-80k, hook up and other fees pushed costs well over 100k for any type of house. Our fees here in AR for everything were less than 3k.
I have been looking at land there, what part of AR is that? My ex-wife is forcing me to sell our almost paid-off house, I can't afford to buy her out due to investors from CA offering well over the asking price for our home here in Dallas plus I can't afford to start all over again with a 30-year mortgage at my age, really sad I had hoped to grow old with her and pass on our home to our kids to either live in or sell to help them in the future to buy their own home since the middle class are being squeezed out
Exactly, I am moving away from that same county in WA state for exactly that reason!! Completely unaffordable to build a new home there. (And I tried for over 5 years!)
Lots of poor reasoning here, unfortunately: birth rates lead to demand in the future, but don't impact household formation until 20-ish years later. Covid has made huge, obvious impacts on how many different families people are willing to live with, and how many rooms in a house are being used as office space. Rental vacancy is at extreme lows, even as more housing is being converted to rentals, so while the prices are going up because more money is going into that space, there's still a fundamental shortage. BlackRock specifically targets housing in areas with lots of zoning restrictions, because it knows there's a shortage in those areas and zoning protects that local shortage, so values will keep skyrocketing there. Low interest rates make it cheaper to buy housing, affecting the price, but doesn't actually impact the overall availability, which is super low most places.
Good video, this definitely reflects where I am living, Bentonville, AR, a booming area where people from all over the country a moving to. If you want to buy a house here, you’ll need to pay cash over the listing price with virtually no contingencies. So many houses are being bought up by investors/renters, even new construction homes. There are so many new apartment units but they’re all for sky-high prices.
Belinda, after your cut away and return at about 7:15ish in the video... when I saw the "tin-foil hat" you officially earned the title of "Legend" in my book. P.S. you do such a great job of producing your videos. They are very thorough, informative, and even fun. You seem very humble and sincere. Keep up the good work. Greeting from Florida
You seem to argue by making irrelevant points. Of course there's a varying "mismatch" of supply/demand. It's always the case that there's a bunch of underused space while other have a shortage. The fact that there's cheap land in the artic tundra (or wherever) doesn't mean a shortage in certain big cities is less important. People can't just move to low cost places, as they have to live where there are jobs, services, and infrastructure suitable to them. Also, we can't solve the problem by just focusing on lower cost housing for the poor, as there's actually a shortage for people who have a average income in many markets. When the *average* person can't afford a house, that's means we have to produce much more housing, at lower per unit cost. Zoning and other restrictions on building have to be radically reformed, to allow for new construction. NIMBY's who are blocking new developments in places like San Francisco Bay area will love your video, as they can claim there isn't a shortage, when there's actually a desperate and extreme shortage.
This, in my opinion, is one of the most urgent issues we need to address as a nation right now, so it's wonderful to see you cover it! We don't lack houses-we lack the ability to afford them. And until we see the de-commoditization of housing (or some other factor to help address increasing wealth inequality), the problem is only ever going to get worse.
In my area the high cost to build generally guarantees that upon completion, most new builds will be underwater in terms of resale value so there is little incentive to even consider new home construction. Resale inventory here is extremely low, of generally poor quality and highly overpriced.
I am so so SOOOO happy to have found your channel! I have been digging through stats, looking at birth rates, etc… to try to understand whether we’re being fed a bunch of non since about a “housing shortage” & the information you provided in your video was so helpful! I really appreciate your work! I will be adding you to the list of those on patreon I support! And again, I simply cannot express just how helpful your video was! You’re amazing!!!!❤️❤️❤️
thank you for this wonderful video! this confirms some issues I've been having when searching for my first house the past year: it is an affordable housing issue. the grand majority of the houses are heavily overpriced, and those that could be affordable are also heavily overpriced. there is no way a 20 year old house has tripled in value over a 2 year lifespan, that doesn't make any sense. but thats what a lot of sellers are offering, and sadly people are buying them up on it.
Turning home rentals into vacation rentals has taken a lot of housing off the market. And management policies of raising the rent on apartments every time they reach full occupancy "to get a better class of client" is a huge problem.
Problem is many states have eviction law that favor the tenants. I have a couple of investment properties. I’ve always worked with my tenants and have never ever charged fees when they pay late. When Covid hit there’s a tenant who lost his job. I let him stay for 2 month free while looking for a job. Eventually he moved in to his girlfriend’s. Out of blue a few weeks after he moved out he contacted me to give that 2 month rent that I have told him not to worry about. I got spoiled and lost reality because of that tenant thinking all tenants are as nice and responsible as him. Then last year to this year, I got two tenants who just flat out refuse to pay. They were disqualified for Covid assistance because they always have income. I don’t have a company or PPP loan. I just been paying mortgage with my own income while they lived in my fucking houses for free for over a year. Two months ago I had enough and turned my properties to management and finally evicted them. Apparently since I’ve never increase rent, the rents are under market value. So they jacked the rent up. Got much higher income tenants. I don’t really care about that 5% rent increase every year. But Is it my fault to want a “better class of client”? No. I worked my ass off last 20 years to be able to buy some investments. I provide my products and services. I expect monetary return. I don’t need squatters playing the system. If I were able to buy another investment property and manage myself, I’d Airbnb out in a heart beat. I don’t care if there’s more work. I don’t want to deal with long term tenants ever again. Note that I’m not saying all tenants are bad. But one bad apple really sour the whole bag. And I’ll do anything to avoid that one bad apple.
@@howo357 You have my sympathy. I have had similar problems. My grandmother had kindly let a disturbed woman stay with her for free, then got a restraining order against her, then let her stay again. When Grandma died (unrelated to this) the woman insisted that she was a tenant, on the grounds that she received mail there. It took half a year to get her out, while she turned my late grandmother's home into a drug den. The woman's "friends" stole everything in the house, up to and including the toilet. But having more money does not make tenants better people. Raising rents by $100 every season was, as happened when I lived in Portland, was not just. Those weren't "luxury apartments" as the manager started to call them. The cutting-board was unfit for cutting, as it turned out to have a toxic particleboard core. Everything in there was cheap and some things didn't work. It was suitable for middle-lower income folks like my husband and I, an elderly couple working remotely, but the management based the high rents solely on Portland becoming popular, which management had nothing to do with and in fact was shortsightedly helping to sabotage. I have seen this all over the country. Creative types who've spent their lives perfecting their arts rather than making money move into a relatively cheap area and soon synergy's going between them. Then their presence makes the place fashionable. Then the Money people, who've spent their lives making money rather than developing their talents, want to move in and enjoy the ambiance that they can't make for themselves. Then the landlords jack up the prices to cater to this "better class of client". This forces the artistic types out. Then the place loses its panache. The Money People look for the next fashionable place to move, while the landlords are left having bought too much property with too high a price-tag and their mortgages go under water, and a once vibrant community becomes wrecked, with vacant buildings attracting criminals and rats. I and creatives like me have been chased all over the country by this dynamic and frankly we're sick of it. Many of us want somewhere that would allow us to pool our resources to form our own communities, but many places are zoned to not allow unrelated people to share a single big house, while banks are hostile to us building shared housing. Some people do succeed in these things, but it's an uphill battle the whole way.
@@howo357 I sympathize, actually. My grandmother had, out of kindness, allowed a woman to use her home as a mail-drop. (She later got a restraining order against her, and then changed her mind and rescinded it.) When Grandma died it took us 6 months to evict this woman, who claimed the rights of a tenant and used letters addressed to her there as proof of tenancy. In the meantime she turned Grandma's old home into a drug den. Her "friends" stole everything in the house, up to and including the toilet. Needless to say, we could only sell the house as a shell, greatly reducing its value. Yet I've lived the other side of it, too. When I lived in Portland, the manager--who had many apartment complexes all following the same policy--raised our rent by $100 dollars every season, until we couldn't keep up anymore. We were decent, quiet people who paid reliably and left the place in good shape; we and many others like us didn't deserve to be priced out of our home. Towards the end it was being billed as a "luxury townhouse". I don't know what was so luxurious about it. The cutting-board turned out to be fake, made of toxic particle-board thinly veneered over; it couldn't stand up to actual use. All the detailing was fake plastic. There were tubes dangling around the door of every apartment from old watering devices that didn't work. It wasn't worth the rent; we had to leave. I've seen this pattern everywhere: Creative people, who spend more time honing their skills than making money, find a relatively cheap area to live, which attracts other creatives, which creates a vibrant, synergistic neighborhood. Then it becomes fashionable, and the Money people--those who neglected their creative side to make money and now miss it--move in, as if years of hard work to develop artistic skills could just rub off on them by proximity. The landlords then jack up the price of rent to woo this "better clientele". They crowd the Creatives out of town. The neighborhood loses its sparkle as a result. The Money People notice that something is missing, and so they scan for the next place to ruin, moving out and leaving behind a gutted town full of underwater mortgages, homelessness, and empty buildings going to seed. I've spent too much of my life chased around the country by the Money People, and frankly I'm sick of it! I contribute my share. My husband and I worked honest day jobs to subsidize our arts and didn't ask for handouts. We always paid our rent on time and cleaned up after ourselves. We earned better than what we got.
Yes, there are slimeball landlords. There also slimeball tenants. Don't blame all landlords for wishing to try and keep shady people from occupying their property. I wouldn't want nice neighborhoods turning into ghettos. I grew up in a ghetto. I've seen the mentality of most who live there. Very few actually attempt to better themselves, get a career, and move out.
investors also buy homes and then just... do nothing with them. Properties in areas that are perceived as "up and coming" can turn a profit just due to the increase in home prices over time - there's not even a need to rent the property for profit.
I always appreciate your down to earth videos. I think the problem in construction industry isn’t that young people don’t want to do manual labor but more of a cultural problem. Our society no longer values and respects the work that skilled trades do. As someone that is a licensed master electrician, from my own experience skilled trades people are treated by society as though they are lesser than a “professional.” All the while, trades people are pushed more and more to produce quantity over quality. There are nuances, there are obviously people that respect the work that construction workers do and there are companies and customers that value quality work but that’s not the overall trend from my perspective.
There has been a cultural de-value of the trades particularly at the start of the millennial generation. Parents to children born in the 80s and 90s looked at that child as having to “get out” from the situation of labor and go to college and to rise the ranks of class. Class is not simply how much money in your bank account but also culture and job type. A tradesperson can definitely make more than a PMC but the PMC is still in a different “class” I do think that now with how the millennial gen and GEN Y have become aware of the lie that in order to do anything valuable in your life is to go to a 4 year liberal arts college is going out the window and I do think we will start seeing a re-investment and thus re-value in the trades.
If you want lower prices for housing, especially in places like California, you need more housing. Period. It’s basic economics. All the charts in the world about population growth are not relevant to that basic fact.
Love this I’ve always suspected like back in the early 2000 that there is no such thing as “housing shortage” and this time around the result of the crash will be worst as you have way more institutional investors building neighborhood developments and all that did not exist to this extent back then.
Another *excellent*, well-researched piece, Belinda, Thanks! (Good to see you with a sponsor, too! You might want to out a link to the sponsor at the top of the video’s description; I wanted to visit their site, but it’s a hassle to scrub through the video to find where their URL was displayed, and then type it into a browser manually :-/)
Hi Belinda: Wow! That is quite an eye opener that it's not a lack of housing, it's oversupply of housing that are heavily invested while there's no affordable housing. Although our population has decreased substantially in the last decade, there still are a lot of homelessness because they cannot afford to pay rent or buy homes anymore. Thanks for your enlightening blog. Jenny
One reason I see for the lack of affordable housing is the opportunity cost. I live in Santa Rosa California, the heart of Wine Country. Here, the minimum price for a house is $400k for a run-down house in the bad part of town. We do have a bunch of new construction, but all of it is exclusively gigantic 4-5 bedroom, two story houses starting at $900k. No one is interested in building "starter homes" anymore because the difference in cost to build is $100k, but the difference in selling price is $300k. Why would anyone make significantly less money on the same amount of land?
@@spacetoast7783 Yup, this is also the case. There are some plots that are under 200k, but those aren't exactly construction ready. I'd still love it if someone was building 2 bedroom houses even for 500k, but the math just doesn't work out for a developer.
As I see it, the housing shortage has at least three parts to it. First, there is a lack of housing in big cities due to increasing preference of gen z to live in walkable cities with good transportation that allows for car-free lifestyle. Second, there is a shortage of housing in the sun belt states and cities due to the in-migration of WFH workers from northern states or West coast with stratospheric cost of housing. Both of these issues are exacerbated by restrictive zoning codes that make housing projects (where people actually need them) so much more expensive. This prevents construction of affordable housing and, specifically, starter homes that are in very short supply currently.
That was Millennials who wanted to live in Walkable cities. Also, that preference is literally just the 1920s. Also, I agree plus one other thing there is a lack of multi-family homes that could alleviate the burden of home ownership by having couples move into together without actually sharing any space except the backyard.
The existence of shitty homes in devastated areas that aren't near work or are in high crime areas is not a proof that there is no problem. Still, I welcome the discussion.
Yeah this video misses the mark. I live in Texas in an area with tons of "available housing" but with only 2 large businesses in town there's no incentive to move here. I mean what are you supposed to do buy a house then lose it because you can't find a job to pay for it?
@@MrBl3ki also working remotely is only an option in places that have good internet available. Out in the hill country we don't even have reliable internet lol
I would love to invest in the real estate market currently and move on to stocks shortly after, I have set asides $180k for stocks and my goal is to make over $930k in one year to invest in real estate and I would really appreciate quality tips and guidelines on how to reach my goal quicker.
First step: get the idea of “quick” out your head be patient move smart and slowly you are only in competition with yourself. This is advice from 6 year realtor I’ve seen it all. I’ve worked new investors and old investors who chased the idea of “quickly” and taking huge losses in their portfolios having to negotiate with the banks they owe to walk away from property they are under water with.
If I understand correctly, you just want to become part of the described problem... And if you look at the amount of likes - many people want the same... Huh
As a homeowner I completely agree with you, there is a manipulation of the market at work here. I can't count the number of times my wife and I lost out to investors and all cash offers, as homebuyers in 2015. I also believe that are own home is now greatly overvalued, as much as it benefits us.
This all basically goes back to the house flipping craze from years ago, they've gamified the whole system and made it attractive to the super rich private equity firms who can buy vast quantities on mere speculation. A crash IS WHAT WE NEED so they lose. Following that we'll need actual government legislation to put a stop to all the investor buyups, especially foreign investors.
@@mynotificationsareoff.400 I mean if we don't fix the problem we'll keep going in 10 year cycles, this whole thing came out of the brilliant idea to build single-family homes in the suburbs for all the GIs and factory workers following WWII. We haven't really broken out of the mindset where everything work near perfectly for the initial 20 years.
It's doubtful anything will happen because if there is a crash and things stabilize the people that find affordable housing will become complacent and not put any further thought into it while private equity will cool off only to prepare for another surge 5-10 years later. We've seemingly accepted that boom and bust cycles are a part of life.
@@philipatha I really hope this mindset of Millennials and Gen Z pushing for “walkability” and “mixed-use” become the norm peer for people’s sanity. Either that or politics will continue to radicalize until there’s another Civil War following someone seceding from the union because of “woke” politics.
I live in a small rural town. Starting a bit before COVID, housing prices have gone through the roof with out-of-towners leaving the big cities to telecommute and buying up housing stock which to them is dirt cheap. And, many others are buying houses for air B&B. For the average worker in this area of low wage jobs, finding housing is becoming next to impossible as the only new, entry level houses being built are 2500+ sqft homes in excess of $500k, far beyond the reach of someone making less than $50K/yr (this income is well above the average earnings here.)
Yeah I agree investors/landlords are bad majority of the time. But your last point contradicts most of your previous points. Yes we do have an oversupply of housing but most of it is built in locations where people don't want to live. We say that there's a housing shortage because of the places like San Francisco and Miami that refuse to build more housing in locations that people want to live. Because of zoning codes, nimbys and general political gridlock building housing in some of these places is hard to near impossible. Yeah of course looking at a macro scale of things the US has enough housing, but looking at it from neighborhood to neighborhood basis shows stark contrasts. Simply put, we have terrible urban planning in the US and that's coming back to bite us because people are now finally looking to live in places that are a nice city with good jobs and not a shitty suburb with balloon frame homes in the middle of nowhere.
You don't seem to see the problem - the 'nice city' is that way because it is not full of shitty buildings housing people who can't afford the houses which make the city 'nice'. Working remotely means good jobs can be found no matter where you live. Why should San Francisco be turned into a high rise ghetto to accommodate everyone that may want to live there?. That is why we have planning laws in the first place otherwise our cities would turn into shambolic messes. Can't afford to live somewhere - move to a place you can afford.
@@zeldaharris6876 What you're talking about is de facto kicking poor people out of the city because you're sick of looking at them. Maybe if you want poor people to stop living in shitty apartment buildings, you should, y'know, address the actual poverty or something. Some aesthetic rules may be sensible, but simply mandating single family housing in most of a city's land area like American cities do is inefficient, barbaric, and god awful for the environment. If you don't want to live near high-rises, just live farther out. It's that simple.
In some parts of the Uk there are streets and streets of empty houses so to say there are no houses is rubbish and yet there are building sites throwing up small useless houses at exorbitant prices for so called first time buyers who can't afford them. Seems to me that the Government are artificially keeping the building industry alive.
I love how many people are saying "I know this sounds conspiratorial, but..." Yeah, I think those conspiracies had more truth than many would like to admit. Great info!
Population growth rate is regularly brought up in this discussion but what gets missed all the time is the fact that the millennial generation, the largest generation in many western countries, are now in their house buying years. Population growth is not the be all and end all of housing needs because someone who is a millennial was factored into the population total 30 years ago. But they clearly have different housing needs now than they did when they were a kid. So its not a good argument for saying there is no housing shortage. For decades we haven't been seeing family sized-units getting built and instead we've seen a lot of 1 bedroom and bachelor housing for individuals (often investor led). While at the same time local governments have made it incredibly difficult to get even modest (triplex and fourplex) housing built in established residential neighbourhoods that have the things young families are looking for (schools, playgrounds, safe streets, etc). Because we haven't been building in many of our neighbourhoods we've also seen these residential areas get older and older and many schools closing down because of declining enrollment. Where we have been building family housing is further and further from population cores. Finally, while people criticize the supply side of this discussion, its only been in the last 7 or so years that policy makers have even begun to acknowledge that how much housing we are building matters. For decades and decades this was viewed as a demand problem and politicians would propose stuff like banning foreign buyers even when the vast majority of properties bought by investors are bought by American businesses and locals buying these properties for investments (not foreigners). In fact, in the US/Canada many of our politicians are also landlords themselves (not just homeowners but people who own and rent out properties).
Yeah, I’m one of those people low key hoping for another housing crash so the prices will come back down into a range I can afford. There are a lot of people in my boat, I think.
The fact that there is already an excessive amount of demand awaiting its absorption, despite how everyone is frightened and calling the crash, is another reason why it is less likely to occur that way. 2008 saw no one, at least not the broad public, making this forecast, as I'll explain below. The ownership rate was noted to have peaked in 2004 in the other comment. Having previously peaked in the second quarter of 2020, we are currently at the median level. Between 2008 and 2012, it dropped by 3%, and by the second quarter of 2020, it had dropped from 68 to 65.
You're not doing anything wrong; the problem is that you don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.
@@hasede-lg9hj Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
I won't pretend to know everything, though. Her name is Melissa Rose Francks but I won't say anything more. Most likely, you can find her basic information online; you are welcome to do further study.
Thanks a lot for this recommendation. I just looked her website up, and I have sent her an email. I hope she gets back to me soon.
The "missing middle" is what we are desperately short of. Affordable housing is literally illegal to build.
Yeah; Sprawling out more, and building more McMansions isn’t going to solve the problem of affordable housing! I’d love to see this channel cover this a bit too.
Yes, I cant believe that people are willing to go full conspiracy mode when the most obvious answer has been there the entire time.
@@func8211 This videos points were still valid and great, i just think we need to make sure this aspect is highlighted as well.
@@ericlotze7724 They are not valid in the sense that they give people the wrong priorities. People need to go after local governments blocking construction, not investors who rent out buildings.
There are a lot of good 3 bed 2 bath 1970s homes in my town, but at least half of them are investor owned. The reason young couples/families can’t buy a house is because they’re forced to rent the houses they should be buying.
We NEED laws limiting the extent to which housing can be an investment. Something like higher taxes on second and third homes, no homes owned by corporations, ANYTHING to help families buy a home, stop renting, and start living the American dream.
I am living this crisis. Those of us that are clinging to the bottom rungs realize the problems are complete lack of affordable, and safe homes. The homes are there, but never affordable for the very poor.
Yup. This video totally missed the mark.
Thanks to FIAT currency, the money printer… and the lowest rungs being hurt the most by inflation.
We need to go back to the gold standard.
eh, it's a standard clickbait strategy. Say something controversial or dumb, people click the video.
@@strayiggytv how exactly? The conclusion of the video is that the houses are there - they’re just out of reach -
and building more is not going to change the rigged system ,which allows investors hoard the housing to themselves for profiteering. I think that a the mark, in my honest opinion.
Namaste
@@geraldbelman759 She actually talked in this video what she wrote on the title.
I think we have the same problem in Europe. We've been told there is a shortage, but the new houses and apartments are built mostly by developers and sold for big money. Seems like it's just a business for rich companies, which can become richer.
I mean tbf Europe's problem is that no one wants to move back into the villages, so they're turning the different neighborhoods into micro villages. The America's problem is that the "affordable" units are mostly in places like Iowa where no one lives.
You do understand how supply and demand works? A high level of supply by definition means low housing prices. Low supply (housing shortage) means high prices. If you are seeing new housing sell for big money, the fact of economics means there is a housing shortage.
@@Inspectorzinn2 Or the company is keeping a percentage to rent off.
My town is not very big but has a university, so a lot of students need homes. We have small "mountains" surrounding the town, so you cant build everywhere. Yet, a certain amount of houses are empty because investors just buy and sell it over and over to make money. A large number of the population here is leftist, so they started spraying the houses that are empty for a long time with "vacant house" to show others how many homes are uninhabited. They even squatted some houses out of protest, some even succesfully in the long run.
@@Inspectorzinn2 Unusually not the case in NYC. Very low retail occupancy rate but prices still high. Also actual square footage is much less than advertised with an odd system including pillars, stairs within the calculations.
Very interesting video. One thing did stick out to me. The assumption that because people aren't getting room mates there is no housing crisis. Unfortunately many landlords simply put restrictions on room mates, because they make more money from many single occupancy units than single units being maximized. If I could have more room mates I would, but my landlord is always searching for a breaches contract to justify an eviction. Simply put many folks may need room mates but not be allowed, skewing the data.
yep, I'm not allowed to have roommates. All of us with housing vouchers are not allowed. Close to half of us with vouchers are homeless because the voucher price is too low for the inflated housing market.
It's not always the landlord. When I was in grad school, the town I lived in had hard limits on how many unrelated people could live in a single housing unit where an apartment counts as one unit.
Yes, even for families some landlords will not accept a large family for a small space. I once looked at a 2 bedroom with my husband and the guy showing the property remarked that a couple with 3 kids was interested in the space but the landlord didn't think the space was appropriate for that many people. Completely insane. I have no idea where landlords like that think young families are supposed to go.
It could also be skewed by the number of houses which don’t have anyone living in them (vacation homes).
@@AS-kf1ol that’s crazy. I know a family with two kids in a one bedroom…they would’ve LOVED a two bedroom upgrade with a third child.
I think it’s also important to remember that many of the homes that come up for sale are bought by “investors” and turned into rentals. This could be a housing rental or it could be something like a VRBO. These ARE the affordable homes and they’re being snapped up by those who already have homes. It’s sad that first time home buyers are losing out on the opportunity to own a home because of this. And I think builders concentrate on higher priced homes instead affordable.
This, absolutely. This is the #1 problem in my area.
Im from Miami and the number of vacant units held by “investors” is ridiculous. They’d rather sit on empty units for months than lower the rent
@@j.g.3293 Yep. Because reducing the rent on any property reduces the value of their entire portfolio of properties. This is what happens when economic incentives are misaligned with societal objectives.
No homes in a supply constrained market can be affordable.
I am a construction worker in the last 2 years I have noticed that many of the new houses that are under construction are being rented before their construction finishes, it is something new for me to see this kind of horrible thing, big conpanies buy them and they just want to rent leaving buyers without cash to buy that house.
Everyone wants affordable housing until they can afford one. Then they want housing to increase in price to 'protect their investment'. We have met the enemy, and they are us.
It's basically people stealing from their own children.
Agreed. It's mostly the banks using the "Your house is an investment and your retirement" excuse to continue to trick people into paying them interest payments for 30 years. The cost of maintainance, emergencies, interst paid over the whole loan and other problems that happen to a house do not imply investment at all. For a $330K home, you pay exactly $330K in interest over 30 years with current 5.5% interest. So you have to hope that your home doubles in value just to break even. Homes are not investments, they are money pits that you almost never get your money back from.
@@chancehansen Try 12% in 1985, which we refinanced down to 9% 8 years later and thought that was a deal!
Good ol capitalism
That is why people should treat houses like cars financially ...
If we could keep wealthier people from buying up the reasonably priced houses for Airbnb locations, that would help. You’re totally spot on here!
Sounds too socialist. Not sure if you are aware but the USA allows way toooo many foreigners to buy real estate. Non Americans are allowed to buy. There are many countries that don’t allow this. These countries make you become a citizen before you purchase. So if anyone to blame it’s the laws of the country. If you want to get into the rental market buy rental properties I guess.
I read in a news article that in Canada, 30% of homes are owned by investors (individuals and companies). Companies have all sorts of sly ways to oust their tenants or jack up rents, and the small scale investors shrug their shoulders and crank up rent, saying that it’s “the going rate”. Using “renovictions” and other means to move out their tenants who are paying reasonable rents.
Shelter is being used as a money making game.
My unpopular opinion is there there should be a cap on how many properties an individual can have their name on. (For example: 3) And tough controls on investment companies.
The situation is the same here in central Texas with anywhere from 1/4 to 1/3 of all home purchases in the last few years being snagged by investors.
@@madstork91 You have something to support that claim?
@@whiteknightcat Probably not
@@whiteknightcat seems to be declining but many of these investors aren’t even renting the homes out, purely for speculation 😒
Canadian property is being bought from overseas, Russia, China, Mexican Drug Cartells etc,, they are putting there money into HARD assets for Long term security. These are not investors looking to make a killing by jacking prices, though that is the result. They are looking to hide there wealth. They can afford to let the hones sit vacant for 10 years or more.. this is long term weath planning
We need to incentivize home buyers who are actually going to live in the homes. Where I live most home owners own 3+ homes, because if you can afford 100k+ down payment you can afford a few 30k+ down payments and essentially build equity for free.
there kinda is and investers just use them too. you get a lower interest rate, property tax and capital gains tax when you live in the house for the first 2-3 years.... but after that, its better to refi the equity out to buy a 2nd house, rent the 1st one and able to tax right off the whole of the 1st house. Add the exchange of equity with out being taxed and interest rates are so low, and investors just keep rolling with more and more houses.
@@cetriyasArtnComicsChannel I know about that, and it's bad but I don't think it's the majority of these cases. Flippers are frustrating, especially when they do BS work just to inflate prices and not value, but I'm more worried about people buying dozens of homes which is really hard to do 2-3 years at a time.
@that2guy I’ve been house hunting and can’t tell you how many places I’ve seen that have almost a 50% increase in price when all the flipper did was repaint
@@j.g.3293 The only solution is to move on and keep looking. The problem is people pay the inflated price which just perpetuates the cycle. One house where I live has been resold at three times in five years, each time with only minor changes eg repainting. It's a case of musical chairs and one day some sucker will get caught when the music stops. It happened in 2008/9 and it will happen again.
Where do you live?
480 Sq. Ft. (studio) apartment in Phoenix has increased 60% since Feb 2020.
Mold exposure / Sick Building Syndrome has bankrupted me and I can't live in HUD apartments because most places older than 5 years have a history of leaks inside walls --> mold.
I live in daily terror of being homeless at 62. Too sick to live in my car.
Houses being built these days are extremely poor quality. Poor craftsmanship, cheap materials. It's pathetic.
Have an air quality test performed before occupying a place. Some home inspection companies offer this service, and there are also businesses that specialize just in air quality testing. An air quality test will measure the levels of different molds inside the home vs outside the home. It will also tell you the types of mold found, which is helpful if you know which kinds are a problem for you. If mold levels are significantly elevated inside by comparison to the outside, there is likely a mold problem. The test will either justify further action to remediate, or give you reasonable confidence that you are safe to live there.
@@dylankmorgan thank you but I've been at this for 8 years and learned a lot. Air tests prove nothing. Inspection needs to include visual inspection for water damage, swab testing inside walls, under floor (it often rains on new construction then they apply a moisture barrier that traps the fungus under the flooring. Even 5% humidity in AZ will continue to feed the fungus). Building materials are left out in the rain. Improper ventilation, toxic glues and paints, plumbing that's inaccessible making it impossible to monitor for leaks, condensation on pipes that lie right next to fiberglass insulation, moisture accumulation near dryer vent, drains that cannot be seen.
Leaks under toilets and windowsills, near chimneys and skylights where flashing wasn't installed properly.
Rising damp due to improper moisture barriers under foundation and slab, poor (if any) exterior drainage, builds at the bottom of hills.
I could write for days.
Same here but thankfully I am not as sick as you are, and i am staying in my home even though I am allergic to the mold inside. I hope my health hods out in other ways, we can hardly make ends meet, and I need to hold down a decent job. Those are definitely in short supply. Lousy ones abound. Harassment low pay, random firing when there are too many workers etc. .
"Houses being built these days are extremely poor quality. Poor craftsmanship, cheap materials. It's pathetic." ---- I would like to see what Belinda has to say about the quality of new home construction, or maybe she already addressed it?
@@2ndChanceAtLife wait so your saying phx can still feed the mold when it has been 109 out. I think you have been living with this for too long and can't get a real grasp of what is going in in your body. Wish ya luck
Very informative. My husband and I are holding off on having kids because of insecure housing. Our landlord told us they had “different plans for the unit” and not renewing our lease at the end of the year, and are letting us brake the lease if we find something because of how competitive renting is. (We live in a very small mountain town) we have been looking for four months and still nothing. Not a single new listing. We are going to have to move, its fucking heartbreaking.
There's always ski-towns.
Based on your story, you are the exact person she’s talking about. I’m so sorry you’re going through this.
My mountain town in Colorado has been building apartments, one such building by a local church to increase affordable housing. But there's a lot of demand by students here, so prices stay high so far.
You're one of my favorite content creators. Your knowledge is incredible, what really stands out is your ability to distill complex subjects down to understandable concepts.
I was watching a news show from New Zealand a couple of weeks ago. The simplified version was that the cost of housing means that only those with enough cash to practically buy homes outright can buy a home. And these people are the corporate buyers, the big investors. Your regular Kiwi is locked out of the housing market.
Meanwhile, in Canada, because of a death in the family, I am set to inherit a quarter of my uncle's house value when it sells. A few months ago it would have sold for a good amount, enough to put down a 50% deposit on a house of my own (I rent in a slum, basically, and was hoping to buy something small and cheap). But now housing prices are dropping due to increased mortgage rates -my uncle's house will sell for much less than it would have three months ago. That would still enable me to put a good deposit on a house since any house I was looking at would also be dropping in price. However, the increasing mortgage rates mean that I (a disabled pensioner) cannot afford a mortgage today, whereas three months ago I could have. And mortgage rates are expected to increase by 30% over the next five years. Even if I were inherit a similar amount from another relative, this situation has meant I will never have my own home.
Housing and other human needs should never be the source of speculation. Human _needs_ like shelter, water, and clean air, should never be allowed to be bought and sold in the markets. I know that where's there's need, there's opportunity for profit. But to take advantage of that (and to allow it continue) is morally corrupt.
Apparently all these companies actually want that Cyberpunk future that was being pushed so heavily in the 80s. The only difference is now they're actually doing it.
You might want to move to a socialist utopian country where Socialism works.
The "reset button" is a land value tax. There isn't a problem with housing and construction, there is a land allocation problem. Taxing the land forces users to use land efficiently, and pays for government spending that would otherwise come from taxes on labour and capital.
And not only that but simplifying the tax code, do more for eco-sustainability than an EV in every garage, and reduce corruption.
I figure it might happen in a 100 years.
You mean something like a "property tax"? I wonder why nobody ever thought of that...
Baloney, all residential property tax should be abolished, and exorbitant fees , the hidden taxes, should be abolished. The federal income tax ammendment should also be repealed.
A property tax already exists in the US. and it is terrifying ‘efficient’ at causing people, especially poor and elderly people, to lose their homes. It is also very ‘efficient’ at converting wilderness and farmland into strip malls and subdivisions. I don’t argue against the necessity of property taxes to fund services, but in my lifetime I’ve seen it have devastating drawbacks for people and the environment
@@aliannarodriguez1581 You're right. A property tax is the opposite of a land value tax, and as expected, does a lot of economic harm.
You genuinely try to understand what is happening with housing. But there is a lot missing from your analysis. New Houses built does not equal New houses available: examples: 800 homes lost to wild fire, 400 new homes built == 400 families homeless. One old apartment building with 120 units demolished, new building built with amenities and only 80 units. This shows up as 880 new starts, but it isn’t, it is a net loss of 440 units. Population growth in the US is still over 1/2 %. That means you need on average 2 millionish NEW living places each year. US housing starts are currently in the 1.5 million range. That’s not new inventory.
Your math is off. I think you missed her excellent points about household density as well as the historical permit ratios.
Using available official 2020 data.. 331 million Americans times population growth rate (0.49%) = 1.62 million.
Then you must divide that number by the number of persons per household (declining and currently at 2.49).
This gives us ~651k new housing units per year needed for population growth (at 2020 growth rates - it's even worse more recently). Curiously this number is right around where the market bottomed during the last crash. Probably not a coincidence.
Then factor in demolished/destroyed houses as you noted (Census Bureau estimates vary based on years, natural disasters, etc. but it's around 3.1 per 1,000 households).
So ~133 million households (331 million Americans / persons per household @ 2.49).
Then divide by 1000 = 133,000. Then multiply by the obsolesce factor of 3.1 = ~418k new units.
That gives us a total of a little over 1 million units per year needed to stay even. The market has definitely built more than enough houses to cover this, even accounting for the "underbuilding" it did right after the last crash and there was already even an oversupply going into that crash.
If this math is too much to follow, another way to look at it is as exactly as she has pointed out - the persons per household ratio. It's declining. Meaning. We have more than enough roofs to put over everyone's heads. There is NO shortage. The shortages only begin when real estate speculators enter the picture. Speculators who are twice as active now as they were during the peak of the last bubble...
She nailed it. You're the one missing the big picture.
@@dancox3251 You use persons per household as an argument for why there isn't a shortage, but did you check to make sure that its not just due to people becoming homeless?
@@jacobsharf8173 Per Census definition of 'household':
"A household includes all the persons who occupy a housing unit as their usual place of residence. A housing unit is a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or if vacant, is intended for occupancy) as separate living quarters."
Homelessness is only around ~0.2% of the population, so it's unlikely to have much of a major influence either way on this metric.
But let's see if we can make a guess..
For context, there are +16 million vacant homes and +600k homeless. All of the homeless could easily be housed in a fraction of the number of vacant homes we have. These vacant homes don't show up as households. Let's say we moved all of the homeless into these vacant houses (thus creating +600k new households). Since the majority of homeless are single persons, then this would likely send the persons-per-household metric even further DOWN.
We have plenty of houses but at the same time homelessness is getting worse (I assume this is your point). This happens every time they send home prices spiraling out of control. There are too many people consuming more than 1 house. 2nd homes were popular in the last bubble and now they're on to 3rd, 4th and 5th homes as all of the wealth continues to be concentrated into fewer and fewer hands.
@@dancox3251 One thing you are missing is that the Feds have zero idea how many people are actually entering our country every single year. They can guess, but it is only a guess, and there is every incentive to underestimate. I'm pro-immigration, but we have to be honest about it.
Okay this is a misuse of data. First, in the 10 years after the 2005-2008 housing bubble, there were 50% fewer homes built (about 5 million homes) than the 10 years before the bubble. She shows those numbers at minute 3:45. HOWEVER.. Since 2008 the TOTAL population of the US has grown by 20 million people. Just because population growth has slowed that doesn’t mean it stopped. Also Millennials are buying homes later in life and they are just now getting into the housing market. Also the pandemic messed up lots of supply chains for wood, windows, wall board, appliances etc. Many builders are sold out for 2022 and 6 months into 2023, with 1 year waits for houses to be built. The FED raising interest rates, and talks of a recession are slowing demand but that just means that rental prices will go up. This shortage will last at least 3 years.
I see a lot of empty homes where I'm at, even rental properties are sitting vacant because middle and lower classes can no longer afford what they cost or what they charge for rent. Covid destroyed my business took my home and now I'm living with family, I really don't believe there's a housing shortage though there is a crisis
There are other factors at work as well. In Canada the single biggest driver of housing prices has been international investors. Those investors are NOT price sensitive. Part of that is because they are buying “residence”min Canada, not real-estate. Part of that is money laundering, real estate is a great money laundering system. Is there a housing shortage? Partly yes. Rental property demand in my city is around -10%. Thats right, 10% lack of rental properties. The largest driver of that has been a lack of new rental housing, for over 30 years no new apartment buildings have been permitted, only replacements. Lots of new single family homes, but all of those are bigger and bigger homes: in 1990 1800ft2, now 3500ft2, with many new developments pushing 4000+. The price of a detached home has risen from 150k to over 1 million. So yes, there is a real housing crisis across the board (rental, ownership, apartments, condo). But not from a basic lack of structures. Rather from a complete lack of balance in inventory.
I think the figures you cite are a bit misleading. The housing shortage isn't national, it's local. Many parts of the country have housing surpluses, such as the Rust Belt. However, the cities with the strongest economies have massive shortages relative to demand.
Because investment firms are buying the houses. I tried to buy an abandoned house and couldn't get the bank to come down. It ended up being sold to Berkshire Hathaway I think(didn't know they bought houses). It's a partially induced "shortage" because of investor demand raising prices and reducing supply at a particular price point. I believe this same thing is happening with cars.
This whole video is so frustrating.
Exactly, plenty of land in the middle of nowhere to build on, you could build thousands of houses no problem. But in cities where jobs are, land is finite resource. There is no land to build houses on hence high prices and housing shortage.
@@Inspectorzinn2The lack of land isn't the root problem: it's strict low density zoning that is so widespread in American cities.
You don't have to build houses. You can also build apartment buildings, but that's illegal due to zoning.
@@TheTokkin True, but high density housing has it's own issues.High density housing costs 50 to 66% more per square foot to construct. Their is also the increased strain on infrastructure like power, water, sewage that requires significant capital expenditure to upgrade. Not to mention, roads, parking, and congestion, mass transit issues. I would say land is the root problem. High density housing is a solution to that problem but an expensive one. But yeah, zoning/building laws are definitely the issue. At the very least, let existing single family homes build ADUs, add an addition story, reduce the ridiculous front setback requirement of 15+ feet so structures can be built and rented out. It won't solve the home ownership issues but at least drop rents due to increased supply.
Your report is not only Not conspiratorial, it is dead accurate. Thank you for bringing up the media bias on how we are covering and talking about this issue.
the one thing she does not include is the foreign speculators that buy up houses and then take them off the market.
they are not included in the graphs she uses. this artificially decreases the supply side which drives up prices also.
ever see rows of rotting houses falling down unattended? prolly owned by a Chinese company subsidiary.
@@michaelwaters6829 Can you think of any expensive cities that have vacancy rates over 10%?
@@spacetoast7783 Spoiler Alert (He can't)
@@michaelwaters6829 Lots of Canadians come south for the winter. I know one family that owns a home in Phoenix they only visit a few months a year.
It's completely factually inaccurate actually. Persons per household is actually going up in the US, which is SHOCKING because it was on a downward trend for 161 years STRAIGHT! Every single metric for housing abundance is going the wrong way! houses on the market, down! Vacancy rates, down! Number of 25-34 year olds living with parents, up (it's DOUBLE what it was 70 years ago)! Freddie Mac did a housing unit inventory and found that 29 states had a substantial deficit, and of the rest on 7 states had a safe surplus of housing units. The rate of childbirth isn't too low to justify housing development rates, rather it is housing development rates that are suppressing the birthrate!
I am also an architect working in New York City. What you did not discuss was the discrepancy between units and where those units exist. If we have any hope for a sustainable future, the suburbanization of america needs to stop and be reversed. vacant units in the middle of nowhere might be nice, but those forced to live in them will have much lower quality of life than their urban counterparts and be emitting far more CO2 per capita. What we do have is a urban housing shortage, which YES, means we need more housing in urban areas.
Yes a common mistake is to look at the country as a whole, not individual areas, especially in America, empty houses in West Virginia does nothing to solve the housing shortage in the Bay Area.
4:13 The problem with this graph is that, when you have a baby, that baby does not need a house, it needs a house in 20-30 years. Therefore overlaying these graphs does paint a wrong picture.
5:18 I'd expect the same argument applies here: The number of people per home will rise when children don't move out, but instead stay, marry and have kids themselves.
8:30 Sidenote: You can see the increased demand by looking at the vacancy rates that have gone down, especially since 2008: 3->1 % for Homeowners and 11->6 % for Rentals
I wholeheartedly agree with the conclusion!
Family formation (having kids) is the main driver of the economy and home ownership.
Glad someone else caught these oversights. Also important to know the avg dependant age in a household, which I suspect once was children but now leans towards young adults & even elderly who can't live independently on SS checks anymore.
There's a reason new home builders are offering more floorplans & options/considerations for multi-generational buyers. Same applies to poorer areas... drive down any street & count functional vehicles against bedrooms.
It also ignored that 10 year span there where there was HUGE deficit of houses to poulation. as those people are growing older they are going to need the housing that just wont be there. currently were in a "catch up period". 2009 was almost triple the recommended. That one year alone covers more houses missing than the 2017-2020 "surplus"
What I am seeing where I live are gigantic houses selling for over 500k. Condos in the 400s. The only people who get tiny homes are the homeless and even those are shut down due to violence and crime. There is a huge difference between the over paid tech employees and the average person. There is a long waiting list for "affordable housing". They say we will build affordable housing, but they build everything except that and they get away with not building the affordable housing they were required to build along with everything else. I consider myself fortunate to live in an apartment built in '61. It's not particularly energy efficient, but rents for half what luxury apartments are going for in the area. There's no marble countertops, no dishwasher, no garbage disposal, no HOA, no central heating, no garage. All I need is basic shelter, but somehow all they seem to build is huge luxury houses that are not affordable. Oh, I forgot communities need to have a higher class of residents to keep property values up. An unspoken cast system of haves and have nots. Forget low income housing "affordable housing". Those people are weird. Can't have those.
"Overpaid".
By what metric? It's a free labour market.
My wife and I are trying to buy a house and we sent a letter with an offer explaining that we were a family who intended to live there full time. Our realtor told us she wouldn't send that letter because it was a, "love letter" and violated the Fair Housing Act, according to her realtor group. This was news to me so I did some research. Turns out there is absolutely NO legal precedent of a seller being sued for violation of FHA over a love letter, and the only case was a Federal judge in Or shooting down a proposed law to make them illegal. As I did more research on the subject I found what I can only assume is the source of this misinformation, which appears to be a Zillow article. So one of only thing we have in our court to compete with cash-up-front property investors, the fact that nobody wants to sell their house to a bank, is something housing investors are attacking with phony BS about how you're racist if you want to sell your house to a family instead of a bank. I wish I was making this up.
So when i sold my house i was told something similar about it being illegal or against the realtor code or some shit., BUT it was still done, i received two letters from the 48 hour showing, and to be honest, the winner was tied with the highest offer and they left a letter and they were basically in the same situation i was when i first bought the home as a first home buyer, a modest 2bed 1bath house. You couple looking to start their lives and a family and wanted a good starter home. They work from time to time, but as long as its neutral and doesnt include race, religion, etc then generally you cant be sued, and on top of that, so much stuff is hush hush, unless one realtor tells another that a lover letter was given then its hard to prove you lost out to a love letter. But small 2bd 1bath homes are soooooo rare now it seems, they dont build them, they are cheaper than renting and you get so much space, but builders dont build them because there is no money to be made according to a developer i spoke to a few years ago.
@@josephescott3263 You hit on exactly the crux of why this is all bullshit. No buyer will ever know they lost out on a bid over a love letter unless the seller's realtor breaches their professional conduct and blabs about it, or the seller outright finds this rejected buyer then tells them, "I didn't sell my house to you because you mentioned you were a black Muslim in your letter." That'll never happen and if it does there are bigger problems at hand than the letter. The whole thing is total and complete fabricated horse shite, made up by property investors to give them more advantage over real people.
We have commoditized a basic human need to the nth degree. It is like taking air, food, and water and turning them into a diamond or precious metals industry.
Belinda, I LOVE THAT TIN FOIL HAT, i screamed a laugh --
OMG, the foil hat was epic!!!
😂😂 classic 👌🏾
I live in the San Francisco area. We have a major issue with people not having homes to stay in. We also have a major issue with empty housing units... market rate units... Even the 'affordable' units that we have had to fight our government to provide... those units are middle class priced....
Thank you for bringing people's attention to this LIE....
Let's guess how many SF units are now AirBnBs and corporate bought or multi-investor owners.
Why are you lying? Vacancies in the bay area are under 5%.
Market rate housing in high tech is 'rich rate'. If you aren't tech salary range, they might as well not exist. Supply & demand don't work like it should when the owners can afford to, and would rather, leave them empty than reduce the prices.
@@curtisbme true true
@@curtisbme I just don't think this is true for any big costal city.
TLDR: It's an affordability crisis. Denialism in America runs deep. Just read the comments section. I'm sure the same people would say the same thing on the Titanic... The solution? Build more non-market housing. Period.
Why would anyone build non-market housing?
@@spacetoast7783 The government would build it because it is not in the public interest of a city to have people sleeping in the streets. Unfortunately public built homes get politicized.
@@spacetoast7783 Basic human dignity, to resolve the issues of tent-cities in urban areas, to give people a baseline to fall to if they lose their job and need to re-enter the workforce. The fact that you had to ask that question shows how the abstraction of money removes us from the physical realities it is supposed to serve as a medium to.
@@may_media Why not just get out of the way of the private market? It's cheaper that way.
@@may_media Have you seen the "Projects" that the government built? That is proof that the government has no business building mass housing.
A) who is blaming construction companies? The problem is what, where, and how much is being built. That's not up to construction companies.
B) Population growth changes are irrelevant at this time scale. Permits also aren't issued evenly in all areas - the housing crisis is localized.
C) Demand subsidies do drive up prices, but that is compatible with there ALSO being a housing shortage. It's not a reason why there isn't a housing shortage.
D) What does the work-from-home bit have to do with anything? If anything, you make the point that there aren't enough units available where people want to live...which is exactly what the housing shortage problem is?
Gotta respect Belinda Carr for going after Vox despite being featured in one of their videos recently. Love her calling people out!
Vox is a propaganda machine - nothing else.
vox is like amazon...pretend to be woke so u can distract from the real issues. amazon shuts down those unions crazy fast and the irony is that most of their workers are poc
Prioritizing careers over children sounds so harsh. Why not phrase it "it's too frickin expensive to have a kid so people are waiting longer"?
Even if house prices do crash there's nothing stopping investment firms, corporations, and rich landlords from just buying the dip and continuing to leech off of our labor.
Oh, and jacking up the interest rates will only harm those of us who can't just drop $300k or more to buy a house outright, while doing nothing to stop said corporations and investment firms.
Belinda, Your presentation is quite detailed and informative. However, it seems to lack a conclusion. Perhaps your intention was for the viewers to add their conclusions to the comments?
Thank you for taking the time to research and report the data and facts that you've found. I have been watching real estate prices escalate rapidly and am very concerned about the inflationary results on our economy, as well as the personal stress it places on families. I hear stories of people having to move "back home" with their parents, and stories of parents needing to move in with their adult children. It seems to be the case of the "rich getting richer" and everyone else feeling the squeeze. In my opinion, most of these problems stem from a government that is failing the people.
The conclusion is that we're heading towards another housing bubble due to oversupply and overvalue (not enough affordable homes). If you're asking for a solution, the first thing I'd say is regulation on speculative real estate purchases. If you're not moving into the home you're buying, then by law you should be considered only if no one makes an offer who is moving in. And there should be a grace period to give these actual homebuyers enough opportunity to participate.
@@NickCombs pretty interesting idea!
@@NickCombs hmm that’s an interesting idea but the issue is homeowners generally don’t want govt telling them what to do with buying or selling their properties. Builders are usually suppose to reserve a small percentage of their development which is for a low income family. Those get taken rather quickly. I dunno. I’ve been doing mortgage loans for 5 years and I’m just totally clueless on what to do. Any idea is usually squashed with the law. I would say the best thing is for families to move to a more affordable area. Out of state if they have to.
I think homeowners could come out ahead overall. They are usually homebuyers at the same time, remember. But also consider that more accessibility drives demand. So we could see an increase in actual homebuyers reentering the market. Right now, mostly just those who have been saving up for a long time or are forced to move are actively looking to buy because there's so little opportunity.
The opposition is mostly going to come from Blackstone and other companies who buy up residential real estate to flip.
I of course didn't define these regs exhaustively, so we could be thinking about different ideas. I'm thinking after 48 hours with no move-in offers at or above appraised value, homeowners are free to sell to who they want. Two days isn't a lot of time, but it's way better than the current auto-buy paradigm.
@@NickCombs my understanding of contract law is once a buyer puts in an offer the contract is accepted by the seller if they agree to terms. So your idea won’t work. You’re not required to disclose if it’s an investment property. Also the only entity that would know that it’s an investment would be a lender unless they pay cash. As a seller, they will always prefer cash buyers. It’s just the reality. FHA/VA are great loans for first time homebuyers. Of course it’s important to go where borrowers can afford. The help is there y’all.
Nobody is trying to fix the root problems we have in this country. Everyone is trying to make enough money so that the problems don't apply to them anymore
Thank you for illustrating the problem. It totally starts with the concentration of the media not allowing one unkind word about certain businesses in favor of others. It certainly gets worse that markets aren't responding to their pressures in ways they need to be solved. R1 Zoning and an obsession with two generation houses left us with this mess. Smacking the problem with 20 story yuppie fishtanks isn't the best solution, but it *is* a solution if that allows for single family homes to be owner occupied and not rented. Making rental units specifically to be rental units has long been neglected and needs to be a part of the conversation. Especially if America won't build rent-to-own houses.
In the US, we're very individualistic, that's probably why we're not sharing housing with 4-5 people at the same rates in other places. We consider it shameful for adult children to still live with their parents or middle-aged people to still need roommates.
Our enemy is ourselves because we can end homelessness if siblings,friends, parents, grandparents live together
@@mynameisas2248The enemy is still greedy housing developers and near non-existent taxes for corporations holding hundreds of homes. Sometimes it's just not possible to do multi-generational living, especially if you want to pursue a certain career, or if honestly your family dynamic is very toxic.
Been desperately trying to find rental housing within even an hour drive (which would add 400$+ a month to costs for gas) of a new job starting next month. Most apartments supposedly available are not actually available, and the competition for the ones that do legitimately exist is so insane that I have had no luck. Affordable housing has a 3-year waitlist in the area, and the few apartment complexes that have affordable rent (not formal affordable housing, but just rent that is less than 2K a month) have 2+ year waitlists. Everything else is "luxury" rentals for 3000-6000 a month.
That sucks, affordable housing is available in my area but investors and coastal migrants have been offering cash and scooping them up, out bidding people that really need them, the avg wage in the middle of the country where i am is not much, and now with the coastal people migrating away from there for numerous reasons have put avg people in a bad position where they cant reasonably afford a home.
If you can't find a place to live, you ought to move to another to see or state..... there are still better places to live . You can find another job easier than a house. Go somewhere else.
I find the whole palava of Housing Crisis a bit ridiculous. There's been a real housing Crysis post war and the Soviets solved it by building tons of blocks of flats, which solved the problem. I lived in one of those, and they did their job brilliantly, cheap to put up, effective, lasted for years, and are still there in my hometown with extra modern insulation nowadays, transforming it from the ugly concrete block into modern looking block of flats. Why the hell are we building so many "detached" houses and then claiming there's a housing Crysis?
It's a business problem, not a "real" problem.
I agree with you some what, but this "Crisis" is government made. Most places have rules that stop multi family buildings or height limits so you can't build large apartments and so on. Zone regulation are another side of it, a lot of land is straight zoned for single family homes. We need to push back on a lot of the red tape and out right block of much needed building to fix this.
Commy blocks are not and have never been safe or "nice" to live in. The conditions are very cramped and things like cave ins, broken pipes, and weather realated failures happen constantly making it very unsafe for the vast amount of people you can technically cram in there. Your anecdotal account doesn't override the huge amount of data there is on these types of buildings. Do some research cuz you don't seem to understand the reality of the situation and why these are not a feizable option for USA
It's because owners of single family homes show up to vote, and they vote to not have any competition. They're using the government to extract money from renters.
@@emmyturner7385 sounds like a very ignorant response from someone that had never lived in one.
We built them because, at least in America, people overwhelmingly prefer single family detached dwellings, especially when it comes to raising children. Surveys consistently show SFDD are the most desirable form of housing, with more than 85% of millenials indicating they prefer it over multifamily housing. Obviously it's unsustainable as the population keeps growing but it's really not a "mystery" why developers are building what people want.
The government, through inflation and regulation, are to blame!
Buying a house in 1920 would only take 3 years of the median US workers salary. Now, it takes around 7 in most cities. In New Zealand it takes almost 30 years of median salary in many cities.
In 1920, about 30% of US citizens worked on farms, and now it is about 1%. We are insanely more productive, and only the deflationary effect of improved technology has managed to somewhat balance out government printing more money, but not completely.
A can of Campbell's Condensed Tomato Soup was $0.10 in 1920, and now it's $2.92.
In 1920 there were nearly zero HOAs, building codes, local councils, regulators. I'm not sure the precise number of new regulations in construction, but in finance, there used to be 10 new financial regulations per day in 2004, and now there are 185 new regulations per day across 750 different regulators. 185 new regulations every single day!
Every single regulation is a cost that consumers, including homeowners, must pay.
We do need regulation reform, but there also have seen huge growth in financialization where back in the day workers could save to pay for their home, now they must get a mortgage. There are more middlemen taking a cut of that home sale. We need to relax some regs and impose other regs on profit taking activities.
In a democracy, the citizens are the government. Therefore, the citizens only have themselves to blame.
@@beedebawng2556 only this is no longer a democracy it is an oligarchy.
@@MetalRat518 Or maybe most people don't agree with you.
@@beedebawng2556 Voting is a sham lol. You vote for, how many, 600 people? Including president, senators, assembly members, state and local reps. There are 19 million public employees in US. I didn't vote for those 19 million people. I didn't get to vote to pay their $1 trillion worth of salaries. 1/6th of them earn over $100k. There are Baywatch LA lifeguards earning $400k, and public transit BART janitors earning $220k. I didn't vote for any of that, and I never would.
I am so happy I discovered your channel! You have created an outstanding, concise overview of the situation we are facing in this country.
Great video, well presented with factual data. Artificially low interest rates over the last 30 years are a big part of the problem. The prime rate should never drop below 2%.
I'll go point by point on why I think this video gets a lot of things wrong:
1. While population growth has continued to decline nationwide, housing is not a nationwide problem, it's a city wide problem. In rust belt cities, homes are cheap and plentiful, while in NIMBY-prone west coast cities, they are expensive and scarce. If a million people move from Chicago to LA, then LA will have a one million home shortage, but the national population hasn't changed at all. The plentiful housing in Chicago can't just be shipped to LA, so the solution is to build homes where they're needed.
2. Yes, there are fewer people per unit. That's part of the problem. People want smaller households, and they're willing to pay extra for the privilege. This means that, even with a declining population, overall housing demand is still increasing. Unless you want to ban people from living alone, the only solution to this is to build more housing.
3. It's highly misleading to list Blackrock as the 'second largest investor' in Comcast, because they only own about 4% of Comcast stock. Nowhere near a controlling majority. This is true of every media outlet that they "control". That is to say, they do not control them in any meaningful way.
4. The quote makes perfect sense. Investors only invest because they know that the value of homes will go up due to scarcity. If we built enough homes to meet demand, then the prices would stop rising, and investors would find somewhere else to invest. Raising interest rates would also lower the value of homes, that's true, but it will also have a severely damaging effect on the economy, so (looking at housing in isolation) building homes is a far superior option to raising interest rates.
5. The only reason that moving from LA to Denver is a problem is because there isn't enough housing. If Denver built enough homes, then prices would not rise significantly, and if LA built enough homes, then people wouldn't be moving in the first place.
My thoughts exactly. There's a lot wrong with this video, and if you follow urban planning at all, #4 should make perfect sense. I really hope a correction to this video is made, or at least I hope they take it down.
You covered all my points perfectly, thank you.
The tough reality that a lot of places in the US (and Canada) will have to reckon with is that our typical approach to development doesn't scale well economically & environmentally.
It exacerbates unsustainable land use, carbon emissions, traffic congestion, and car usage (a very expensive form of transportation, particularly considering infrastructure costs). It creates communities that inherently skew consumer habits in favor of major companies at the detriment of local businesses. And most relevant to this video, it (NIMBYism) restricts land in urban areas which drives up land value, requiring developers to resort to "luxury" pricing for high-density projects to make a good margin.
We're facing a severe shortage of medium & high-density development, and a lot of the new housing construction we're seeing (sprawl) is kicking the can down the road to perpetuate our problems into the future.
@@reiddickson You lost me with all your ""unsubstantial" mindset talk.
@@reiddickson It's going to be really hard to fix, too, because once homeowners get used to the value of their home going up year after year, they're _really_ not going to want the prices to go down, and homeowners are the exact sort of people to vote in local/citywide elections. So most local governments don't even really want housing costs to decrease, at least not significantly.
This big shuffle of the "remote worker" trend is socio-economically very painful for all - directly or indirectly. The Mismatch portion of this video is probably the most important. Ultimately, either people need enough money to buy or rent in their current/preferred area where they have a support network *or* a big, damn, compelling reason to go elsewhere (and probably money to move).
I have had real estate agents cold call me over the past 10 months or so practically begging me to have some houses ready to go for them. My area in SE Missouri is still very limited on available houses.
*I totally acknowledge this is anecdotal.
This is the exact problem in Canada, and particularly Vancouver. The tidal wave of offshore money has locked up huge swaths of real estate from being used as actual dwellings. So the problem is that municipalities have a functional shortage and have to continue to build. In Vancouver particularly, new units tend to be in dense "minicities" while giant chunks of the city are still zoned as single detached, because that's the most valuable to the "investors."
I agree it definitely needs to be easier to build housing types other than single detached homes, but as to your first point, I believe Vancouver has a pretty low vacancy rate.
This is a myth. Vancouver lacks housing, because there is not enough housing. It's that simple.
@@TheSharkasmCrew If I'm honest, City of Vancouver is also notoriously bad for NIMBYism and glacially slow approvals. Some of its surrounding sububrbs are ahead of the game in terms of development and urban planning, but the problem in general for Vancouver is that as more housing gets built, more of it gets locked up as investment properties. There are some things that are done to try to alleviate that, like vacancy taxes, but Vancouver is also notorious for being grossly out of whack for affordability, where the average rent/housing cost is way out of line with what people actually earn here.
in 2016 Vancouver introduced a 15% tax on foreign buyers who don't use the home as their primary residence. This has had effect on housing prices but it's calculated in the 2-4 percent rage.
My city is full of new luxury apartments that are at 60-70% vacancy judging by their websites. No one with an average income can afford to life there and the 3 story 1920s walkup I live in is illegal to build with current zoning laws. But cost less to maintain per unit than a skyscraper and blends in well next to single family houses.
And the worst part is the old affordable apartments aren't accessible no ramps, no elevators. If you have a mobility disability then you're screwed if you're not making 6 figures.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
One strategy for protecting against a recession is to buy equities. Investors, especially during a recession, need to know where and how to put money in order to make money while avoiding inflation.
It has never been easier to understand how to build your money than it is right now, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investtments, in my opinion, are complex.
Working with a Financial Advisor to help guide you on your wealth-building journey if you're just starting out is a wonderful way to get started and thats how i was able to accrued good gains . They helps to manage investment overall risk profile , prevent permanent loss of capital consider maintaining a broad diversification of your investments that reflects your personal risk tolerance, time horizon, and the nature of your financial goal
@@bob.weaver72 please who is the consultant that assist you with your investment and if you don't mind, how do I get in touch with them?
@@kenanporubsky2122 My advisor is ‘’Catherine Morrison Evans’’ she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
Finally! Thank you for your uncommon sense on this matter. I read a brief article explaining the culpability of gentrification and NIMBY restrictions towards affordable housing in the current crisis. Your video fills in the missing pieces. I'm headed to your Patreon link right now.
The "supply" is being hoarded by one investor that has like 5 properties. More than one property in the hands of one person adds up quick! Keep apartments in complexes where they belong and get rent out of single family homes!
It's not just purchase, but also rental rates that people cannot afford. You are only thinking of one aspect,
It's not the lack of homes, it's the affordability of the homes available.
Thank you for talking about this. I certainly wish the comfortable and privileged cared, because it isn't just corporate greed that is a problem. It is disgusting.
One of the most informative videos i've ever seen.
5-8 roommates in a single family home is an unacceptable decline in the standards of living for Americans, and is also the reality for many people in the Bay Area and New York.
“It’s not a real housing crisis until cohabitation is at the same levels of the developing world” is insane
In all areas now... I live with 4 soon to be 5 in our house small east coast ocean tourist city allegedly "affordable".
Guess it depends on your definition of a crisis.
Pointing to a lack of roommates isn't a smoking gun. A lot of the people who are unable to find housing right now are full grown adults, couples, and families who can't or don't feel comfortable taking roommates. More and more we're seeing people unable to buy homes and being stuck in rentals longer, when they would normally have been in a home. It's not young renters, it's full grown adults who are middle aged or approaching middle age, have kids, live in a tiny apartment, are married, etc. Those are not the kind of situations where roommates really makes much sense or is even viable.
Also, you don't seem to address the issue that construction isn't addressing AFFORDABLE housing. People build luxury housing to make money, but the 'market' for apartments, condos and homes that are affordable to the average person is basically ignored. In that sense we DO need more construction, but in the right areas to address the housing issues for everyday Americans and the lower class/poor.
Basically houses are just holders of value like a physical NFTs. They aren't useful for their actual purpose anymore because investors are just using them to hold and build value.
I disagree. A house owned by an investor generates revenue as it is rented out.
@@CrazyArcher2160 For some reason people think that investors by homes and then let them sit empty. Why? That is literally throwing away free money.
Instead of building new homes why aren't people or companies fixing existing homes?
You can drive past a huge area of homes that are falling apart and dilapidated and yet another home gets built...
This was an interesting video to think about and I appreciated the evidence presented to support the conclusion of the video. I think this video is both correct and incorrect in it's analysis. I agree that it's not the case that the US as a whole has housing shortages if you look at the total amount of houses built. The issue is the migration patterns in the US. People want to live in Cities and a lot of our Cities don't have the housing capacity to handle the increased demand.
This is presented in two different ways. The soaring prices in cities (like San Francisco in this video) that people want to live in and the plummeting occupation rate in small towns in the US.
As two examples Seattle has had an occupation rate between 2% and 1% for almost 10 years now. You generally need 5% of homes to be unoccupied for prices to stabilize in a market. Whereas the small town in Washington State like Aberdeen have seen very little rise in their housing costs because they have basically no out of state migration and an occupancy rate that ranges from 4-10 percent in the last 10 years.
I haven't done a city by city analysis of the united states so I can't say this definitively. But I would bet that if you did an analysis of the occupancy rates of all towns less than 80,000 people (limit picked randomly) you'd find an average occupancy rate that's quite large (5-15 percent) and the average city will be under 5%.
I agree. Much of Belinda's analysis in her videos is spot-on, but this one felt off the mark.
Given the surge in single-person households among younger generations, and the decline in the number of children per household, permit-to-population and people per unit ratios are no longer at historical norms, and as such these historical numbers are no longer relevant.
'No money down' and 'easy qualification' mortgages haven't been available since the 2008 recession.
It's a secondary issue, but her comment about companies 'realizing they can pay less' for remote workers doesn't fly at all. Labor is a market just like any other, and companies compete for talent. Unless all large companies work together as an oligarcy, they cannot simply index salary to local cost of living. Demand for information works is simply too high. The WFH movement has begun to and will continue to completely and permanently shake-up the labor market for high-skill information workers. Companies who want to offer them less will do without.
y'all seem to have left out the part where Blackrock has bought everything.
And that 5% unoccupied it thing is just grotesque. The should not even be a thing as a 'Housing Market' because for there to be a market there must by definition be those that go without.
What I'm saying it that if you like there to exist a housing market you by definition support homelessness.
@@blazor907 your claim that for there to be a market for something there must be people going without is hyperbolic, isn't it? You're essentially implying that any good that supports a human need should exist outside of a marketplace and associated economic forces, which suggests you're ultimately against property ownership, and in favour of ...what?
I've also noticed a huge trend in folks moving from small town USA to the Big Cities. Some of this is out of preference and yet some of it is out of need. There is declining opportunity in small-town USA. The kind of jobs that pay you enough money to actually be able to buy a house/start a family/live the American dream are moving out of towns and into Big Cities. You are almost forced to move out of smaller towns if you want to find a good job. Businesses are leaving, jobs are leaving, tax money is leaving. That leaves you in a city where the education system becomes increasingly poor while crime, poverty, drug use, homelessness and more are all issues that are growing. Then those folks who can leave, do.
Sure there is remote work now, but remote work is more available for white collar jobs. What about the blue collar workers? They can't telecommute to work. Blue collar jobs that pay a living wage are disappearing. Even if you have the privilege of a remote job, maybe there isn't great WIFI connection in many small towns to give you the option to live and work there with a decent paying job. I would prefer to live in a more rural place than a Big City but I have migrated from Topeka, KS to the KC Metro.
My company (one of the best paying companies in Topeka) had an M&A and a lot of the good jobs went to KC. The workforce and the company itself was a huge contributor to economic stability in the city. The M&A had a huge trickle-down effect contributing other businesses in the area (downtown) closing and thus more job loss. Also, the culture and operations of my company (from an employee perspective) really went down hill after the M&A. So I almost needed to come to KC where the other good jobs are in order to have quality of life. So sure, the houses in the rural places are more available and more affordable compared to big cities but not for the people who live in the area. Masses of people aren't just all of a sudden deciding to live in the city because it tickles their fancy. The true story of all (voluntary) people migration is that people follow opportunity and the chance to live the best possible quality of life that they can.
Seattle? Antifa land? No wonder they are moving out.
This video is kind of bizarre. It's extremely focused on personal home ownership when the majority of the housing crisis (though certainly not all of it) is in dense urban centers where the majority of units (and desired units) are apartment rentals. Not to mention, investors buy houses because they can rent them out for high prices, and they can rent them out for high prices because there aren't enough houses in the places where people want to live. If there wasn't a housing crisis, investors couldn't charge high rent, and investors wouldn't pay high prices for buildings, and in turn people could afford to buy homes to live in. Investor owned houses don't disappear from the housing supply.
Just because there's too much development in (relatively) low demand places (arterial exurbs) doesn't mean that we shouldn't be developing in places with high demand (dense urban centers, walkable communities along public transit, etc).
Thanks for enlightenment! Would add many boomer friends, acquaintances own 2 3 4 5 and in one case 6 homes. Homes sit empty much of the time. We live in Ohio. State policies subsidizes hundreds of thousands of out of state homes. Stay in your Florida home for five months and one day pay $0 Ohio income tax. In addition during the time in Florida Ohio loses many millions in sales tax, gas tax. Another phenomenon with this group is they have construction projects going on at multiple homes tying up needed labor. They also overbuild as they keep up with the Joneses which exacerbates material shortage and cost. Finally millions of condos sit empty 50 weeks out of year. Irrational irresponsible
Breaking down the facts, debunking the myths, and getting to the truth. Thank you for bringing some clarity to this discussion!
The housing crisis is the result of market manipulation by immoral speculators. it is disgraceful.
This video felt like a knee jerk defense of the construction industry, and given the amount of reporters and experts claiming a shortage this topic really deserved a more in depth review. We may have enough houses in sheer numbers but the US does not have the right kind of housing in the places people need it. People shouldnt have to move across the country to afford rent. A house is a maintenance money pit, the only reason its currently profitable for Blackrock is that the supply shortage is increasing rents. While private equity isnt helping buyers, this isnt going to be solved until we relax local regulations to allow for more dense or mid-sized buildings.
I enjoy your videos even when I am not 100% in agreement with your analysis. I agree that there is not a shortage and that there is a surplus of investors for profits and Airbnb's. This has led to the emptying of the inhabitants of cities that had vibrant communities such as London and Vancouver and starting to happen in Montreal. I moved to a small town because I could no longer afford either the rents or the houses in the big city. I am very curious for you to talk about the fraudulent "companies that claim to be the solution to homelessness and lack of affordable housing". Please tell us more. Who are they and how are they fraudulent. Thank you!
I cannot find the name of the builder, but they charged LA $1M per homeless person. A homeless person could live a pretty nice live style on $1M. The city should have just given them the money.
Or, there’s a complete lack of paying people a sufficient wage to live on, not just barely survive by… and, I agree that there is over production of homes.
Great video, no one seems to be talking about birth rates. The other thing I would love for you to discuss are regulatory barriers (costs) to affordable housing. We left an area (WA) where a building permit could cost 20-80k, hook up and other fees pushed costs well over 100k for any type of house. Our fees here in AR for everything were less than 3k.
I have been looking at land there, what part of AR is that? My ex-wife is forcing me to sell our almost paid-off house, I can't afford to buy her out due to investors from CA offering well over the asking price for our home here in Dallas plus I can't afford to start all over again with a 30-year mortgage at my age, really sad I had hoped to grow old with her and pass on our home to our kids to either live in or sell to help them in the future to buy their own home since the middle class are being squeezed out
That's the government sucking the people dry. We need to do away with all property tax. Fees and such are just hidden taxation.
Exactly, I am moving away from that same county in WA state for exactly that reason!! Completely unaffordable to build a new home there. (And I tried for over 5 years!)
Thats obviously the government robbing the people ..... but the people are letting them do it.
Lots of poor reasoning here, unfortunately: birth rates lead to demand in the future, but don't impact household formation until 20-ish years later. Covid has made huge, obvious impacts on how many different families people are willing to live with, and how many rooms in a house are being used as office space. Rental vacancy is at extreme lows, even as more housing is being converted to rentals, so while the prices are going up because more money is going into that space, there's still a fundamental shortage. BlackRock specifically targets housing in areas with lots of zoning restrictions, because it knows there's a shortage in those areas and zoning protects that local shortage, so values will keep skyrocketing there. Low interest rates make it cheaper to buy housing, affecting the price, but doesn't actually impact the overall availability, which is super low most places.
Good video, this definitely reflects where I am living, Bentonville, AR, a booming area where people from all over the country a moving to. If you want to buy a house here, you’ll need to pay cash over the listing price with virtually no contingencies. So many houses are being bought up by investors/renters, even new construction homes. There are so many new apartment units but they’re all for sky-high prices.
Belinda, after your cut away and return at about 7:15ish in the video... when I saw the "tin-foil hat" you officially earned the title of "Legend" in my book. P.S. you do such a great job of producing your videos. They are very thorough, informative, and even fun. You seem very humble and sincere. Keep up the good work. Greeting from Florida
I agree 100% with this video! We've got to come up with a solution to reduce the percentage of homes being purchased by big investment firms.
Where I live Air BNB are about 20 percent of the houses in my neighborhood. Meanwhile, the hotels parking lots are empty.
My college town in Arizona I live in has a 2% vacancy rate, rent has gone up like 40-60% in the last few years
So clearly there aren't enough homes. 2% vacancy rate is crazy low. That means the average landlord has 1 month of vacancy every 4 years!
You seem to argue by making irrelevant points. Of course there's a varying "mismatch" of supply/demand. It's always the case that there's a bunch of underused space while other have a shortage. The fact that there's cheap land in the artic tundra (or wherever) doesn't mean a shortage in certain big cities is less important. People can't just move to low cost places, as they have to live where there are jobs, services, and infrastructure suitable to them. Also, we can't solve the problem by just focusing on lower cost housing for the poor, as there's actually a shortage for people who have a average income in many markets. When the *average* person can't afford a house, that's means we have to produce much more housing, at lower per unit cost. Zoning and other restrictions on building have to be radically reformed, to allow for new construction. NIMBY's who are blocking new developments in places like San Francisco Bay area will love your video, as they can claim there isn't a shortage, when there's actually a desperate and extreme shortage.
This, in my opinion, is one of the most urgent issues we need to address as a nation right now, so it's wonderful to see you cover it! We don't lack houses-we lack the ability to afford them. And until we see the de-commoditization of housing (or some other factor to help address increasing wealth inequality), the problem is only ever going to get worse.
In my area the high cost to build generally guarantees that upon completion, most new builds will be underwater in terms of resale value so there is little incentive to even consider new home construction. Resale inventory here is extremely low, of generally poor quality and highly overpriced.
I am so so SOOOO happy to have found your channel! I have been digging through stats, looking at birth rates, etc… to try to understand whether we’re being fed a bunch of non since about a “housing shortage” & the information you provided in your video was so helpful! I really appreciate your work! I will be adding you to the list of those on patreon I support! And again, I simply cannot express just how helpful your video was! You’re amazing!!!!❤️❤️❤️
Thank you, Jennifer!
Excellent video as always Belinda! At this point this is my fav youtube channel
thank you for this wonderful video! this confirms some issues I've been having when searching for my first house the past year: it is an affordable housing issue. the grand majority of the houses are heavily overpriced, and those that could be affordable are also heavily overpriced. there is no way a 20 year old house has tripled in value over a 2 year lifespan, that doesn't make any sense. but thats what a lot of sellers are offering, and sadly people are buying them up on it.
Interest rate targets the middle class.most investors buy houses from the go meaning they don’t pay interest rates at all.They own the housing
Turning home rentals into vacation rentals has taken a lot of housing off the market. And management policies of raising the rent on apartments every time they reach full occupancy "to get a better class of client" is a huge problem.
I agree, Dolores
Problem is many states have eviction law that favor the tenants. I have a couple of investment properties. I’ve always worked with my tenants and have never ever charged fees when they pay late. When Covid hit there’s a tenant who lost his job. I let him stay for 2 month free while looking for a job. Eventually he moved in to his girlfriend’s. Out of blue a few weeks after he moved out he contacted me to give that 2 month rent that I have told him not to worry about. I got spoiled and lost reality because of that tenant thinking all tenants are as nice and responsible as him. Then last year to this year, I got two tenants who just flat out refuse to pay. They were disqualified for Covid assistance because they always have income. I don’t have a company or PPP loan. I just been paying mortgage with my own income while they lived in my fucking houses for free for over a year. Two months ago I had enough and turned my properties to management and finally evicted them. Apparently since I’ve never increase rent, the rents are under market value. So they jacked the rent up. Got much higher income tenants. I don’t really care about that 5% rent increase every year. But Is it my fault to want a “better class of client”? No. I worked my ass off last 20 years to be able to buy some investments. I provide my products and services. I expect monetary return. I don’t need squatters playing the system. If I were able to buy another investment property and manage myself, I’d Airbnb out in a heart beat. I don’t care if there’s more work. I don’t want to deal with long term tenants ever again.
Note that I’m not saying all tenants are bad. But one bad apple really sour the whole bag. And I’ll do anything to avoid that one bad apple.
@@howo357 You have my sympathy. I have had similar problems. My grandmother had kindly let a disturbed woman stay with her for free, then got a restraining order against her, then let her stay again. When Grandma died (unrelated to this) the woman insisted that she was a tenant, on the grounds that she received mail there. It took half a year to get her out, while she turned my late grandmother's home into a drug den. The woman's "friends" stole everything in the house, up to and including the toilet.
But having more money does not make tenants better people. Raising rents by $100 every season was, as happened when I lived in Portland, was not just.
Those weren't "luxury apartments" as the manager started to call them. The cutting-board was unfit for cutting, as it turned out to have a toxic particleboard core. Everything in there was cheap and some things didn't work. It was suitable for middle-lower income folks like my husband and I, an elderly couple working remotely, but the management based the high rents solely on Portland becoming popular, which management had nothing to do with and in fact was shortsightedly helping to sabotage.
I have seen this all over the country. Creative types who've spent their lives perfecting their arts rather than making money move into a relatively cheap area and soon synergy's going between them. Then their presence makes the place fashionable. Then the Money people, who've spent their lives making money rather than developing their talents, want to move in and enjoy the ambiance that they can't make for themselves. Then the landlords jack up the prices to cater to this "better class of client". This forces the artistic types out. Then the place loses its panache. The Money People look for the next fashionable place to move, while the landlords are left having bought too much property with too high a price-tag and their mortgages go under water, and a once vibrant community becomes wrecked, with vacant buildings attracting criminals and rats.
I and creatives like me have been chased all over the country by this dynamic and frankly we're sick of it. Many of us want somewhere that would allow us to pool our resources to form our own communities, but many places are zoned to not allow unrelated people to share a single big house, while banks are hostile to us building shared housing. Some people do succeed in these things, but it's an uphill battle the whole way.
@@howo357 I sympathize, actually. My grandmother had, out of kindness, allowed a woman to use her home as a mail-drop. (She later got a restraining order against her, and then changed her mind and rescinded it.) When Grandma died it took us 6 months to evict this woman, who claimed the rights of a tenant and used letters addressed to her there as proof of tenancy. In the meantime she turned Grandma's old home into a drug den. Her "friends" stole everything in the house, up to and including the toilet. Needless to say, we could only sell the house as a shell, greatly reducing its value.
Yet I've lived the other side of it, too. When I lived in Portland, the manager--who had many apartment complexes all following the same policy--raised our rent by $100 dollars every season, until we couldn't keep up anymore. We were decent, quiet people who paid reliably and left the place in good shape; we and many others like us didn't deserve to be priced out of our home.
Towards the end it was being billed as a "luxury townhouse". I don't know what was so luxurious about it. The cutting-board turned out to be fake, made of toxic particle-board thinly veneered over; it couldn't stand up to actual use. All the detailing was fake plastic. There were tubes dangling around the door of every apartment from old watering devices that didn't work. It wasn't worth the rent; we had to leave.
I've seen this pattern everywhere: Creative people, who spend more time honing their skills than making money, find a relatively cheap area to live, which attracts other creatives, which creates a vibrant, synergistic neighborhood. Then it becomes fashionable, and the Money people--those who neglected their creative side to make money and now miss it--move in, as if years of hard work to develop artistic skills could just rub off on them by proximity. The landlords then jack up the price of rent to woo this "better clientele". They crowd the Creatives out of town. The neighborhood loses its sparkle as a result. The Money People notice that something is missing, and so they scan for the next place to ruin, moving out and leaving behind a gutted town full of underwater mortgages, homelessness, and empty buildings going to seed.
I've spent too much of my life chased around the country by the Money People, and frankly I'm sick of it! I contribute my share. My husband and I worked honest day jobs to subsidize our arts and didn't ask for handouts. We always paid our rent on time and cleaned up after ourselves. We earned better than what we got.
Yes, there are slimeball landlords. There also slimeball tenants. Don't blame all landlords for wishing to try and keep shady people from occupying their property. I wouldn't want nice neighborhoods turning into ghettos. I grew up in a ghetto. I've seen the mentality of most who live there. Very few actually attempt to better themselves, get a career, and move out.
investors also buy homes and then just... do nothing with them. Properties in areas that are perceived as "up and coming" can turn a profit just due to the increase in home prices over time - there's not even a need to rent the property for profit.
I always appreciate your down to earth videos. I think the problem in construction industry isn’t that young people don’t want to do manual labor but more of a cultural problem. Our society no longer values and respects the work that skilled trades do. As someone that is a licensed master electrician, from my own experience skilled trades people are treated by society as though they are lesser than a “professional.” All the while, trades people are pushed more and more to produce quantity over quality. There are nuances, there are obviously people that respect the work that construction workers do and there are companies and customers that value quality work but that’s not the overall trend from my perspective.
There has been a cultural de-value of the trades particularly at the start of the millennial generation. Parents to children born in the 80s and 90s looked at that child as having to “get out” from the situation of labor and go to college and to rise the ranks of class.
Class is not simply how much money in your bank account but also culture and job type. A tradesperson can definitely make more than a PMC but the PMC is still in a different “class”
I do think that now with how the millennial gen and GEN Y have become aware of the lie that in order to do anything valuable in your life is to go to a 4 year liberal arts college is going out the window and I do think we will start seeing a re-investment and thus re-value in the trades.
If you want lower prices for housing, especially in places like California, you need more housing. Period. It’s basic economics. All the charts in the world about population growth are not relevant to that basic fact.
Love this
I’ve always suspected like back in the early 2000 that there is no such thing as “housing shortage” and this time around the result of the crash will be worst as you have way more institutional investors building neighborhood developments and all that did not exist to this extent back then.
Another *excellent*, well-researched piece, Belinda, Thanks!
(Good to see you with a sponsor, too! You might want to out a link to the sponsor at the top of the video’s description; I wanted to visit their site, but it’s a hassle to scrub through the video to find where their URL was displayed, and then type it into a browser manually :-/)
Hi Belinda: Wow! That is quite an eye opener that it's not a lack of housing, it's oversupply of housing that are heavily invested while there's no affordable housing. Although our population has decreased substantially in the last decade, there still are a lot of homelessness because they cannot afford to pay rent or buy homes anymore. Thanks for your enlightening blog. Jenny
One reason I see for the lack of affordable housing is the opportunity cost. I live in Santa Rosa California, the heart of Wine Country. Here, the minimum price for a house is $400k for a run-down house in the bad part of town. We do have a bunch of new construction, but all of it is exclusively gigantic 4-5 bedroom, two story houses starting at $900k. No one is interested in building "starter homes" anymore because the difference in cost to build is $100k, but the difference in selling price is $300k. Why would anyone make significantly less money on the same amount of land?
It's hard to sell a house for $300k when the land costs $350k.
@@spacetoast7783 Yup, this is also the case. There are some plots that are under 200k, but those aren't exactly construction ready. I'd still love it if someone was building 2 bedroom houses even for 500k, but the math just doesn't work out for a developer.
@@TheDaniel9 That's why it needs to be legal to sell more than one home on a plot.
@@TheDaniel9 It would be better if we changed zoning laws to allow for 5 over 1s.
I enjoyed the vid, I feel like I learned a bit about what's going on from a different perspective. Very cool
As I see it, the housing shortage has at least three parts to it. First, there is a lack of housing in big cities due to increasing preference of gen z to live in walkable cities with good transportation that allows for car-free lifestyle. Second, there is a shortage of housing in the sun belt states and cities due to the in-migration of WFH workers from northern states or West coast with stratospheric cost of housing. Both of these issues are exacerbated by restrictive zoning codes that make housing projects (where people actually need them) so much more expensive. This prevents construction of affordable housing and, specifically, starter homes that are in very short supply currently.
That was Millennials who wanted to live in Walkable cities. Also, that preference is literally just the 1920s. Also, I agree plus one other thing there is a lack of multi-family homes that could alleviate the burden of home ownership by having couples move into together without actually sharing any space except the backyard.
The existence of shitty homes in devastated areas that aren't near work or are in high crime areas is not a proof that there is no problem. Still, I welcome the discussion.
Yeah this video misses the mark. I live in Texas in an area with tons of "available housing" but with only 2 large businesses in town there's no incentive to move here. I mean what are you supposed to do buy a house then lose it because you can't find a job to pay for it?
@@strayiggytv Agree, only a small subset of people can work remotely.
@@MrBl3ki also working remotely is only an option in places that have good internet available. Out in the hill country we don't even have reliable internet lol
if there was a shortage, one sign would be the free market would incentivize fixing up these areas for profit. which is happening
The problem is many places can increase density due to zoning laws.
This was a great video, thank you
I would love to invest in the real estate market currently and move on to stocks shortly after, I have set asides $180k for stocks and my goal is to make over $930k in one year to invest in real estate and I would really appreciate quality tips and guidelines on how to reach my goal quicker.
First step: get the idea of “quick” out your head be patient move smart and slowly you are only in competition with yourself. This is advice from 6 year realtor I’ve seen it all. I’ve worked new investors and old investors who chased the idea of “quickly” and taking huge losses in their portfolios having to negotiate with the banks they owe to walk away from property they are under water with.
If I understand correctly, you just want to become part of the described problem... And if you look at the amount of likes - many people want the same... Huh
As a homeowner I completely agree with you, there is a manipulation of the market at work here. I can't count the number of times my wife and I lost out to investors and all cash offers, as homebuyers in 2015. I also believe that are own home is now greatly overvalued, as much as it benefits us.
This all basically goes back to the house flipping craze from years ago, they've gamified the whole system and made it attractive to the super rich private equity firms who can buy vast quantities on mere speculation. A crash IS WHAT WE NEED so they lose. Following that we'll need actual government legislation to put a stop to all the investor buyups, especially foreign investors.
I feel bad for anyone who buys a home this year. Its like investing in stocks at record highs. The value can only go one way from here.
@@mynotificationsareoff.400 I mean if we don't fix the problem we'll keep going in 10 year cycles, this whole thing came out of the brilliant idea to build single-family homes in the suburbs for all the GIs and factory workers following WWII. We haven't really broken out of the mindset where everything work near perfectly for the initial 20 years.
It's doubtful anything will happen because if there is a crash and things stabilize the people that find affordable housing will become complacent and not put any further thought into it while private equity will cool off only to prepare for another surge 5-10 years later. We've seemingly accepted that boom and bust cycles are a part of life.
@@philipatha I really hope this mindset of Millennials and Gen Z pushing for “walkability” and “mixed-use” become the norm peer for people’s sanity. Either that or politics will continue to radicalize until there’s another Civil War following someone seceding from the union because of “woke” politics.
A crash only hurts want to be millionaires while the billionaires sweep up more market control after.
I live in a small rural town. Starting a bit before COVID, housing prices have gone through the roof with out-of-towners leaving the big cities to telecommute and buying up housing stock which to them is dirt cheap. And, many others are buying houses for air B&B. For the average worker in this area of low wage jobs, finding housing is becoming next to impossible as the only new, entry level houses being built are 2500+ sqft homes in excess of $500k, far beyond the reach of someone making less than $50K/yr (this income is well above the average earnings here.)
Yeah I agree investors/landlords are bad majority of the time. But your last point contradicts most of your previous points. Yes we do have an oversupply of housing but most of it is built in locations where people don't want to live. We say that there's a housing shortage because of the places like San Francisco and Miami that refuse to build more housing in locations that people want to live. Because of zoning codes, nimbys and general political gridlock building housing in some of these places is hard to near impossible. Yeah of course looking at a macro scale of things the US has enough housing, but looking at it from neighborhood to neighborhood basis shows stark contrasts.
Simply put, we have terrible urban planning in the US and that's coming back to bite us because people are now finally looking to live in places that are a nice city with good jobs and not a shitty suburb with balloon frame homes in the middle of nowhere.
have my babies
You don't seem to see the problem - the 'nice city' is that way because it is not full of shitty buildings housing people who can't afford the houses which make the city 'nice'. Working remotely means good jobs can be found no matter where you live. Why should San Francisco be turned into a high rise ghetto to accommodate everyone that may want to live there?. That is why we have planning laws in the first place otherwise our cities would turn into shambolic messes. Can't afford to live somewhere - move to a place you can afford.
@@zeldaharris6876 What you're talking about is de facto kicking poor people out of the city because you're sick of looking at them. Maybe if you want poor people to stop living in shitty apartment buildings, you should, y'know, address the actual poverty or something. Some aesthetic rules may be sensible, but simply mandating single family housing in most of a city's land area like American cities do is inefficient, barbaric, and god awful for the environment.
If you don't want to live near high-rises, just live farther out. It's that simple.
In some parts of the Uk there are streets and streets of empty houses so to say there are no houses is rubbish and yet there are building sites throwing up small useless houses at exorbitant prices for so called first time buyers who can't afford them. Seems to me that the Government are artificially keeping the building industry alive.
I love how many people are saying "I know this sounds conspiratorial, but..." Yeah, I think those conspiracies had more truth than many would like to admit. Great info!
I love the way you present content and can see that the information has been well thought out. Don't stop..... all the best
Great video, Belinda. You hit the nail right on the head.
Population growth rate is regularly brought up in this discussion but what gets missed all the time is the fact that the millennial generation, the largest generation in many western countries, are now in their house buying years. Population growth is not the be all and end all of housing needs because someone who is a millennial was factored into the population total 30 years ago. But they clearly have different housing needs now than they did when they were a kid. So its not a good argument for saying there is no housing shortage.
For decades we haven't been seeing family sized-units getting built and instead we've seen a lot of 1 bedroom and bachelor housing for individuals (often investor led). While at the same time local governments have made it incredibly difficult to get even modest (triplex and fourplex) housing built in established residential neighbourhoods that have the things young families are looking for (schools, playgrounds, safe streets, etc). Because we haven't been building in many of our neighbourhoods we've also seen these residential areas get older and older and many schools closing down because of declining enrollment.
Where we have been building family housing is further and further from population cores.
Finally, while people criticize the supply side of this discussion, its only been in the last 7 or so years that policy makers have even begun to acknowledge that how much housing we are building matters. For decades and decades this was viewed as a demand problem and politicians would propose stuff like banning foreign buyers even when the vast majority of properties bought by investors are bought by American businesses and locals buying these properties for investments (not foreigners). In fact, in the US/Canada many of our politicians are also landlords themselves (not just homeowners but people who own and rent out properties).
Yeah, I’m one of those people low key hoping for another housing crash so the prices will come back down into a range I can afford. There are a lot of people in my boat, I think.