215
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 27 Sep 2023
215 points (98.2% liked)
News
21746 readers
1694 users here now
Welcome to the News community!
Rules:
1. Be civil
Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. Trolling is uncivil and is grounds for removal and/or a community ban.
2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.
Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.
3. No bots, spam or self-promotion.
Only approved bots, which follow the guidelines for bots set by the instance, are allowed.
4. Post titles should be the same as the article used as source.
Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.
5. Only recent news is allowed.
Posts must be news from the most recent 30 days.
6. All posts must be news articles.
No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.
7. No duplicate posts.
If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.
8. Misinformation is prohibited.
Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.
9. No link shorteners.
The auto mod will contact you if a link shortener is detected, please delete your post if they are right.
10. Don't copy entire article in your post body
For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.
founded 1 year ago
MODERATORS
"Record low affordability" is a really weird way of saying price gouging.
Part of the problem is that housing in the US is treated as a commodity and used for investment. Purchasing a house isn't just so you have someplace to live, but rather it's treated as an investment that must appreciate in value over its lifetime. This is in stark contrast to every other major living expense. You don't purchase a car and expect to be able to sell it for more than you paid for it a decade later, but somehow that's the expectation with housing.
In a traditional market prices would rise and fall to match supply and demand, but because housing is treated as an investment, there's a strong pressure to never let the prices fall. If someone can't make a profit selling their house they'll rent it out instead or even let it sit empty until such a time as they think they can make a profit selling it, which means the only way to reliably bring the prices of housing down in the US is to build new housing, and even then the effects of that are limited and highly localized. Outside of that the only time houses come down is in catastrophic events like the sub-prime mortgage fiasco.
Is just building more houses enough? I live in a brand new house in a brand new neighborhood. I bought right before COVID and since then my house has gone up 60k in value. I'm watching the builder raise their prices for the same floor plan by 60k to match.
I guess if you overbuild then maybe there's pressure for it to go down? But right now I'm seeing new build prices match inflation of the housing market even though building cost inflation aren't matching home valuation inflation.
It's a complicated problem. The builder wants to make as much profit as possible, so they're going to build what they think they can sell at the current market rate. If high end housing isn't selling and a bunch of mansions are all for sale with nobody buying they're not going to build more mansions, instead they'll shoot for lower cost housing that there's demand for. However that's still going to leave a bunch of people unable to afford a house if there are still other people in the market able to afford more expensive houses. This then gets even more complicated by people who don't actually need a house, but are instead purchasing houses as investments who then end up buying many of those new houses and artificially inflating the demand and therefore the prices.
At some point though, demand will be entirely met, at the high end and builders will be forced to move down market to keep selling property. Municipalities can help address some of this by zoning and requiring a decent mix of low, mid, and high income housing to be built, but once again "investors" and even worse investment companies can screw this up by snapping up the low income housing and converting it into rentals, or simply sitting on it for some period of time.
As with most problems that haven't been solved yet, there's no easy solution (because if it was easy to solve, it would be already).
In my market, we currently have an unmet ten-year demand. It's going to take a long time to even out supply and demand.