America’s Housing Market Is A Sad Punchline
New homes. They're expensive, chintzy, hastily-built and typically arranged in dystopian, crowded rows, such that yours is both indistinguishable from your neighbor's and close enough that you can hear him scream at his wife for going over budget at the grocery store.
The American dream is truly alive and well. Now who wants a new home?!
693,000 people in 2024, as it turns out. That's the answer. 693,000 people will buy an overpriced, poorly-made, cookie cutter box in America this year, if Mar
Politicians who channel this resentment are gaining ground. In the USA, it’s through blaming immigrants, the Chinese and woke ESG rules.
Personally, I think the problem is the Boomers.
There are about 75M Boomers in the US, between the ages of 60-78, who aren’t selling their homes and downsizing – compared to the historical trend for the past 20-30 years, due to their low (sub3%), 30 year mortgages.
Boomers collectively own about 55% of the 128M privately owned homes in the USA (see statista). Therefore, 70M homes are being “turned over” to younger generations at a much slower rate, compared to the historical rate from the past 20-30 years.
Deaths rates for people in the US in the 60-78 age range are between 4%- 12% per year. Assuming an average of 6%, then maybe 4% of the houses owned by Boomers (only 2.8M) become available for sale every year, due to the passing of the homeowners.
The home ownership rate for people in the USA under the age of 35 is only 12% and for people in the 35-54 age range, it is only 34%.
This could take awhile for homeownership rates to go up for younger generations.
Maybe the fix is to ban healthcare for anyone over 65. Oh wait, that includes me.
I’d say mental health and addiction are more likely symptoms than causes of homelessness. Not having shelter is just right above not being able to find food on the list of human needs. You can go days without eating but everyone needs to sleep every day.
Ah yes. But you do not need a home to sleep. Sleeping in houses, fixed in a place, is a relatively new phenonemon for humans. Most of our existence we were nomads.
Eating on the other hand, 99% of us, couldn’t figure out our own food if we did not have grocery stores to buy from.
I have left my house (renting it out) and live in an RV, sleeping freely on public lands. We’ll see how long it lasts until city people decide that occupying space is not free anymore.
Higher median prices insure that normal to below normal earners have low access to shelter. Its not just the prices per se, but the mix of available units. No developer wants to create new low cost housing. They can’t make any money on it. (Same with cars). RE theory continues to support the “trickle down” process. Income goes up with GDP growth, new houses get built, higher earners buy them and leave their existing housing, not worth as much, to trickle down to those making lower incomes. The trouble is in most places, this just doesn’t happen any longer. Older homes today just end up dilapidated and abandoned and there is little shelter for the homeless not available at REI or Dick’s. We offer subsidies and tax abatements for developers building high class commercial real estate and huge mixed multi-use projects. Apartments used to be a solution, but no one wants to build them (or own them). Want to house the homeless, take a hike. These days not only are prices high, but the mix is all wrong, mostly driven by greed.
This is an interesting article:
https://www.globest.com/2024/04/19/new-multifamily-supply-wasnt-built-for-hybrid-workforce/
Claims developers built small units (studio/1-bdrm) to maximize rent/sf, but in post-pandemic hybrid-work world renters want larger units, hence a market mismatch. “cited Washington, DC as an example of a market where there is an oversupply of one-bedroom apartments — 43% of the units in DC are one-bedroom, but only 15% of renters in the DC metro are looking for them and, in certain markets, it’s only 8% of renters.”
In my city, developers were all in on building studios and 1-bdrms. Just scanning Craigslist for my city I see for-rent ads for 3,346 studios, 3,309 1-bdrms, 2,910 2-bdrms, 336 3-bdrms. That is both new and older units.