The housing market just slid into a full-blown correction

[shonuff]

If the supply of houses increased yeah the price would fall because suddenly there's drastically more houses out there.

Houses where I live cost on average $230K for an average middle-class home and in LA that might be $900K. The cost to build the house isn't why the price is so high.

Yes in SOME places the prices may drop but im in NYC and in large metro areas there's lots of building but the building that has to occur is for the established market which is 400 to 600

There's no way for.people who live in large metro areas like NYC LA SF DC etc to buy a new or already built home for less than 400 - and there's no way to drive that price down since it would mean that somehow people who have homes already there would have to have a collapse in the already established value of their home .

Housing is especially needed in the metro and suburban areas where values are high so if building is going to occur its not going to be at a price point to allow lower priced homes to come.on the market - it will.just mean more homes at the same price that noone can afford in the first place

Again the issue goes way beyond supply - there's is a financial infrastructure that underpins so many other things in the economy that's based on an appreciated home value -

Realistically you can't just remove that without taking some huge and deleterious hits to other aspects of the financial markets which would make things much worse financially and still won't make it easier to buy a home

The only allegory I can liken the belief that we can put supply to the market and only drive down the initial cost of purchasing a home

...is someone thinking you can jump up while falling at the same time .

Building a lot of new homes to make the price go down on the market won't make the price lower since it still COSTS the same amount to build a home and to do so and make a profit in this region you'd have to build that home and sell it for 400k - not the 230 to 250k that people in the region have the income for. . You'd have to sell it for 400k becuase you'd take a loss if you sold it for less than that ... building a home is an investment- just like farming or pulling oil out of the ground - no one builds to take a loss. In order to have a stable.market oil has to sell at a certain amount ( now at about $85BBL) for it to be profitable to drill and process oil for the market

And again the problem is the amount of smaller earners - who also feed into the demand that is already being supplanted by those who earn more

For prices in major metro areas where jobs growth is at youd have to have a collapse for prices of homes to plummet from 400k to 250to300k ...a calamity worse than the pandemic which at best lowered prices about 10%from the previous high ( and due to more demand they've now gone back up to and surpassed their previous highs )

 

[shonuff]

Even with a supply increase I don’t think prices would drop. Way too many people are on the sidelines waiting to jump in.

Part of the problem is there are few desirable areas to live in this country when you consider things like education, amenities, crime, etc. I’m not so sure there’s a bubble in cacville, usa

You are exactly correct

Mind you - again my only issue is what people are saying is the solution...

And really when you think about it - it can't really be a solution

 

[Consigliere]

Inside the Wildly Popular Forum Where Landlords Plot to Screw You Over

It's a terrifying window into the tenant/landlord power dynamic—and a national housing hellscape.

www.vice.com

TikTok’s Landlord Influencers Want You To Stop Being Mad and Start Landlording

Extremely online landlords are regularly told their jobs are “inherently corrupt” and that they, personally, are "greedy animals.” But they claim their mission is noble—and that they deserve some sympathy too.

www.vice.com

The relationship between landlords and tenants is toxic. And it’s become much more so as smaller landlords become squeezed out by bigger pockets. The more your landlord is disconnected from the community and insulated by money to pay off politicians and fight minor lawsuits the worse the conditions that they can get away with become.

Tenants can be incredibly shytty too. This isn’t a one sided relationship.

Maybe all of this can be fixed by changing the structure of renters insurance (and property insurance) so that it covers missed rent payments up to a completed eviction and all the other things like pest issues and unnecessary maintenance that damage the landlord tenant relationship.

 

[shonuff]

The relationship between landlords and tenants is toxic. And it’s become much more so as smaller landlords become squeezed out by bigger pockets. The more your landlord is disconnected from the community and insulated by money to pay off politicians and fight minor lawsuits the worse the conditions that they can get away with become.

Tenants can be incredibly shytty too. This isn’t a one sided relationship.

Maybe all of this can be fixed by changing the structure of renters insurance (and property insurance) so that it covers missed rent payments up to a completed eviction and all the other things like pest issues and unnecessary maintenance that damage the landlord tenant relationship.

Think about this

most new housing falls under HOA s which also control homes and appearance and PRICE

HOA s are written into the deeds and when you purchase the home you are under the covenants of the HOA

 

[Consigliere]

Think about this

most new housing falls under HOA s which also control homes and appearance and PRICE

HOA s are written into the deeds and when you purchase the home you are under the covenants of the HOA

HOAs are largely powerless, especially in terms of home price. Depending on where you live they can be vital. Or they can be a double taxation as homeowners pay twice for services that are usually provided by their local government: bulk trash, tree pruning, storm water/sewage maintenance, etc.

 

[ogc163]

Again the solution is simple...build more housing.

 

[mastermind]

Again the solution is simple...build more housing.

Nope, its genocide!

 

[winb83]

HOAs are largely powerless

 

[shonuff]

Again the solution is simple...build more housing.

Well obviously it's not since they do build a lot of housing in places in the Bronx and Brooklyn and queens and the apts are out of reach for people just just earn an average salary

Building 3000 dollar a month Apts in a place that people can barely pay 2000 is not driving down the rental price of the other apts in the area

If anything its pushing up the price -since now the property owner that rents normally for 1500 will raise his rates to be in line with the newer built construction that has to return a profit on the recently built building as opposed to the one owned by the property owner that has a building that was built 20 or 40 years ago

 

[ogc163]

Well obviously it's not since they do build a lot of housing in places in the Bronx and Brooklyn and queens and the apts are out of reach for people just just earn an average salary

Building 3000 dollar a month Apts in a place that people can barely pay 2000 is not driving down the rental price of the other apts in the area

If anything its pushing up the price -since now the property owner that rents normally for 1500 will raise his rates to be in line with the newer built construction that has to return a profit on the recently built building as opposed to the one owned by the property owner that has a building that was built 20 or 40 years ago

Since it's obvious..do you have any large stats or data supporting this?

 

[Consigliere]

I’m biased on this, but from my experience, the HOA is usually toothless unless:

1) they have something in their bylaws that allow them to garnish wages
2) the problem can be escalated to the homeowners mortgage lender

I’m sure there are good folks on both sides… but in general the people who are in bad standing with their HOAs are typically at fault as there is nothing esoteric about reading and complying with your bylaws and covenants.

 

[shonuff]

Since it's obvious..do you have any large stats or data supporting this?

Have you see the bronx and East Brooklyn???- they have PLENTY of new construction going on -

Rents are at 2500 to 2800 in most places and ots not going down

And in the Bronx its going up when it was somewhat affordable just a few years ago

So again if building more is supposed to drive down the cost of renting its not doing it in NYC

but tell you what - is there anyplace that you can show where so.much housing was built that it drove down the current rate 30% or more?

Becuase to get an apt in NY at 2500 p/mo and IF housing is supposed to be a 3rd of your income , your house hold income would have to be 90k... take home ( that means you'd have to earn180k or more before taxes )

If people on avg in working class neighborhoods take home about 60k to 70k ( that's visited in the latest NYT poll from the census ) that means their rent to be "affordable" should be 1200 a month ....

So again how much housing would have to be built to drive down the monthly rent from 2800 to 1200??? Im.surethats way more than the 20k or 30k the mayor has announced as a goal to occur over 10 yrs - How is that realistic that 20k apts ...or even 40k over 10 years is moving the needle when the city gets that many people in a year or less coming in that need housing ???

And where has it occured that housing has been built to chop down the monthly rental by such a drastic amount and NOT be the result of a disaster in an economy ? That would bear out your assertion that the simple.solution is just to build more ....

 

[ogc163]

Have you see the bronx and East Brooklyn???- they have PLENTY of new construction going on -

Rents are at 2500 to 2800 in most places and ots not going down

And in the Bronx its going up when it was somewhat affordable just a few years ago

So again if building more is supposed to drive down the cost of renting its not doing it in NYC

but tell you what - is there anyplace that you can show where so.much housing was built that it drove down the current rate 30% or more?

Becuase to get an apt in NY at 2500 p/mo and IF housing is supposed to be a 3rd of your income , your house hold income would have to be 90k... take home ( that means you'd have to earn180k or more before taxes )

If people on avg in working class neighborhoods take home about 60k to 70k ( that's visited in the latest NYT poll from the census ) that means their rent to be "affordable" should be 1200 a month ....

So again how much housing would have to be built to drive down the monthly rent from 2800 to 1200??? Im.surethats way more than the 20k or 30k the mayor has announced as a goal to occur over 10 yrs - How is that realistic that 20k apts ...or even 40k over 10 years is moving the needle when the city gets that many people in a year or less coming in that need housing ???

And where has it occured that housing has been built to chop down the monthly rental by such a drastic amount and NOT be the result of a disaster in an economy ? That would bear out your assertion that the simple.solution is just to build more ....

Thus, the answer to my question is NO, you do not have any data to support your assertion.

 

[ogc163]

Providing some context to rambling nonsense in this thread and other real estate threads regarding NYC...

 

[shonuff]

Thus, the answer to my question is NO, you do not have any data to support your assertion.

Ackshually

YIMBY's 2021 Construction Report Shows 30,036 New Residential Unit Filings in New York City - New York YIMBY

YIMBY’s 2021 New Building Report, covering 2020's numbers, reveals a sustained development push in the city, with 30,036 submitted residential units.

newyorkyimby.com

30k new bldg filings in 2021


Rent is still much higher now than in 2021 - headlines just in Feb 2023 talked about rent hitting 3k in Brooklyn and 4 k in Manhattan

So pretty much proves ...even with 30k new bldgs being built still prices aren't falling