Where are the homes? Glaring need for housing construction underlined by Century 21 CEO
The highest mortgage rates in more than two decades are keeping many prospective homebuyers out of the market and discouraging homeowners who locked in ultra-low rates from listing their home for sale.
The dearth of available properties is propping up prices even as sales of previously occupied U.S. homes have slumped 21% through the first eight months of this year.
The combination of elevated rates and low home inventory has worsened the affordability crunch. Where does that leave homebuyers, given that some economists project that the average rate on a 30-year mortgage is unlikely to ease below 7% before next year?
https://apnews.com/article/mortgage-rates-housing-affordability-century-21-ceo-b60d7bf34139334a843f9760a976f33cOpen linkView original on lemmy.world115
Comments36
The issue is not the number of houses, it's who owns them. There are 16 million houses with nobody living in them because private investors are buying them purely as an investment.
Where are those houses? Nowhere anyone wants to live
That's fine, there are other homebuyers than you
I mean, The Grand Tour bought a house for $2200 in a bad area of Detroit that nobody wanted. There are a shitload available starting at around $500. Have at it.
https://tiremeetsroad.com/2022/10/13/did-the-grand-tour-really-buy-a-house-in-detroit-for-2200/
That's not true at all. Most of the houses are in prime areas, otherwise they would be bad investments for the people buying them.
Nobody wants to live on the streets usually either?
I work for a building materials supplier. Among our renovation clients (not new builds), Almost all of their names end in LLC. That’s who is buying them. Companies, foreign investors, landlords.
Solution: ban companies from owning single family homes, ban foreign ownership of residential property, ban individuals from owning more than 2 homes—and heavily tax rental income at 50%.
Heavily taxing rental income raises rents. Not a good move.
The answer is, and you personally will love this, to build a shitload more homes. End single-family zoning outright, nationwide. Let people build, and they will build
It would encourage things like renter owned co-ops, and discourage things like LLCs owning a shitload of apartments.
It really wouldn't, since all rental units would pay the tax. You'd just drive up cost of renting.
Good way to find the ceiling on rental prices I suppose
It's like you have no understanding of what rental co-ops are. Or are just choosing not to. Rental co-ops don't have income. They might have utility and maintenance costs. But none of that would become anyone's income. In fact because there is no profit located or individual income to be derived from this. Even before taxes it would be way cheaper.
I understand what a co-op is, but there aren't going to be a lot of rental co-ops, ever.
ever is a really long time, you sure you want to make that definite of a statement?
there are plenty of examples of successful co-ops all over the world, after all!
why would you think the u.s. is some special, magical place where they could never ever work when they work just fine elsewhere?
Yes I am quite confident that, culturally, the US is not likely to ever have a predominance of rental co-ops.
Raise rental taxes 50% and you'll see a lot more homeless people and not many more co-ops.
What prevents companies from buying them all?
The problem right now is the incentives.
Banks are incentivised to buy homes. It increases the homes for sale and reduces supply.
Banks are deincentivized from building homes. It increases supply.
Increase supply, and the whole first bullet crumbles. They'll run out of money eventually, and if they don't, at least we have more homes on the market to balance out rent.
They won’t run out of money lmfao. This solves nothing.
Chinese developers did
https://www.cnn.com/2023/08/18/investing/china-evergrande-bankruptcy-explained/index.html
No they didn’t.
The same thing that prevents companies from buying. Literally every house available right now - it's not worth it. Even if they own them all they would still rent them, driving prices down as supply increases.
This is such a weird question. It's like asking what happens if companies buy all farmland. It's just so implausible lol
https://www.axios.com/2022/02/18/investors-homes-wealth-families
You have good points, but this issue isnt really acting like normal markets. Renting space in this desperate market is a lot more like a cartel than simple supply and demand seems to suggest, and:
https://nypost.com/2021/04/20/an-office-vacancy-crisis-is-haunting-nyc-but-owners-remain-bullish/
There is also nothing stopping banks from simply holding onto these long term assets, asking for the right price, rather than following the market and lowering the asking price.
Increasing supply removes the incentive to hold them as long term assets
Yes. Oh. I don't think I had a disagreement with you, but rather misunderstood you.
All the crappy houses in my area got bought for cheap by companies, some paint and a minimum amount of upgrades and now they’re renting those pieces of crap for $3k+. You’re clearly not capable of rational thought.
P.s. get what you give.
Get what you give what?
And people are currently incentivized to buy houses and rent them because of extreme shortages in supply. This is all very predictable behavior. No one is buying every house. Lots of people are buying several houses to rent as income - increasing supply makes that unprofitable over mortgage costs, disincentivizing the practice.
You're not gonna beat supply and demand, ever.
There are tons of new houses being built in desirable areas. I’m near one. They’re mostly owned by LLCs. Businesses need to be banned from owning residential property. It’s the ONLY way to ensure reasonable prices.
Nah, just change zoning and building requirements
Zoning is local, you might as well invite pigs to fly
Yes I'd love to change that, but admit it is wishful thinking.
I do, though, always remind people to vote locally
Corporate landlords are sucking all the inventory out of the market and allowing empty homes and property taxes to go to waste while homeless Americans suffer so they can raise your rent.
There's also a general lack of building trades workers and contractors. The US wasn't really keeping up with demand pre-covid and they year of no work and shortages made the problem worse.
They exist. But that requires adequate pay.
Ban zoning