patrick.net

Fortwaye says

It’s colossal stupidity that we let turn housing into ever appreciating CC. That kind of system sinks society.

Or just evil. Maybe the goal of lefty government is to keep the population in debt. Why else did they invent the "Reverse Mortgage" except to decrease the number of mortgage free homes?

Fortwaye says

It’s colossal stupidity that we let turn housing into ever appreciating CC. That kind of system sinks society.

What is CC?

Glock-n-Load says

What is CC?

Credit Card

Maybe I heard it first on PatNet back in the 'naughties, but for most of the history of this country, it was always more expensive to rent than to own. Then the 90's hit, and shit got seriously fucked up.

Until it becomes less expensive to own than to rent, I'll continue to rent. For appreciation and opportunity cost I have PM's and stocks. I can wait.

stereotomy says

but for most of the history of this country, it was always more expensive to rent than to own.

Just a couple thoughts.
1) It makes sense that it would be more expensive to rent than own. If you are a landlord, you have to keep the place up and you have to cashflow +.
That's just business sense...unless appreciation is the goal? When will appreciation end? Again, I think we've entered an new paradigm.
2) Maybe a large enough stock of rentals exist that have low enough debt that lower rents still cashflow?
3) The drive to own is big enough to make it this way?

B.A.C.A.H. says

Time will tell if the changes affect rents and house prices.

Other threads discussing that;

https://patrick.net/post/1382641/2024-11-18-post-labor-economy-challenge

https://patrick.net/post/1313956/2018-02-21-artificial-intelligence

https://patrick.net/post/1382702/2024-11-24-farming-robot-kills-200-000-migrant

https://patrick.net/post/1378388/2023-01-25-another-episode-hype-tech-series-with

MolotovCocktail says

Other threads discussing that;

Thank you for sharing. I missed those that were mostly posted as the backstory of what's unfolding.

Now here we are in Q3 of 2025 and the Gold Collar payroll in the Cool And Hip Bay Area Knowledge Economy is shrinking.

BigSky says

The acid test would be to find any period in the last century where if anyone who held a home for 10 years actually lost money.

Detroit, MI (pop. ~630,000): From 2006 to 2016, median home prices fell from $73,479 to $45,000, a ~38% decline, driven by the housing crash and industrial decline.

Cleveland, OH (pop. ~370,000): From 2005 to 2015, prices dropped from $112,800 to $66,000, a ~41% decrease, impacted by foreclosure waves post-2008.

Flint, MI (pop. ~95,000, borderline midsize): From 2000 to 2010, prices declined from $67,900 to $50,200, a ~26% drop, due to economic stagnation.

Las Vegas, NV (pop. ~650,000): From 2006 to 2016, prices fell from $317,000 to $200,000, a ~37% decline, hit by the subprime crisis.

But even getting the same price after 10 years is a big loss because of the inflation caused by the Fed, at least 25%.

Not to mention the realtor vig of 6%.

BigSky says

have been hearing that since the sixties. The acid test would be to find any period in the last century where if anyone who held a home for 10 years actually lost money. I am referring to reasonably sized populated areas, not small towns where a mine, military base, or rural distribution center closed down.

How about the entire state of West Virginia?

https://lindynewsletter.beehiiv.com/p/the-housing-issue-we-don-t-talk-about-a6bb

That's a great point. If these areas were halfway decent, it would really add to the housing stock. Many of these places are ideal for young families to start out - if they weren't crime-ridden, shit-school dumps.

And if they ended up gentrified and going to DINKs, then that would free up more of the closer burbs, so there would still be a beneficial impact.

MolotovCocktail says

How about the entire state of West Virginia?

Much of Upstate NY, parts of Ohio, etc. in Rustbeltia, too.

Aaron Clarey had a great intro that was similar:

"I worked at the Lumber Mill for a year while your mother waited tables part time at Earl's cafe, took my pay stub to Community Bank, and we brought our first Ranch house! You just need to bootstrappity and roll your sleeves up!"

Booger says

And I’m pretty sure it’s going to stay like this.

Glock-n-Load says

And I’m pretty sure it’s going to stay like this.

Unsold at that price or even one 20% off of it?

Yup.

MolotovCocktail says

Glock-n-Load says

And I’m pretty sure it’s going to stay like this.

Unsold at that price or even one 20% off of it?

Yup.

I don’t understand your question/comment.

Glock-n-Load says

MolotovCocktail says

Glock-n-Load says

And I’m pretty sure it’s going to stay like this.

Unsold at that price or even one 20% off of it?

Yup.

I don’t understand your question/comment.

So we know what it sold for?

Glock-n-Load says

MolotovCocktail says

Glock-n-Load says

And I’m pretty sure it’s going to stay like this.

Unsold at that price or even one 20% off of it?

Yup.

I don’t understand your question/comment.

@Glock-n-Load

MolotovCocktail was saying that "going to stay like this" can be interpreted to mean that that house will stay unsold at the current price, and still stay unsold at 20% off.

He's saying prices need to fall a lot to make sales now.

Patrick says

Glock-n-Load says

MolotovCocktail says

Glock-n-Load says

And I’m pretty sure it’s going to stay like this.

Unsold at that price or even one 20% off of it?

Yup.

I don’t understand your question/comment.

Glock-n-Load

MolotovCocktail was saying that "going to stay like this" can be interpreted to mean that that house will stay unsold at the current price, and still stay unsold at 20% off.

He's saying prices need to fall a lot to make sales now.

In general, yes. Even Interest rate cuts will only effect sales at current prices on.the margin.

MolotovCocktail says

MolotovCocktail says

But don't worry. Housing Experts on PatNet have assured us this will only effect coasts and cities.

MolotovCocktail says

But don't worry. Housing Experts on PatNet have assured us this will only effect coasts and cities.

.

Lumber is at spring of 2018 price levels. It looks like lumber prices steadily climbed from 2015 to 2018.

.



.

I love Wall Street apes, and it's true the market can stay INSANE for longer than you can keep your short going or economically possess puts, but eventually there is price discovery.

There are two things in life that are inevitable, as Franklin said, death and taxes. And bum knees and strokes after 70 despite the Centrum Silver and Mall Walks.

Not only are the kids gonna be alright, in the end they might get a deal better than the luckiest of all Boomers got who brought at the precise time the interest rate-home price balance was in the sweetest of spots.

I can't see the meme he posted anymore but, it ain't gonna go back to the way it was before. I'm just going out on a limb and predicting that house prices will stay elevated for a long time. Loooong time.

GNL says

I'm just going out on a limb and predicting that house prices will stay elevated for a long time. Loooong time.

How? Who's going to pay those prices?

How can they?

I can't believe that after all the data about income-to house prices ratios and undeniable demographic trends ppl here still refuse to accept reality.

But then again, there's Coastal Wookie, so...

In the past I bought a condo on Sand Key, Fl on the beach. I purchased it from an engineer that had places around the world. Upon closing he shook my hand and said “congratulations, you bought a million dollar view, and you're gonna pay for it!” 6 mos later the assessments started rolling in. 20k, then 5k, then 5k. Fixed income seniors were bailing left and right. 7 years later I doubled my money at got out.

SharkyP says

In the past I bought a condo on Sand Key, Fl on the beach. I purchased it from an engineer that had places around the world. Upon closing he shook my hand and said “congratulations, you bought a million dollar view, and you're gonna pay for it!” 6 mos later the assessments started rolling in. 20k, then 5k, then 5k. Fixed income seniors were bailing left and right. 7 years later I doubled my money at got out.

So he was wrong, correct?

MolotovCocktail says

But then again, there's Coastal Wookie, so...

You saw Patrick's recent map post that proves my point on values. You guys live in a different world. It's 2025 and you can make the same amount in most parts of the country. Coastal it gets to 10X income. I agree that's happening. The center of the country you can get 3-5x income to price no problem unless you're working at McDonalds. Even then you might pull it off.

Fact is I could move from LA or SF and buy the same house for hundreds of thousands less, maybe a million. LA to Austin. Yes that means LA prices will eventually drop. Austin will rise, but from a lower baseline value. Same thing for NYC retirees. Sold their expensive places and bought cheaper in the south. It drags down the average and median and everyone freaks because I think we all lived through the housing crash.

It's high priced markets correcting, not crashing and actually lower priced markets are booming. So the median and average sales price goes down nationally. It's movements from cities to suburbs and rural. It's not a crash. With higher (normal) interest rates people are moving to lower cost of living place and work from home. This is basic stuff.

I get why city and coastal people would be upset. Values there are dropping. I'd make the move now. It's only going to get worse as millennials have school aged children and get their kids into better schools away from city centers and coastal areas.

My crew of buddies all 90% work from home. Maybe 10% are blue collar, but they do well for 30-40ish. They can live in cheap homes in the midwest. Hell two of my best buds live in Gallatin county, MT with average price of $700k. They both bought house for $280k roughly. This excuse that housing is unaffordable generally comes from people that don't make money.

WookieMan says

I get why city and coastal people would be upset. Values there are dropping. I'd make the move now. It's only going to get worse as millennials have school aged children and get their kids into better schools away from city centers and coastal areas.

Only about 3% of homes in the Bay Area are bought/sold each year. (Look it up if you don't believe me). It means the dropping values are a Big Yawn non-event for those who've owned, which is the huge majority of us, for more than a few years.

What we're upset about is that in spite of the recent declines our kids and renter friends are still priced out. For all but a few of us, we desire a much more huge drop.

By your logic, It's only going to get worse   better with a more massive drop as millennials will be able to afford to have school aged children and get their kids into better schools away from city centers and coastal areas.

B.A.C.A.H. says

By your logic, It's only going to get worse   better with a more massive drop as millennials will be able to afford to have school aged children and get their kids into better schools away from city centers and coastal areas.

Overall I think we're in agreement. Problem is price drops result in less tax revenue. That equates to worse schools. You've mentioned before the foreigners will fill the void, but that's a CA thing.

My point on all this is cities and coastal areas are dying. Even boomers are buying in my town and getting out of the suburbs at least. Millennials are buying leaving high end suburban and Chicago. They will never go back. A few might have a studio crash pad I suppose, but you gotta be making $200k plus for two properties and do it as a part time vacation rental.

I've had my fun in cities and mid sized cities, but they're going to get smashed as rural and small suburbs boom.

SharkyP says

In the past I bought a condo on Sand Key, Fl on the beach. I purchased it from an engineer that had places around the world. Upon closing he shook my hand and said “congratulations, you bought a million dollar view, and you're gonna pay for it!” 6 mos later the assessments started rolling in. 20k, then 5k, then 5k. Fixed income seniors were bailing left and right. 7 years later I doubled my money at got out.

One of the better DeSantis reforms is buyers must be provided Condo Assoc minutes and budgets going back quite a while.

Guy probably knew the Assoc was about to approve a buncha assessments.

90% of the Condo stuff in Florida is because Seniors kept delaying maintenance for many decades, and think that Concrete, Brick, and Steel buildings last forever without repairs. Salty Sea Air is a bitch and Limestone is worn down by slightly acidic rain, especially if there's a massive weight on it.

PanicanDemoralizer says

Guy probably knew the Assoc was about to approve a buncha assessments.

Yep you ask as a buyer all the information as well as if there is an upcoming vote (in that year) of a special assessment

and you also try to see if they are siphoning from the reserves

and get a feel for the total or big picture as far as not just the regular assessments but also how well they fund reserves, how well they maintain the property, etc

WookieMan says

You guys live in a different world

Yes. The Real World.

...and this ain't it:

WookieMan says

My crew of buddies all 90% work from home. Maybe 10% are blue collar, but they do well for 30-40ish. They can live in cheap homes in the midwest. Hell two of my best buds live in Gallatin county, MT with average price of $700k. They both bought house for $280k roughly. This excuse that housing is unaffordable generally comes from people that don't make money.

WookieMan says

I've had my fun in cities and mid sized cities, but they're going to get smashed as rural and small suburbs boom.

Yes, no. Exurbs have been the fastest growing areas for 25 years now. But when demographic/immigration reductions happen, towns get abandoned and the large cities become sponges. That's because it doesn't take much depopulation for the local services to shut down, thus forcing the rest of the locals to leave. Bars, medical clinics, restaurants, police, grocery stores.

We'll see if the exurbs can absorb this 'collapse flight' instead of just the cities. I am guessing many will.

MolotovCocktail says

Yes. The Real World.

...and this ain't it:

WookieMan says
My crew of buddies all 90% work from home. Maybe 10% are blue collar, but they do well for 30-40ish. They can live in cheap homes in the midwest. Hell two of my best buds live in Gallatin county, MT with average price of $700k. They both bought house for $280k roughly. This excuse that housing is unaffordable generally comes from people that don't make money.

I guess I don't hang with losers?? A male or female in IL can have a blue collar job flipping a stop/slow paddle and make prevailing wage. $40/hr. Overtime is up to $90 per hour which there's a lot of here because of weather conditions. Any John/Jane Doe could move to IL and make $90-100k AND collect unemployment when they're laid off in the cold months.

Dual income household at say $180k X 3 is a $540k home within reason. If you have more down payment could be $600-800k. Times have changed. $600k in IL is a beautiful home 9 out of 10 times. The taxes will suck though.

My reality is not yours. Yours is not mine. 31% live on the coast so 69% live inland. My life is the majority. So yes, you don't live in the real world. You live in an inflated pile of trash. Shit on the streets. Below average coast. I'll give AD one on this though in PCB, the beaches are top notch and emerald water on a calm day. All other coasts are trash.

WookieMan says

I'll give AD one on this though in PCB, the beaches are top notch and emerald water on a calm day. All other coasts are trash.

I noticed rent is now $2000 a month for 3 bedrooms, 2 car garage within 2 miles of the beach in Bay County, Florida. That was what was being charged in mid 2021. Same 3 bedroom townhome could sell for $250,000.

And starting wage for hospitality and service workers is now $16, so its gone up about $3 over last 3 years. So a dual income couple earning $16 each could afford renting as well as afford buying that townhome.

.