patrick.net

https://boriquagato.substack.com/p/talking-sense-on-housing-affordability

the last 4 years have seen a big spike in housing unaffordability.

but many of the claims this is being used to support are just plain fantasy.

consider:




this is simply not true and never was. it’s just sentimental revisionism. the home pictured is NOTHING like an average new home in the 1950’s.

the house above is nearly four times that size.

the average new home in 1955 was 983 square feet. that’s the size of most new 1 br apartments. it had one bathroom, no dishwasher, no garbage disposal, and no AC. 40-50% of people owned a washing machine. only 10% had a dryer.

and keep in mind that’s the average. many were considerably smaller.

a typical home today is nearly 3 times that size.




small starter homes were the answer to demand.

in fact, the 50’s saw a meaningful drop in home size vs the 30’s and 40’s (close to 20%)

what that was was the housing boom for starter homes for baby boomer families. they needed places to live and to meet demand, home size dropped to keep them affordable.

the “housing development suburb” was being born with massive numbers of smallish bungalow-style dwellings.

the “tiny home” idea today seems unable to get traction. many places forbid them with zoning. and zoomers raised in big houses do not want to live in small ones.

but they work. it’s a great solution.

you can see the massive spike in home ownership rates.

prior to the late 1940’s, less than half of americans owned their home.

it rose to nearly 2/3 by 1980 and remains there today.

I like this idea of tiny houses.

But owners of big houses don't like it at all, because it would reduce demand for their own house, and therefore their equity.

Solution is to not have government subsidizing debt. Remove Fannie out of the picture and housing goes back to normal.

We created economy that lives on debt and inflation. Rates drop = house prices up. Inflation up = house prices up. Fake economy, this will not end well.

When average first time buyer is 40 yo, that’s a sign we are doing it wrong. Communism from r builders and lenders is nice though, they can’t complain. Now shut up and get a HELOC you wonderful consumer debt slave.

Santa Cruz is going down, even the sacrosanct 100 yard zone from the beach. It has to be one of the most bullet proof markets in the country due to oligarchs always getting richer while the riff raff are inflated and taxed to death.

Of course, a lot of illegals aren't struggling workers and welfare rats. They do that but many also manage the cartel business so they can have lots of under the table cash. They use that cash to buy houses, often down long streets that have no outlets for cross traffic. Prepare to be scrutinized if you go down there.

A couple of years ago, a large home close to the corner of Portola and 41st (rabid richfuck beach area) was invaded to discover a large weapons cache and drug inventory. Dealers work through social services and corner vendors of flowers etc. and they have some ties to certain police but not all.

My blue collar father, bought this as his FIRST house. Stay at home mother and there were 5 of us kids.

Oh, and this house is valued at $1,275,000 now. Show me anything close to a blue collar worker with 5 kids and a stay at home wife who can purchase this at any time in his life, let alone as his FIRST house. I believe it was 2x his income.

Not very many 2-income households make enough to afford that.

AND he already had 5 kids BEFORE he bought that house.

Patrick says

I like this idea of tiny houses.

Plan on buying one? No? Well neither does anyone else. It is like mass transit - lots of folks are for it but never plan to ride. Those folks just want others to ride to free up the road for their own cars. Besides, on rural and small town areas, there already are homes affordable to low local wages. Homes that are referred to in terms like "single and double wide."

Ceffer says

Santa Cruz is going down, even the sacrosanct 100 yard zone from the beach. It has to be one of the most bullet proof markets in the country due to oligarchs always getting richer while the riff raff are inflated and taxed to death.

How can that be!

The Housing Experts of PatNet for years said this is not possible!



Then again, SC definitely qualifies as both Hip AND Coastal.

Glock-n-Load says

AND he already had 5 kids BEFORE he bought that house.

Economy was much more equitable and more people followed Jesus, it mattered. Today it’s just worldly and elites are chasing trillions instead of caring for Americas future.

HeadSet says

Plan on buying one?

I'd instantly buy a tiny house if one were available around here for some reasonable amount of money.

Patrick says

this is simply not true and never was. it’s just sentimental revisionism. the home pictured is NOTHING like an average new home in the 1950’s.

Yeah, that was the kind of house a doctor or factory senior manager lived in, perhaps a well off tradesman with his own business, but not Joe Average.

Joe Average lived in this kind of house, which was not the original entry level model ("The Rancher") but a step above:


BUT, in the 70s and 80s people did upgrade or buy contemporary split-levels with modest jobs. My Grandfather brought a split-level in the 1950s after two decades of renting apartment buildings; 3 bedrooms and the boys shared one and the the girls the other. One bathroom for all.



(Very close to the house I grew up in, but we didn't have that massive window; my grandfather had something like it but those old fashioned semi-opaque glass blocks)

Housing is vital, because Jefferson knew the best protector of the Republic was the Yeoman, and Levitt, himself a WW2 Vet said:

DemoralizerOfPanicans says

$17990 home in 1955 in Syosset NY (Long Island) in today's dollars based on 5% annual appreciation is $547,371 :-/

AD says

$17990 home in 1955 in Syosset NY (Long Island) in today's dollars based on 5% annual appreciation is $547,371 :-/

Not do the salary at the same 5% annual appreciation.

2026 house appreciation will pick up slightly. No crash

https://rudy.substack.com/p/that-permanency-of-value

Melody Wright

“…the numbers that were being published for what was available for sale or permitted in no way matched what I was seeing on the road. We also had heard from an anonymous xTwitter account who claimed to be in new home sales that the builders were urging sales folks to get the initial contract signed even if they knew the borrowers would not qualify. In builder world, sales are tracked by that initial contract signing versus a closed sale. Shockingly as well, those at the Census who gather the information in the Survey of Construction don’t go back and revise those numbers for cancellations. The reason? Too hard to independently verify. Just as FRED relies on Realtor.com to provide listings for sale for its data series, the Census relies on industry insiders to tell them the state of things in the new home market…

Government has been intervening in housing for quite some time. We have reached the point where we have moved from the law of diminishing returns to one of no returns. This market has been subsidized to death. If indeed we are living in the strongest economy ever, why would we need a 50-year mortgage? As I asked on xTwitter are we now admitting we are in a silent depression?

In my hoods, the situation is complicated by insurance withdrawal. Some of the insurance companies were tipped off to the pending DEW fires in Palisades because they started withdrawing home insurance from Palisades homeowners months before the attack.

Around Santa Cruz, ever since the fires in the hills a few years ago, there has been a value ramp up in the more treeless flats, and a bit of drop in the tree bound areas in the hills. I don't think I would even ponder to purchase anything up there without an assurance of insurance availability.

Santa Cruz is one of the designated '15 minute city' candidates, which means if they can still activate the DEW Dresdens, it could get hit. Streets all over where I travel have been dug up and piping replaced, presumably from metal to plastic so that it can remain intact from the space weapons when they are deployed? WOO knows.

Patrick says

I'd instantly buy a tiny house if one were available around here for some reasonable amount of money.

Let me know if you need me to come by and help you take the wheels off.

Patrick says

1. the high cost of a house in a safe area prevents family formation, killing our future

2. truly lowering the cost of housing would alienate pretty much everyone who owns a house, and damage the banks

Best option is for household wages and income increase at a greater rate then housing costs.

Ideally housing prices drop 10% from recent all time high and then remain steady while income increases 3% a year for the next 7 years.

AD says

Best option is for household wages and income increase at a greater rate then housing costs.

deally housing prices drop 10% from recent all time high and then remain steady while income increases 3% a year for the next 7 years.

AD says

Best option is for household wages and income increase at a greater rate then housing costs.

Ideally housing prices drop 10% from recent all time high and then remain steady while income increases 3% a year for the next 7 years.

Why are you using 7 years as the "proper" amount of time?

https://finance.yahoo.com/news/more-than-half-of-us-homes-lost-value-in-the-past-year-171219733.html

More than half of US homes lost value in the past year

GNL says

Why are you using 7 years as the "proper" amount of time?

It's part of the 'magic'.

GNL says

Why are you using 7 years as the "proper" amount of time?

It's part of the 'magic'.

zzyzzx says

https://finance.yahoo.com/news/more-than-half-of-us-homes-lost-value-in-the-past-year-171219733.html

More than half of US homes lost value in the past year

BUT this Housing Expert of PatNet sez...

https://patrick.net/post/1383080/2025-01-03-housing-prices-will-not-go-down

MolotovCocktail says

The 15 year car loan...

Holy Shit! I just got a 4 year zero interest last August. Basically a free loan that I just have to pay back in 4 years.

Literally zero?

Patrick says

Literally zero?

Yes. From Ford for an F150 I bought.

New data from ATTOM shows 36,766 foreclosure filings in October, almost a 20% increase year-over-year, along with a 32% rise in completed foreclosures. Several states—Florida, South Carolina, and Illinois among them—reported some of their highest rates since the pandemic-era boom fizzled.

https://finance.yahoo.com/news/foreclosures-soar-20-people-struggle-174612935.html

AD says

New data from ATTOM shows 36,766 foreclosure filings in October, almost a 20% increase year-over-year, along with a 32% rise in completed foreclosures. Several states—Florida, South Carolina, and Illinois among them—reported some of their highest rates since the pandemic-era boom fizzled.

https://finance.yahoo.com/news/foreclosures-soar-20-people-struggle-174612935.html

So, how exactly do the foreclosures lead the price collapses? What is critical mass? When people perceive their mortgage investments are depreciating and wiping out their down payments, they see turning in the keys as a viable strategy on the losing proposition.

In California, people are buffered by their delusion of home equity wealth and being able to turn their appreciated homes into more loans for consumer glory bullshit.

Ceffer says

So, how exactly do the foreclosures lead the price collapses

Really?

We've been contemplating putting a bolus of fiat dollars into another place in Santa Cruz for a while, but not in an Appalachian weed strewn tiny sugar shack at a million plus. Foreclosure activity might help to bolster the base quality of investment per fiat dollar. It would be an asset hedge against the pending currency collapse. I'd rather do that than dive into the gold/silver or crypto dream states.

There is zero indication for a crash or collapse on the horizon. Sure the housing market sucked 2024, 2025 and will continue to do so, but 2026 will show low single digit appreciation IMO while 2025 was mostly flat to high single and some low double digit decline. Not going to outpace inflation, not a good "investment" but certainly no crash. Plus plenty of owners who locked in 3% mortgages, sitting tight.

mell says

There is zero indication for a crash or collapse on the horizon. Sure the housing market sucked 2024, 2025 and will continue to do so, but 2026 will show low single digit appreciation IMO while 2025 was mostly flat to high single and some low double digit decline. Not going to outpace inflation, not a good "investment" but certainly no crash. Plus plenty of owners who locked in 3% mortgages, sitting tight.

Florida panhandle housing market especially townhomes has sucked since the 30 yr mortgage rate reached near 7% in 2022. Two townhomes in a nearby HOA sold for around $265,000 recently and would have sold at an all-time high price of $320,000 in 2022.

mell says

There is zero indication for a crash or collapse on the horizon.

AD says

mell says

There is zero indication for a crash or collapse on the horizon. Sure the housing market sucked 2024, 2025 and will continue to do so, but 2026 will show low single digit appreciation IMO while 2025 was mostly flat to high single and some low double digit decline. Not going to outpace inflation, not a good "investment" but certainly no crash. Plus plenty of owners who locked in 3% mortgages, sitting tight.

Florida panhandle housing market especially townhomes has sucked since the 30 yr mortgage rate reached near 7% in 2022. Two townhomes in a nearby HOA sold for around $265,000 recently and would have sold at an all-time high price of $320,000 in 2022.

In northern CA covid created a new high/frenzy and prices appreciated into 2022 or 2023.

https://www.newsweek.com/price-correction-worse-2008-housing-market-analyst-11103703

Price Correction ‘Worse Than 2008’ Coming To US Housing Market

https://www.cnbc.com/2025/11/25/home-sellers-delisting-redfin.html

Real Estate Sellers are taking their homes off the market at the fastest pace in nearly a decade

Sellers are delisting because so many listings are going stale, sitting on the market longer and longer. Redfin reported that 70% of listings in September were on the market for 60 days or longer.

Homeowners are seeing prices weaken significantly and would rather wait than accept a low offer.

Freddie Mac House Price Index Up 1.0% Year-over-Year in October

Punta Gorda House Prices Down Over 20% from Recent Peak, Austin Down over 17%

26 States and D.C. have seen price declines Seasonally Adjusted

As of October, 26 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-3.2%), Florida (-3.0%) and Texas (-2.5%).

For cities (Core-based Statistical Areas, CBSA), 200 of the 387 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Punta Gorda has passed Austin as the worst performing city. Note that 5 of the 7 cities with the largest price declines are in Florida.

Florida has the largest number of CBSAs on the list and Texas has the 2nd most.

https://calculatedrisk.substack.com/p/freddie-mac-house-price-index-up