Housing affordability

[3 Pete]

Good article. I wonder if this is limited to Phoenix. .

1. Since 2010, rental properties available for $1,000 or less in greater Phoenix has declined 86%
2. The number of homes selling for $300,000 or less dropped 73 percent.

Measures of affordability generally assume that a household should spend no more than 28 percent of its gross income on housing. By that criteria, only about one-fifth of all homes sold in the Phoenix area late last year were affordable for a family earning the median local income, about $72,000. Before the pandemic, nearly two-thirds of local homes were priced at affordable levels.
Why is it so expensive to live in Phoenix

 

[aadco]

Biden’s America

 

[-lowcountrydawg]

Good article. I wonder if this is limited to Phoenix. .

1. Since 2010, rental properties available for $1,000 or less in greater Phoenix has declined 86 percent.
2. The number of homes selling for $300,000 or less dropped 73 percent.

Measures of affordability generally assume that a household should spend no more than 28 percent of its gross income on housing. By that criteria, only about one-fifth of all homes sold in the Phoenix area late last year were affordable for a family earning the median local income, about $72,000. Before the pandemic, nearly two-thirds of local homes were priced at affordable levels.
Why is it so expensive to live in Phoenix

Housing is a chicken or egg issue for the Fed in its fight against inflation. By raising interest rates they are dampening liquidity as it is cost prohibitive for folks to tap equity from their homes by refinancing. Needed to happen because I think free tax free piles of cash tapped in 2020-2022 contributed greatly to inflation.

In theory raising rates decreases home values. But they are also making it very difficult for new home construction to occur, especially at lower price points. Limits supply and puts upward pressure on home prices. Most importantly they are freezing the transaction market of existing homes because folks dont want to trade their existing 3 percent mortgage for one that is 7 percent. Lack of supply of existing homes for sale keeps pricing higher. Same on apartments. Once the existing supply of construction peaks this year there’s nothing coming behind it as developers with few exceptions haven’t been able to finance new apartment construction the last 18 months or so. Rents have come down the past year but they will go back up once the supply pipeline peaks.

It is counterintuitive but I actually believe housing prices would come down a bit if rates came down 200 bps. There would be a huge rush of pent up home sellers who could now stomach trading a lower rate for one that feels okay if not low. People will continue to puke on rates that start with a 6 or a 7. 5.5 percent would bring a ton of inventory to market.

 

[shonuff253]

Or or...it could be the billionaires running the private equity funds and buying up millions in single family homes thus pricing millions of Americans out of the American Dream. Reduced supply equals of single family homes means more people are being forced to spend ridiculous cost of rents or buy overpriced homes compared to pre-COVID prices.

The only way this is fixed is the givernemnt, either state or federal, has to step in and stop these hedge funds from purchasing t SFH properties or real estate

"Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

Prices for detached homes have increased faster in key Sun Belt states than the national average."

Wall Street has purchased hundreds of thousands of single-family homes since the Great Recession. Here's what that means for rental prices

Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

www.cnbc.com

 

[SLC_Dawg]

No doubt that corporate greed has entered the housing market, but I think it has taken a beating recently

 

[-lowcountrydawg]

Or or...it could be the billionaires running the private equity funds and buying up millions in single family homes thus pricing millions of Americans out of the American Dream. Reduced supply equals of single family homes means more people are being forced to spend ridiculous cost of rents or buy overpriced homes compared to pre-COVID prices.

The only way this is fixed is the givernemnt, either state or federal, has to step in and stop these hedge funds from purchasing t SFH properties or real estate

"Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

Prices for detached homes have increased faster in key Sun Belt states than the national average."

Wall Street has purchased hundreds of thousands of single-family homes since the Great Recession. Here's what that means for rental prices

Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

www.cnbc.com

Even if the government employed a socialist style totally illegal anti-American restriction on private businesses investing in whatever real estate they want, that wouldn’t move the needle. Very small percentage of the overall transaction market.

 

[shonuff253]

No doubt that corporate greed has entered the housing market, but I think it has taken a beating recently

Yes because the problem has gotten worse with investors purchasing these properties and they're being replaced on the markets with build to rent properties. The American Dream of owning a home is dieing and its unchecked capitalism at fault.

 

[shonuff253]

Even if the government employed a socialist style totally illegal anti-American restriction on private businesses investing in whatever real estate they want, that wouldn’t move the needle. Very small percentage of the overall transaction market.

Corporations purchased 25% of affordable housing last year and 18% of all homes sold in 4th quarter of last year. This a huge problem for everyday America and can't understand how anyone would just thumb their nose at the problem and say deal with it.

Investors Bought 26% of the Country’s Most Affordable Homes in the Fourth Quarter—the Highest Share on Record

Elevated home prices and mortgage rates, along with sluggish rents, have made low-priced homes increasingly attractive to investors

www.redfin.com

 

[Georgia Jim]

Or or...it could be the billionaires running the private equity funds and buying up millions in single family homes thus pricing millions of Americans out of the American Dream. Reduced supply equals of single family homes means more people are being forced to spend ridiculous cost of rents or buy overpriced homes compared to pre-COVID prices.

The only way this is fixed is the givernemnt, either state or federal, has to step in and stop these hedge funds from purchasing t SFH properties or real estate

"Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

Prices for detached homes have increased faster in key Sun Belt states than the national average."

Wall Street has purchased hundreds of thousands of single-family homes since the Great Recession. Here's what that means for rental prices

Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

www.cnbc.com

^^^ This ^^^....we actually agree on something...

 

[shonuff253]

^^^ This ^^^....we a actually agree on something...

This is an issue that both sides of the isle SHOULD be able to agree on. The only people that don't are those for big corporations. There will be some that will try and say is "marxism" or "communism" to do so but those are the useful fools of the wealthy trying to milk the middle class. I'm glad we can have some common ground.

 

[-lowcountrydawg]

Corporations purchased 25% of affordable housing last year and 18% of all homes sold in 4th quarter of last year. This a huge problem for everyday America and can't understand how anyone would just thumb their nose at the problem and say deal with it.

Investors Bought 26% of the Country’s Most Affordable Homes in the Fourth Quarter—the Highest Share on Record

Elevated home prices and mortgage rates, along with sluggish rents, have made low-priced homes increasingly attractive to investors

www.redfin.com

That percentage is skewed by the fact that overall existing home sales are way down because folks don’t want to borrow at 7 percent. These guys can pay cash. You’ll see that percentage move towards 10 in a normal market.

The bigger point is what do you suggest? Private companies in a free country can purchase whatever they want. Also This additional capital will be important in the event of a housing crash. Would help put a floor on values for existing owners.

 

[shonuff253]

That percentage is skewed by the fact that overall existing home sales are way down because folks don’t want to borrow at 7 percent. These guys can pay cash. You’ll see that percentage move towards 10 in a normal market.

The bigger point is what do you suggest? Private companies in a free country can purchase whatever they want. Also This additional capital will be important in the event of a housing crash. Would help put a floor on values for existing owners.

It's not just interst rates but the over inflated value of housing due to equity funds snatching up these homes thus reducing inventory. There is no way corporation purchasing up all the afford homes is good for America

 

[nice marmot]

It's not just interst rates but the over inflated value of housing due to equity funds snatching up these homes thus reducing inventory. There is no way corporation purchasing up all the afford homes is good for America

Don't forget short term rentals reducing stock of long term rentals.

This is a more complicated issue, obviously, because it does have benefits to smaller owners, families vacationing, etc., and so I don't want to throw the baby out with the bathwater, but where REITs are buying up/building STVRs it dramatically affects the housing market. see: Nashville, Savannah, similar markets where tourism is rampant.

 

[-lowcountrydawg]

It's not just interst rates but the over inflated value of housing due to equity funds snatching up these homes thus reducing inventory. There is no way corporation purchasing up all the afford homes is good for America

Fair. Just don’t think you can impose a restriction on a class of investor. May make first home tougher to get but ultimately having that buyer in the market will help the 70 perdent of the country who does own a home.

 

[-lowcountrydawg]

Don't forget short term rentals reducing stock of long term rentals.

This is a more complicated issue, obviously, because it does have benefits to smaller owners, families vacationing, etc., and so I don't want to throw the baby out with the bathwater, but where REITs are buying up/building STVRs it dramatically affects the housing market. see: Nashville, Savannah, similar markets where tourism is rampant.

Local municipalities can and have imposed restrictions there. I’m a staunch property rights guy but can at least see the argument against short term rentals. Overall ADU’s sometimes are the difference in being able to afford a home and not tho

 

[55dawg]

Corporations purchased 25% of affordable housing last year and 18% of all homes sold in 4th quarter of last year. This a huge problem for everyday America and can't understand how anyone would just thumb their nose at the problem and say deal with it.

Investors Bought 26% of the Country’s Most Affordable Homes in the Fourth Quarter—the Highest Share on Record

Elevated home prices and mortgage rates, along with sluggish rents, have made low-priced homes increasingly attractive to investors

www.redfin.com

Article does say there is “no evidence” of impact on pricing.

 

[nice marmot]

Local municipalities can and have imposed restrictions there. I’m a staunch property rights guy but can at least see the argument against short term rentals. Overall ADU’s sometimes are the difference in being able to afford a home and not tho

not suggesting banning - esp as i'm not aware of a municipality that's gotten those restrictions right, unless it's New Orleans, which basically just prohibited STVRs historical French Quarter (hotel lobby made sure of that)

It was deleterious in downtown Savannah where a couple of major investment concerns just blacked out whole areas of the city with Airbnbs

If you wanna look at how not to do it, Savannah is a good place to start

 

[poorpreacher]

Economics isn't my thing. But I'm a small church pastor, who has lived in a parsonage for 20 years. I'm trying to save for a down payment on a house, because the day will come, when I retire.

It's pretty discouraging to look at the market, for a building or buying a basic 3/2 home.

I'm honestly concerned that i won't be able to afford a home, in my retirement

 

[MRDAWG]

Here in rural Pickens County the appraiser said Chinese are buying houses through corporations.

 

[MaitlandFloridaDawg]

Or or...it could be the billionaires running the private equity funds and buying up millions in single family homes thus pricing millions of Americans out of the American Dream. Reduced supply equals of single family homes means more people are being forced to spend ridiculous cost of rents or buy overpriced homes compared to pre-COVID prices.

The only way this is fixed is the givernemnt, either state or federal, has to step in and stop these hedge funds from purchasing t SFH properties or real estate

"Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

Prices for detached homes have increased faster in key Sun Belt states than the national average."

Wall Street has purchased hundreds of thousands of single-family homes since the Great Recession. Here's what that means for rental prices

Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

www.cnbc.com

Fun fact, groups like Blackstone, Prudential, Goldman Sachs, JPM, and public pension funds have been providing equity for rental housing for decades. Developers very rarely provide most of the capital themselves, they will provide a percentage and lean on institutional funds for the rest. You start putting restrictions on institutional investment in rental housing you will radically restrict new supply, which will further negatively impact affordability.

 

[MaitlandFloridaDawg]

Corporations purchased 25% of affordable housing last year and 18% of all homes sold in 4th quarter of last year. This a huge problem for everyday America and can't understand how anyone would just thumb their nose at the problem and say deal with it.

Investors Bought 26% of the Country’s Most Affordable Homes in the Fourth Quarter—the Highest Share on Record

Elevated home prices and mortgage rates, along with sluggish rents, have made low-priced homes increasingly attractive to investors

www.redfin.com

When you say they purchased affordable housing, I’d be will to bet that includes multifamily rental housing. You don’t want to blackball institutional investors.

 

[shonuff253]

When you say they purchased affordable housing, I’d be will to bet that includes multifamily rental housing. You don’t want to blackball institutional investors.

But you also don't want it where people, especially young people, are being priced out of being home owners until they are middle-aged. Rent is so how is difficult for people to save up enough money for a down-payment. Gone are the days where young couples get help with a down payment for their first home when that down-payment is $30k to $60k

 

[MaitlandFloridaDawg]

But you also don't want it where people, especially young people, are being priced out of being home owners until they are middle-aged. Rent is so how is difficult for people to save up enough money for a down-payment. Gone are the days where young couples get help with a down payment for their first home when that down-payment is $30k to $60k

Institutional investors are the primary buyers of large multifamily rental projects. Without them, there is no large scale rental housing. If you restrict rental housing, it will raise home prices for people who want to buy a home because it forces renters to become buyers. The best thing politicians can do to make housing more affordable is to relax or remove restrictive zoning and other entitlement hurdles.

 

[poorpreacher]

But you also don't want it where people, especially young people, are being priced out of being home owners until they are middle-aged. Rent is so how is difficult for people to save up enough money for a down-payment. Gone are the days where young couples get help with a down payment for their first home when that down-payment is $30k to $60k

Exactly.

My story is too long to tell. But I've always pastored small, rural congregations.

In those "jobs" the pay is small and turnover is great. Not a good formula for home purchase.

What we should have done, is forced ourselves to make a house payment to ourselves every month. But that is easier said, than done. Life happens

Now I'm starting to panic, because I don't have 50k for a down payment....and even if I did, I'm not sure if we can pay $1500 per month, just for a mortgage.

They are terrible investments, but we may have to buy a manufactured home.....Just to have something to live in. But even they run $175k easily

 

[jbpayne32]

From another article.

John Kobierowski, president and CEO of real estate brokerage firm ABI Multifamily, shares similar concerns about Phoenix’s impending supply and demand fundamentals.

“With all of these folks coming here, we can’t keep up with the demand for housing,” he says, noting that the region needs about 277,000 additional housing units by 2030. “We have never been able to deliver more than 12,000 multifamily units in any calendar year. We cannot build enough to keep up with the forecasted demand.”

The issue is Phoenix does not approve or build enough housing of all types. Look at Austin, they built 2x as many rental units as the national average last year and rents are down 7% and housing prices are flat. It's becoming affordable for more people to live there andd buy a house.

 

[shonuff253]

From another article.

John Kobierowski, president and CEO of real estate brokerage firm ABI Multifamily, shares similar concerns about Phoenix’s impending supply and demand fundamentals.

“With all of these folks coming here, we can’t keep up with the demand for housing,” he says, noting that the region needs about 277,000 additional housing units by 2030. “We have never been able to deliver more than 12,000 multifamily units in any calendar year. We cannot build enough to keep up with the forecasted demand.”

The issue is Phoenix does not approve or build enough housing of all types. Look at Austin, they built 2x as many rental units as the national average last year and rents are down 7% and housing prices are flat. It's becoming affordable for more people to live there andd buy a house.

So what are the road blocks to building more housing?

 

[jbpayne32]

So what are the road blocks to building more housing?

The two biggest are zoning and community pushback. For instance, in Phoenix it is illegal to build housing on a lot smaller than 6k sqft. Houston reduced the min. lot size from 5k to 1,400 sqft and built tens of thousands of townhomes and other affordable housing in high-demand neighborhoods. What seems more efficient in a major city, building 30 townhomes 3 stories tall on 1 acre or 7 detached homes? One leads to density and affordability, and one leads to sprawl.

Basically, anything the city council can do to slow down and make approval take longer and cost more in lawyers, architects and engineers drives up the cost of housing and makes homes more expensive to build.

Here's a good article on vested interests and how they try and keep cities from becoming more adaptable in meeting the diverse housing needs of a growing population:

Sweeping bill to address Arizona's housing crisis shot down

In a rare show of bipartisan agreement, the Arizona state Senate voted down a bill aimed at addressing the housing crisis by a vote of 9-20.

azmirror.com

 

[Eastmandawg]

Economics isn't my thing. But I'm a small church pastor, who has lived in a parsonage for 20 years. I'm trying to save for a down payment on a house, because the day will come, when I retire.

It's pretty discouraging to look at the market, for a building or buying a basic 3/2 home.

I'm honestly concerned that i won't be able to afford a home, in my retirement

It is always either a buyers or sellers market.

Now, as has been for some time, it is a sellers market. It will eventually switch back to a buyers when there is more inventory and interest rates go down.

Just keep saving and control the controllables, you can’t go wrong.

 

[jbpayne32]

Exactly.

My story is too long to tell. But I've always pastored small, rural congregations.

In those "jobs" the pay is small and turnover is great. Not a good formula for home purchase.

What we should have done, is forced ourselves to make a house payment to ourselves every month. But that is easier said, than done. Life happens

Now I'm starting to panic, because I don't have 50k for a down payment....and even if I did, I'm not sure if we can pay $1500 per month, just for a mortgage.

They are terrible investments, but we may have to buy a manufactured home.....Just to have something to live in. But even they run $175k easily

Would also look at the Georgia Dream program and potentially a USDA loan which requires 0% down if you are in a rural area.

https://dca.ga.gov/sites/default/files/updated_vertical_english_brochure_2.5.24_0.pdf

 

[K_Walt32]

Or or...it could be the billionaires running the private equity funds and buying up millions in single family homes thus pricing millions of Americans out of the American Dream. Reduced supply equals of single family homes means more people are being forced to spend ridiculous cost of rents or buy overpriced homes compared to pre-COVID prices.

The only way this is fixed is the givernemnt, either state or federal, has to step in and stop these hedge funds from purchasing t SFH properties or real estate

"Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

Prices for detached homes have increased faster in key Sun Belt states than the national average."

Wall Street has purchased hundreds of thousands of single-family homes since the Great Recession. Here's what that means for rental prices

Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.

www.cnbc.com

I don't mind companies owning very small amounts of homes that they can use to offer as a relocation perk or travel accommodations, but it should be VERY limited.

Example, you live in GA and get hired by google so you get a relocation bonus. It may take some time to find a house so instead of you (and maybe a family) needing to get an apartment or hotel for weeks or month they offer you a small furnished house to float you until you find a home you actually want to purchase.

Or, you have people constantly traveling to you for work, you could put them in a small furnished house if the trip lasts more than a couple days. this would make travel easier and better and possibly cheaper for the company over hotels for extended stays.