A Grim Warning To ALL Renters: It's No Longer A Choice
HTML-код
- Опубликовано: 17 сен 2024
- Ken McElroy outlines the critical issue of the housing and rental market crisis, highlighting the growing gap between population growth and housing supply in the U.S. He presents a detailed analysis of housing trends, affordability issues, and the necessity for increased housing construction to stabilize the market.
Ken has a real estate strategies podcast! Follow your favorite platform each week.
Apple Podcasts: apple.co/3jDqftx
Spotify: spoti.fi/31GUDwW
Follow Ken on social media at: x.com/kenmcelroy
• • •
Be sure to click the bell to be notified as soon as the next informational video is posted!
Visit Ken's Bookstore: kenmcelroy.com...
•
ABOUT KEN:
Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and has an upcoming book: "ABCs of Buying Rental Property: How You Can Achieve Financial Freedom in Five Years." Ken is a Rich Dad Advisor.
Ken offers a wealth of personal experiences, practical advice, success stories, and even some informative setbacks, all presented here to educate and inspire. Whether you’re a new or seasoned investor, the information and resources on this channel will set you on a path where you and your investments can thrive.
Ken's company: mccompanies.com/
•
DISCLAIMERS: Any information or advice available on this channel is intended for educational and general guidance only. Ken McElroy and KenMcElroy.com, LLC shall not be liable for any direct, incidental, consequential, indirect, or punitive damages arising out of access to or use of any of the content available on this channel. Consult a financial advisor or other wealth management professional before you make investments of any kind.
Although Ken McElroy and his affiliates take all reasonable care to ensure that the contents of this channel are accurate and up-to-date, all information contained on it is provided ‘as is.’
Ken McElroy makes no warranties or representations of any kind concerning the accuracy or suitability of the information contained on this channel.
Any links to other websites are provided only as a convenience and KenMcElroy.com, LLC encourages you to read the privacy statements of any third-party websites.
All comments will be reviewed by the KenMcElroy.com staff and may be deleted if deemed inappropriate. Comments which are off-topic, offensive or promotional will not be posted. The comments/posts are from members of the public and do not necessarily reflect the views of Ken McElroy and his affiliates.
2023 KenMcElroy.com, LLC. All Rights Reserved.
#kenmcelroy #realestate #realestateinvesting #RentalCrisis #HousingShortage #PopulationGrowth #USHousingMarket #Affordability #NewConstruction #SupplyAndDemand #HousingPrices #RentPrices #GovernmentPolicies #ZoningLaws #LowIncomeHousing #HomeOwnership #RealEstateTrends #HousingCrisisSolutions #EconomicAnalysis #HousingDemand #RentalMarketAnalysis #MultifamilyHousing #SingleFamilyHomes #HousingMarketForecast #InvestmentStrategies #UpZoning #LowInterestRates #TaxAbatements #EntryLevelHousing
Supply is part of the problem. The bigger problem that for some reason you don’t even mention is investment firms buying up most single family homes to rent them out. Taking away home ownership from regular American people.
You can thank the Federal Reserve for that screwjob.
Homes owned by investors are still part of the supply. It’s a straw man argument to suggest this has added to the imbalance.
One of the reasons there was slower supply after the financial crisis was the slowing in household formation. That’s why it took four years for house price declines. Supply has been repressed because of high development costs for new homes. High land costs, high carrying costs and high development costs have together pushed up house prices. Local regulations have kept supply below demand. Pushing home prices much higher than general inflation.
Its because he is one of those investment firms..
YESSSS! 😢
Without mentioning the role players like blackrock and vanguard behind the scene😳
Non-factor in 99% of the US.
@@mikeyis009 No it isnt, they buy something like 12% of the available sfrs on the market.....every year. Do you have any idea what you are talking about?
Why would they be in issue, they don't want to leave the houses vacant so they would not contribute to the shortage. AirBnb is a huge part of the problem, we essentially rezoned everything as hotel.
How is it not a factor when they own 60-70% of the housing market. I see a monopoly coming your guys way , if it ain’t that already
@@info781 Do they rent the houses out at break even or for a profit? Is there an absolute shortage of housing in America or a shortage of affordable housing?
I kept renting while others paid $500k+ for a dump with bad layouts. Used my savings to buy land and build a beautiful house overseas near the coast on the Mediterranean. Use it as a vacation home, but will be my permanent retirement home in 3 years. Retirement in the USA is not our only option. I never would have been able to build my modern dream home in the U.S. Especially if I bought the $500k dumps in my area.
Or you can sell back your dump at $800k and then build your dream house abroad.
Just did my passport renewal the other day.
If your story is true, then you are in about 1% of renters. Most renters have a minimal, if not negative net worth.
@@marcoprolo1488 Capital gains takes a big chunk.
Yep, if I ever decide to buy a house it will be overseas somewhere with a view. But there are all kinds of place to rent.
In my area, about 1/4 of homes are empty because they have been scarfed up by out of state air bnb scumbags. They’re literally buying everything that comes on the market by outbidding the local young families who can’t compete financially. Pretty soon our school will close because there won’t be any kids in town. It’s an aweful situation facing many towns these days that are desirable vacations destinations.
My town is next to the largest lake in NH. Same thing. AirBNB has 1000 short term rentals out of about 4500 homes. Not including VRBO or other rentals. And owners who come for summer only, rent the rest of the year. Our schools are spoiled by all the tax revenue though! A house is under contract usu within days.
All it takes is an ordnance change like what was done in Sevier County Tn. They changed the laws to tax all air bnbs at the commercial tax rate instead of the residential rate. Raised their tax burden from 25% to 40%. Completely destroyed their income. So guess what they are all doing, selling. But here is the thing, they cant get what they paid for them so they are taking a big loss.
You want to change your home market, talk to your city and county planners. Put pressure on them. They will come around as soon as they figure they can squeeze more money out of them with tax increases.
But you just admitted they can't make any money at the new tax rate, so they will sell, which puts that property at the regular, homeowner tax rate. How is that a win? Is that good governance? No it's not.@@worndown8280
Well the AIr BnBs are not putting burdens on the school systems, and in most areas pay hotel tax of 11% or so, locals should be happy.
I think the increase in Airbnb is is because it's attractive to landlords to do it that way because it's nearly impossible to evict a bad tenant in most States because all the laws are favorable to the tenant and unfavorable to the landlord.
The short-term rental Airbnb model is more like a hotel so it's very easy to evict somebody for not paying their fee and the owner can still collect a security deposit. Many landlords are doing this for those reasons and so far it has worked out well for landlords.
Of course this takes a lot of properties out of the long term rental market for people who want to rent an apartment. The unintended consequence of the laws made to protect the tenants is that it made it more difficult for tenants to find a rental. The solution is to change the landlord tenant laws so that landlords don't get screwed when a tenant stops paying the rent and destroys their property.
I would like to see a video on how the migration of millions of people impacts the housing and rental market.
Legal immigration probably not that much.
Agreed. I’ve only seen one real estate person even mention the millions of illegals in the country. They will not live outside.
@@mikeyis009 actually even illegal immigration does not increase many have family here.They are going to live 10 to a house that was meant for four. Even though they will pile into the house they can still make more then in their home country then their countries because they can get trained for free for jobs Americans do not want. These jobs include cleaning jobs, long term care which is in dire need of million of workers.
Illegal immigration playing huge role
No video needed: Result ? higher rent !
You say "it is math" and there just aren't enough homes, but "the math" actually says differently. In 2000, Per the FED data, there were 116,914,000 "housing units" (i.e. places to live). As of the end of Q3 2023, 145,558,000 housing units in the United States. This is a 24.5% increase in homes since the end of 2000. The population at the end 2000 in the US was 282,398,554 and the current population is estimated at 335,896,656. This is an 18.9% increase in population compared to a 24.5% increase in homes since 2000. Clearly the math DOES NOT support a shortage of homes from traditional norms. More likely what has happened is that the government printed a bunch of money that increased the demand for buying homes, the government also put moratoriums on foreclosures (the last of which just ended November 30 for FHA homes) which reduced the supply of homes, and there was an unusual boom in VRBO's due to everyone having more money and time to vaction/work far away, which further increased the demand for homes.
Nope. You're wrong. The current population numbers are not including the mass illegal immigration. I live in Buffalo NY and I can guarantee you that even despite so many people moving south, illegals are not only back-filling, but eating up normal housing availability. Rents are way up and illegals from all around the world are everywhere. And they don't live on the streets here, they rent apartments.
You guys are not factoring in birth rate, demographics, or new household rates. Nor the fact that immigrants generally live (at least initially) with extended family under one roof. I think these things are needed to get a true picture.
@Spry011 playback. You are correct. Housing isn't being built to keep pace with illegal immigration. It can't. Those that think our census is keeping up with reality? 😂😂😂
@Spry011 how can illegals buy homes and get a job that can afford them to buy a home? American citizens are struggling already, we got the advantage of applying for a better paying job while illegals are stuck with under table below minimum wage jobs. Illegals are not buying up homes. It's the greedy american corporations institutions etc. It's also the greedy rich boomers owning several rentals to fund their retirement. I met one while looking for a place to rent. That boomer basically told me he got 10 rentals now and need 10 more rentals to retire... why someone need 20 rental property to retire? SMH
The "housing units" that are available also dont take into account that some houses are completely decrepit
There's a guy in my town who makes about 80k a year and lives out his van.
Nice van at least?
Smart man
down by the river?
Kiyosaki lived in his car!
We added more than 4 million people with our open border policy!
2.5 million
Which is a good thing. Everyone is understaffed. Population growth by births are way down , this puts burden on the younger population. China, Japan, Italy and most developed nations are losing working age native populations. The US because of immigration is not
It's 4 million per year according to our government, and they have every reason to error on the low side when they try to estimate people that weren't even stopped. Then there are another 5 or 6 million in h1b visas, mostly in stem. It's like 1.7 new in stem alone, 1.5-2 renewed, and several million that get more permanent green cards, making your college degree worthless and allowing employers to require 4 years industrial experience for entry level grad jobs and 2 years experience on software that's only existed for a year (look that up!). There is no hope. Try to go teach overseas so that you get paid good money and free housing to train more imports to replace Americans, or you won't survive.
idk i got my engineering job without a degree. you could just try to be better
Illegal immigration is never a good thing. @@terranceware4627
Of course, this whole issue does not take into account the increased cost of building due to continuing inflation. Though the inflationary rate may have eased it is still piling onto baked in numbers. Anecdotally, my local Ace Hardware, grocery store and Walmart just increased prices this week in their stores. I found that a number of products I regularly purchase were upped by 10% or slightly more.
The building of residential livings spaces will continue to increase and that increase will keep pressure on higher prices. Here in Phoenix there are supposedly 30,000 empty apartment units. Their cost is just too high for the majority of the apartment seekers. Likewise, the number of empty single family houses for rent is high. Once again, there are vacancies, but everyone is priced out of the market. It’s no a lack of homes, but a lack of affordable ones.
I just don't believe that there are 10's of thousands of units sitting empty for that long. People have massive equity and low mortgages around 3%, so they will drop rents as long as they can make money they will rent it.
@@info781 Exactly this. Even if they don't have low mortgage rates it's better to have some rental income as opposed to none. Like all things the price will be driven by supply and demand.
@@info781 You must not live in the US. Interest rates are at 8% here. And that's for a perfect credit score.
@@hotarubinariko Yes if you bought today, but most people who owned in 2019 refinanced their 30 year fixed under 3%. so if needed they could rent out for low rents and still be cash flow positive.
I am famiilar with the situation in Phoenix too, back in 2020-21 it was almost impossible to find an available rental unit anywhere in the valley and there were a lot of new building developments in the metro area that were on hold due to supply and labor shortages from the lockdowns. Starting in 2022 that situation began to quickly reverse and it was actually fairly easy to find a rental, though the rents had increased dramatically, at the same time building sped up on all these projects that had been sitting idle for the last couple years. In 2023 a bunch of these new developments came on the market with insanely high rents and the vast majority of them have massive vacancies. Its obvious to me that a lot of investors saw the rental increases in 2020 and 2021 and this drove a massive spike in the new building of rental units, and it's now totally oversaturated the market. Almost the exact same thing happened in the Phoenix area back in 2007 and in the following years it quickly became far less expensive to rent that it would have been to own in most of the valley as a result.
I have been a landlord for about 30 years now and one thing that was not mentioned in this video that is driving up rent are the actions of a portion of the renter population (accumulating with how many renters took advantage of the Covid situation and refused to pay rent even if they had the ability to) When I first started renting out property aprox 30 years ago when someone moved the average turn around rate for a property was 3 days to maybe a week at the most repairing "wear and tear" re-painting etc... Now the "wear and tear" has become malicious destruction which the law still wishes to classify as "wear and tear" so they don't have to charge the tenants with a crime. It has went from the average turn around rate being 3 days to a week to being over a month (if you do the repairs yourself to keep costs at a min.) because the "wear and tear" is now holes in the sheet rock, stealing water supply lines, stealing electric wire especially if it is copper, destroying cabinets, pour bleach/motor oil on the carpet, (all these things I have personally had done to rental places) etc... The tenants can ALWAYS do more damage to the property then you can charge deposit and still have it where a renter can afford to get into the place. That is not even mentioning the sky rocketing of property taxes, licenses and other fees for the "privilege" of having a business in a county or town. Oh and the kicker when it comes to paying all those fees the county and town can figure out to charge you at that point they consider you a "business" but the irony is you do not receive ANY of the protections of a business because when the tenant destroys property the law considers it a "civil" agreement.
This is no joke. You can join Face Book groups where people brag about how they destroyed the house when they moved out.
It also have a 2nd negative affect to affordability. Less people are willing to become land lords. I myself am one of these people. Two years ago, I was looking into buying some rentals, but decided that it was just too much work for the pay off. I bought a small business in a different field instead. So I am one less land lord providing housing for people, and I'm sure I am not the only one scared away by this behavior.
Worlds smallest violin playing for you right now..
@@columbiabasincorp5685 HA HA fair enough - and right back at you when you whine about rent being out of sight and you cant pay it :) the fact that you cant see those actions affect how much the tenants rent ends up being makes it very suspicious that you may possibly be guilty of doing some of the things mentioned. It's truly hilarious that cause and effect eludes you. Shooting holes in the boat that carries you and then crying because its filling up with water - truly comical
more people ought to live in a car it's easy and cheap there's plenty of ways to get access to bathing and a PO box, at that point your living expenses are super low it's great. This will put landlords back in their place when nobody is willing to pay the prices.
@@Yelkwood9 Yes especially if the person has no respect for the other person's property and does damage PLEASE PLEASE live in the car that would be doing the landlords a favor. I gave you a thumbs up because I agree with you 100% If everyone of the tenants who felt it was ok to destroy the landlords property or run up charges did what you suggest then those who DO respect the property would end up having cheaper rent it would be a Win for the landlords AND a win for the tenants that have self respect and respect for other's property. I could not have come up with a better idea if I had tried - thank you.
Oregon law used to ban rent control stating specifically that rent control acts to restrict supply. This was ignored when rent control was implemented. I now know developers who no longer build in Oregon.
Just need to sort immigration. In New Zealand we have same problem built so many houses last five years on record but the gates wide open we can’t keep up..the governments plandemic . The world is @ war with their own governments.
YES. But at least New Zealand does better.....
The number of houses built was way behind government targets, though obviously immigration doesn't make the situation any better.
Wages no change
Groceries ⬆️
Car payment ⬆️
Health insurance ⬆️
Car insurance ⬆️
Utility ⬆️
Credit card debt ⬆️
Hygiene products ⬆️
Same wages vs tripled living expenses
Mortgage OVER PRICED 🤔🤔🤔 what’s going on America 🇺🇸
Thank you Melody for fighting for the truth and give awareness to citizens 🙏🙏🙏🙏🙏History will remember you and other RUclips who Scream for real estate justice 🙏🙏🙏
As Joe Biden would say….
“ I have 3 words for you, Bidenomics “
"history will remember youtubers" 😂😂😂 gtfo here
And Lays Potato Chips....almost 6 dol a bag....lOL.......A French grocery chain just dropped Lays...billions per year rev lost....lol
@@AmericanScout-USAIt's all supply and demand. If the supply of apartments is not keeping up with the population, they will cost more.
If you add millions of workers to the supply, workers become cheaper. Employers don't have to pay them very much.
If you're not getting paid much, it's because there are plenty of new migrants willing to work for less. That's not a GOP thing. That's Bidenomics.
It is insane how much empty land there is in this country and yet we can't solve this inventory problem.
Longer distance means more automobile traffic unless we use passenger trains. Economic centers can only support from so far away, but with more telework the distance which they support has increased such that people can live 2 hours or more from the office since they only need to go in 2 or 3 times a week. It would be like someone in Tuscon having a job in Phoenix; Culpeper having a job in D.C.; Lafayette to Chicago. Fully remote work has also increased the minimum price everywhere that has internet because well, the worker can work anywhere with internet, so is free to choose a more affordable location. Inventory problem in America is mostly to do with zoning and building codes, not empty land.
It's not insane. We hopefully have lots of empty land. If we have no empty land, then that would suk. Just a bunch of houses and cement for the whole country.
The free market never fails, sit tight. The real problem: Over 60% of Americans live hand-to-mouth, and public schools failed these people. We have a stupid problem. I own (4) modest rentals and see these people every day. My tenants drive newer cars than me, they have big screen smart TVs and pay for premium cable service, they have the latest high-dollar I thingy in their pockets, take vacations they can't afford, and pay high interest every month on credit card balances. The stupid is strong in America,
Biden is saving that for the illegals and the chinese.
All by design.
In Nashville they are giving away 2 months Free Rent on all the grossly over built apartments … So it actually
over supply and it’s really bad if you’re an apartment investor
.......in Nashville. One of thousands of cities.
All depends; you can write off those losses.
In Idaho as well. My sons just sighed for an apartment and are getting two months free. First payment due in April.
@@RARochester I don't know much about building apartments. How do write offs work?
Except that once those two months are over, the renter will face a grossly-inflated rent payment. The building owner will recoup that 2 months in higher rent before the year is up. A smarter renter would have negotiated a lower rent.
I see rents declining in CO and huge amounts of construction still going on for additional units. Real Estate is local and this video is very general with some questionable stats as the number of new builds and permits is very high. I take real estate advice from people that have a vested interest with a grain of salt.
It's like you are a farmer. I buy everything you sell, then I sell it to my customers. It doesn't matter how much you grow, because I buy it all and I dictate the final cost. This is builder to investment firm dealings that are going on. It doesn't matter how many people want homes or how many home get built. Government has to diminish the economic return these firms get from these purchases. Either with rates, taxes or laws. From what I hear they are doing this.
I live in CO as well. What you are seeing here is a good thing. Once all of these new dwelling units become available, then rents will drop to a reasonable level. Rents have only declined a percent or two, if anything at all. Not many people can afford the $2500 to $3000 that new apartments in desirable areas are renting for.
same thing is happening in Arizona
I recently read that there are more people pouring over our border(s) than births to American mothers. I wonder if this includes that demand on housing. Granted you will typically have high density per unit (10 people in a small house etc.) but it's still "demand."
Most of those people are from the war and they already have housing that is fully paid for by the government from our tax money. They have housing, food, transportation, internet, phones, and pretty much everything. I believe last I check we are spending 6 billion on that.
The funny part is we complained about the government canceling debt and helping people living here but we are fine with them paying 3 times as much money to people who will be gone the moment the war is done and did not have to work to make a living at all in this country.
Unless they are going to live without a roof like many in Southern California then they need housing.
Yes this is true
I believe this because in recent years, I noticed the U.S. top music charts on RUclips Music have become increasingly Spanish. Perhaps signaling a demographic shift is underway.
The govt is paying their rent. So low income renters now pay more to try to get something higher than their budget. This puts pressure on middle income renters, and so on. You can't add 14 million people in 3 years and then pretend we don't know why citizens are increasingly priced out of housing.
I'm a landlord and own many single family homes I bought for my company in 2008-12 at bargain basement prices with cash. It's a tough business but a good business and not for everyone. The worst thing that ever happened for renters was the Covid-19 Eviction Moratorium. Landlords like me took heavy losses in some cases when tenants didn't choose to participate in the federal rent relief programs. There was no real reason to. They could stay in a home without fear of eviction and didn't have to take any action whatsoever. The Supreme Court ruled the moratorium was illegal but the Feds never came back and made landlords whole. Well guess what - it's payback time!! Rents have gone waaaaay up since 2020 and will keep going up into the future. The eviction moratorium created a huge moral hazard and emboldened people to quit paying rent and taking responsibility. Landlords have jacked up rents due to increased risk. For increased risk, one needs a higher reward. It's very unlikely there will be widespread rent controls. This would just result in more of a shortage.
Yep, I am a landlord too and you are exactly right. The moratorium took away rights of the landlord to conduct his business the way it needs conducted and forced landlords to directly subsidize people. The govt
Was only offering assistance to renters but if they didn't take the initiative to do that then they just squated and this forces the landlords into a very bad situation. Very, very shortsighted solution. They should have had the assistance open to landlords so they could get paid and they were the once with the incentive to act.
I disagree on rent control. Politicians in Democrat run cities are stupid and will still enact rent control.
Point 1 - Birth rates by US citizens is the lowest ever recorded which means your US Population Growth chart is based on total numbers which I'm guessing includes non-citizens in the country illegally. Point 2 - we have more corporate ownership of the housing market than ever before. Point 3 - Salaries vs inflation vs housing cost has been declining since the 90's. My father bought a 3000 sqft home on 11 acres for $55,000 in 1980 on a $60,000 salary.
Wrong, on a per capita basis there have never been more homes per person in history. There is no shortage there is a misallocation to investors
This needs to be weighted against the growth in regulations that prevent modest homes from being built. The minimum standards keep going up which limits the base level cost of a small home. However, once 3d printing gets going I think we'll see major deflation in housing nationwide. That's probably like 5+ years away though. And it relies on government passing regulations that support the new technology. We'll see.
I'd agree that banks and large investors are holding on to properties, with extreme markups (only willing to let them go at overvalued prices), to systematically keep prices high.. which translates to people with mortgages having to pay banks more interest. Regardless of the Fed rate, if your home costs more, you're going to pay more interest in total.
Regardless, the guy in the video is correct about the solution. Like the board game, Monopoly, when there's fixed number of squares (properties) on the board, the incentive is to hold onto those properties. By moving away from fixed supply, increasing supply, that weakens real estate as a static investment vehicle and might encourage investors to sell, further increasing supply (specifically, make more homes available for people actually looking to buy a home to move in to).
Everyone wants their own housing regardless if it's a rental or their own homes but the biggest obstacle is Inflation. I have seen new apartments for rent but they are all vacant rental prices that are too high.
Then that means they are not following the market and this is when regulations are required. Free market doesn't work for everything.
Yeah, a new apartment building just got built down the street. The rents seem ridiculous for the area, but we'll see if they find renters. My guess is if they start renting during the summer they'll have the best chance at getting people because the new units have AC which is very uncommon in this area.
@@Delimon007 The market is severely distorted from ridiculously low interest rates the past 15 years and free money that was given out to people during the pandemic. Now that rates have been raised, the market needs time to digest. It's gonna take awhile. Hopefully the Fed does the right thing and keeps rates higher for longer, but I doubt they will once people realize the recession is here.
We were taught not to have any sex, from AIDS and other STDs in the 80s, to everyone becoming attracted to their own sex, they became alarmed that no children (especially white children) have been born….no they are importing young baby makers….now I’m 54 and can’t get a place to rent. The new landlord from Iraq doesn’t like women and I lost the apartment I had for ten years. The male tenets were allowed to stay. I’ve been homeless for 3 years now, from living in the woods to accepting a floor with moly rain that drips on me. I’ve been a nurse since 1982. I have no record and owe no money to anyone. Everyone in my family has died and I have no one to turn to. I have a lot of money that no one will accept because I don’t have a co-signer but I know it’s age discrimination. I’m happy for everyone who is doing so well, i hope there is something better coming along for me. 😢
I don’t see this changing. What is coming is your kids don’t leave the house and live in a basement apartment and share the burden of the bills. Also, where I live occupancy dwellings are rising. Now you have multiple renters in one house or multiple families. If you go into these neighborhoods there are too many cars to park.
I'm currently in one of those apartment communities you are talking about, moved in 2019, brand new build, vibrant buseling, leased up. I'm still here almost 5 years later and this place is a ghost town. This is a direct result of: "To get the public to accept the need for a pan Corona virus vaccine. We need the media to create the hype to get to the real issues, we need to use that hype to our advantage, investors will follow if they see profit at the end of the process", that's a quote from Peter Daszak, 2015, published in the February 2016 proceedings of the national academy of sciences. My neighbors walked as much as $18,000.00 back rent and are now living in there car in a Wallmart parking lot. Supply & demand, try again
When a family is bidding on a home, investors and real estate firms should not be allowed to bid.
It's sad when people are doing what they can to save to buy a house then get outbid by an investor.
Very true
What ? How about investors with cash should get first dibs. If I am selling, then no trouble cash now. And pros know how to close the deal and pay. Thanks.
Whelp, we are empathetic to your argument, however, if you place restrictions on who can transact, this has the tendency to create unintended consequences. Eventually, we become socialists/communists. There is no incentives to keep up properties. Where is there any incentive in your argument?
@@Notme-tq4xs So screw families trying to buy their first home. Greed at its finest.
Please like this will drive the cost of everything up and cry about paying taxes, writing everything off to look like they make no money, exploiting the need for housing.
@@dreamlopez1a lot of this is a delicate balancing act. If you’d like to understand why the rich do what they do (trust me, when you peel back this layer your thinking will shift) read the book Tax Free Wealth by Tim Wheelright.
The other thing to keep in mind is that this thing has two sides. If the landlord prices the rents or if the seller prices the home too high, then they don’t rent or sell. Priced too low and they’ll be hemorrhaging money. The other side is that as a renter (depending on the circumstances) you -general form of you-may be saving a ton of money.
I haven’t done this, but I would hate to have a mortgage and be cash poor while trying to own a home. The stress must be a humdinger…
Great video and great comments. Here in Rhode island we have had massive rent increases, close to double in many areas totally unaffordable. Yes supply outstrips demand here.
The drivers seem to be massive migration from south and central america (that may be incompletely or uncounted by census) and the conversion of about 15% of the rentals to air bnb and the like, and a lot of pandemic money drove increased household formation. New construction here is very very low.
Student rentals and section 8 rates are high and they put a floor under the market . Section 8 is a price leader and basically guarantees rents will never go down, since HUD never lower the rates.
Say roughly for every 2 or 3 migrants that come in, 1 current resident gets priced out and has to leave RI. Ditto for air bnb. There is almost no new construction so for every air bnb conversion, somebody just got priced out.
The other problem is that in RI it's only really economically possible for a builder to build expensive houses, $500K+
In Rhode Island the apartment shortage is a major major crisis with no appearant solution.
BTW any number I quote above I mean just roughly, SWAG.
In the last 30 years there have been many construction equipment innovations and improvements. Unfortunately the productivity per worker is half of what it was 30 years ago. There is a reason for this. Cheapo labor is not a good deal
Fortunately I have owned a home since the 90s and was able to get my foot in the door in the now absurdly expensive market in San Diego. My second place was a townhome in a desirable area and we lived there for ten years. But as I looked around, I started to notice that almost all the new building was luxury condos and multi-family units. It was clear to me that owning some property with land was something we should transition to, even if it means moving to a less convenient, but still desirable area. So glad we did, because after we moved, California basically declared war on single family homes. They would only fast-track multi-family dwellings and were encouraging people to break up single family lots and turn them into multi-family properties with up to ten units, existing zoning be damned! The few new single-family houses going on the market were all high end and very expensive. So we consider ourselves fortunate to be sitting in our new home with a quarter acre of land and big back yard. Especially since the new home has appreciated faster than our previous townhome.
Exactly. Developers are destroying the bungalows in California. These are great starter homes even if a bit dated. The bungalows are being torn down and luxurious boxes are being put up. The pricing puts McMasions to shame being 4 times or more what the bungalow sold for. Few can afford the $3M, $4M, and $5 million dollar price tags. Many are sold to foreign investors here in Southern California.
@@conniehuffaCRE8 Hard to believe I knew a guy who bought a little fixer upper in North Park in the late 90s for $100k. Even had a little rec room off the back yard. Probably at least $800k today.
@@norwegianblue2017if there’s more than one bathroom it’s definitely 1 million easy 🤣 closer to balboa definitely 2 ATP
@@copiouscat Only had 1 bathroom, a true bungalow. But with the new more lax permit restrictions, could make an ADU out of rec room with its own bathroom.
The situation is actually worse on the ground than the statistics show because housing availability isn't necessarily in the same place as housing demand. For example, my state of Arkansas is growing incredibly fast in the northwest corner where I live, with the population in the two-county metropolitan area projected to double from half a million to over one million by 2045. The state as a whole has a growing population, but only 16 of the 75 counties had an increase in population in the 2020 census, which means that the empty houses in the 59 counties that lost population will show up as "available" on state-wide statistics, but they are not in the areas where the demand is. My guess is that this will be the situation in almost every housing market.
I live just outside of Nashville and my apartment complex now has vacancies. But at about $1,600 for a two bedroom it's still not affordable for many. I have two bachelor's degrees and I'm a licensed real estate agent and I'm probably going to give up my apartment and live in an RV for a while to get ahead. I can't get ahead and save a down payment to buy if I am paying crazy rent prices. I pay alone today about 90% of what I used to pay for a nice 5 bedroom house (2017 purchase) in a nice suburb with my ex-wife who also worked.
Agree! I live in Franklin. I have two jobs and 50% of my income goes just to rent. I’ve moved three times since the pandemic due to affordability and despite empty units everywhere I noticed that the rent has jumped up $100 since December I have screen shots of several local complexes and I don’t understand why the rent has gone up let again. It’s impossible to save with rent so high. But I’m so tired of moving,chasing lower rents and specials. It’s very expensive to live if you’re single without a second income in Nashville right now. It’s so sad. I had a three bed, two bath house with a garage for five years and I now live in a 600 ft apartment that’s almost $1000 more a month then that house was. It’s very frustrating that everything has gone up except wages.
Get a roommate
@@AmandaGatesHomefranklin is too popular now. Pick a cheaper town
Low supply only drives up prices if demand remains consistent or increases. And yet housing prices are falling in many areas of the country. For instance, homes in Florida, despite a huge demand due to surging population, have been sitting on the market longer and have seen steady listing price decreases. All of this while interest rates have been dropping recently. Explain that.
There are several headwinds for homeownership. High consumer price inflation, flat or decreasing real wage growth, reduced hiring, massive losses in high income full time jobs, increased debt service costs, etc. People may want to buy a home, but they simply can't afford it.
We've been spoiled here in the U.S. Super low interest rates and loose credit standards made it so that everyone was able to buy a house, even though many of them shouldn't have. This inflated housing prices. The sub-prime market crash of 08 exposed that, but now the party is truly ending.
We're already seeing record numbers of young adults moving back home. Many are having to take on roommates to share costs. This will continue until this economy turns around and people can afford to buy houses again.
And I'd be remiss if I didn't mention the elephant in the room. If we have a shortage of housing, we need to stop the out of control flow of immigrants into the country. We've allowed 3.8 million immigrants to enter the country in the past 3 years. They have to live somewhere and they consume resources. This puts extra pressure on the system.
Bottom line, don't buy into this FOMO crap. Don't feel pressure to jump into the housing market just because talking heads tell you to "buy now because prices always go up." Hogwash! Don't fall for the hype. Nothing goes up forever. Prices will come down. They're already starting to.
actually a lot of immigrants already have place to go because family already home owners. They will live with 8 or nine to ac small house and not complain like Americans would.
In Florida insurance rates have gone through the roof. People are trying to get out because they can't afford 50-150% rate increases every year. I have questions why that is the case. I suspect vanguard/blackrock is involved.
Florida prices have gone up 30% in the last few years. If a house has gone up 300k in four years and they have to drop their list prices by 10k, that is not a issue.
@@claytonmatt4334 "You will own nothing, and you will be happy."
@@info781 Generally it wouldn't be a big deal. But it's indicative of a trend reversal. 18 months ago, houses were going under contract within 24 hours at above listing prices. That has shifted. However, I expect there to be a Spring bump, then down we go into the end of the year.
Sixteen million homes
Sixteen million homes currently sit vacant across the U.S. Despite how many houses are in the U.S., millions remain empty across the country while hundreds of thousands of Americans face homelessness. - United Way.
Oct 13, 2023 - According to the Census Bureau, there were approximately 15.1 million vacant homes nationwide in 2022.
Well, rent is dropping in my area. Texas alone Added 1.5 million units last year. What makes you think we can’t build 10’s of millions if it we wanted to? I rent by choice because I move around. I’ve lived in 4 different states in the last decade going were more money could be made. Imagine selling a house every time. Looked at a house down the street from where I lived and the yearly taxes were more than the rent. I’m actually saving money by not owning a house there.
Selling a house every time would have actually made you more money. Do you know how to do math? Is it more work? Yes, but the money you put into it you get to keep and maybe even sell it for a higher price. I have no F'in idea how you can say you saved money that sounds like cope.
@Delimon007 Precisely. I've moved around 3 times in the last 7 years. I bought a condo the first time in Chicago. A townhouse in Kensington, MD the next time. Then A house in Silver Spring. Each time I made at least half the money a paid in mortgage back on top of the closing costs when I bought. Only people who don't understand how the housing market has been on fire the last 15 years would say something so blasphemous as renting is saving more money than buying 🤣. It only saves you time and paperwork. Renting is just as good as throwing your money into a fire pit. Gone with no chance of return.
As well as Corporations , Foreign and Domestic , purchasing Houses in bulk .
Probably one of the best videos on the housing crisis. There does seem to be a lot of empty properties in the US but they seem to be in cities like Detroit. Not a city most people want to live in at the moment.
The math seems to be off. If the population grew from 178M -> 341M in 66 years, that is an average of 2.5M people a year. However, the average household in the US contains 3 people, so this would only require an increase of about 1/3rd that number (about 800K) housing units per year. The average number of new units in the graph (@2:59) shows 1.5M new units per year, which would be more than enough to meet this demand. Indeed, this is why in the 2000's the rent has held steady whereas the house prices continued to climb due to the new bubble created by Fed policy. It is true however that starting from ~2010 onward, we have been under building, but even that doesnt look like it was below the 800K units average we would have required. So I am with some people who think we have another mini housing bubble right now, which will pop in the next couple of years.
18 years into my 3 bdrm house mortgage refied once and I pay down the loan balance by 600 per month in a town where 1 bdrm apartment runs 1600. Over time the debased dollar shows its effect
No mention of all time consumer debt. The average person is tapped out. The bond market is signaling a hard landing. Kenny is making a red herring argument (population growth = higher home prices). The main point is affordability, NOT supply.
Spot on. This video is oversimplified bunk.
I've hard this same argument over and over that home prices only go up and lack of supply. Gammon did a good video looking at Germany the other day. They have had a "lack of supply" for years but home prices still crashed.
People in high debt are not home buyers. Home buyers are savers.
@@mikeyis009 I used to be a mortgage processor. Let me tell you before the GFC I would see loans get approved where the buyer was 100k is debt for cars, boats, CCs and other crap. It is not much better now.
Investors are always snatching up low income housing before anyone else can, driving those prices up.
Population growth by invasion. How does that affect the math, given the amount that the immigrants can pay for these increasing prices??
*Upzoning* is fine, so long it’s not in my neighbourhood.
Increasing density of units just leads to ghettos. I have seen this play out in Los Angeles. Went to to San Diego for better ROI and now I am seeing the same thing being pushed.
@@redtiger7268 it’s common sense that it lowers property values. You bring riffraff into what used to be an upscale community.
Excellent video, Ken! Yes, adding supply will solve more housing problems than perhaps any other "fix" contemplated.
Can you help add to supply ? Maybe build a house or two ? What ? no money ?
Key phrase is "affordable" housing. Most places being built are not affordable by most people.
With wide-open borders, we have over 12-15 million more people here in the last two years alone, which is just throwing gas on the fire... THANKS AGAIN, BIDEN!
But people no longer have many kids or kids at all
They've been saying the same thing in Germany about a decade of shortages but their real estate is absolutely tanking right now.
Germany killed their middle class manufacturing jobs with high energy prices. So who is left to afford things.
We're making the same mistake in the U.S. Lack of supply is irrelevant if people can't afford homes, regardless of home prices. And much of the price increases are due to institutional investors like hedge funds bidding up prices.
@@BrandonGrieveSupply is always relevant. If there is excess supply rents will fall.
@@info781 but there won't be excess supply because millions of illegals are now flooding the market
Airbnbs, vrbos, corporations buying single family houses should be illegal!
I was under the impression that rents were declining in many markets...and that a whole swath of new rental inventory is poised to hit the market...
Yes, excess rental inventory is pushing rent down. I'm not sure why he's saying otherwise 🤔. FRED economics data is the best resource
That's short term and does not change the long term trend
They are….cap rates are rising, values are dropping….Ken is wrong
@@njroberts011 But, the long-term trend is also that we are overbuilding houing. The rate of population growth in the US has slowed to half of what it was in the early 2000's, but the number of homes being built each year is about the same.
Rents went down for a bit in 2007-08 also; you are correct rents are in decline in many areas - it's a temporary trend that will likely change direction in the next 1-2 years. Long term, Ken is saying rents will be forced to rise beyond the reach of many Americans.
I really enjoyed listening to your video and advice and suggestions. I bought my home in 2004 when prices were low and just found out that my home is worth 3 times what I paid for it. I only bought my home because even at that time [2004], my rent kept going up twenty to thirty dollars a year and it didn't take a rocket scientist to realize that I would eventually be homeless by the time I retired if I didnt buy a home which costed just a bit more than I was paying rent at that time. I totally agree that renting should be a option. I am worried for the follow up generations and how they will live. I have seen personally how long it takes to get a home constructed in my area. In 2004-5 it took about 6 to 8 months to have my home built. Now homes are taking almost 2 years to build and they aren't even as large as mine. One home is still in the construction stage and its been over 2 yrs. Great video thanks for sharing.
Population growth *is* a choice.
Mass immigration is public policy and has been for decades.
Drives up housing demand and labor supply, making rent more expensive while driving down wages, benefits, and job security.
I disagree. Right out of the gate ignoring the influx over 4 million immigrants in the past 3 years negates your numbers.
Supply is NOT the only problem. And building low cost rentals only means you will lbe living in a tiny one bedroom unit for $2,000 plus. Low cost housing means shoddy workmanship on small homes that a family will outgrow. Those homes will become slums because they are poor quality and too small. This problem of high cost has cross the line and gone on to be ridiculous. You can blame government intervention for that with manipulated value and availability of money and puposly designed suplly chain shortages which drove the cost of building through the roof. And now you want the government to step in and fix this? Tell me one thing the government has ever made better. Free market was the answer but that has been killed. The cost of housing can't go down because no one can afford to sell their property for less than they paid.
You're seeing the implementation of the "you will own nothing" reset in full swing.
Ken, I hear arguments on both sides. There is a housing shortage and no housing shortage. I have to believe that there is a shortage in some markets but no shortage in many other markets. This seems to be too broad of a statement when we say USA has a shortage. How do we find out where the shortages are? What type of shortage is there? Like the one commenter mentioned, no shortage of apartments in Nashville. So, is there a shortage of 2 bedroom apartments going for $800/month or a shortage of 3 bedroom townhouses for $3,000/month. I guess migration data is needed. Everyone and their mother was moving to specific markets during the pandemic years. Big shortages. Now many people are leaving and going back where they came from combined with over building in those areas and wham, it swings to over supply. Also, where are all these people sleeping at night that we don't have homes for? In the streets? Do they just need a room to rent in a house for $100 a week like so many people do. Or do these people have a place to sleep and they just want a nicer place to sleep. Can people afford to pay for this nicer place to sleep? IDK, seems complicated with a lot of question marks.
tons of apartments and condos being built in my area but that's not what families like mine are looking for. We want houses not housing - unfortunately developers are driven by incentives that don't serve the majority of small to medium sized families.
Spot on
Developers can only build what is financially viable. A SFH in expensive metros is not viable with the level of fees needed to break ground. Apartments are what local governments are pushing for.
What the government needs to do is 1) reduce the mass influence of illegal aliens that is adding to pressure for housing, 2) identify illegals on the census so we know the real numbers of citizens, 3) stop adding so many restrictions on building to allow the ability to build "affordable" housing, 4) stop doing subprime lending to people who cannot afford homes and 5) great good government policy on spending to control inflation. Every problem he talks about is tied to the inability and inefficiency of the government in other areas. All of these "save the Earth" green policies add so much cost to building its not even funny. Houses and cars face the same issues. When you look at the homes built a century ago, the appliances installed, etc, you can see why home prices have skyrocketed. Just the difference in framing, windows and insulation requires alot more cost. Add in high efficiency appliances, new electrical requirements, changes in codes across the board, cost has to skyrocket just to meet those new regulations. We have allowed our citizens to be regulated into poverty and subsidized our own demise with good intentions that are not financially feasible for the lower 1/3 of the public.
Question: in 2022, we had 131 million total HOUSEHOLDS and 143.5 million housing UNITS plus 1.55 million new housing starts. Doesn't that math say we have a good-sized SURPLUS of inventory? Counting increases in population isn't the right metric. We don't need to build a home for every baby born. Generally, people live in households together. We have Surplus of inventory. (Way overpriced inventory, that is) in FL.
How many immigrants are coming over the border and how will the population look at the rate they are going by 2025?
Plenty of people own 2 or more homes. Your math says 12.5 million more units than households. That represents a little more than 3% of our population. I suspect more than 3% have 2 houses, and some have even more.
You want to fix supply? Make it easier for landlords, ie less tax, easier eviction of bad tenants, criminal charges for wilful and malicious damage. I’ll build some more houses tomorrow and rent them.
Baby Boomers make up 22% of population but own 42% of the homes. I am in construction and for the last 20 years they have been our best customers. They have around 10-15 years left and maybe 5-10 years left owning homes. When this supply comes online it Will satisfy our shortage and sadly we will all loose loved ones
It will come, slow and quiet. investors will buy them.
I'm a boomer with substantial real estate. It will pass to Boomer's children. Same picture.... Different generation
Inflation from population growth is a more organic and not as bad as inflation from pumping an economy
As a follow-up post I found the error in the assumptions this guy is making on "the math". His two assertions he makes are:
1. US population is continually going up
2. US housing supply is increasing slower than it was prior to the great financial crisis of 2008.
What he fails to mention or realize is that the US population is growing at a much slower rate than it was prior the great financial crisis of 2008. In 2008, our population was growing at at roughly 1% per year or roughly 3 million people/year. Our population is currently growing at 0.5% per year or a little under 2 million/year. So one would expect that housing supply increases today would be roughly 60% of what they were in 2008, but as you can see from his graph, this isn't true and we are currently building about 80-90% of the housing units now as we were historically when the population was increasing more than it is today.
Yes 100% especially your point at 7:00 about upzoning. The free market cant work its magic when its being held back artificially by zoning restrictions that are no longer sustainable.
This analysis assumes 1 person per household. If the population grows by 1.8m people wouldn't we divide it by average size of a household to get supply of new housing stock needed, not including obsolete units?
A quick search showed that the average number of people per housing unit decreased from 3.33 people in 1960 to 2.5 people in 2023. Fewer people per housing unit means more units needed.
It is a lot more subtle that just looking at "gross" supply, but you also need to consider demographic trends, economic forecast, number of people per dwellings, living area used by dwellings... It would also be smart to consider where things are going, not just the past, and recent trends. Some indicators (such as recent supply) are trailing (also known as lagging) indicators. Trailing indicators are often referenced in investing and finance as measurable economic factors that change after the economy has already begun to follow a particular pattern or trend. Lagging/trailing indicators do not predict long term or even short term trends. Areas that have seen the most people moving in may actually become overpriced and start loosing appeal. Aging populations may move to retirement homes instead of new traditional "supply". Some may also move to more affordable sunny destinations full time of part time. Those who become snow birds to Central America for example, may sell their large homes and settle in smaller rental units. Not all supply is equal. Lots of retiring baby boomers will downsize. Immigrants from the developing world or even Western Europe are more likely to accept smaller dwellings, or to pack up more people per unit. The currently strong dollar is also likely to make many people think twice about investing in American real estate, when you can get better value in other countries, and often live safer, and with a more affordable cost of living. On top of that, there are all the other factors mentioned in the comments, such as the impact of airbnb, investor speculation, evolution of rental regulations/restrictions, zoning, banking situation... Also, look at China with a massive surplus of housing supply and insanely high prices where the home price to annual income ratio could be as high as 40 versus 3 to 5 traditionally in the US. This is an example of what can happen when governments try to drive markets in one direction, creating booms and busts. What the US and most countries with housing problems need is smart, appropriate supply, and to obtain that, a wholistic approach to housing, investments and population management.
You call for lower interest rates to solve the housing crisis but low interest rates is what caused the problem to begin with. It’s extremely easy to see this. If no one could get a 30 year loan or any loan for that matter and banks weren’t allowed to lend money. What do you think the cost of your house would be? The answer is around 50-70% less. Everyone points to things like Airb&b, immigration, landlords etc. unfortunately most people don’t understand how and why banking is the real problem.
Grim warning for landlords. Vacancies are rising, rents are dropping, cap rates rising, values dropping. It's bend over time.
Are you dense?
We are seeing this really heavily here in Phoenix with the apartments. We have a corporate housing company, and we rent between 2-5 apartments in dozens of buildings across the city. Vacancy rates are skyrocketing here in town. With that, many complexes are dramatically dropping rates (after sticking it to us with $400+ increases in a single year in 2022). I get the supply/demand causing increases, but I also think some builders and developers are overly optimistic and greedy...which is what's happening here in PHX.
Not true in Boston. All real estate is local.
@@zhinan888 Boston's nasty ass weather and high cost of living is causing population loss. Harvard is imploding as well. Bend over time in Boston.
@@zhinan888 Exactly real estate is local. In the DFW and Phoenix areas rents are coming down. In San Diego rents are going up. (Those are the two areas I have investments in, other than that I can only talk on broad trends)
There is a lot of math and data related reasons mentioned, but it's pretty simple. If you have lived in a military town, you'll get this. The military pays service members X to live on the local economy. The rentals know what the military pays the service member, so they adjust the rent accordingly, with each annual increase. It's no different anywhere else. Nothing more than capatalism operating at 100%.
The reason why we are having a problem with finding a rental is this…people who can afford to buy a home are not buying them, instead they are now opting to rent. This has been the trend for the last few years. Which leaves a limited amount of rental units available, for those who can’t afford to own a home. Also a new trend is for renters to pay for their own heat and hot water. Until recently, a renter could expect to have heat and hot water include in the rental agreement. This all changed when the cost of heating fuel skyrocketed. We live in scary times.
Paying your own utilities is not new. Maybe you have lived in apartment buildings where they didn't have separated systems. It's hard to control how much a person uses the utilities when they aren't paying for them. People who don't have to pay them will crank the heat and open the windows in the winter lol.
Only problem w that math is the 1/1 correlation of pop growth from '57 to now and a projection of necessary housing as one unit to each new human. Most households have more than one person living in the so....divide that number by at least two. Presto.
Thank God I learned Spanish when I was young. Heading southward, lots of choices....MX to Tierra del Fuego....and all places in between, probably will end up in one of the guays....Peace. PS been in Phx area since the 70s, ebb and flow boom and bust...part of valley DNA. Impossible to use the valley as a metric for the big picture. As much as things shot up, they have room to crash down, seen it probably 7 or 8 times in 45 years. Good luck greedy landlords in Phx....buena suerte.
How much of lack of supply is due to political pressure, zoning and regulations, against growth to “save the earth” and/or selfishness?
100% of it. If the numbers worked, builders build.
We’re at the point of inevitable discomfort. Imagine a 2 lane road, and subdivisions are built until traffic is unbearable. Development slows. So a 4 lane road is built and more subdivisions are added until traffic is unbearable. Then development slows. The point’s that as long as things are easy, population just grows. That’s why it’s gone up exponentially in the past century … easier living. And as long as it’s easy, there’ll be more people until it gets hard again. Meanwhile alot of other problems mount, with resources, pollution, congestion. So stop building now instead of later. Clearly the growth can’t go on forever so slow it down sooner than later.
I guess it depends on the area but apartments were around $900 in my area and now there are a ton of them available (same units) for $700. Happy birthday to me!
Same thing is happening in my area
Housing prices have gotten so far out of control due to homes becoming monetized. People see real estate as a way to keep up with or outpace the inflation of the money supply. At the trajectory we are at most middle class people will not be able to afford traditional homes. I believe there will be a massive boom in affordable housing such as prefab homes, tiny homes, ect.
Free market will make more houses if you let them and get out of the way.
When have homes not been monetized? Our capitalist society is based on this. We can get into to the discussion of different systems that have mostly failed what was promised of it(communism) because people just can't help being corrupt when they get power. Lol
Thanks for a concise snapshot of the problem, Ken. New real estate investors need to know how the deck is stacked, and the time limitations for meeting this demand is crucial. Do the math, indeed!
this is ridiculous, There is lots of land. If builders could build they would build. The problem is that there are fewer workers to build homes. So homes are more expensive to build. Between higher wages and inflation of building materials, homes are more expensive to build. And there are millions of short term rental properties like AirBnB. Which have taken homes off the market. Add that to all the homes with favorable 2% and 3% mortgage rates that could not sell their homes because even a smaller home would be too expensive to down size into. You don't have to change any zoning unless you change unused commercial buildings into residential building. The problem is that there are fewer workers and everything costs more.
Prevent banks, investment firms from buying houses, they are proping up their greedy lending. Reduce new build lending by restricting valuations to 90% labour and materials. Reduce maximum loan to value ratios. Restrict second hand lending on a sliding scale. Old houses of acomparible construction method should cost way less, after 5, 10, 15. House buyers and owners shouould understand. Make bank reposessions far more difficult.
People are moving out of coastal areas in droves. Lots of new subdivisions and housing units going in across the Midwest nearing completion in the last year. Unless interest rates come much farther down, prices of real estate will take a fat dump. The only thing that's holding back new construction is the lack of skilled laborers, the younger generation are not having kids and not learning from the older generations knowledge in skilled trades. Over leveraged mortgages will force foreclosures and bring rental prices down. Just my opinion.
There’s 16 million homes on Airbnb in America. Thats a bubble for shadow inventory right there
Uh, my Rent is about to change for the first time in 14 years, but my rent was $985 for a very long time for a 2 bedroom apartment in New Jersey, 20 minutes from Manhattan. I just had a 3% bump which isn't much. Renting is the best thing for me right now.
But you're not addressing WHY home builders STOPPED building in areas like mine.
You would be nuts as investor to build in a blue state! Rent control, law that prohibits evictions, green roofs etc.
We need to lose the blue and red thing. No more identity politics. Let's get together and find solutions.
Canada and Australia have the same problems with slight timing variations.
Federal and state Governments need to sell land and get rid of a lot of zoning restrictions allowing the market to right itself.
Local ordinances against modular homes keep construction costs high. Some of that may be union influence. Homes do not have to be custom-built. Imagine the only clothing you could buy being custom-made.
People mentioning investment firms completely miss the point of the video. this video represents the foundation of the housing problem which is .....everyone needs a home. You may want to buy instead of rent, you may say rent is too expensive. It doesn't matter. When an investment firm buys a house and rents it out, it may spoil someone's dream of being a homeowner, but it still represents a home for someone to live in. What this video points out is regardless of who owns what, or whether your rent or own, there is not enough supply of houses and apartments to house everyone as supply as been lagging behind population for 15 years. The major issue NOT mentioned (because its political I suspect) is the open border. We have had over 10 million illegal border crossings since Biden took office, relaxed previous policies and welcomed migrants. Whether this is good or bad doesnt matter. What matters is these millions will need a place to live and we already have a 15 year shortage on top of inflation and regulations making it hard to build cheap housing.
I am sorry but isn’t it obvious that rents are high because of low supply?
The reasons of low supply need to be studied. In places it’s because owners don’t want to rent, but why? Etc etc
In other places rentals are awful quality, or too far, or bad schools, etc.
The ratio of housing units in the United States to population is actually higher than before the GFC. According to the St Louis FED the US has ~146 million housing units and ~341 million people (2.3 people per house). Immigration is a factor but the large surge of investor purchases in 2020-2023 is the true cause of the "shortage".
In Northwest Indiana (Lake County), there's an apartment complex trying to rent a 540 sq ft, 1 bedroom apartment for $900/month (!) Only place to get "cheap" vacant land for building is in towns you don't want to live in (Hammond, Gary, East Chicago).
of course the home builders want to see more housing!!. surgeons see everyone as needing surgery!!!
The supply problem had been created by the millions of people crossing our southern boarder into this country.
I would like to add high insurance prices It’s a variable hit hard on the owners of many States
And property taxes.
Government is the problem, not the solution.
Wow thank you for explaining. It's true we need new housing building outside the main cities to allow people to afford new houses or Atleast give them entry into home ownership and rental home businesses..awesome video
Population is up 1..8 million. Southern border invasion is 3 million a year. Seems like a demand problem to me.
Talk about someone begging the question that is this guy.
Curious what your demographics are for the population increase in the US. Are those new birth rates? Are those illegal immigrants ? This needs to be addressed for a clearer picture.
I believe the statistics includes those who are US citizens and greencard holders. I don't think the illegal immigrants and those here on Visa are counted. The birthrate amongst natively born US citizens is below replacement rate. US population is increasing because of legal immigration.
Supply is restricted by government attacks on freedom and thefts by "rules and regulation". Unless your a major builder who pays campaign contributions.
Actually i thought our growth rate was at zero or slightly below zero. Rent in my area is stabilizing and going down. The requirements are very high.
We added 1.8 million people really did you count the illegal immigration? More like 10 million
Exactly 😢
What about the abandoned homes in our failing “Blue Cities” being bulldozed as you speak?
Almost one million migrants entered the US in December 2023. What are your thoughts about the millions of illegal migrants that this government is allowing to enter the US impacting the economy, housing and services?
On a different topic, commercial real estate has lost so many tenants and many are not coming back, what do you think about the viability of commercial office buildings conversion into apartment buildings?
When my rent was raised 400.00 a month last year, I decided it’s time to buy.
And it’s gonna cost me a lot more to buy, but at least it’s MINE and I’m not paying off someone else’s financial future.
Great information! There are also two other factors that are driving up the cost of housing in addition to zoning ordinances. Strengthening of the current IBC building codes by the international code council (ICC)and rising insurance premiums due to the sustained losses incurred by insurance underwriters caused by unexpected adverse weather events.