Moral imperative for a housing crash... and permanent devaluation

[ygolo]

What happens to First Republic Bank's stock and deposits now?

JPMorgan Chase is buying the troubled lender after it became the second biggest bank failure in U.S. history.

www.cbsnews.com

It's interesting that First Republic Bank shutting down was so much less covered than SVB going down.

Their assets had a lot real estate. Was that part of why it got so little coverage?

 

[ygolo]

Another article about the "urban doom loop":

The "return to the office" won’t save the office

More people are going to offices more of the time. Offices are still in trouble.

www.vox.com

Seriously, how much more obvious can we make things?

Nobody wants to work where they cannot afford to live close by, duh!

Only thing that'll make the commercial real estate doom loop to stall is to put some residential real estate in the mix.

It's amazing how many problems people talk about just comes down to people not being able to afford to live some place.

 

[ygolo]

This is a very UK focused video, but the "con" has happened everywhere.

 

[Tomb1]

the market sucks right now...

 

[ygolo]

The housing market is so unaffordable that a record share of homebuyers are looking to relocate to cheaper cities despite rising natural disaster risks

A record one-quarter of house hunters are looking to relocate as high mortgage rates push Americans to cheaper metros, Redfin said.

finance.yahoo.com

Yet at the same time, people are saying the housing "correction" is "over" and keep pointing the same lack of (affordable) supply as the reason why prices won't come down.

Quite frankly, commercial real estate needs to completely implode and be rezoned and replaced by mixed-use and residential real estate.

All these "free market" people would rather force people to commute to unaffordable hellscapes of a city to prop up traffic to zombie commercial districts than convert any of that space to affordable housing so that people wouldn't need to commute. It's as disgustingly extractive as we can get.

 

[ygolo]

Again, I'm not in favor of prediction, but it's amazing how often in these cities it's about the locals not being able to afford the price.

 

[ygolo]

So much empty space and nobody wants to convert the outside places with good lighting to residential?

So much for the "free market" allocating resources effectively.

 

[ygolo]

Housing market shortage is so acute and the office glut is so big that Boston will offer 75% tax breaks on office-to-residential conversions | Fortune

Boston Mayor Michelle Wu: "We must take every possible action to create more housing and more affordability so that Boston’s growth meets the needs of current and future residents,"

fortune.com

Finally! Good for you Boston!

If only other places with these twin problems get it.

Edit: https://www.ocregister.com/2023/07/...ffices-pivoting-to-apartments-warehouses/amp/

It's interesting, the tone. IMO, if you are demanding return to office and not simultaneously demanding affordable housing around where your office is, you are an exploitor and nothing else.

 

[ygolo]

Middle class homebuyers are taking on $7,000 mortgages with plans to later refinance down | Fortune

The U.S. housing market firmed up this year. One reason being that buyers jumped in assuming they'll be able to refi to a lower rate in the near future.

fortune.com

I've heard people doing this. But I still remember when my parents had to pay for an 11% mortgage. There are plenty of people predicting high rates for the foreseeable future.

There are financial advisors who say things like this:

Buying a House in Recession: Pros, Cons, and Expert Advice

In this comprehensive guide, I’m going to talk about the pros and cons of buying a house in a recession, so before you make any decisions, you’ll want to read this first. Let’s talk about an important…

www.iwillteachyoutoberich.com

tl;dr: "I suggest that it’s best to keep the total of your housing costs to under 28% of your GMI (gross monthly income), and your total household debt under 36% of your GMI, and if buying a home puts you over this, it’s not the right decision."

As I keep saying, I am not someone who can make predictions, but in many areas, housing prices are ridiculously unacceptable in comparison to wages.

The part that irks me more than anything else is that the real reason for buying the house is never said out loud.

They want to look better than other people, or at least not as bad as other people. They are afraid of being seen as "poor".

If people said this out loud and stated this as the main reason of buying, rather than saying they are executing weird "clever" strategies for investing, I could respect them as honest and rational people. I'd still see them as ridiculously materialistic, but at least not fake people succumbing to the latest memes of ready rationalization.

 

[ygolo]

World can't afford US-style home energy consumption habits

The U.S. is hoping to play key leadership roles in an array of areas tied to the global energy transition, from developing corporate champions that drive emissions reductions to funding research and development of clean-burning fuels.

www.reuters.com

This came through my feed. It's absolutely clear how incredibly harmful this land use is, but I know how hard it is to change people's minds.

One counterpoint is if every single family home were equipped with solar panels that paid for energy consumed by the household (it's possible by my calculations) then in terms of energy alone we may be okay.

But we also have to consider albido, transportation emissions, and deforestation.

I also believe, we can think about more congenial and communal ways of living.

MAP OF THE DAY: If The Entire World Lived In A City As Dense As Houston, It Would Be This Big

www.google.com

The data above is 12 years old, so you'll need to increase land areas by about 15%-20%, but the main idea stands.

 

[ygolo]

More mainstream people are talking about this now:

It's basically the same stuff as Strong Towns and Not Just Bikes

 

[ygolo]

This was pushed into my feed just now:

The US housing market is so expensive that incomes would have to spike 55% for it to be considered affordable, industry exec says

To hit pre-pandemic affordability, either US incomes must spike, home prices have to crash 35%, or mortgage rates must come down.

markets.businessinsider.com

 

[The Cat]

This was pushed into my feed just now:

The US housing market is so expensive that incomes would have to spike 55% for it to be considered affordable, industry exec says

To hit pre-pandemic affordability, either US incomes must spike, home prices have to crash 35%, or mortgage rates must come down.

markets.businessinsider.com

politicians also need to stop investing in real estate scams too, because buying or selling a home has never been more of a nightmare from which there is no waking.

 

[ygolo]

I have literally been having nightmares about living in a fascist nation where we no longer have meaningful elections and Trump rules with an iron fist.

What got him into office to end Democracy in these nightmares?

It's cost-of-living stupid.

Indeed, in my nightmares, the young and minority populations (who are most likely to not find affordable housing) join the disaffected white people from 2016 to stay at home instead of voting because they see voting for the establishment as voting for late-stage capitalism.

I live in one of the areas of California that flipped to red last election. I know a lot of people personally who flipped their vote. It is they same familiar set of stories.
1) They lost a job during the pandemic and lock-downs and haven't really recovered full employment. They blame the government for that.
2) They scrimped and saved to buy a house/condo close to Silicon Valley instead of renting only to get priced out of that market and settled for buying incredibly far away instead. Now their bosses want them to come into the office. They blame the zero interest rate environment followed by relentless rate hikes for that.
2a) They got priced out of the market so bad they can't even afford rent in Silicon Valley or buy a house ridiculously far away. The blame is the interest rates for that.
3) They switched jobs for a tech sector job due to higher pay (to maybe not have to share a house with 2 other families, maybe) only to get laid off later when Big Tech started its massive firing (still on going). They blame Big Tech for that, and believes Big Tech has captured the Government regulatory apparatus.
4) They work a job they hate in Big Tech and "quiet quit" their job. They loathe Big Tech for that, and believes Big Tech has captured the Government regulatory apparatus.

I'd imagine the stories in flipped red districts outside of New York city, LA/San Diego, Seattle, Boston, etc. are similar. Except the Big industry around which their resentment centers could be finance, law, media, etc.

I think, in the political calculus, if you get rid of BTFP for real estate, and enforce anti-NYMBYism, you may lose some blue voters in the bluest of blue regions, but I think you will gain a lot more, and more importantly you would gain them in regions that are more purple or even red.

 

[The Cat]

Meanwhile in Housing...​

 

[ceecee]

Meanwhile in Housing...​

Here's more on that, specifically from the senate.

Brown, Colleagues Introduce Bill to Crack Down on Big Corporate Investors that Buy Up Local Homes, Drive Up Housing Prices | U.S. Senator Sherrod Brown of Ohio

WASHINGTON, D.C. – Today, U.S. Senator Sherrod Brown (D-OH), Chair of the Senate Banking,...

www.brown.senate.gov

 

[ygolo]

The policy failures that led to California’s housing crisis | Fortune

A case study in how local control and a shifting national economy created today’s perverse housing market.

fortune.com

When they talk about the top 20% of households having done really well financially, where do you think it comes from?

The house as a financial asset, rather than a place to live.

 

[ygolo]

Gen Z are over having their work ethic questioned: ‘Most Boomers don’t know what it’s like to work 40+ hours a week and still not be able to afford a house’ | Fortune

One Gen Zer has gone viral for explaining how much easier life was for Boomers.

fortune.com

The generational debate over housing rages on.

If humanity survives, it's the younger generation that writes the history books. The boomers may be rooting for the end of humanity, but hey, at least their houses will be worth a lot when it does. Lol.

 

[ygolo]

What if public housing were for everyone?

Local governments are trying a new way to address the housing crisis.

www.vox.com

Another possibility, maybe.

 

[ygolo]

It's pretty common knowledge, but:

Only managers can afford to live in pricey cities | Fortune

Pricier home values in cities are linked to a higher concentration of managers, according to new research from ADP.

fortune.com