wage growth does not keep up with monetary expansion. you therefore have less purchasing power year as measured in fiat. and if you want to save up to a certain purchasing threshold you must work more, which takes away time from family, and your personal life.
houses are thus becoming more expensive. in order to keep houses affordable certain decisions are made.
if you havent read Hullsman, here is a link https://mises.org/library/book/ethics-money-production
This is true, but houses are also becoming larger, at the same time that they have fewer occupants. Housing is actually getting cheaper, by square foot.
Doesn't mean much if they can't afford it.
The problem is more that the cheaper, smaller homes are rarely on the market, or are pulled down and replaced by McMansions.
True. Too bad that the cheaper, smaller homes that you're referring to are not all that cheap anymore. 🤷♂️
They are, in real terms. Square foot to median wage actually looks pretty good, adjusted for inflation.
Not everyone lives in London or San Francisco. The smaller homes are all over.
Even if there was a sudden influx of these smaller homes onto the market, few would be able to afford them.
I doubt that, as most people are buying larger homes and most people own a home.
People are buying larger homes; I can't deny that. And most own a home sure. But, the current supply is minimal and those who are selling are doing their best to take advantage of current market conditions by drastically overestimating property values. I know some of the biggest lenders plan on increasing mortgage rates very soon and sure property prices may have seen a temporary decrease, but clearly only to increase short-term demand. Not sure what the current conditions are in your hometown. But... I don't know 🤷♂️. Everything's a mess.
House prices are down here, per m², this year, but the houses are getting gigantic, so the prices are high. What really hurts is the higher interest rate.
Younger people don't actually know what houses used to be like and it's getting harder to find 80s-style housing because it's basically illegal, now.
My first apartment was 12 m² and had a gas stove in the corner.
My uncle's apartment, that I live in for a while, had no central heat or hot water and only two bedrooms, so we kids always had to double-up. One toilet and the bathtub had a wood-fire boiler (the only heater in there 🥶), so we only bathed every couple of days. Oil stove in the dining room.
No big refrigerator or freezer, either, and laminate countertops and floors.
Then the landlord renovated it in the 90s and nearly doubled the rent.
And nobody had air conditioning. It wasn't a thing.
i hate aircon... makes the air inside dry and positive charged and the environment outside cold and wet
just walk around a city these days to notice how wet the microclimate is in winter
my preference for heating is old school carbon coils in quartz tubes like the original dim orange incandescent lamps... plus they give you lots of reddish IR light which i'm pretty sure is good for your health... just have to sit em close to you... and an air purifier for the dust, the air indoors in winter is abominable
I also hate air conditioning. It is one of the main reasons I left Texas. The dry air and freezing to death in the summer. 🥴
Like living in a giant refrigerator, with cold air blasting at you, all day.
I loved our new fireplace insert, in Maryland. Could heat the whole house, if we left the doors open.
Even when we moved to Texas, in the early 90s, lots of people lived in small homes, some with no air conditioning or central heat. You were doing pretty well with a rancher the size of a mobile home and a swamp cooler or whole-house fan. And lots of trailers. Most of my relatives lived in trailers.
They would have screen doors, front and back, and they would open both and let the air through, to cool.
And always only one toilet.
Remember shotgun houses?
It will get interesting when the Boomers begin to die off and Gen Xers get older. Previous generations were taught to expect that the value of their homes would go up when they were ready to sell. Thus, they were able to climb a ladder of wealth predicated on ever-rising home values.
The problem is, this assumes that the next generation will be more prosperous than you are, and able to buy the same home for a higher price. That is no longer true, certainly not to the extent it was. Interest rates aside, I'd expect to see home values start to plateau, unless supply is kept artifically low.
That last line is already happening in my area as blackrock, et al. have been snapping up hundreds of homes as they come on the market. Entire neighborhoods that were homeowners are now 100% rentals at an astronomical monthly rent.
Investors trying to convert everything into Airbnbs is another big problem. Some cities have begun to seriously crack down on short-term rentals.
I can imagine property values plateauing sooner than most expect, within a year perhaps. Then, once the market pops, people will take a breather to wait and see how low property prices will go before demand begins to rise again. Of course, if immigration issues continue to escalate, the government will surely just swoop in beforehand and buy up whatever properties aren't being sold after the crash to house them.
We were actually interested in buying two smaller fixer-upper houses near here, as we're used to renovating, but the municipality bought both of them, renovated them, and now they house migrants.
That's where a lot of property has disappeared to. Impossible to compete with the state because they just offer more than the highest bidder.
It's the same with renting. Rentals all go to the state. No way to keep up.
sane people are nomads these days... unless there is low chances of eminent domain expropriation... the majority of Western governments are straight up cryptocommunist
The state loves illegal immigrants. The more the merrier! Lol. No one I've spoken to believes me when I tell them this.
Yes, they always act surprised that so many are coming and it's like 🥴
I'm always like "Do you really think a country as wealthy and with as many resources as ours would have second-rate border security? 😑"
Fr. I grew up next to the East German Wall and everyone be like "you can't use a wall to control people's movements".
lol but yet they live on a piece of land called a country that is surrounded by fences and walls that they cannot breach to get out without permission and call it freedom.
The people who are buying a home are likely the same people who are working from home. The requirement of an effective office room necessitates a larger home than maybe they would have bought in the before-times. If two people in the household are working from home, maybe even larger still.
During the first year or so of the pandemic, I shared a small room, converted to an office, with another member of my household, and a third person had a desk just outside the door. It was not ideal. Fortunately, it was only temporary, but if that was the new normal, I would absolutely be looking for a larger house.
Even worse is when the smaller homes are closer to the center of the ever-growing urban sprawl, so the land value is through the roof due to location, and only the wealthy can live in them.
There are no starter homes left at starter home prices. You either get a mcmansion that could hold a family of 8 comfortably, or you're stuck in an apartment. There are no modest new homes being built for a family of 3 or 4.
Yeah, you have to go out to the stix, to find them. Or live someplace like Montana.
Out here, there are some, but they don't meet the energy guidelines, they get bulldozed and replaced by a bigger building.
You'd have to go to one of the tiny house settlements, to buy one.
Factually wrong. Houses are not becoming cheaper per square foot, they average 350$ a square foot now, where as they ran 75-80$ a square foot 40 years ago. And 250$ a square foot just 5 years ago.
You’re mistaken on a lot of points regarding the US housing market in this thread, seemingly biased by your opinions of US persons. Sounds like you’re not from the US and don’t know what you’re writing about.
I SAID ADJUSTED FOR INFLATION AND QUOTED HOUSE PRICES IN GOLD LEARN TO READ FFS.
anyone who uses words like "factually wrong" isn't worth paying attention to, i know that feeling but this is a mental habit of mids, you want to see more, go to reddit
Yeah, he's saying more stuff that reeks of illiterate mid. Muted him for being a twat.
Where did you say adjusted for inflation?
And the commenter you replied to spoke about wage growth not keeping up with housing prices, so while houses may be keeping up with inflation, wages are not- ie more expensive per square foot.
This link has in highlighted the issue in bold. “Wages have not kept up with housing prices”
The numbers that define the issue in your favor are skewed by homeowners “trading up” for a larger house. If you rerun the numbers for first time home buyers you’d see the wage growth issue in plain sight. When existing homeowners trade up they leverage existing equity to attain a larger house and wages don’t have as large of an impact, especially in a low interest rate era. Home builders built larger homes to satisfy this demand, resulting in the larger square footage, and smaller homes were ignored as first time home buyers were not as profitable. As interest rates have risen, we now have people trapped in their homes unable to trade up, and home builders building too large of a home for first time home buyers to afford.
Part of this has to be that even starter homes are viewed as an investment, now. It's not just that people are selling their homes to recoup the equity and lever up into a larger house as their families expand; they expect the total value of their home to increase as well, apart from any work or rennovations they've put into it. So those starter homes become more expensive with each cycle, and younger generations are priced out of home ownership.
230m2 average house! That's crazy. In our appartment we leave at 5 in 110m2 so 22m2 per person, below 1975 average apparently.
- "Are we poor Mummy?"
😂 Yeah, we're 4 adults downsizing this year from 180 m² to 130 m², so those houses sound gigantic to me. We'll have 32,5m²/person, which is almost 10m² less than the German average.
Housing has gotten HUUUUGE.
And then you have to fill it with stuff, buy window coverings for all of the windows and robots to clean the floors and utilities are higher and repairs are higher and...
...and then you live to pay for your house. 🤷♀️
That's at least in part because people are expecting their houses to be everything, now. Third spaces have been disappearing, so work or home have to do more and more to fill the gap.
Got bad since COVID. I know people building houses with 2 studies, and they don't even have desk jobs. 😂 You just know they're going to end up working on their laptop on the living room couch.
And everyone needs a home gym and each person needs a walk-in closet and etc.
The newest houses I've been in are over 350 m² (3750 ft²) and usually end up with one person living in them because they divorce over the house upkeep and payments.
The best is when they have five bedrooms and no kids. 🥴 What army was supposed to occupy that space?
My wife and I have been thinking about work-from home as we look for a house. That'll probably be the second bedroom. But I'm actually in my "study" most of the day in our apartment, attending virtual meetings and such.
The garage can be the home gym, if you really need one.
My husband is in the study, but I'm at the desk in the living room. The study used to be mine, but I got displaced.
I don't have meetings, so I'm glad he's loud-talking into his headset in there. Meetings all day.
What are prices like in your area?
Currently we're looking at 3-bed, 2-bath homes, 1000-1400 sq ft, reasonably close to the city (so not in brand-new developments on the outskirts), with a decent-sized yard. There's a reasonable amount of inventory in the $300k-400k range.
We're shooting for the lower end of that range, so we're waiting for the right one to pop up.
That doesn't actually sound so bad. Something like that is going for like $500k out here, now, and we live in the boonies.
Yeah it's definitely better here than in some places. Though the market is kinda slow for those homes because people don't want to lose their low interest rates from 2020-2022.
Prices on comparable homes are in the $250k-350k range in some other cities/towns where inventory is higher.
👀 That's actually a great deal. A house edging towards 1400 sq ft in my area would go for close to £750k+! Maybe even more now since so many people are trying to take advantage of the current low supply within the market.
That's what prices are like over in California right now. A lot depends on location. The outlying towns are booming until they get absorbed into the suburban sprawl (see Houston). In geographically limited regions like the Bay Area or LA, eventually you can't grow any more, so prices just go up.
there was an architect/designer advocate for building a tiny wfh shed in the backyard. believe the argument was it is healthy to create boundaries between family and work, even if it is 15 steps away from your home. i daydream about this setup on slog days.
Yes. One does not preclude the other. You are missing the great 2020 time theft event (praise to orange man). See the same CS index for the more recent 5-6 years. 
