Why a housing scarcity?

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I Shrugged
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Why a housing scarcity?

Post by I Shrugged » Wed Mar 03, 2021 9:41 am

All of these people wanting houses today. Where were they living? Are those places emptying? Are rents dropping? Are purchase prices dropping for rental homes and apartments?

Or is it due to interstate moves?
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Re: Why a housing scarcity?

Post by WiseOne » Wed Mar 03, 2021 10:02 am

I Shrugged wrote:
Wed Mar 03, 2021 9:41 am
All of these people wanting houses today. Where were they living? Are those places emptying? Are rents dropping? Are purchase prices dropping for rental homes and apartments?

Or is it due to interstate moves?
In city apartments. You can get a great deal on one of those right now if you're interested. High supply, rents have dropped, and landlords offering perks like waiving the first few months of rent.
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Re: Why a housing scarcity?

Post by I Shrugged » Wed Mar 03, 2021 11:17 am

Second hand info, a guy from my home town wants to move to Phoenix and build a new house. Builder is telling him it will be 9 months to 2 years to get one built. Materials shortages mostly.
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Re: Why a housing scarcity?

Post by I Shrugged » Wed Mar 03, 2021 11:24 am

The NYC apt market makes sense.
Never considered AirBnB!

We have our snowbird AZ home under contract. It's becoming a bidding war thing here. We got a little more than asking, on the first day, and that was a month ago. During that month it has become much more intense. Our agent says it's actually getting to be unnverving. I suppose tempers are getting short, that sort of thing.

Out here, we have met a lot of new buyers from California, of course. But that can't be all of it, and it can't explain why it seems to be nationwide. Or can it??? Don't want to turn this into a what's wrong with CA thread, lol.
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Re: Why a housing scarcity?

Post by Cortopassi » Wed Mar 03, 2021 12:04 pm

Sure hope lending rules haven't been loosened along with all of this again....

In my area, houses seem to go under contract immediately, and the few that I have spoken to got a few thousand over asking price.
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Re: Why a housing scarcity?

Post by D1984 » Wed Mar 03, 2021 12:05 pm

I Shrugged wrote:
Wed Mar 03, 2021 11:24 am
The NYC apt market makes sense.
Never considered AirBnB!

We have our snowbird AZ home under contract. It's becoming a bidding war thing here. We got a little more than asking, on the first day, and that was a month ago. During that month it has become much more intense. Our agent says it's actually getting to be unnverving. I suppose tempers are getting short, that sort of thing.

Out here, we have met a lot of new buyers from California, of course. But that can't be all of it, and it can't explain why it seems to be nationwide. Or can it??? Don't want to turn this into a what's wrong with CA thread, lol.
On a nationwide level we never did get back to trend on home building (i.e. a trend that would roughly keep up with population growth) after the start of the Great Recession. To be fair we did need to (for a little while) stop building so many homes as the trend was above population growth during the bubble years but (IIRC from what either Brad Delong or Scott Sumner said backa few years ago) by December 2007 or Jan 2008 we had already gotten beyond the decrease needed (in other words, in early 2006 builders started realizing they had built too many houses, saw prices were falling, could see the early signs of the bubble starting to pop, and thus curtailed dramatically the number of new houses they built. By the beginning of 2008 this curtailment of new housing production was enough to offset the previous few years overproduction and at that point we as a country could've started building new houses again in amounts enough to keep up with population growth); we never really got back on track in terms of number of new housing units of any and all types....first came a huge and devastating credit crunch and recession, then a slow recovery, etc....and to this day we are still below trend on new housing units vs population.
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Re: Why a housing scarcity?

Post by I Shrugged » Wed Mar 03, 2021 12:22 pm

Cortopassi wrote:
Wed Mar 03, 2021 12:04 pm
Sure hope lending rules haven't been loosened along with all of this again....

In my area, houses seem to go under contract immediately, and the few that I have spoken to got a few thousand over asking price.
So who is buying in a state that is losing people? Are buyers coming out to Buffalo Grove from Chicago? Or what?
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Re: Why a housing scarcity?

Post by I Shrugged » Wed Mar 03, 2021 12:23 pm

D1984 wrote:
Wed Mar 03, 2021 12:05 pm


On a nationwide level we never did get back to trend on home building (i.e. a trend that would roughly keep up with population growth) after the start of the Great Recession. To be fair we did need to (for a little while) stop building so many homes as the trend was above population growth during the bubble years but (IIRC from what either Brad Delong or Scott Sumner said backa few years ago) by December 2007 or Jan 2008 we had already gotten beyond the decrease needed (in other words, in early 2006 builders started realizing they had built too many houses, saw prices were falling, could see the early signs of the bubble starting to pop, and thus curtailed dramatically the number of new houses they built. By the beginning of 2008 this curtailment of new housing production was enough to offset the previous few years overproduction and at that point we as a country could've started building new houses again in amounts enough to keep up with population growth); we never really got back on track in terms of number of new housing units of any and all types....first came a huge and devastating credit crunch and recession, then a slow recovery, etc....and to this day we are still below trend on new housing units vs population.
That is very interesting. Thanks.
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Re: Why a housing scarcity?

Post by pp4me » Wed Mar 03, 2021 12:29 pm

Cortopassi wrote:
Wed Mar 03, 2021 12:04 pm
Sure hope lending rules haven't been loosened along with all of this again....
If my refinance last year is any indication, lending rules have not been loosened. The amount of paperwork I had to submit compared to the original mortgage in 2006 was like night vs day. Back then they only seemed to care that I had a pay stub but this time they required a full financial accounting with 2 months worth of statements from all of our accounts.
Last edited by pp4me on Wed Mar 03, 2021 12:31 pm, edited 1 time in total.
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Re: Why a housing scarcity?

Post by Cortopassi » Wed Mar 03, 2021 12:29 pm

I Shrugged wrote:
Wed Mar 03, 2021 12:22 pm
Cortopassi wrote:
Wed Mar 03, 2021 12:04 pm
Sure hope lending rules haven't been loosened along with all of this again....

In my area, houses seem to go under contract immediately, and the few that I have spoken to got a few thousand over asking price.
So who is buying in a state that is losing people? Are buyers coming out to Buffalo Grove from Chicago? Or what?
Good question. I don't have an answer other than maybe it is a combo of people getting out of apartments and into houses because they've realized they now have jobs that may let them work all or part of from home?

One software guy here is leaving for a job in Pittsburgh, but moving to Colorado -- he will likely never see the people he works for in person. Crazy to me, but is becoming common.
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Re: Why a housing scarcity?

Post by Tortoise » Wed Mar 03, 2021 12:39 pm

I think the pool of potential homebuyers has increased noticeably over the past year due to people taking money they normally would have spent on vacations and social outings (sports, concerts, restaurants, and bars) and redirecting it toward home down payments -- whether for a first home, second/vacation home, or investment property -- since the Covid lockdowns and restrictions severely limited their choices.

In other words, I think the Covid lockdowns and restrictions created a market distortion: Deflation in the industries related to travel and in-person gatherings and corresponding inflation in residential real estate.

If that theory is correct, then we should see housing prices cool down as people gradually return to their previous levels of spending on vacations, sports, concerts, restaurants, and bars.
Last edited by Tortoise on Wed Mar 03, 2021 12:41 pm, edited 1 time in total.
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Re: Why a housing scarcity?

Post by I Shrugged » Wed Mar 03, 2021 12:39 pm

Cortopassi wrote:
Wed Mar 03, 2021 12:29 pm
I Shrugged wrote:
Wed Mar 03, 2021 12:22 pm
Cortopassi wrote:
Wed Mar 03, 2021 12:04 pm
Sure hope lending rules haven't been loosened along with all of this again....

In my area, houses seem to go under contract immediately, and the few that I have spoken to got a few thousand over asking price.
So who is buying in a state that is losing people? Are buyers coming out to Buffalo Grove from Chicago? Or what?
Good question. I don't have an answer other than maybe it is a combo of people getting out of apartments and into houses because they've realized they now have jobs that may let them work all or part of from home?

One software guy here is leaving for a job in Pittsburgh, but moving to Colorado -- he will likely never see the people he works for in person. Crazy to me, but is becoming common.
I’m personally aware of people like that too. Doesn’t bode well for office space and some cities in general.
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Re: Why a housing scarcity?

Post by I Shrugged » Wed Mar 03, 2021 12:43 pm

Tortoise wrote:
Wed Mar 03, 2021 12:39 pm
I think the pool of potential homebuyers has increased noticeably over the past year due to people taking money they normally would have spent on vacations and social outings (sports, concerts, restaurants, and bars) and redirecting it toward home down payments -- whether for a first home, second/vacation home, or investment property.

In other words, I think the lockdowns created a market distortion: Deflation in the industries related to travel and in-person gatherings and corresponding inflation in residential real estate.

If that theory is correct, then we should see housing prices cool down as people gradually return to their previous levels of spending on vacations, sports, concerts, restaurants, and bars.
That might be the best/ biggest answer. I feel dumb for not seeing it myself. I knew that people are spending on their existing homes for that reason. Last summer could not buy deck wood anywhere for example.

I wonder if the trend will have staying power. I think this thing has changed us more than we realize.
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Re: Why a housing scarcity?

Post by vnatale » Wed Mar 03, 2021 2:16 pm

I Shrugged wrote:
Wed Mar 03, 2021 12:39 pm

Cortopassi wrote:
Wed Mar 03, 2021 12:29 pm

I Shrugged wrote:
Wed Mar 03, 2021 12:22 pm

Cortopassi wrote:
Wed Mar 03, 2021 12:04 pm

Sure hope lending rules haven't been loosened along with all of this again....

In my area, houses seem to go under contract immediately, and the few that I have spoken to got a few thousand over asking price.


So who is buying in a state that is losing people? Are buyers coming out to Buffalo Grove from Chicago? Or what?


Good question. I don't have an answer other than maybe it is a combo of people getting out of apartments and into houses because they've realized they now have jobs that may let them work all or part of from home?

One software guy here is leaving for a job in Pittsburgh, but moving to Colorado -- he will likely never see the people he works for in person. Crazy to me, but is becoming common.


I’m personally aware of people like that too. Doesn’t bode well for office space and some cities in general.


That was in the beginning of Rickards's book as part of his support for his thesis that it is going to be a slow economic recovery with a lot of things like this maybe never getting back to what it had been.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Why a housing scarcity?

Post by whatchamacallit » Sat Mar 06, 2021 4:25 pm

https://youtu.be/rM5UV3KPIQs

Building slow down coming?
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