This Time ON… IS MY WEALTH VALORIZABLE OR IS IT ALL JUST FICTITIOUS CAPITAL.
I saw this on twitter https://twitter.com/nickgerli1/status/1673774695693385728/photo/1
I wonder if this will have a measurable effect on the price of housing on the west coast.
wow not in California unfortunately
housing prices are already on their way down. when people can no longer pay the absurd mortgages they’ve taken on, we’ll see a wave of foreclosures.
Houses have further become Pokémon cards for the wealthy to trade, a correction is a sale for these ghouls.
It depends heavily on the market. Prices have come down in some areas, but the desirable places to be (like where I am) aren’t seeing much change. Prices near me have just stopped increasing, but are still double what they were in Q1 2020.
In terms of affordability, it’s actually worse now due to the interest rates being what they are. On top of that, fewer people are selling because if they jump from one mortgage to another, they’ll get killed with the higher rate. For an average house in my area, the rate hike increases the monthly cost of a mortgage by like $800 and that’s for some starter home from the 70s or something.
for sure. people talk about current rates being a return to “normal” (aka the late 80s/90s), but all i can do is look at the amortization schedule of a 30 year loan and think, “wow, what a shitty deal!” probably because wages are so much crappier and home prices are also much higher than they were in those years.
i live in a generally LCOL region in a MCOL small city. the housing market here has generally been acknowledged as “tight” (houses put on the market are sold very fast) for about 6 years. though, generally, i would describe the prices as reasonable compared to median salaries up until about 4-5 years ago. rents starting climbing up fast and then home prices went up 50% or more in a very short time.
historically, the housing inventory for this city in the last decade or so stayed around 2000 on average, swinging each year +/- 300. this refers to homes listed on the market. in the last few years, that number has plummeted to something like 500. meanwhile, houses designated as “short term rentals” (airbnb, vrbo, etc) went from 0 to about 1400.
i’m not going to say airBNB type shit is entirely responsible for the current recognized-by-local-government housing crisis. certainly, there was downward pressure on residential construction for a bit during COVID, but in the last years, tons of multi-unit construction has popped up (5-over-1s, etc) and seems like 75% of it was cannibalized by conversion into short term rentals.
i will say i think there was a STR bubble that is probably deflating now due to whatever the fuck, the recession, recognition that STRs often suck ass to stay in, etc. i don’t know that this will translate into lower housing prices, but i would bet they won’t climb for a while as some these bozos can no longer cover their mortgage payments with STR income. and that might translate into lower home prices if the trend continues for a while / how many of these people are over leveraged.
