Originally published at: https://boingboing.net/2018/07/27/party-like-its-2008.html
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A tanking market is great for those with loose capital, say the beneficiaries of the recent tax cuts in the US.
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So, this notion of one day owning my own home, isn’t as crazy and farfetched as I’ve been led to believe? Cool!
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I’m not sure if Austin belongs in that list. That’s where I live and there’s still lots of affordable housing here. We never had the same kind of real estate bubble that afflicted other cities with lots of tech work.
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Woo hoo!
Now if CA can pass Prop 10 in November, reppealing Costa Hawkins and cities can introduce real rent control, perhaps we can curb the crazy investor-inflated market even more!
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It sounds like a lot of people learned exactly nothing from the last Great Recession… You can get away with speculating in a market for a while, but when the market becomes primarily speculators instead of actual consumers, you’re on a serious downslope.
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Nah, you’ll make an offer on a house, then get outbid by a venture capital-backed real estate holding company making an all-cash offer, who will then turn around and rent that house to you for some extortionate price. Sorry.
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Loose Capital is going to be the name of my next band
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Can you name a modern market that isn’t?
Will be quite a ride. Wheeeeeee.
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With the new rules regarding “short term rentals” in San Diego city limits, we’re already seeing the market do a freaky deaky. Many of those condos / homes were bought on the premise of profiteering and well that’s not going to fly anymore.
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Good news! Soon housing prices will stabilize at a million dollars (and up)! You can afford that, right?
I’m not sure that’s the problem with California’s housing right now. Anecdotally, looking at houses in my neighborhood, the speculators were shed in the recession, and now it’s the actual occupants of the homes who are paying the crazy prices to buy.
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Yep, Boston has an interesting approach to disrupting the speculation/short-term rental market. Because of some of our other laws, owner occupied properties are largely exempted (that castle doctrine thing), which makes more sense than banning them outright, just bans the speculators and slumlords.
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How about in its “most expensive cities”, though?
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File under “unsustainable trends tend not to be sustained”. Prices retreating to a couple of years ago is not a disaster for anyone who didn’t just buy. It’s not an “implosion”, it’s real estate doing what it’s always done, overheating and then cooling off. I’ve seen a lot of “wishful thinking” local prices, that come down after some time on the market.
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I’m sure that’s a big factor. For my part, I’ve been thinking that we will reach peak %1 where the wealthy have bought up all the investment properties they want and the resulting bubble ceases to earn the same returns due to lack of upper middle class renters who can afford the inflated price which brings on the sell offs.
In any case, I can’t see this as anything but “about damned time”
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Can confirm. I’m in the process of finalizing my first home purchase right now (in a Los Angeles coastal town). I managed to knock the seller about 10% off their original asking price. My offer was the only one after approximately 40 days on the market.
Though I must admit, it’s a bit scary to see everyone around me yelling that the sky is falling while I’m trying to complete this transaction. My mortgage will be less than the rent I currently pay. I really like the place I’m buying and I’m hoping to live there for at least 10 years (or until I get washed away by a wave or I am underwater due to global warming). So hopefully a market ‘correction’ will be a blip on the radar for a person who isn’t in it for short term gains.
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Living in San Jose, one of the most expensive cities mentioned, that’s been my personal experience (which may not be representative, granted). I’m sure San Francisco has more speculation going on. But the basic problem is that there’s an oversupply of people making obscene amounts of money far in excess of the average wage who are willing (and able) to pay absurd amounts of money for modest homes, skewing prices for everyone, and a significant under-supply of housing, far below the demand. San Jose has traditionally been a “bedroom community” - the city has always been building new housing to the benefit of the rest of the Bay Area cities that had limits to new development (and were more susceptible to speculation). That housing prices are crazy here, too, is an indication by itself.
I’m a little skeptical that we’ve reached a turning point (I’ve heard it before), as the basic dynamics haven’t really changed.
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Thanks! Yes, San Jose prices have always surprised me, as it’s not quite a keystone city. Neat town, my dad used to work there.
Do you think that limiting their purchases of third, fourth, and fifth ‘modest homes’ will help? That’s what I understand the goal to be?
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Affordable and Austin in the same sentence?
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I’m on the opposite side of the table. Just signed the closing papers today to sell the house we built 17 years ago (Colorado - where the market is still red hot). Got full asking price after just two showings before the listing even went active. Buyers are a nice couple which this will be their first house.
Made a very handsome profit and walking away at the peak of the market. Going to rent a condo for a few years from a family member at below market price. As of Monday I will be totally debt free.
For many years I bought into the “house as investment” American dream mindset but came around lately to see my house as a giant albatross around my neck. Maintenance, taxes, rising utilities, never ending mortgage payments…the expenses just never seemed to stop and the burden on my time was getting to be too much. Feel much freer now.
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