Kamala's housing plan

Part of the problem is one of scale. Good land is getting harder and harder to find for a developer to build 100 houses on. Or, the land has a bunch of wetlands or other problems with it making development more costly. When that happens, simple math says you can't put a 1500 or 1800 SF house on that lot, you need larger homes to justify the cost of the dirt. Those ain't starter homes. Back in the 70's or 80's 2000 SF was a large house, the dirt was cheaper so you didn't have to put a 3500 sf house on it.

Now, I do agree with keeping companies or people that aren't going to live it the house buy them and rent them out. All that seems to do is keep beginning families from getting a house. If you want an investment, buy an apartment complex.

 

She’s announced in Raliegh new incentives to add 3 million new housing units during her administration, which she said would solve America’s housing shortage.

 

Okay. So we established #1 is yes. Since you need this broken down simply, I will split the second question into two questions.

1. Since we now can stipulate that lower demand for rental housing exists because of the shift to ownership, will there be higher or lower demand for housing ownership from rental property owners or those who intend to own rental property (i.e., the market demand for housing purchases will drop from rental property owners due to their decreasing demand for their owned properties)?
2. If the answer is lower, then wouldn't this offset the increase in demand from somebody shifting from a rental property to an ownership property?

 

1. Possibly lower. Key word is possibly. But anytime anyone just gives away free money(this is what this is) inflation follows.

Since you think this is such an awesome idea, why didn't anyone come with 25k before? Hmmmm...

 

There's already plenty of demand. But many people are being priced out, which is actually lowering prices in some areas. Say you live in a desirable area and bought years ago for $300k. You want to sell and list at $600k. Nobody is biting, so after months, you lower the price to $580k and get an offer for $575k and sell. You still make out OK with your equity and agree to the price. This is happening in my area. About a 4% YOY drop in house prices.

As stated before, houses and the housing market is more complicated that the widgets you learn about in high school. A drop in interest rates makes houses more affordable, but doesn't change the value of the house. A $25k government down payment also makes houses more affordable without changing house value, and will help those who don't have a down payment and/or those with a smaller down payment available, but now can get a convention loan at a lower interest rate without MIP from an FHA loan. Throw in a potential rate cut or two, and house prices will de facto become more affordable without losing value.

Will this drive prices up? Maybe. But probably not that much. Otherwise, we'd be in the exact same position we're in now, which is plenty of supply, ample demand, but too many priced out of the market.

 

Okay, here are some of the times in which you didn't talk about impending recessions in terms of "possibilities or probabilities."

 

This is absolutely destroying some markets in terms of affordable housing. Most people want government regulation out of their lives, and I get it, but this is one area the government needs to step in and limit the damage that these hedge funds, investment groups and corporations are doing to the housing markets.

 

25k will change the value. It's like anyone defending all the spending in 2020-2021 and saying it was only "transitory". It will for sure raise prices. Not a debate at all.

 

Not Aging but the first thing you quoted from him says "pending recession". Stopped reading after that. Swing and a miss.

 

I agree with you that tax credits and down payment assistance aren’t the answer. Prices are too high. We need more building of single family homes.

 

So your argument is that rental owners might just buy property at the same rates despite falling demand from renters? That seems...unlikely.

As somebody pointed out, we have done this in a number of different areas of the country and with conditions multiple times. The issue is that the shortage is more widespread right now than ever, as rental property owners buy up a larger and larger percentage of housing. This is causing a dramatic split between people who have capital and people attempting to get capital.

Home ownership rates are about 65% for a rapidly aging population. This means that younger people aren't getting into homes. That isn't because there aren't homes (although there are certainly shortages in many areas) but rather because buying homes and renting them for a profit has become a profitable enough business that more and more large corporations and capital owners have entered into the market to compete for housing. Getting people out of the rental market is a shift in the market back to people who weren't given capital.

There are three release valves that I see here:

1. Push for remote work and spread people more evenly around the country.
2. Convert substantial amounts of commercial real estate that we don't need into housing (something that would work well with #1, it should be noted).
3. Get renters out of the cycle of renting and building capital for a down payment but never collecting enough resources to actually utilize it (because rents increase as more and more people try to collect ever increasing capital for housing to compete with the people who want to rent them houses).

Fourth option: be okay with people renting their entire lives and handing over huge profits to large capital owners.

 

So if someone is selling a house at say $300k, but nobody can afford it. And suddenly, people have $25k to help, you really think sellers are going to raise the price of their house to $325k now?

Again, the problem is too many people are priced out of the market. Raise prices, and even with the $25k, they will still be priced out of the market.

 

Do you not understand the meaning of that word?

pending

Not a probability of happening. Something that will happen.

 

Again, you give people 25k, you will have more than 1 person buying houses in your little example. What will happen is there will be a bidding war. Oh, and who is paying for all this? Wonder who...

 

Pending:


LOL. A simple google search shows this:



So let's see. Synonyms for Pending are undecided, uncertain, up in the air.

This is so awesome. You keep digging deeper! Take a lap.

 

Meanwhile, the rental market will have one less person in it, lowering prices, and making the property less attractive to rental owners. Bidding wars are happening now, they are just more likely to involve people with the intent of renting the property.

 

Lol! I went with the definition. You went with similar words, because the definition didn't provide you the answer that you wanted. Enjoy your L! It can join your extensive collection, sport.

 

LOL. You are batting 0 today. Tough L. It is so fun making you flustered on a Friday.

 

Did you just link a definition of "pending" as "until something happens." Good job. You disproved your point. Own goal, skippy sport!

 

LOL. You are grasping at straws. Look at pretty much every synonym. Let's see, we have Unresolved, Undecided, Unsettled, Uncertain. Ooops. It's ok. You look foolish and everyone is laughing at you, not with you.