There is no housing shortage. We have historically the highest number of housing units per capita. In addition, population continues to grow at its slowest pace in decades. New supply will come out of existing inventory if investors, financial institutions, flippers, and AirBNB hosts no longer found it profitable to speculate on and hoard houses. Supply is currently increasing as liquidity continues to be drained out of the real estate market.
Don't forget immigration, which is probably their most significant driver. Even illegals need to live somewhere and rent. Renting has become too profitable as people share apartments/houses and prices increase. Freezing or lowering of house prices, reduced immigration or deportation, and higher insurance/taxes will make renting unprofitable. If Trump is aggressive in deporting, the housing market will tank, especially in the South.
One of the big problems is that building codes, which get stricter every year, have outlawed cheap starter homes. Starter homes are cheap homes, and cheap homes have been effectively outlawed.
Exactly Right, the most affordable starter homes are $250,000. but it's very difficult to find builders to work with that constraint. I have been pushing for that in my current city in undeveloped lots. It's an impossible task without subsidy. Where in 1955 there were building starter homes massively for about that price in today's dollars. or $19k back then. Now new builds are at least 300k for a base model.
There was a time not too long ago that an individual built their own home with their own hands. I would think codes add to the complications and prevent there from being new homes.
Trump is historically known as a RE mogul, why would he freely cut his own balance sheet? That's a pretty obvious conflict of interest!! But damn those emotions run hot, don't they?
Great job illustrating the issues in the housing industry. Another super important point is lack of anyone who can read a tape measure properly. There’s a severe shortage of competent workers in our trade. I’m getting the hell out of it and back into manufacturing.
Are houses for living in or they financial vehicles for speculation by investors with more dollars than sense? We have enough of the former but not enough of the latter.
Here in the Boston area it comes down to land and there is no more land. They are buying small houses and ripping them down to Build bigger houses. That is expensive.
I own my house outright in RI but cant afford to move back to my hometown in Attleboro because of the thousands of McMansions they built on all the woods I used to play in. Its so disappointing and disgusting that $450,000 might get you a run down shack if you can find one. The landscape has changed so much i drove right past the road that was so easily identified. Sad 😔
I listen to what you say and watch and listen to the people out there. I’m taking my house off the market, buckling down on spending and still enjoying life even if I have to eat bugs! 🐛 Gotta love the fat ones! Thanks Simon!
Sure it can. Raise the rates and keep it there so that prices come back down to REALality. Only the MOST qualified consumers should be buying homes. That is those who have saved at least enough for a 20% down payment. Low interest rates and cheap debt is the reason for exponentially high inflation. 🤓
The money supply in the US also increased by 27 percent in one year. I know at least 8 business owners who simultaneously had their most profitable year ever and on top of that received between 200000 and 400000 in PPP "loans." Why wouldn't these people buy investment real estate with these gigantic chunks of cash coming in.
It's one thing to explain the marketplace. It's quite another to make the information actionable--and pointing out how you are personally taking action. Harsh words but the reality of life as an influencer.
Housing inventory is up. It will continue to ramp up dramatically most likely in one way... Spiking unemployment. If housing completes are going to be up...builders will have to let people go.
Even if unemployment does rise, the defaulting loans would take time to move into foreclosure. Considering underwater mortgages are the fewest in recent history, there is no reason for a foreclosure when the house could be sold.
@@UneducatedEconomistin many places houses are sitting for months, especially those states in the sun belt and intermountain. The only reason there aren't already more in foreclosure is not because of a lack of delinquency, but because of forbearance, etc. But now, things are coming to a head. A lot of the dysfunction is largely because of Fiscal Dominance, which hopefully is coming to an end. Homes could come online a lot faster than people think if the Covid Absurdity is finally ended.
The other ominous solution is the destruction of demand. That would mean people would need to go or desire to live in a tent. I dont see that happening outside of necessity, making housing a low priority. Mad Max sh!t Im just rambling now Thanks Simon Callin grey sky on the 🎲🎲
I am in kansas. This state 70% of all the houses hear were built from 1880 to 1960. Sure new houses have been built but in no way has it ever met demand and majority of the houses hear are falling apart....The town I live in 13K population maybe 60 new houses have been built in this town in 24 years and I am being generous.......Most of small town america has never kept pace....
Theres plenty of lower priced available development land. Builders will move away from cities and build in surrounding counties with cheaper land and development costs. It is there.
Builders cannot move away from the city to build because noone in the cheap land region pays, there is no money...Come out to Kansas if you make $20 a hour your one of the lucky ones...
When someone creates so much of a product that it decreases the value of their product, they will produce less product, especially if they product requires work like building a home.
You’re missing the demand side of the equation. Houses aren’t selling, inventories are rising. Prices will go down. The reason housing start supply is going down is because the builders understand this.
Right I've been slashing contracts upto 35-40 percent just to help grease the wheels for clients to sign. The cost of construction is completely stalling out the market.
There are abandoned or failing shopping malls all across this country I’ve seen them with my own eyes and we can’t build affordable housing? I understand converting them to residential use would be expensive but surely it could be done cheaper than a giant new apartment complex. What we lack in this country is imagination.
All good points! However, have you considered the coming foreclosures that we’ll see, starting spring 2025? Many people are too over leveraged and forced sales will be an issue. Just like ‘08-‘12… This will bring a long grinding market correction. Unless the government starts printing heavily again and creating more modification products!
There will be no tsunami of foreclosures. That's not happening. Around 40% of homes in the U.S. are owned outright. A huge portion of those with a mortgage have a rate of 4% or less. For those people, rent for an apartment that is half the size of their home is more than their existing mortgage. That means if they can't afford their mortgage, they can't afford to rent either. Remain "on the sidelines" at your own risk.
So is this slumbering 'sinkhole' for lack of production why lumber prices are rising even though there's not a lot of production? Is this some lag effect pricing in the costs to re-ramp up production? Like lumber cost equivalent based on production matters rather than actual value?
I understand that generally it is not profitable for a builder to create houses priced under $400,000 or more. A lot of that cost is due to government, but most of that is local not federal.
@UneducatedEconomist absolutely, it was done once already 1953-1954 With today's technology, easily. Most of the tech we carry around as conveniences doubles as surveillance devices.
Silly question from a capitalist. Large market companies limited to making houses and allow the individual citizens to fill that gap. Always big companies this big companies that! When can the individual get a chance at the game?
Happened before. I bought my house during the late 1980s real estate bubble. Two years after I bought it the market crashed and I couldn't give it away. The bank I was working for had so many foreclosures it went out of business.
That is wishful thinking. Crash bros have been calling for this crash since at least 2019. When you ask them when, it's always just another year or two away, again and again.
@user-zk6fc3dw9e OK, I know what your saying but your young, and I don't mean your not smart, but you haven't watches 6 decades of this yet. So if you have the patience to follow me for a minute and add this to what you know or understand. From what they did leading up to 2008, it to 3 QE programs 23T in B-outs, ZIRP for a decade just to stop the bleeding down of prices in RE. By 2018, they barely got rates to 2 3/8s and barely bled down the Fds balance sheet. Timeliness now> 2018- New home builders were falling off a cliff and by summer, existing RE was correcting downward and in December, equities cratered! 2019- FDs Powell pivot where he announced he was stopping raising rates and stopped bleeding off the FDs balance sheet. ON Sept 17th the REPO market blew out and was NEVER repaired or recovered going into year end. 2020- thing got worse and they used "CVD" to justify 8T in direct injections, FD bought 80B a month in MBSs. 20M household had no payments in mortgage / rent moratoriums, PPP loans, pandemic tax credits, no student loans and on and on.. The point being, we were heading into a recession in 2018/19 as yield curves were starting to invert and they used 2020s CVD to try and PRINT over it all and they created mass inflation and Bubbles with their programs and only extended the cycle and made it worse. Now, with out mass stimi programs and etc, we will correct down to at least pre 2019 levels which is huge. It maynot be a crash, but it will get there absent massive massive printing/programs interventions. What has changed from the 08 and 2020 mess till now is that the 40 year cycle on rates/inflation bottomed and we are on an upward cycle for decades to come, so any of those programs they try will cause severe inflation this time. It's very hard to have honest discussions on here, but people really do not take into account the full extent of what has gone on to extend and pretend this mess to where we currently are.
So homes are just going to keep going up but peoples spendable income isnt? That wont work forever... eventually people will be so broke and all these people that over paid just to buy a house wont have anything saved to retire and have to find the greater fool then they were after you factor a mortguage you buy the house twice. Plus yearly taxes and upkeep a house does not proffit the average person if you buy a house for a proffit.
Not to be morbid or morose. However, I’m curious as to how the aging baby boomers will affect the supply of housing. Over 35 million boomers have already passed. And as of right now about 5800 are dying each day. I don’t know what percentage of those boomers own property, but it would seem to me as more boomers pass, more housing will become available. Would love to hear your thoughts on that. Thanks for the insight that you bring.
Just my opinion: the "silver tsunami" is more of a silver trickle and I don't know any stats but I would assume probate may get 25% of what's coming while a lot will get inherited by Gen X and millennials. Again, I have no stats on hand to support this, just going from memory of what I've researched before, I could be way off.
Its all going to be inherited by Gen X and millennials who will then either live there themselves or rent out the property. With rents super high why wouldnt they get $3,000 per month on a paid off asset. Thats better than a part time job.
The boomers already sold it, years ago..Do you know when these boomers go into a nursing home they forfeit every asset they have money and hard assets even there social security..Bet you did not know that
Just like gas run vehicles ate phasing out along with Auto Part stores, traditional home and corporate buildings are next. Lumber yards are next😢 TH-cam Fourth Industrial Revolution and let them show you
America has been worlds lagest producer of oil for over 6 years, how has that helped...Fact American oil refinerys cannot produce america lite crude oil...
I don't understand why anyone has to worry about the housing market or stock market anymore. We can all buy Microstrategy stock and we will all be super rich by the end of the month.
There is no housing shortage. We have historically the highest number of housing units per capita. In addition, population continues to grow at its slowest pace in decades. New supply will come out of existing inventory if investors, financial institutions, flippers, and AirBNB hosts no longer found it profitable to speculate on and hoard houses. Supply is currently increasing as liquidity continues to be drained out of the real estate market.
Don't forget immigration, which is probably their most significant driver. Even illegals need to live somewhere and rent. Renting has become too profitable as people share apartments/houses and prices increase.
Freezing or lowering of house prices, reduced immigration or deportation, and higher insurance/taxes will make renting unprofitable.
If Trump is aggressive in deporting, the housing market will tank, especially in the South.
That’s only about
20 % of the housing market.
One of the big problems is that building codes, which get stricter every year, have outlawed cheap starter homes. Starter homes are cheap homes, and cheap homes have been effectively outlawed.
Exactly Right, the most affordable starter homes are $250,000. but it's very difficult to find builders to work with that constraint. I have been pushing for that in my current city in undeveloped lots. It's an impossible task without subsidy. Where in 1955 there were building starter homes massively for about that price in today's dollars. or $19k back then. Now new builds are at least 300k for a base model.
Thank the government yeaah
Starter homes were mobile homes. And if built and installed properly just as safe as a fixed home.
@@mrleafbeef634Somewhat yes especially in regards to codes.
There was a time not too long ago that an individual built their own home with their own hands. I would think codes add to the complications and prevent there from being new homes.
Trump won’t do shit to lower real estate prices, I don’t know why people believe that.
Because campaign promises are actually believed
Because the average person is uneducated and dumb.
@ because people are gullible, you make sense by seeing through both sides BS. Keep it up!
Trump is historically known as a RE mogul, why would he freely cut his own balance sheet? That's a pretty obvious conflict of interest!!
But damn those emotions run hot, don't they?
Oh he could do it -- if he inadvertently causes a recession
Great job illustrating the issues in the housing industry. Another super important point is lack of anyone who can read a tape measure properly. There’s a severe shortage of competent workers in our trade. I’m getting the hell out of it and back into manufacturing.
Banks were allowed to lend massive amounts of money to the public and this is what you get.🤔🤔🤔 High prices from money printing.🤔🤔🤔LENDING
@ Absolutely! Totally agree. One big money printing scheme.
capitalism gonna capitalize.
Are houses for living in or they financial vehicles for speculation by investors with more dollars than sense? We have enough of the former but not enough of the latter.
Preach. People don't appreciate lumber. Wood don't grow on trees!
Here in the Boston area it comes down to land and there is no more land. They are buying small houses and ripping them down to Build bigger houses. That is expensive.
I own my house outright in RI but cant afford to move back to my hometown in Attleboro because of the thousands of McMansions they built on all the woods I used to play in. Its so disappointing and disgusting that $450,000 might get you a run down shack if you can find one. The landscape has changed so much i drove right past the road that was so easily identified. Sad 😔
I listen to what you say and watch and listen to the people out there. I’m taking my house off the market, buckling down on spending and still enjoying life even if I have to eat bugs! 🐛 Gotta love the fat ones!
Thanks Simon!
Sure it can. Raise the rates and keep it there so that prices come back down to REALality.
Only the MOST qualified consumers should be buying homes. That is those who have saved at least enough for a 20% down payment.
Low interest rates and cheap debt is the reason for exponentially high inflation. 🤓
People buying stuff that shouldn't be
The money supply in the US also increased by 27 percent in one year. I know at least 8 business owners who simultaneously had their most profitable year ever and on top of that received between 200000 and 400000 in PPP "loans." Why wouldn't these people buy investment real estate with these gigantic chunks of cash coming in.
It's one thing to explain the marketplace. It's quite another to make the information actionable--and pointing out how you are personally taking action. Harsh words but the reality of life as an influencer.
UE just got an insurance quote for my house hack and replacement cost was 4x my purchase price! This video explains that cost so well thanks man!
Housing inventory is up. It will continue to ramp up dramatically most likely in one way... Spiking unemployment.
If housing completes are going to be up...builders will have to let people go.
Even if unemployment does rise, the defaulting loans would take time to move into foreclosure. Considering underwater mortgages are the fewest in recent history, there is no reason for a foreclosure when the house could be sold.
@@UneducatedEconomistin many places houses are sitting for months, especially those states in the sun belt and intermountain. The only reason there aren't already more in foreclosure is not because of a lack of delinquency, but because of forbearance, etc. But now, things are coming to a head. A lot of the dysfunction is largely because of Fiscal Dominance, which hopefully is coming to an end. Homes could come online a lot faster than people think if the Covid Absurdity is finally ended.
The other ominous solution is the destruction of demand. That would mean people would need to go or desire to live in a tent. I dont see that happening outside of necessity, making housing a low priority. Mad Max sh!t
Im just rambling now
Thanks Simon
Callin grey sky on the 🎲🎲
If the replacement cost of a home is high then a home that isn’t well maintained should have a massive price reduction.
If the seller has to sell. A lot can afford to hold steady
@@je5406 True, but I mean if you need a new roof to get it insured and that's 50k, that should basically come right out of the purchase price.
If the replacement cost is high it raises the value of existing homes.
@@tallyrc Except homes are depreciating assets, which is why the tax code allows you take depreciation on them against the income they generate.
I am in kansas. This state 70% of all the houses hear were built from 1880 to 1960. Sure new houses have been built but in no way has it ever met demand and majority of the houses hear are falling apart....The town I live in 13K population maybe 60 new houses have been built in this town in 24 years and I am being generous.......Most of small town america has never kept pace....
Wait until Trump tariffs Canadian lumber 😂
Mobile homes are the answer for starter homes. Include a cement storm shelter for another 20k.
Theres plenty of lower priced available development land.
Builders will move away from cities and build in surrounding counties with cheaper land and development costs. It is there.
Builders cannot move away from the city to build because noone in the cheap land region pays, there is no money...Come out to Kansas if you make $20 a hour your one of the lucky ones...
When someone creates so much of a product that it decreases the value of their product, they will produce less product, especially if they product requires work like building a home.
You’re missing the demand side of the equation. Houses aren’t selling, inventories are rising. Prices will go down. The reason housing start supply is going down is because the builders understand this.
That's what they said 5 years ago. . . It's not getting better.
Five years ago if you put your house on the market it would sit there for months
Let the chips fall where they may.
Thanks Simon!
Right I've been slashing contracts upto 35-40 percent just to help grease the wheels for clients to sign. The cost of construction is completely stalling out the market.
Also the quality
On what planet are you operating with 35-45% margins? Myself and other builders are making 5-10% right now.
There are abandoned or failing shopping malls all across this country I’ve seen them with my own eyes and we can’t build affordable housing? I understand converting them to residential use would be expensive but surely it could be done cheaper than a giant new apartment complex. What we lack in this country is imagination.
If there was profit in converting old malls into apartments, investors would do it
Learn to build using Earthen build methods. Cob, haybale etc. Do not rely on government etc
Supply is the problem, not enough people to build homes. Even if the builders wanted to ramp up production and rates dropped.
Not the only issue. Have you SEEN new home constructions? They will fall over if you stare at them too hard.
If the speculators weee forced out of the market you would have more homes than we know what to do with
Construction labor shortage? No problem I hear there will be 1.5 million laid off federal workers available to fill those positions soon
@@shanerogers9386 so, regulation?
@@punkagrrlzeroamerica don't like small business construction. They like cheap labor. No quality in construction anymore.
All good points! However, have you considered the coming foreclosures that we’ll see, starting spring 2025? Many people are too over leveraged and forced sales will be an issue. Just like ‘08-‘12… This will bring a long grinding market correction. Unless the government starts printing heavily again and creating more modification products!
That is a "what if"
There will be no tsunami of foreclosures. That's not happening.
Around 40% of homes in the U.S. are owned outright. A huge portion of those with a mortgage have a rate of 4% or less. For those people, rent for an apartment that is half the size of their home is more than their existing mortgage. That means if they can't afford their mortgage, they can't afford to rent either.
Remain "on the sidelines" at your own risk.
Thank you
I just realized you don’t have nearly enough subscribers
Exactly
So is this slumbering 'sinkhole' for lack of production why lumber prices are rising even though there's not a lot of production? Is this some lag effect pricing in the costs to re-ramp up production? Like lumber cost equivalent based on production matters rather than actual value?
I understand that generally it is not profitable for a builder to create houses priced under $400,000 or more.
A lot of that cost is due to government, but most of that is local not federal.
Real estate is local. You can buy a brand new 1200sq ft home in Oklahoma for less than 200k
@@trahar6257 True, but that is a long commute to Denver CO
How many homes sit empty?
Do you think deportation could lower the work force and drive up prices as well?
I would not think so. The vast majority of them are receiving wages far below market value.
Less housing demand will help on the supply side. If 20 million go prices will drop crazy crap. on housing .. and rent.
@@wishicouldspel interesting so like the housing that would become available would actually increase supply?
Do you really think the deportation of 20 million is even possible?
@UneducatedEconomist absolutely, it was done once already 1953-1954
With today's technology, easily. Most of the tech we carry around as conveniences doubles as surveillance devices.
Plus it take 2 months to kiln dry lumber
Silly question from a capitalist. Large market companies limited to making houses and allow the individual citizens to fill that gap. Always big companies this big companies that! When can the individual get a chance at the game?
You da man!
Fixing means> price drops.of 30 to 50% in most areas. It's coming.
Happened before. I bought my house during the late 1980s real estate bubble. Two years after I bought it the market crashed and I couldn't give it away. The bank I was working for had so many foreclosures it went out of business.
That is wishful thinking. Crash bros have been calling for this crash since at least 2019. When you ask them when, it's always just another year or two away, again and again.
@user-zk6fc3dw9e OK, I know what your saying but your young, and I don't mean your not smart, but you haven't watches 6 decades of this yet.
So if you have the patience to follow me for a minute and add this to what you know or understand. From what they did leading up to 2008, it to 3 QE programs 23T in B-outs, ZIRP for a decade just to stop the bleeding down of prices in RE.
By 2018, they barely got rates to 2 3/8s and barely bled down the Fds balance sheet. Timeliness now> 2018- New home builders were falling off a cliff and by summer, existing RE was correcting downward and in December, equities cratered! 2019- FDs Powell pivot where he announced he was stopping raising rates and stopped bleeding off the FDs balance sheet. ON Sept 17th the REPO market blew out and was NEVER repaired or recovered going into year end. 2020- thing got worse and they used "CVD" to justify 8T in direct injections, FD bought 80B a month in MBSs. 20M household had no payments in mortgage / rent moratoriums, PPP loans, pandemic tax credits, no student loans and on and on.. The point being, we were heading into a recession in 2018/19 as yield curves were starting to invert and they used 2020s CVD to try and PRINT over it all and they created mass inflation and Bubbles with their programs and only extended the cycle and made it worse. Now, with out mass stimi programs and etc, we will correct down to at least pre 2019 levels which is huge. It maynot be a crash, but it will get there absent massive massive printing/programs interventions. What has changed from the 08 and 2020 mess till now is that the 40 year cycle on rates/inflation bottomed and we are on an upward cycle for decades to come, so any of those programs they try will cause severe inflation this time. It's very hard to have honest discussions on here, but people really do not take into account the full extent of what has gone on to extend and pretend this mess to where we currently are.
If the majority of Americans have less than $400 bucks in savings I guess they won't qualify for a home loan anyway.
Look up economist Henry George. He had great theories on how to fix this
So homes are just going to keep going up but peoples spendable income isnt? That wont work forever... eventually people will be so broke and all these people that over paid just to buy a house wont have anything saved to retire and have to find the greater fool then they were after you factor a mortguage you buy the house twice. Plus yearly taxes and upkeep a house does not proffit the average person if you buy a house for a proffit.
We are moving to digital currency.
Closer to Revelation 13:16kjv.
Misery loves company
Not to be morbid or morose. However, I’m curious as to how the aging baby boomers will affect the supply of housing. Over 35 million boomers have already passed. And as of right now about 5800 are dying each day. I don’t know what percentage of those boomers own property, but it would seem to me as more boomers pass, more housing will become available. Would love to hear your thoughts on that. Thanks for the insight that you bring.
Just my opinion: the "silver tsunami" is more of a silver trickle and I don't know any stats but I would assume probate may get 25% of what's coming while a lot will get inherited by Gen X and millennials. Again, I have no stats on hand to support this, just going from memory of what I've researched before, I could be way off.
Its all going to be inherited by Gen X and millennials who will then either live there themselves or rent out the property. With rents super high why wouldnt they get $3,000 per month on a paid off asset. Thats better than a part time job.
The boomers already sold it, years ago..Do you know when these boomers go into a nursing home they forfeit every asset they have money and hard assets even there social security..Bet you did not know that
I would love to see the faces of people buying BLM land when they show up to see what they got. 😂😂😂
Just like gas run vehicles ate phasing out along with Auto Part stores, traditional home and corporate buildings are next. Lumber yards are next😢 TH-cam Fourth Industrial Revolution and let them show you
🌮
Bring on the TRUMP BUMP!!!
Simon 🫡
Wait till that oil starts pumping 📉🏡
🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣
America has been worlds lagest producer of oil for over 6 years, how has that helped...Fact American oil refinerys cannot produce america lite crude oil...
Sounds crazy. Right. They used to refine it just fine but one day it was worth more on a world market. So now our refineries can't refine it.
Trump will free up a few homes 😂😂
I don't understand why anyone has to worry about the housing market or stock market anymore. We can all buy Microstrategy stock and we will all be super rich by the end of the month.
Thanks Simon!
Will trump cut Fed rates ?
Jerome Powell the one deciding.
They are already historically low. Where can the rates go? We cannot live on credit forever.
@@loggerchadwake7141 4.58 with a target at 4.75% is not low...
Crash, crisis ... 🥱 ... I am tired of these stories.
Maybe you need to educate yourself better
@GhostRider-dp2tc
Do not get fooled.
Crisis have been part of human lives. Life is a challenge.
What crash,crisis?
@UneducatedEconomist
'A housing market crisis' as your headline states?!