You briefly mentioned “maybe even birth rate“ was affected. That seems highly probable to me.
We spent a couple generations telling people, culturally, that what you do is get a job, then get married, then buy a house together, then have up to one kid per available child bedroom.
As a millennial who entered the job market in 2007, the life experience of basically everyone my age is the feeling that the goal posts were always moving further and further out of reach, and that each of us one by one had to decide to either give up on having a family, or go ahead and have kids without having met the cultural expectations we were supposed to meet.
My kids share a bedroom. This is fine, they don’t mind, and I don’t mind. We have a good life! But if this comes up in conversation a lot of adults react with a mix of sadness, pity, or disapproval. Those poor kids, or something.
I think a lot of people feel that they simply cannot have children if they cannot achieve those cultural checkboxes. And so a lot of households are having 0-1 kids these days.
Yeah. I think you're right. And it's perfectly natural. People will benchmark to their cultural and technological surroundings.
The fact that there is scolding about these expectations, to me, good evidence of why we have a crisis. Nobody would ever claim that everyone should shut up and be satisfied with having the same level of health care, technology, and education that our grandparents had.
My mother's job when she was young was carrying the piss bucket out to the outhouse on winter mornings. Now that would be considered inhumane living conditions. In practically every category but housing, the intuition of demanding improving conditions is universally understood.
Figure 4 can be used to discuss a simple counterfactual about housing production. Permits seemed to have a natural rate of 20,000 a year and prior to 2005 were exceeding that by a few thousand a year. If the Fed hadn't decided to go nuclear on the housing market then there would have been a natural correction in permits after the "boom" to probably 18,00 for a few years. Instead, the credit slaughter resulted in the destruction of homebuilding capacity and sales for the next ten years and counting.
Missouri. So, if I have this right, Missouri is clipping along, with a steadily, if slowly increasing balanced market. Three years after the great recession prices on low end homes cratered 20%, basically because potential buyers were being denied credit. That increased the number of renters (demand increase) and rents rose..
Okay, but if low end houses dropped in price and rents rose, why weren't investors buying these cheap low end houses hand over fist. With high and rising rents they should have penciled out as good deals, no?
1) Funded homeowners are willing to pay much more for a single-family home than landlords are, for a number of reasons of preference and practicality. In other words, the marginal price/rent ratio for owner occupied homes is generally much higher than for landlord owned homes, so when the owner-occupier market was killed off, the price had to decline to the level that landlords would buy.
2) Because of that, landlord ownership of single-family homes has always been small, and generally dominated by mom-n-pop owners in aging units. There was no institutional single-family landlord segment to speak of outside of a few niche players. An entire segment has arisen, with new firms like Invitation Homes buying up thousands of homes. Creating a new market segment that shouldn't exist and never existed before doesn't happen on a dime, so I think it developed with some frictions. That's why yields on those investments was high over the last decade. The new firms were getting in on discounted deals. I think now we will see much more of the growth in that segment happen in new construction, rather than purchasing homes dispersed throughout existing neighborhoods.
You briefly mentioned “maybe even birth rate“ was affected. That seems highly probable to me.
We spent a couple generations telling people, culturally, that what you do is get a job, then get married, then buy a house together, then have up to one kid per available child bedroom.
As a millennial who entered the job market in 2007, the life experience of basically everyone my age is the feeling that the goal posts were always moving further and further out of reach, and that each of us one by one had to decide to either give up on having a family, or go ahead and have kids without having met the cultural expectations we were supposed to meet.
My kids share a bedroom. This is fine, they don’t mind, and I don’t mind. We have a good life! But if this comes up in conversation a lot of adults react with a mix of sadness, pity, or disapproval. Those poor kids, or something.
I think a lot of people feel that they simply cannot have children if they cannot achieve those cultural checkboxes. And so a lot of households are having 0-1 kids these days.
Yeah. I think you're right. And it's perfectly natural. People will benchmark to their cultural and technological surroundings.
The fact that there is scolding about these expectations, to me, good evidence of why we have a crisis. Nobody would ever claim that everyone should shut up and be satisfied with having the same level of health care, technology, and education that our grandparents had.
My mother's job when she was young was carrying the piss bucket out to the outhouse on winter mornings. Now that would be considered inhumane living conditions. In practically every category but housing, the intuition of demanding improving conditions is universally understood.
Figure 4 can be used to discuss a simple counterfactual about housing production. Permits seemed to have a natural rate of 20,000 a year and prior to 2005 were exceeding that by a few thousand a year. If the Fed hadn't decided to go nuclear on the housing market then there would have been a natural correction in permits after the "boom" to probably 18,00 for a few years. Instead, the credit slaughter resulted in the destruction of homebuilding capacity and sales for the next ten years and counting.
Missouri. So, if I have this right, Missouri is clipping along, with a steadily, if slowly increasing balanced market. Three years after the great recession prices on low end homes cratered 20%, basically because potential buyers were being denied credit. That increased the number of renters (demand increase) and rents rose..
Okay, but if low end houses dropped in price and rents rose, why weren't investors buying these cheap low end houses hand over fist. With high and rising rents they should have penciled out as good deals, no?
They were! There are 2 primary issues, I think.
1) Funded homeowners are willing to pay much more for a single-family home than landlords are, for a number of reasons of preference and practicality. In other words, the marginal price/rent ratio for owner occupied homes is generally much higher than for landlord owned homes, so when the owner-occupier market was killed off, the price had to decline to the level that landlords would buy.
2) Because of that, landlord ownership of single-family homes has always been small, and generally dominated by mom-n-pop owners in aging units. There was no institutional single-family landlord segment to speak of outside of a few niche players. An entire segment has arisen, with new firms like Invitation Homes buying up thousands of homes. Creating a new market segment that shouldn't exist and never existed before doesn't happen on a dime, so I think it developed with some frictions. That's why yields on those investments was high over the last decade. The new firms were getting in on discounted deals. I think now we will see much more of the growth in that segment happen in new construction, rather than purchasing homes dispersed throughout existing neighborhoods.
thanks