Zillow shows prices and rents going up. I have attached a chart at the end of the post showing the 5 year change in rents and prices in a few Cleveland ZIP codes. It looks like Cleveland fits the picture of a city that was devastated by the mortgage crackdown. Housing starts collapsed even below the low maintenance rate of construction Cleveland needed. Now, rents and prices are rising regressively.
I would guess that the build-to-rent market will start to grow in Cleveland, but if permits are any indication, it isn't quite there yet.
So, after 100 years of zoning regulations and other anti-supply measures, the final equilibrium of the U.S. economy can be summarized as follows:
-Productivity and efficiency gains in all areas of the economy EXCEPT real estate can result in a stabilization of prices and eventually have no impact on inflation.
-Land prices, and the purported value of single family homes, can appreciate perpetually at a range of 5 to 8% annually.
-Exceptions to the land & house price appreciation are tolerated for geographic areas that are experiencing population decline and/or environmental devastation---unless political influence deems that they will be perpetually insured by taxpayers.
Part 4: Once there are no more exceptions, you have the problem everywhere of too many buyers with too much money, so you must keep reducing the number of buyers through legal abolition or general economic austerity.
I also think that to really eliminate systemic risk in the economy we should ultimately abolish lending for single-family home purchases. Houses can be inherited, bought with cash only, or transferred to trusts for historic preservation. There will also be a general prohibition on rental of single family homes by individuals or any corporate entities.
How would you explain the situation in a city like Cleveland?
Cleveland has one of the very lowest Price/ rent ratios, but also has some of the fastest YoY rent growth.
Does this simply represent a lag before home prices shoot up, or is there a different dynamic at play in this market since it is not growing?
Zillow shows prices and rents going up. I have attached a chart at the end of the post showing the 5 year change in rents and prices in a few Cleveland ZIP codes. It looks like Cleveland fits the picture of a city that was devastated by the mortgage crackdown. Housing starts collapsed even below the low maintenance rate of construction Cleveland needed. Now, rents and prices are rising regressively.
I would guess that the build-to-rent market will start to grow in Cleveland, but if permits are any indication, it isn't quite there yet.
Here are permits for the metro area:
https://fred.stlouisfed.org/graph/?g=1CA7L
Tax land, not income. Problem solved. Imagine the backflips from the trickle down set as they try to get out of that one
So, after 100 years of zoning regulations and other anti-supply measures, the final equilibrium of the U.S. economy can be summarized as follows:
-Productivity and efficiency gains in all areas of the economy EXCEPT real estate can result in a stabilization of prices and eventually have no impact on inflation.
-Land prices, and the purported value of single family homes, can appreciate perpetually at a range of 5 to 8% annually.
-Exceptions to the land & house price appreciation are tolerated for geographic areas that are experiencing population decline and/or environmental devastation---unless political influence deems that they will be perpetually insured by taxpayers.
Houses are money pits, as Kevin says the land appreciates in value not the structure
Part 4: Once there are no more exceptions, you have the problem everywhere of too many buyers with too much money, so you must keep reducing the number of buyers through legal abolition or general economic austerity.
I also think that to really eliminate systemic risk in the economy we should ultimately abolish lending for single-family home purchases. Houses can be inherited, bought with cash only, or transferred to trusts for historic preservation. There will also be a general prohibition on rental of single family homes by individuals or any corporate entities.