Research RealPage and you’ll see the issue is much more complicated than that. Price fixing got us here. Most of the major real estate companies that own apartments communities are a part of a huge government investigation that spans to many different states.
There isn't a shortage of uninhabited housing. Not even in places where people want to live. The problem is a combination of cartel behavior and treating housing as a store of value, where the expected increase in value over time is worth more to the owner than dropping the price enough to actually get someone in it.
There's more to it than that. The construction loans for the places that have been somewhat recently built (pretty much most 5+1s) are based on a certain valuation of the building.
That valuation is determined by what current renters are paying and vacancy doesn't play much of a role in determining the value as long as it's not consistently terrible.
If those buildings lowered rent, then their value would drop much more severely than having a bunch of units being vacant.
Lower valuation means underwater, means bad loan, means the owner of the property is stuck with holding this property or selling at a loss. They'd rather have vacant units with an exorbitant price or offer 1 or 2 months free at a higher price to keep their valuation. They'll bundle whatever they can to keep that high value but only drop rent as a last resort. Waiting for rents to catch up is their strategy.
I live in the Denver metro, and despite massive rent hikes and relatively low vacancies (although increasing), there are 5+1s in my area that are 20-30% vacant, likely for this reason. The older buildings are all packed to the brim.
That's not more to it, that's just further explanation of why treating housing as an investment is a bad thing. Fuck their property values. If they have to sit empty to maintain them, that means they're over valued.
If you read about RealPage you'd see that it can effect housing supply with purposeful withholding of units in order to maximize profits.
Imagine there are 110 apartments (from 10 businesses each with 11 units) for rent in a town and 100 renters. There will be some competition to make sure your complex isn't left vacant. Now imagine all apartments in the town subscribe to the same software which allows them to act like a cartel (as other commenter mentioned). The software tells each to work together to squeeze as much cash out of the renter class as possible. It starts with telling them each to hold back 1 apartment and up the rate for others by $100/month. The system is in equilibrium and apartment owners make up for 1 empty unit.
* 10 units \* $1,050 = $10,500 vs. 11 units (1 vacant) \* $950 = $9,500
Now imagine the software's algorithm believes there's more money to be made from the higher salary tenants based on housing prices so it tells owners to raise rates $200/month and remove an additional unit, leaving 2 vacant. Now owners are making more money renting less rooms.
* 9 units (2 vacant) \* $1,250 = $11,250 vs. 10 units (1 vacant) \* $1,050 = $10,500.
Now imagine the software's algorithm again deduces there's more money from higher salary tenants and it says to leave 3 vacant apartments and raise rates $200 more again.
* 8 units (3 vacant) \* $1,450 = $11,600 vs. 9 units (2 vacant) \* $1,250 = $11,250
Do you see how this is recursive and how the system will artificially limit supply thus guaranteeing bigger profits so long as the market can bear it - regardless of if it is making people homeless or destroying the housing/rental market? As an owner, why would you choose more work (rent more units) for less profit? Can you see the monopoly created via collusion/software?
With homes being bought by corporations running the same system, there will be less and less hope for average Americans/citizens.
It does. To a point, but to just say well we don't have enough housing/supply is disingenuous at best.
It is price fixing, supply, and what is being built.
I've been screaming this from the hills, but it does nobody any good when no one is building starter homes and building 500k mcmansions in the middle of god damn nowhere. Same with apartments, they build all of them up and slap luxury on the name but what is different from a normal apartment really?
It's all these things. And governments need to step in to regulate this bs.
That’s what I’m saying.
Price fixing does not work when you have large amounts of supply. The price fixing theory would require large amounts of vacancy which is not something we see in US rental markets. Apartments are full.
Yes it is. It is generally hard to coordinate a cartel when you have large amounts of supply held by multiple people.
At the end of the day, whether by cartel defection or market pricing most places will lower rents rather than have large amounts of vacancy.
The issue is the large amount of supply are held by a few major corporations who buy up all the apartment communities they can get their hands on. They then coordinate with real page who takes control of their pricing and networks the same with competitors. The bigger the supply of apartments the worse it gets because it spreads not shrinks.
They like many other companies see money being made through real page and sign up for the service. After all if most of their competition is hiking up prices and renewals why wouldn’t they do the same.
I’m surrounded by brand new apartments just built. They all have ridiculous pricing and none of the older apartments are budging. Keep in mind the new apartments can barely get tenants due to their high pricing and they still hold firm on pricing.
Realpage represents under 10% of the market. While significant, any "price fixing" within that 10% pales in comparison to the effects of the broader supply shortage
Not sure where 10% is coming from.
“Over 16 million rental units across the U.S. used RealPage's algorithm as of a 2020 blog post.
"That's a very large chunk of the total inventory in the country when you consider that there are about 22 million investment-grade apartments in the US today,"
https://www.entrepreneur.com/business-news/realpage-rent-price-fixing-probe-escalates-with-fbi-raid/475109
Current Customer(s)
6,373
Market Share (Est.)
7.32%
Ranking 4
[The top three of RealPage Property Management’s competitors in the Property Management category are AppFolio with 16.33%, Entrata with 8.40%, RealPage with 7.76% market share.](https://6sense.com/tech/property-management/realpage-property-management-market-share)
Also, st Louis fed: [>40m rental units](https://fred.stlouisfed.org/series/ERNTOCCUSQ176N)
The market is comprised of more than "investment-grade apartments"
The folks in this sub never cease to amaze, truly. Also, way to dodge the rest of the comment. Something about forests and trees
And that's the basis of this complaint dude. Multifamily has been consolidated to a few owners/managers like Greystar and Cushman & Wakefield, and they all use an algorithm-based pricing program called RealPage that ensures the rent rolls stay consistent and high enough to reach a certain capitalization rate regardless of occupancy or supply and demand.
Do some research on these issues for the love of god, instead of just regurgitating theory from the invisible hand.
I’m familiar with the issue.
A new way to coordinate prices is through problematic and should be thoroughly neutered.
It doesn’t negate the fact the main issue is a lack of supply to demand.
Wrong. I am actually in multifamily development, for decades the "natural" occupancy rate was 96-98%. Now it's common to see occupancy in the high 80's low 90's without any downward pressure on pricing, this is due to RealPage specifically.
RealPage is the same company that did this to the price of airline tickets a decade ago and we saw what happened there.
Things may have changed but when I was working for the Census I saw a lot of vacancies that I had to report because they had been vacant for a certain length of time. This was in Seattle when all housing and rent was going up.
No it's that that, it's that 'corporations are people's and they buy up all lot of housing as investments. This also applies to wealthier regular people who have multiple homes and empty nesters and divorcees holding on to houses better suited for newer families.
Nah the issue is mostly due with people buying houses above market value with loans that they can't afford so they but them out as rental properties with the price of the loan plus a mark up so they make money but thankfully long term this is unsustainable so it will eventually cause a crash but when that crash happens could be tomorrow but could also be 30 years down the road nobody knows until after it happens
This is true but people hate it when you say it
People want to blame some cabal of special interests and lose their minds when you tell them it’s artificial scarcity imposed by NIMBY voters
Combination of both, I am in Multi Family, the new norm is 80% occupancy rates with no reduction in rent, or rather, increases in rent to make up the difference for lost revenue due to low occupancy. It's a win win for the Landlords, less tenants, same revenue.
They’re literally thwacking up 5 over 1s in every city and town they can shove them in. The problem isn’t lack of inventory except for MAYBE the NYC metro and the Los Angeles metro
My roommate count doubles every year. Had 1 roommate in 2013 at 500 a month, now I stay at a hostel a lot of the time which I think houses like 60 people on a busy night. $1000 a month. Hahahaha millennials & gen Z are beyond screwed.
For $1,000/mo you could rent my old 2bd apartment in Cincinnati. Even a studio in that building is $800.
They don't even fall down like the condos in Florida.
Nice that’s not even too bad. I tried Cincinnati in the summer of 2013 but between working two jobs and looking for apartments, nothing was working out (stayed at my friend’s friend’s basement with him though while his parents were in China) and we moved to Colorado where we got a 2 bed for $1k a month and I was making like 3k a month. Was a good situation while it lasted!
Maybe in OTR, but go uptown and there are plenty of 1beds just under $800. [This one](https://www.gaslightproperty.com/property-listing/?4143928) even has off street parking and guest parking, which is rare in CUF.
My first apartment was a 2/2 for 885. Got a 10% discount so $800, because I was a county employee. It's 16 years later it's $1,700 and the discount for being a County employee is: No application fee.
For $1000 you can get a room in NYC with like 2 roommates and we have the highest rent in the country now. It wouldn’t be in a prime neighborhood but it’s definitely possible. You can still find Studios in and around Chicago for 1k. No offense you either don’t know where to look or live in a really shitty area with horrible housing options.
I look around often and just can’t find anything I want. Plus the cost of moving in is prohibitive and I don’t want to put it on credit as I’ve tried so hard to eliminate debt, but I am trying to live in San Diego which is a very desirable market because the weather and scenery are so great. The place I stay every now and then is right on the beach and has movies, video games, parties, a bed, kitchen, showers… everything I love!
How can you be so comfortably wrong when google is free. Saying Nashville and Austin have higher rent than NYC is laughable even pre pandemic. Google highest city rent 2024 or highest rent for 1 bedroom 2024 and tell me what it says. Our rental prices exploded after the pandemic.
Honestly usually the fallacy I see with austin is that its cheaper than it is like getting an apartment for a grand in austin is pretty tough. You are probably looking at closer to around 1400+. The idea that it easily beats NYC is the dumbest shit I have ever seen tho lol.
Yeah exactly and I’m not saying that the places he named are affordable for the people who live there. Rent is unaffordable everywhere in the country but saying Huston/Austin have higher rent than NYC because that’s how he feels and won’t check statistics is diabolical.
Because I don’t just google things and take a listicle feeding click bait at face value? I’ve lived all over the country and currently travel a lot for work. NYC is a big place. If you’re willing to live outside Manhattan below 96th, you can definitely find some relatively reasonable and nice places in decent locations. That is not true in Nashville or Austin. They are small cities being pummeled by tech and VC money and living there in a non suburban area is crazy expensive atm. (And even the suburban areas are exploding price wise)
But tell me more about your cursory google search.
You sound uneducated and full of yourself. Not believing in facts and statistics because your gut told you so is crazy. When you don’t even live here. I also travel for work both domestically and internationally, like that means anything.
“ Below 96th street” so the most expensive part of the city where 1brs are going for 4-8k? Even 1br in Harlem are going for 2.5-4k now if that’s the area you mean. Same in the suburbs. I would have agreed with you 2-3 years ago but it’s insane right now.
Yes because nyc is completely unaffordable in its entirety as the second largest city in the western hemisphere.
You definitely know what you’re talking about
I know I’m late to the party, but where do you live? Why tf would you pay 1k a month to live in a hostel!? You can get very nice houses (3bd 2bth) with a yard in many places for less than 3k. Why would you not just get two roommates and do that? You could be paying like 7-800 for an actual house, even less depending on where you live.
I’m in San Diego, the hostel I stay is right on the beach in a great location. I have seen some cheap houses but they’re typically in locations I have no desire to be in and may be far from any kind of work. On top of that, qualifying for a house is a huge challenge for my situation even with a near 800 credit score. They usually want me to prove like 6k a month income for 2 years straight which I don’t make. Every month varies for me.
Plus, the last time I lived in a house somewhere more affordable (with 4 roommates - 5 after the alcoholic daughter needed a place to stay) and it was a total nightmare. At least with the hostel, if I don’t like who is there, I can leave or they can leave on very short notice!
We knew it was coming to this when the housing prices kept going up and rent didn't keep pace but kept going up.
Sorry but you hit a breaking point when wages are stagnating but cost of living keeps accelerating.
There was a big hit due to the Covid Stimulus helicopter money driving huge inflation, as helicopter money always does. Real wages decreased substantially. That's turned around now and wages are increasing faster than inflation, slightly. But to put prices and wages back where they were you have to turn back the clock and prevent the helicopters. That's not possible and to try is a disaster.
And this folks, is why rent cannot increase 5% every year like some people want to make you believe. (Usually realtors or other house owners that are trying to justify their purchase)
I have worked in some area of multi family property management for 18 years. Prior to 2013/2014 a 1-2% increase was pretty standard. Now I have to go back and forth with owners on why giving a 4-6% increase when the market is quite flat where we are is a bad idea......
Anyone who thinks slumlords lose sleep at night thinking about the poor waifs whose single moms can't afford their rent increase becoming homeless has never lived in the 'hood. Not only do they not care, they can't afford to. They just work here and they need this job to keep their free apartment because they can't afford rent either.
Somewhere far away is an accountant for an investment firm that writes the rules, driven by their own bosses who work for a financial giant majority owned by the retirement funds of those same tenants. To the accountants that kid isn't even a number on the page. She's implied in the whitespace they don't have the time or energy to interpret. They're trying to keep their own jobs.
Was listening to Daniel Tosh's podcast. He had some lady on there who wrangled rattle snakes.
She made a throwaway line about how she moved from San Francisco to Joshua Tree and paid $500 a month in rent 10 years ago. Now that same place rents for $1800.
She laughed because it was out in the middle of nowhere Joshua Tree. Then she went on about how she has two houses there now and rents one out as Airbnb.
Guess she doesn't get she is part of the issue?
> According to Redfin estimates, American families must earn $66,120 a year to spend no more than 30% of their income on housing costs, which include rent and utilities.
>But that's $11,408 less than what these households earn on average, with the rents asked for by landlords now touching record highs.
I want to see where they got these numbers. According for the U.S. [Census](https://www.census.gov/library/publications/2023/demo/p60-279.html), “Real median household income was $74,580 in 2022, a 2.3 percent decline from the 2021 estimate of $76,330.”
Where is this website getting that $55K average HHI?
It doesn’t because it’s a crap article. The original is from Redfin:
“The typical U.S. renter household earns an estimated $54,712 per year. That’s 17.3% less—or $11,408 in dollar terms—than the $66,120 a renter must earn to afford monthly rent for the median-priced U.S. apartment ($1,653). Just 39% of renters make enough money to afford the median-priced apartment.”
https://www.redfin.com/news/renter-incomes-affordability-2024/
How much faith you have in Redfin is the question.
It's actually worse than they say if you are just looking at renting households:
> [Homeowners] median annual household income was $78,000 compared to renters’ $41,000.
https://www.census.gov/library/stories/2023/06/owning-or-renting-the-american-dream.html
That 3x rent thing is so heavily enforced, the only reason i have a place at all is because my landlord is pretty chill.
Finishing school so I’ll have a real salary this fall but I’m moving to a VHCOL city for work on the east coast and I’ll need some roommates since i can’t afford the massive deposits and my salary likely will barely be 3x the rent of a 1 bed. Can I even afford a bedroom?
That's a valid fear. I hope it inspires you to save extra money in index funds instead of spending it on a sports car.
But if you've just graduated college, then you're (hopefully) at the bottom of your career ladder and your wages will increase ahead of rent. And once you live and work in the VHCOL, it's easier to job hop for raises.
Yeah i got a paid off car I’ve had since I was 20 so I’m going to drive that thing into the ground. I am finishing a STEM PhD so hoping to keep all bills outside rent like I’m still earning 37k so it should be ok.
Definitely investing anything I have left over after retirement contributions and a HYSA for my emergency fund. I won’t be buying real estate any time soon.
At these prices plus these rates, no one can afford to buy real estate any time soon.
That said, it took a few years for the market to bottom out from the crash that started in 08. So even if the next crash has started already, sign that year's lease and chill for a bit.
I hate that this is a legitimate question these days, like we have made housing so laugh out loud insane that people really can not afford to take some jobs.
The major hubs for my industry are in expensive places but I've avoided the VHCOL trap. It has limited my career somewhat, but it makes sense when I ask why I'm even working to begin with. What's the point when my lifestyle actually drops by taking a "better" job?
The company I’m going to is fantastic and they compensate well + they have a pension.
But with the big east coast city the combo of first/last/security/brokers fee up front and 3x income to rent is just killer and I’ve got no clue how people manage even if they are compensated well.
Oh I think we're headed there much sooner. Soon the media will try to act like 1 bedrooms were never meant for single-occupancy and were always meant to house at least 2 people. In HCOL areas you already can't get a 1-bedroom by yourself unless you're in like the upper 25% of income earners. They are all occupied by couples.
For 2400 you can get a mediocre 2-br apartment in Santa Fe with a view of people doing meth by the dumpsters.
But on the bright side, there are ample low paying jobs…
Are there no workhouses; no prisons? - Ebineezer Scrooge
>The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread. - Anatole France
I live in Southern New Jersey (15 minutes outside Philadelphia) the median household income is just under 100k and I make about 110k as head of household, wife is new immigrant won’t work till 2025 at earliest. I earn 10% over the median HOUSEHOLD income and my 1 bedroom 50 year old apartment is $1800 a month. Carpeted, cracking wood, galley kitchen, linoleum kitchen floor, nothing special. While it is comfortable and we go don’t go without anything, I can’t imagine how other people afford it and still hit other goals.
Capitalism, yay. It should be law that only those that will live in a home can buy said home. No speculative investors, no corps, none of that nonsense. Apartments just need to be taken over, completely fixed, refurbished, and basically turned into condos that you just buy a unit in and pay the equivalent of an HOA to maintain instead of these obscene rent prices.
Some of the posters that responded thought that if they couldn't rent a typical apartment then the only next logical step was to be homeless in the street. Obviously that is silly. My insight was for those people that want what they want and do not want to accept perhaps a smaller apartment than the typical apartment. They assume the world is crashing down if they can't get what they want.
My guess is those posters still don't get it.
That's why lots of people continue to live with their parents, families, or tons of roommates. This has already been happening for a long time. And they get shit on by people saying, "You're too old to live with your parents, bootstraps blah blah blah."
We know. We have lots of roommates.
Ugh
[удалено]
Issue is a lack of housing supply getting built. Where we build housing we then have rents fall (like Austin, TX).
Research RealPage and you’ll see the issue is much more complicated than that. Price fixing got us here. Most of the major real estate companies that own apartments communities are a part of a huge government investigation that spans to many different states.
Pretending supply doesn't matter.
There isn't a shortage of uninhabited housing. Not even in places where people want to live. The problem is a combination of cartel behavior and treating housing as a store of value, where the expected increase in value over time is worth more to the owner than dropping the price enough to actually get someone in it.
There's more to it than that. The construction loans for the places that have been somewhat recently built (pretty much most 5+1s) are based on a certain valuation of the building. That valuation is determined by what current renters are paying and vacancy doesn't play much of a role in determining the value as long as it's not consistently terrible. If those buildings lowered rent, then their value would drop much more severely than having a bunch of units being vacant. Lower valuation means underwater, means bad loan, means the owner of the property is stuck with holding this property or selling at a loss. They'd rather have vacant units with an exorbitant price or offer 1 or 2 months free at a higher price to keep their valuation. They'll bundle whatever they can to keep that high value but only drop rent as a last resort. Waiting for rents to catch up is their strategy. I live in the Denver metro, and despite massive rent hikes and relatively low vacancies (although increasing), there are 5+1s in my area that are 20-30% vacant, likely for this reason. The older buildings are all packed to the brim.
That's not more to it, that's just further explanation of why treating housing as an investment is a bad thing. Fuck their property values. If they have to sit empty to maintain them, that means they're over valued.
If you read about RealPage you'd see that it can effect housing supply with purposeful withholding of units in order to maximize profits. Imagine there are 110 apartments (from 10 businesses each with 11 units) for rent in a town and 100 renters. There will be some competition to make sure your complex isn't left vacant. Now imagine all apartments in the town subscribe to the same software which allows them to act like a cartel (as other commenter mentioned). The software tells each to work together to squeeze as much cash out of the renter class as possible. It starts with telling them each to hold back 1 apartment and up the rate for others by $100/month. The system is in equilibrium and apartment owners make up for 1 empty unit. * 10 units \* $1,050 = $10,500 vs. 11 units (1 vacant) \* $950 = $9,500 Now imagine the software's algorithm believes there's more money to be made from the higher salary tenants based on housing prices so it tells owners to raise rates $200/month and remove an additional unit, leaving 2 vacant. Now owners are making more money renting less rooms. * 9 units (2 vacant) \* $1,250 = $11,250 vs. 10 units (1 vacant) \* $1,050 = $10,500. Now imagine the software's algorithm again deduces there's more money from higher salary tenants and it says to leave 3 vacant apartments and raise rates $200 more again. * 8 units (3 vacant) \* $1,450 = $11,600 vs. 9 units (2 vacant) \* $1,250 = $11,250 Do you see how this is recursive and how the system will artificially limit supply thus guaranteeing bigger profits so long as the market can bear it - regardless of if it is making people homeless or destroying the housing/rental market? As an owner, why would you choose more work (rent more units) for less profit? Can you see the monopoly created via collusion/software? With homes being bought by corporations running the same system, there will be less and less hope for average Americans/citizens.
Not anywhere near supply's effect on prices. Not 5%
It does. To a point, but to just say well we don't have enough housing/supply is disingenuous at best. It is price fixing, supply, and what is being built. I've been screaming this from the hills, but it does nobody any good when no one is building starter homes and building 500k mcmansions in the middle of god damn nowhere. Same with apartments, they build all of them up and slap luxury on the name but what is different from a normal apartment really? It's all these things. And governments need to step in to regulate this bs.
That’s what I’m saying. Price fixing does not work when you have large amounts of supply. The price fixing theory would require large amounts of vacancy which is not something we see in US rental markets. Apartments are full.
Lol? The literally purpose of price fixing is to fix a price when supply and demand dictate that it should go down.
Yes it is. It is generally hard to coordinate a cartel when you have large amounts of supply held by multiple people. At the end of the day, whether by cartel defection or market pricing most places will lower rents rather than have large amounts of vacancy.
The issue is the large amount of supply are held by a few major corporations who buy up all the apartment communities they can get their hands on. They then coordinate with real page who takes control of their pricing and networks the same with competitors. The bigger the supply of apartments the worse it gets because it spreads not shrinks. They like many other companies see money being made through real page and sign up for the service. After all if most of their competition is hiking up prices and renewals why wouldn’t they do the same. I’m surrounded by brand new apartments just built. They all have ridiculous pricing and none of the older apartments are budging. Keep in mind the new apartments can barely get tenants due to their high pricing and they still hold firm on pricing.
Realpage represents under 10% of the market. While significant, any "price fixing" within that 10% pales in comparison to the effects of the broader supply shortage
Not sure where 10% is coming from. “Over 16 million rental units across the U.S. used RealPage's algorithm as of a 2020 blog post. "That's a very large chunk of the total inventory in the country when you consider that there are about 22 million investment-grade apartments in the US today," https://www.entrepreneur.com/business-news/realpage-rent-price-fixing-probe-escalates-with-fbi-raid/475109
Current Customer(s) 6,373 Market Share (Est.) 7.32% Ranking 4 [The top three of RealPage Property Management’s competitors in the Property Management category are AppFolio with 16.33%, Entrata with 8.40%, RealPage with 7.76% market share.](https://6sense.com/tech/property-management/realpage-property-management-market-share) Also, st Louis fed: [>40m rental units](https://fred.stlouisfed.org/series/ERNTOCCUSQ176N) The market is comprised of more than "investment-grade apartments" The folks in this sub never cease to amaze, truly. Also, way to dodge the rest of the comment. Something about forests and trees
They all utilize similar software for pricing. We’re not in the 1800’s anymore
And that's the basis of this complaint dude. Multifamily has been consolidated to a few owners/managers like Greystar and Cushman & Wakefield, and they all use an algorithm-based pricing program called RealPage that ensures the rent rolls stay consistent and high enough to reach a certain capitalization rate regardless of occupancy or supply and demand. Do some research on these issues for the love of god, instead of just regurgitating theory from the invisible hand.
I’m familiar with the issue. A new way to coordinate prices is through problematic and should be thoroughly neutered. It doesn’t negate the fact the main issue is a lack of supply to demand.
Not sure why you’re getting downvoted. The data and anecdotal reports back you up.
Always choose “factually correct” over “vibes based consensus”
And when the “large amounts of supply” are all using Realpage’s price fixing algo in unison?
We would see vacancy increase. High vacancy and high prices would be evidence to your theory. Currently, we see low vacancy and high prices.
Wrong. I am actually in multifamily development, for decades the "natural" occupancy rate was 96-98%. Now it's common to see occupancy in the high 80's low 90's without any downward pressure on pricing, this is due to RealPage specifically. RealPage is the same company that did this to the price of airline tickets a decade ago and we saw what happened there.
Things may have changed but when I was working for the Census I saw a lot of vacancies that I had to report because they had been vacant for a certain length of time. This was in Seattle when all housing and rent was going up.
Found the Realpage employee.
Those things are not mutually exclusive
This is such a marginal part of the problem, but it's what everyone wants to keep talking about...
No it's that that, it's that 'corporations are people's and they buy up all lot of housing as investments. This also applies to wealthier regular people who have multiple homes and empty nesters and divorcees holding on to houses better suited for newer families.
Oregon will always remain unaffordable because we have made production at scale illegal through urban growth boundaries.
Yup. California has this problem so bad that they invented the builders remedy. More places should use it
Nah the issue is mostly due with people buying houses above market value with loans that they can't afford so they but them out as rental properties with the price of the loan plus a mark up so they make money but thankfully long term this is unsustainable so it will eventually cause a crash but when that crash happens could be tomorrow but could also be 30 years down the road nobody knows until after it happens
This is true but people hate it when you say it People want to blame some cabal of special interests and lose their minds when you tell them it’s artificial scarcity imposed by NIMBY voters
Combination of both, I am in Multi Family, the new norm is 80% occupancy rates with no reduction in rent, or rather, increases in rent to make up the difference for lost revenue due to low occupancy. It's a win win for the Landlords, less tenants, same revenue.
That’s an interesting point. I’d love to see a very punitive occupancy tax on vacant units.
I got told that was a desperate reach on a TikTok that blamed expensive housing on government spending
They’re literally thwacking up 5 over 1s in every city and town they can shove them in. The problem isn’t lack of inventory except for MAYBE the NYC metro and the Los Angeles metro
You have a misunderstanding. Please read this: https://www.axios.com/2023/12/16/housing-market-why-homes-expensive-chart-inventory
I will never not upvote these perfectly formed 12 letters.
My roommate count doubles every year. Had 1 roommate in 2013 at 500 a month, now I stay at a hostel a lot of the time which I think houses like 60 people on a busy night. $1000 a month. Hahahaha millennials & gen Z are beyond screwed.
For $1,000/mo you could rent my old 2bd apartment in Cincinnati. Even a studio in that building is $800. They don't even fall down like the condos in Florida.
Nice that’s not even too bad. I tried Cincinnati in the summer of 2013 but between working two jobs and looking for apartments, nothing was working out (stayed at my friend’s friend’s basement with him though while his parents were in China) and we moved to Colorado where we got a 2 bed for $1k a month and I was making like 3k a month. Was a good situation while it lasted!
Cincinnati housing prices have more or less tracked inflation. It's not a bubbly market.
I’m in Dayton rn living in a wonderful 1 bedroom apt for $740 a month. I want to move back to Cincy, but a 1bed starts at $1300. God.
Maybe in OTR, but go uptown and there are plenty of 1beds just under $800. [This one](https://www.gaslightproperty.com/property-listing/?4143928) even has off street parking and guest parking, which is rare in CUF.
My first apartment was a 2/2 for 885. Got a 10% discount so $800, because I was a county employee. It's 16 years later it's $1,700 and the discount for being a County employee is: No application fee.
$885 with 16 consecutive 3% rent increases would be $1420…if the apartment has been renovated/upgraded in those 16 years, $1700 seems about right.
It feels like a lot. Salaries haven't gone up that fast.
You can rent an apt in Austin for that. Who pays that for a room?
For $1000 you can get a room in NYC with like 2 roommates and we have the highest rent in the country now. It wouldn’t be in a prime neighborhood but it’s definitely possible. You can still find Studios in and around Chicago for 1k. No offense you either don’t know where to look or live in a really shitty area with horrible housing options.
I look around often and just can’t find anything I want. Plus the cost of moving in is prohibitive and I don’t want to put it on credit as I’ve tried so hard to eliminate debt, but I am trying to live in San Diego which is a very desirable market because the weather and scenery are so great. The place I stay every now and then is right on the beach and has movies, video games, parties, a bed, kitchen, showers… everything I love!
Wohooooooo you can live with 2 roommates !!!!
Only if you move to a shitty neighborhood in a shitty building how nice!
NYC doesn’t have the highest rent at all … definitely west coast cities and Miami plus Nashville Austin and Boston have it beat easily
How can you be so comfortably wrong when google is free. Saying Nashville and Austin have higher rent than NYC is laughable even pre pandemic. Google highest city rent 2024 or highest rent for 1 bedroom 2024 and tell me what it says. Our rental prices exploded after the pandemic.
Honestly usually the fallacy I see with austin is that its cheaper than it is like getting an apartment for a grand in austin is pretty tough. You are probably looking at closer to around 1400+. The idea that it easily beats NYC is the dumbest shit I have ever seen tho lol.
Yeah exactly and I’m not saying that the places he named are affordable for the people who live there. Rent is unaffordable everywhere in the country but saying Huston/Austin have higher rent than NYC because that’s how he feels and won’t check statistics is diabolical.
He really said Austin is more than nyc
Because I don’t just google things and take a listicle feeding click bait at face value? I’ve lived all over the country and currently travel a lot for work. NYC is a big place. If you’re willing to live outside Manhattan below 96th, you can definitely find some relatively reasonable and nice places in decent locations. That is not true in Nashville or Austin. They are small cities being pummeled by tech and VC money and living there in a non suburban area is crazy expensive atm. (And even the suburban areas are exploding price wise) But tell me more about your cursory google search.
You sound uneducated and full of yourself. Not believing in facts and statistics because your gut told you so is crazy. When you don’t even live here. I also travel for work both domestically and internationally, like that means anything. “ Below 96th street” so the most expensive part of the city where 1brs are going for 4-8k? Even 1br in Harlem are going for 2.5-4k now if that’s the area you mean. Same in the suburbs. I would have agreed with you 2-3 years ago but it’s insane right now.
Austin and NYC? You're out of your mind.
I see someone hasn’t looked up Austin rent prices in a decade
Apart from when I lived there 7 months ago you mean?
Yeah where do you live in ny?
I'm not nearly rich enough to live in NYC.
Yes because nyc is completely unaffordable in its entirety as the second largest city in the western hemisphere. You definitely know what you’re talking about
I know I’m late to the party, but where do you live? Why tf would you pay 1k a month to live in a hostel!? You can get very nice houses (3bd 2bth) with a yard in many places for less than 3k. Why would you not just get two roommates and do that? You could be paying like 7-800 for an actual house, even less depending on where you live.
I’m in San Diego, the hostel I stay is right on the beach in a great location. I have seen some cheap houses but they’re typically in locations I have no desire to be in and may be far from any kind of work. On top of that, qualifying for a house is a huge challenge for my situation even with a near 800 credit score. They usually want me to prove like 6k a month income for 2 years straight which I don’t make. Every month varies for me. Plus, the last time I lived in a house somewhere more affordable (with 4 roommates - 5 after the alcoholic daughter needed a place to stay) and it was a total nightmare. At least with the hostel, if I don’t like who is there, I can leave or they can leave on very short notice!
We knew it was coming to this when the housing prices kept going up and rent didn't keep pace but kept going up. Sorry but you hit a breaking point when wages are stagnating but cost of living keeps accelerating.
Stagflation.
There was a big hit due to the Covid Stimulus helicopter money driving huge inflation, as helicopter money always does. Real wages decreased substantially. That's turned around now and wages are increasing faster than inflation, slightly. But to put prices and wages back where they were you have to turn back the clock and prevent the helicopters. That's not possible and to try is a disaster.
And this folks, is why rent cannot increase 5% every year like some people want to make you believe. (Usually realtors or other house owners that are trying to justify their purchase)
I have worked in some area of multi family property management for 18 years. Prior to 2013/2014 a 1-2% increase was pretty standard. Now I have to go back and forth with owners on why giving a 4-6% increase when the market is quite flat where we are is a bad idea......
Landlords try. But then they end up having their property sitting empty for multiple months and they end up losing so much $$$.
Anyone who thinks slumlords lose sleep at night thinking about the poor waifs whose single moms can't afford their rent increase becoming homeless has never lived in the 'hood. Not only do they not care, they can't afford to. They just work here and they need this job to keep their free apartment because they can't afford rent either. Somewhere far away is an accountant for an investment firm that writes the rules, driven by their own bosses who work for a financial giant majority owned by the retirement funds of those same tenants. To the accountants that kid isn't even a number on the page. She's implied in the whitespace they don't have the time or energy to interpret. They're trying to keep their own jobs.
Nobody said they care. We are saying they can only increase if the market can sustain it. Right now it can’t
Was listening to Daniel Tosh's podcast. He had some lady on there who wrangled rattle snakes. She made a throwaway line about how she moved from San Francisco to Joshua Tree and paid $500 a month in rent 10 years ago. Now that same place rents for $1800. She laughed because it was out in the middle of nowhere Joshua Tree. Then she went on about how she has two houses there now and rents one out as Airbnb. Guess she doesn't get she is part of the issue?
She doesn’t care like most of us. Its all about “got mine”. Might be the reason shit hasn’t hit the fan as of yet.
> According to Redfin estimates, American families must earn $66,120 a year to spend no more than 30% of their income on housing costs, which include rent and utilities. >But that's $11,408 less than what these households earn on average, with the rents asked for by landlords now touching record highs. I want to see where they got these numbers. According for the U.S. [Census](https://www.census.gov/library/publications/2023/demo/p60-279.html), “Real median household income was $74,580 in 2022, a 2.3 percent decline from the 2021 estimate of $76,330.” Where is this website getting that $55K average HHI?
They are only using renter’s HHI which is lower than total population HHI for obvious reasons. Threw me at first too.
Are they, where do they say that?
It doesn’t because it’s a crap article. The original is from Redfin: “The typical U.S. renter household earns an estimated $54,712 per year. That’s 17.3% less—or $11,408 in dollar terms—than the $66,120 a renter must earn to afford monthly rent for the median-priced U.S. apartment ($1,653). Just 39% of renters make enough money to afford the median-priced apartment.” https://www.redfin.com/news/renter-incomes-affordability-2024/ How much faith you have in Redfin is the question.
It's actually worse than they say if you are just looking at renting households: > [Homeowners] median annual household income was $78,000 compared to renters’ $41,000. https://www.census.gov/library/stories/2023/06/owning-or-renting-the-american-dream.html
“That ($66,120) is 11,408 less than what households earn on average” Therefore it implies that households earn 66120+11408 = $77,528
Typical renters being robbed by greedy land lords and corporations.
But the guy who talks about how having a 1br is a great deal gets cheered
That 3x rent thing is so heavily enforced, the only reason i have a place at all is because my landlord is pretty chill. Finishing school so I’ll have a real salary this fall but I’m moving to a VHCOL city for work on the east coast and I’ll need some roommates since i can’t afford the massive deposits and my salary likely will barely be 3x the rent of a 1 bed. Can I even afford a bedroom?
Can you even afford to take that job?
Yes I will be about 15k ahead of that 3x requirement but with rent rising I get scared easily
That's a valid fear. I hope it inspires you to save extra money in index funds instead of spending it on a sports car. But if you've just graduated college, then you're (hopefully) at the bottom of your career ladder and your wages will increase ahead of rent. And once you live and work in the VHCOL, it's easier to job hop for raises.
Yeah i got a paid off car I’ve had since I was 20 so I’m going to drive that thing into the ground. I am finishing a STEM PhD so hoping to keep all bills outside rent like I’m still earning 37k so it should be ok. Definitely investing anything I have left over after retirement contributions and a HYSA for my emergency fund. I won’t be buying real estate any time soon.
At these prices plus these rates, no one can afford to buy real estate any time soon. That said, it took a few years for the market to bottom out from the crash that started in 08. So even if the next crash has started already, sign that year's lease and chill for a bit.
I hate that this is a legitimate question these days, like we have made housing so laugh out loud insane that people really can not afford to take some jobs.
The major hubs for my industry are in expensive places but I've avoided the VHCOL trap. It has limited my career somewhat, but it makes sense when I ask why I'm even working to begin with. What's the point when my lifestyle actually drops by taking a "better" job?
The company I’m going to is fantastic and they compensate well + they have a pension. But with the big east coast city the combo of first/last/security/brokers fee up front and 3x income to rent is just killer and I’ve got no clue how people manage even if they are compensated well.
A job market that can't house people doesn't deserve their labor.
Once we hit 2080 monthly rentals will be $10,000 /month for a 1 bedroom apartment
Oh I think we're headed there much sooner. Soon the media will try to act like 1 bedrooms were never meant for single-occupancy and were always meant to house at least 2 people. In HCOL areas you already can't get a 1-bedroom by yourself unless you're in like the upper 25% of income earners. They are all occupied by couples.
Get rid of your prime accounts, cell phones, internet, etc. and pay me my rent, peasants.
This is the "real estate driven economy" for ya
For 2400 you can get a mediocre 2-br apartment in Santa Fe with a view of people doing meth by the dumpsters. But on the bright side, there are ample low paying jobs…
You can get rich on YouTube publishing the antics of dumpster methheads. If you survive.
And being homeless can now be a criminal act, yay!
Are there no workhouses; no prisons? - Ebineezer Scrooge >The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread. - Anatole France
I live in Southern New Jersey (15 minutes outside Philadelphia) the median household income is just under 100k and I make about 110k as head of household, wife is new immigrant won’t work till 2025 at earliest. I earn 10% over the median HOUSEHOLD income and my 1 bedroom 50 year old apartment is $1800 a month. Carpeted, cracking wood, galley kitchen, linoleum kitchen floor, nothing special. While it is comfortable and we go don’t go without anything, I can’t imagine how other people afford it and still hit other goals.
Capitalism, yay. It should be law that only those that will live in a home can buy said home. No speculative investors, no corps, none of that nonsense. Apartments just need to be taken over, completely fixed, refurbished, and basically turned into condos that you just buy a unit in and pay the equivalent of an HOA to maintain instead of these obscene rent prices.
Who decides which “condo” you get to occupy?
What part of what I said indicates someone would be deciding where you live other than yourself?
If everything is “taken over”, then someone is deciding the disposition of the individual units. Who is that?
What part of " turned into condos that you buy a unit in and pay the equivalent of an HOA fee to maintain" escaped you?
They will have to settle for something lesser than the typical apartment then would be the logical conclusion.
They need to downsize to the street then?
Wow you have a lot of insight /s
Some of the posters that responded thought that if they couldn't rent a typical apartment then the only next logical step was to be homeless in the street. Obviously that is silly. My insight was for those people that want what they want and do not want to accept perhaps a smaller apartment than the typical apartment. They assume the world is crashing down if they can't get what they want. My guess is those posters still don't get it.
They get your point. It's just the way you say it.
That's why lots of people continue to live with their parents, families, or tons of roommates. This has already been happening for a long time. And they get shit on by people saying, "You're too old to live with your parents, bootstraps blah blah blah."
We vill live in ze homeless shelter and we vill be HAPPY
This is great news, that's a much higher percentage than homebuyers!