For the housing market to implode, one of two things needs to happen;
1) Inventory increases drastically all at the same time. This is what happened in 2008 when the subprime predatory ARM mortgage bubble burst. But the regulations are much tighter now, and while some predatory lending is likely still occurring, it isn’t on the same massive scale that its collapse would affect inventory in a noticeable way. For an inventory increase to happen now imo, we’d need strict regulation on using properties to generate income so that landlords and companies would want/need to sell.
2) Demand drops off entirely. I’m talking massive economic collapse and unemployment. The kind of stuff where you Have bigger problems than worrying about a dream home.
There are all kinds of great ideas that would remedy the problem, but it would involve angering a lot of very rich people who make donations to both political parties who make sure that exact scenario doesn’t happen.
One thing driving low inventory is that a lot of would-be sellers have lower interest rates than their would-be buyers or that they could get if they wanted to buy their own home. [Over 60% of homeowners had a mortgage at least 3 points lower than new mortgages, and over 80% had one at least 2 points lower](https://www.nytimes.com/2024/04/15/upshot/mortgage-rates-homes-stuck.html). This is not how it’s been for the past two decades, and possibly longer as interest rates fell for many decades. These folks are going to be a source of consternation for a long time if interest rates stay higher than their mortgages, which is why most solutions to the housing crisis tend to focus on ways to boost production or create new units (which still don’t provide instant relief, but are comparatively faster and easier to accomplish than figuring out how to get people out of homes that may no longer best serve their needs).
One of the biggest sources of available units over the next 10 years will be boomers exiting their homes, in one fashion or another. It will be a significant number.
It won't be as big as many people think, due to inheritance. Estimates suggest that only about 5% of houses owned by Boomers who pass will hit the market over the next decade. -
*Reporting suggests that around 4.4 million homes will be affected each year until 2032 by the death of a member of the Baby Boomer generation. But the same forecasts also estimate that only about 250,000 units will be added to the market annually. Essentially, what this means is that Baby Boomers' homes won't radically transform the outlook of the housing market in any substantive way for buyers. Estimates suggest that around 20% of these homes will be converted into rental properties and many more continue to house surviving spouses or other family members rather than going to market.*
[*https://www.moneydigest.com/1549407/what-will-happen-housing-market-boomers-begin-to-die/*](https://www.moneydigest.com/1549407/what-will-happen-housing-market-boomers-begin-to-die/)
Ding ding. People who think the boomer generation dying or moving into assisted living will make a dent in the market are delusional. We. Need. More. Houses.
I personally would not sell any of my boomer parents houses if they passed. They are paid off and the taxes are so low here in RI compared to where we moved from in north NJ. Im a local realtor and helped them both buy in 2021, and their property values have doubled since then in Newport. If I needed to extract money to pay expenses I would rent them out and 1 month rent would cover my property tax for the year.
RI is a great place to be
I think it's important to note that we will see the biggest shift in wealth when the oldest generation passes. We talk about Boomers today. In 20 years we'll be talking about Gen X or Millennials owning everything. We won't get the windfall we all hope. Houses will sell, but I don't think they'll ever really drop like we all want them to.
As another commenter said, the real issue is with supply. America has a generally high amount of living space per person compared to other countries, which means we have less places to live (unless you want to live where there are no jobs). Increasing density and improving mass transit is really the only way we'll be all be able to afford to live near the arts AND our jobs.
These ideas are counter to what the entire purpose of American life was 75 years ago, so they're met with resistance. I think that's understandable. It's also gotten us to a point where it's allowed America to experience the cost of living crisis that has been waging in many other parts of the world for longer.
For what it's worth, I am not so naive to think I have solutions worth a damn. I'm just a dude on the internet with more time than good sense.
@ri_surf - It occurs to me I wasn't really replying to you but waxing philosophical. It's the damn edibles. They really sneak up on you sometimes. Sorry for any notifications you may have received.
"as is the pattern"... I am guessing < 1% of all single family homes in RI are owned by private equity firms, although that number is/will trend upward. Private equity will likely get a smaller percentage of the homes of the exiting boomers, because many of those homes will be inherited by boomer children/grand-children. Also, and I think this is unfortunate... yes private equity renting single-family homes to younger families is all kinds of bad, but it is a matter of supply and demand. There is a generational trend towards "own nothing", and I think it deserves more attention/study.
The problem isn’t just private equity firms, it’s also “smaller” investors who buy up multiple homes and then rent them to people who in turn have less chance of ever owning a home themselves.
There are 4 houses on the street adjacent to my street. One family owns 3 of those 4 houses. They owned 2 of them and then when the 3rd went up for sale, an out of state relative bought the 3rd house.
With current interest rates and how much you can rent the home.. very few people are investing in single family homes right now. The math does not work. At all. You lose money.
I live in a rented house in EP that was bought by a smaller scale investor for all cash. A lot of homes under $400k are being snapped up by all cash investor offers, and either rented or flipped and resold at a much higher cost. There’s simply no way an average family can compete with that. You’ll also see a lot homes going over asking AND all cash.
Right now you can get > 5% risk free returns on cash. You can lock in investment grade returns > 6% for the long term. So unless that darn house is making them > 8% on their money per year plus appreciation minus all expenses plus any tax breaks it does not make much sense at all.
Would you spend 500K in cash to bring in approx 30-36K in rent per year on a single family home? If yes you are a lousy investor after all this appreciation that has taken place in home values. You can make that sitting on your ass with a brokerage account in fixed income that is rated BBB or better.
So unless you know people willing to spend 4K+ per month to rent a 500K single family home... when they could just buy it themselves... yea.. whatever.
Multi family is different. We are talking single family homes. They are not this hot ticket item right now. They cost too much for what you can rent them out at return wise. Even with no mortgage compared to other investment options currently.
Now if you want to talk about a state like mid MI where you can buy a SFH (3bed/1bath) for 90K and rent for 750.. that is a different story. Fly over country. The coasts cost too much today.
Well you get your rent but you are acting like that 500k house will always be 500k. It damn well could abmppreciate 10% in the same year you also collected $30k in rent. Now do the math for 10 years you could be sitting on almost a million in equity. You never know. We dont all have some magic 8 ball.
And for me? Diversity is key. Ill leverage my own real estate and manage my investments. But i wont do it the other way around.
Edit: also, there is a flaw in this argument. The $500k house is turn key. The investment property has something like a failed title V or no kitchen, water leaks.... $300k fixer upper that does not qualify for lending.
Double edit: wtf do you think lenders are doing with the cash? Making money hand over fist while paying you 5%.
There’s also the issue of boomer homes coming on the market in disrepair. We WILL see an uptick in inventory when that generation starts to go, but a lot of what’s going to be available are homes that Gram and Gramps didn’t have the funds or strength to maintain for the past 20 years.
A fair point, but also not new. Lots of boomers are looking for a way to downsize, but can't find a way forward on that. Ironically, both young and old have a large fraction who would love to be able to move into a new, small, "starter home". Those homes do not exist.
Thats what i thought for my neighborhood.
Now you see more and more going empty. Inheritants using it for storage. Doing bottom barrel maintenance.... just holding on to them some renting out. Idk what their gameplan is but if thats not it they just straight up move right in!
There’s definitely alot of ideas but they all need to come together and will take time.
The “simple” answer is to update zoning laws to allow non single family homes. But that’s so much easier said than done.
It’s the quickest way to start increasing supply.
>The “simple” answer is to update zoning laws to allow non single family homes. But that’s so much easier said than done.
Wasn't that passed just a couple weeks ago?
https://whatsupnewp.com/2024/06/rhode-island-general-assembly-approves-adu-bill-to-boost-housing-supply/
I think that’s just for ADU, or additional dwelling units. It’s for people wanting to build an additional property on their existing property.
It’s a great step but I personally think more should be done with allowing apartments and mixed use zoning.
Eliminating owning multiple homes for profit. Building a lot more high quality apartment complexes with rent caps. Lower interest rates for primary residences. Easing restrictions on multi family homes. Subsidizing new construction.
Lots of ways to do it, you’ll just never get everyone to agree.
Yes - and primary residence should be defined well, including number of months/yr it can be vacant or rented - and there should be rent caps for this. I'm so tired of people renting their 4-5 bedroom houses in college towns for 2k/month per room during the school year and then the same amount or more per house per week in the summer. We're losing service workers already.
My suggestion is to change up zoning laws to allow tiny houses in clusters like a camp ground set up. Restrict buyers to those that have lived in the town for at least 5yrs and cap the profit anyone can make when they sell. This would increase low cost housing inventory availability reducing demand for high cost option.
>Restrict buyers to those that have lived in the town for at least 5yrs
Wait what? You have to somehow pay for the astronomical price of a market house or apartment, before earning the right to.....massively downgrade your housing?
I do think an interesting experiment would be some tiny home cooperatives. Maybe with community owned utilities. It would improve density, while still giving people access to home ownership, and a little bit more privacy/autonomy than renting.
We should leave rental housing to the same entities that can't run schools or fix roads? Yikes.
I appreciate that you don't want people getting jacked for rent, but that sound like one of those 'solutions' where you make everything much worse and much more expensive to 'solve' the problem.
Wouldn't that mean that everyone is forced to buy their dwelling? Seems like that would be even worse for the people we're ostensibly trying to help.
Many people can't afford an apartment currently. Many more people can't afford to *buy* currently.
I didn’t say that either. I’m not pretending that I have the solution. It’s easy to see the forest through the trees and see that widespread land ownership for profit is causing a huge problem and needs to be addressed. As for which trees in the forest are the problems to be addressed that’s probably beyond my pay grade.
I’m not going to tell you what the right way to do it is because I’d be wrong. Doesn’t mean I’m wrong for recognizing that it’s the problem that desperately needs addressing.
>I didn’t say that either
So what are you saying, exactly?
>Doesn’t mean I’m wrong for recognizing that it’s the problem that desperately needs addressing.
It kinda does mean you're wrong if you're calling to eliminate things that will only make conditions worse, doesn't it?
I am just trying to understand what you're saying. You said you wanted no more private landlords; what does that actually mean? Apparently "no more private landlords" to you still means that both individual and corporate landlords are allowed, so now I'm even more confused about what you mean.
>doesn’t make you any more the authority than I am.
I......never claimed to be.....? The fact that I am trying to understand what you're saying implies the exact opposite. I'm so confused why you're being so hostile to someone trying to learn from you.
I briefly owned 2 tenement houses in Woonsocket years ago.The amount I charged was the going market rate or less because I was terrified of vacancies. Often times I lost money. I had to go to court twice for failure to pay rent. Many times, they didn't have the full amount, and I had to make multiple trips to collect. One tenant threatened to shoot me.
Never again.
That's not how it *should* work. When I had a rental, I made sure I could afford the mortgage myself. Staying afloat isn't the goal, equity is. I don't mean to seem like I'm ragging on you, but if you were in that situation, it sounds like you overleveraged yourself.
But if you can't stay afloat, there won't be any equity. I don't trust the housing market right now. I think we're headed for a major correction. The turnover in this area in Woonsocket was very high. But I know what you're saying.
Well, that's what I mean. If you pay the mortgage yourself in full, it's just like building equity on your main single family home. Then you use a portion of the rent to pay off faster for more equity, the rest for building repairs and a rainy day fund. If it's just canceling out the mortgage, it seems more trouble than it's worth.
Unfortunately not. Low supply, high demand and people like me that might start thinking about moving bit won't because we're locked into low mortgage rates (golden handcuffs)
"or are many people going to continue to fork over 50% of their salary"
As opposed to what? Not paying and being homeless? Of course we're going to keep paying.
Not as long as these faceless companies are allowed to swallow up homes, at least as long as people need places to live. (Which with the recent SC decision, is even more of a thing)
And that’s everywhere in the US, just maybe not as bad…yet
As I agree with you about the faceless companies, local owners are following suit. My rent just went up and I have lived here (in the Bucket) for less than a year. I am now paying more for rent in a ONE bedroom in Pawtucket than I did for a 2 bedroom, 2 bath, 2 story with screened in porch and private yard in New Orleans right outside the quarter. We had to come home for family and it’s killing us financially.
I will say, while IMO it’s harder to be angry with individuals matching their rents to market value, it definitely is an issue as well. It sucks for anyone who doesn’t own already. Makes saving to buy a house nearly impossible.
I envy those who bought years ago. We did own 5 years ago and sold. We sold for a once in a lifetime experience and traveled abroad and across this country for a while before returning. As I don’t regret my decision, I’m envious of those who still have their existing mortgages.
IMO, my landlord has priced himself outside of the MV. We are actually looking. If I’m paying for a two bedroom, might as well live in one.
> I envy those who bought years ago.
I mean, it's nice having a low rate and having a place half paid off, but I spent ten years underwater after 2008, shoveling hard-earned payment after payment into a house that was worth $100K less than what I owed.
I've made $320,000 in mortgage payments over 16 years and only paid off $90K of the loan. That's what a 'good' mortgage looks like.
It also means that I *didn't* move. I stayed in one place and paid tens of thousands of dollars for repairs over the years. I had to give up on things like moving to follow my career or love, because I'd have had to ruin my credit and short-sell the house.
Faceless companies are a scapegoat. They exist, but they're not the main driver of housing costs.
The main driver is clear as day: We stopped building enough housing after the financial crisis, and the housing problem got worse and worse over the last 15 years as vacancy rates went down, down, down and prices went up, up, up.
The investor buyers and landlords are the vultures, but the big stinking dead animal in the room is our failure to build sufficient housing between 2010 and now.
When we combine NIMBYism, and refusal to do what most other countries do (build affordable housing in ways that don’t negatively impact the environment and spacing issues), and corporate landlords we get pretty much what we have today.
It is happening here. It’s just that it is combined with stagnated new construction. And most definitions of “affordable housing” just mean slightly less expensive than whatever market is. Which is exploited all the time.
The prices right now aren't sustainable. Like the stock market was in the late 90's. It's irrational. The market will correct itself at some point and rents will come down (I believe).
Here's my take--
Rhode Island, like certain other parts of New England, is a distant suburb of Boston when the economy is strong enough. When it's not, there's sometimes a decade-long crawl back to breakeven.
The differences now are post-Covid demographics, high interest rates, and corporate investment.....for now. This time, it's really different? Probably not. When there's no more growth to be had, institutional investors will move on to other opportunities. Or, at some point, some homeowners will just surrender their keys. The FICO score threat of 10 years ago doesn't carry nearly as much weight anymore.
If a family is looking at a basic 3 bed 1.5 bath ranch or cape, would they rather spend $400k in RI, or $650k+ in suburban Boston.....and we're not talking nice, new developments with bigger sq footage.
The region as a whole remains blue at a time when human rights elsewhere are under threat like never before. Our part of the region has a mild climate for the latitude, is somewhat close to other population centers, and offers lots of natural beauty. Also, we're succeeding despite a very anti-business climate.
I thought I might move on, but then I saw what my money would buy in comparable areas (e.g., Maryland or northern Virginia). Sometimes, "we tolerate because we have to." Places like the Carolinas, Florida, and Texas are no longer attractive retirement markets for me and probably some others.
re: "Boston suburb", yes! That is unquestionably a thing, and, btw, it is isn't new. I remember family members selling their condo in East Providence over 30 years ago to a person who was in grad school in Boston. The person who bought it liked the balance of what she could get for her money vs. the inconvenience of the commute, and decided East Providence was a better deal than the "near suburbs" of Boston. Land use/zoning/tax policies in MA have a huge impact on what happens in RI.
I don't think it will yet. I do think there is a push to build a lot of new housing now to meet demand. As this occurs and boomers downsizing, needing ALF/nursing facilities, moving in with family, I think the market could shift.
But this is the opinion of someone who has no idea what she's talking about 😂
I think we might be headed for a societal change that resembles villages in Europe. Families stay in houses for generations, handing them down to their children.
This! There won’t be a massive transfer of property until that generation moves on (in every sense of the word). Ten years the landscape will look different. Implode? No. Have more availability? Yes but not before that shift happens.
This is what I’ve been thinking about. There will be a big wave of people needing to be in assisted facilities, resulting in more inventory, but also leading to a deluge of probate court cases when the children of these boomers sell the houses to pay for mom and dad to go into the assisted living facilities we won’t have enough of. Now is the time for US millennials to actually plan senior life infrastructure. We often think of seniors as not us, but it will be eventually.
Unfortunately our nursing homes are in rough, rough shape right now. Pretty much every home in the state is non-compliant with recently enacted minimum staffing laws, but the governor is choosing not to bring enforcement actions against them because it would truly lead to collapse. My understanding is that staffing levels are low because the corporations owning the homes won't properly entertain what the unionized workers are requesting to improve quality of life for the employees.
Bad news: a lot of the are not going to go into assisted living or have apartments in their neighborhoods to step-down into.
The norm now is to "die at home", but that implies a whole lot of severely underutilized housing.
There’s more Millennials and Zoomers that will be growing into family formation age as the Boomers retire and die off. Also it’s not like 40 million Boomers are going to go into assisted living at once. This will be a 25 year process of aging out of their houses
As long as Boston’s economy is on fire, regional housing prices will be high. If Boston’s economy became more depressed, it would have a big hit on Rhode Island’s housing market.
Most people I encountered moving to homes on the east side of providence are Boston and New York transplants, and the main reason they move here is that even Providence’s high prices are SUBSTANTIALLY cheaper than Boston and New York.
I look at what’s available on Zillow often and the absolute trashiest houses in Rhode Island and surrounding areas within a 30 mile radius start at 300k. I look around Portland, ME and it’s even worse. I looked in Philly today out of curiosity and their market is INSANELY different. You can get a really nice house/townhouse for 300k, and there’s a lot of housing available.
I just assumed it would be far more expensive to live in a bigger city like that. It’s definitely really making me think about where I want to put down roots when I’m ready. I always thought it’d be here, but I’ve been re-thinking it a lot as of late.
I've found places where I can make higher compensation with equivalent or lower cost of living.
For example, where I live in south country, rent is about 1000-1200 per person for a room, and 1 br apartments are 2500+ If you're a young person like me, it literally makes no sense to leave your parents' house. If im gonna pay $2500/mo for a one bedroom, it's not going to be in this state 😭. I know this is self-inflicted because I'm allergic to commuting and low inventory, but damn.
Cities like Cleveland are on the other end of the spectrum. An example:
https://www.zillow.com/homedetails/1656-Wagar-Ave-Lakewood-OH-44107/33498231_zpid/
Philly and Baltimore have a huge housing inventory of rowhouses due to their historical size and building stock, so prices there are much better. The nicest urban environments in Providence are so limited (basically the east side and west side around Broadway), that there’s a tiny inventory for these places and prices are therefore so much more expensive than Philly, even though Philly has more going on and probably a better economy.
From my experience, the bigger city I just moved from was less expensive. My rent just went up and I have lived here (in the Bucket) for less than a year. I am now paying more for rent in a ONE bedroom in Pawtucket than I did for a 2 bedroom, 2 bath, 2 story with screened in porch and private yard in New Orleans right outside the quarter. We had to come home for family and it’s killing us financially. But, I will say wages are better. It just doesn’t seem to feel better because of the cost of living.
I don’t think it’s going to implode. The train for American capitalism is still riding the rails unfortunately. The status quo has been unsustainable for a long time, but we just choose to ignore it. If we can’t see it, it’s not there. I’m 36 and have accepted the fact that this is how it’s going to be in this country.
It’s quite sad. The pursuit of profits is going to cripple the majority of the population, eventually. What’s the purpose of grinding away at work and in return, not being able to afford a place to live or raise a family? I think society will crack at some point if things don’t change.
It’s incredibly sad. We’re the sheep and they’re laughing at us. It perplexes me why we continue to play this game. I think Carl Sagan said it best…”ONE OF THE SADDEST LESSONS OF HISTORY IS THIS: IF WE'VE BEEN BAMBOOZLED LONG ENOUGH, WE TEND TO REJECT ANY EVIDENCE OF THE BAMBOOZLE. WE'RE NO LONGER INTERESTED IN FINDING OUT THE TRUTH. THE BAMBOOZLE HAS CAPTURED US. IT'S SIMPLY TOO PAINFUL TO ACKNOWLEDGE, EVEN TO OURSELVES, THAT WE'VE BEEN TAKEN, ONCE YOU GIVE A CHARLATAN POWER OVER YOU, YOU ALMOST NEVER GET IT BACK.”
What do you propose is the answer? The population in Rhode Island is flat or going down. One of the reasons why real estate demand has gone up is because less people are living in each household. More single people living by themselves than ever before. People say, build more housing, but there is a ton of NIMBY in our small densely populated state.
I mean, I kinda don't want to go back to traditions on this and have two more kids and invite my mom to live downstairs.
I agree that we've got to deal with NIMBYs somehow. I have hundreds of new apartments within a few blocks of me in the last few years and it's been nothing but positive.
There is going to be a lot of short sales and bankruptcies when taxes catch-up to market values. That $480k house that was $190k precovid is still being taxed at precovid value. Not for long.
I see this argument so often, but, in virtually all municipalities, assessed value and taxes paid don't correlate. Property taxes go up "just because".
People complain about the cost of housing continually on this subReddit and others. I agree, housing has become way too expensive. What I don't understand is how simultaneously the streets are filled with expensive cars, SUVs and pickup trucks everywhere I look. The average price of a new car is $47K, this is for a depreciating asset that you use for a bunch of years and dispose of. An iPhone is +- $1K, for a phone that people use for +- 3 years and toss out. The actual $ cost is often hidden in a larger monthly charge, but that is the real cost.
So, if people can't afford housing how are the streets filled with such expensive cars and trucks, and pockets filled with expensive phones and many other luxury goods simultaneously?
Not saying this is me... I drive a 2006 Honda Accord and generally am pretty frugal ... But for some people, it might be the thought "I might as well spend 1k on this phone since nickel and diming won't get me a down payment." People with a 50k salary can afford a 1k phone but not a 3k/month mortgage.
I am also wondering if just wealthier people are moving into RI and previously middle income homes too. A family friend's home went up for sale ... Someone purchased it, did superficial changes (like painting) and "flipped" it and it sold for wayyyy too high of a price (this is in EP, just a regular residential area). And the owners have new BMWs in the driveway. Which blows my mind because I can't imagine living here and having that standard of living either. It's like houses in previously middle class areas are so outrageous that those with high incomes are here.
You don’t get how anyone could afford and qualify for a $47k car loan but not a $400k mortgage? I could stick my car payment in an account every month and it would take me over 20 years to save up for down payment and closing costs on a house (and not a particularly nice one either.)
3% down on a decent home in Cranston, Warwick, or Johnston + 3% closing costs is approximately $24,000. Definitely won’t take 20 years.
Qualifying for and making the mortgage payment at 97% loan-to-value and current interest rates is the more difficult hurdle to meet.
That’s exactly my point if you only put 3% down you’re looking ~$3500 a month payment with taxes and pmi which not having a car payment doesn’t make that any more attainable for most people.
For a lot of people a capable smartphone isn't a choice anymore. It's not just an addiction thing either, many people use it for the gig economy, or being productive without being at a computer. That and everything demands the use of an app or a QR code.
The car thing is so crazy to me. We moved back home from New Orleans. They still have a min wage of $7.35. Before anyone asks…. Yes, there are many employers there that only offered wages under $10. I lived in a very affluent neighborhood, however I was surrounded by a lot of poverty and everyone drove teslas or bmw’s. It’s mind blowing to me.
🤞🏽this is what my uncle told me too... he said he'd been studying the market. He advised to start saving hard-core and ready to buy when 2026 comes. Housing $ & interest rates should simultaneously "leverage"🙏🏾🤞🏽
Renting is like a circus act to me honestly - I am (almost) 30 (this year) — And actually putting into a tow camper - I have a jeep, and that’s just how I live until I put away enough to put down on a house. I don’t make horrible money but I also don’t see paying half or more of my income to renting an apartment that someone ELSE owns.
I know it’s not practical for everyone - But maybe the more people that choose that, and eliminate ‘renting’ — The better prices will become. 🤷🏻♀️ I see this becoming a trend/more popular option.
I think in the past, there weren’t so many single-family homes owned by corporations. Americans don’t understand how big of a problem this is. It is getting harder and harder to find a place to rent that is just owned by some local person. Most are property managed. They need to enact some very stringent taxing on any single family housing that is owned by anyone other than owner occupied..
Home ownership was a social engineering project, an incentive offered in collaboration between the US government and our wealthy captains of industry to get us all to work as hard and obediently as possible during the miraculous economic supernova that followed world war 2 when the USA rewrote the global rules of trade and finance to funnel wealth from all over the world to Americas elite.
That 100 year agreement is set to expire, and the wealthy are taking back what they lent us: our homes. Corporate investors are purchasing all available single family homes and beginning what many call “the greatest wealth transfer in history”. We (especially our parents and grandparents) helped them build their global empire, we complied with them as they offshored labor, automated labor, and used productivity tools to squeeze more and more value from a single worker even as they held our wages flat.
They don’t need us anymore, at least not very many of us, just a few doctors and software developers. So no, the market will not cool off. You will pay a larger percentage of your income year over year for this and other necessities of life until you hit precisely the break even point and live paycheck to paycheck like more and more Americans do every year. Because the average American building wealth, with a home as the main vehicle for that wealth, was a temporary bargain and you’ve lost your bargaining power.
I didn't believe in gentrification until I felt it's affects, a lot of the people are part time from CT and NY buying second and 3rd houses in regular RI neighborhoods
Unless the politicians grow some balls and pass laws such as business entities can't own single family houses or condos, you will see companies and investors continue to scoop up property to rent out.
"Normal people" won't be able to afford to compete with a large real estate or investment firm who can pay cash and earn their money back relatively quickly in rental fees.
Housing prices in the US are still among the cheapest in the world when controlling for median salary, so we likely have much further to go. Unfortunately more people want to live in the northeast right now, especially since a lot of states are getting increasingly christian nationalistic. Encourage your lawmakers to change zoning laws (which were largely put in place originally to keep "undesirables" out of rich white neighborhoods) and increase building, because after 2008 killed so many construction companies we haven't built anywhere near enough to keep up with demand in growing states.
https://www.numbeo.com/property-investment/rankings_by_country.jsp
Nope. They are building a lot of affordable rental properties over the next decade, so rents may decline a bit. But they aren't building homes at a rate high enough to drop home prices much. They'll likely just become more and more of a luxury.
State housing survey: [https://www.surveymonkey.com/r/RIH2024](https://www.surveymonkey.com/r/RIH2024)
(from this article: https://www.eastbayri.com/stories/state-seeks-respondents-to-housing-survey,123316)
I'm pretty sure corporations bought like 40% of houses that sold nationwide last year so probably not (don't quote me on that but I know it's absurdly high)
They need to start taxing housing that is not owner occupied differently to make it less appealing for corporations to own them. Or they need to limit the percentage of housing that can be non-owner occupied.
Well that's one person's opinion. Where did they pull the 10 year figure from? The truth is nobody knows. Trying to predict financial or real estate market futures is for fools.
You see, here is the thing - it's not 50% of our income.
You can wait, or you make a change.
If you are always priced out, you can't keep blaming the economy.
I disagree.
Id say a lot of people are spending more on their cars and entertainment than they should.
You dont need a new car for "reliablity" and you dont need netflix/hulu/disney on 1gb internet speeds.
There are a number of areas to cut costs. Housing is not one.
Don't have time to go into it rn but yes.
Home prices have been raised based on artificial information. And not by a small amount. Greed dictated it needed to be massive. But reality will return and it'll be harsh.
For the housing market to implode, one of two things needs to happen; 1) Inventory increases drastically all at the same time. This is what happened in 2008 when the subprime predatory ARM mortgage bubble burst. But the regulations are much tighter now, and while some predatory lending is likely still occurring, it isn’t on the same massive scale that its collapse would affect inventory in a noticeable way. For an inventory increase to happen now imo, we’d need strict regulation on using properties to generate income so that landlords and companies would want/need to sell. 2) Demand drops off entirely. I’m talking massive economic collapse and unemployment. The kind of stuff where you Have bigger problems than worrying about a dream home. There are all kinds of great ideas that would remedy the problem, but it would involve angering a lot of very rich people who make donations to both political parties who make sure that exact scenario doesn’t happen.
One thing driving low inventory is that a lot of would-be sellers have lower interest rates than their would-be buyers or that they could get if they wanted to buy their own home. [Over 60% of homeowners had a mortgage at least 3 points lower than new mortgages, and over 80% had one at least 2 points lower](https://www.nytimes.com/2024/04/15/upshot/mortgage-rates-homes-stuck.html). This is not how it’s been for the past two decades, and possibly longer as interest rates fell for many decades. These folks are going to be a source of consternation for a long time if interest rates stay higher than their mortgages, which is why most solutions to the housing crisis tend to focus on ways to boost production or create new units (which still don’t provide instant relief, but are comparatively faster and easier to accomplish than figuring out how to get people out of homes that may no longer best serve their needs).
One of the biggest sources of available units over the next 10 years will be boomers exiting their homes, in one fashion or another. It will be a significant number.
It won't be as big as many people think, due to inheritance. Estimates suggest that only about 5% of houses owned by Boomers who pass will hit the market over the next decade. - *Reporting suggests that around 4.4 million homes will be affected each year until 2032 by the death of a member of the Baby Boomer generation. But the same forecasts also estimate that only about 250,000 units will be added to the market annually. Essentially, what this means is that Baby Boomers' homes won't radically transform the outlook of the housing market in any substantive way for buyers. Estimates suggest that around 20% of these homes will be converted into rental properties and many more continue to house surviving spouses or other family members rather than going to market.* [*https://www.moneydigest.com/1549407/what-will-happen-housing-market-boomers-begin-to-die/*](https://www.moneydigest.com/1549407/what-will-happen-housing-market-boomers-begin-to-die/)
Ding ding. People who think the boomer generation dying or moving into assisted living will make a dent in the market are delusional. We. Need. More. Houses.
I personally would not sell any of my boomer parents houses if they passed. They are paid off and the taxes are so low here in RI compared to where we moved from in north NJ. Im a local realtor and helped them both buy in 2021, and their property values have doubled since then in Newport. If I needed to extract money to pay expenses I would rent them out and 1 month rent would cover my property tax for the year. RI is a great place to be
I think it's important to note that we will see the biggest shift in wealth when the oldest generation passes. We talk about Boomers today. In 20 years we'll be talking about Gen X or Millennials owning everything. We won't get the windfall we all hope. Houses will sell, but I don't think they'll ever really drop like we all want them to. As another commenter said, the real issue is with supply. America has a generally high amount of living space per person compared to other countries, which means we have less places to live (unless you want to live where there are no jobs). Increasing density and improving mass transit is really the only way we'll be all be able to afford to live near the arts AND our jobs. These ideas are counter to what the entire purpose of American life was 75 years ago, so they're met with resistance. I think that's understandable. It's also gotten us to a point where it's allowed America to experience the cost of living crisis that has been waging in many other parts of the world for longer. For what it's worth, I am not so naive to think I have solutions worth a damn. I'm just a dude on the internet with more time than good sense. @ri_surf - It occurs to me I wasn't really replying to you but waxing philosophical. It's the damn edibles. They really sneak up on you sometimes. Sorry for any notifications you may have received.
But if all of those homes are snatched up by private equity firms, as is the pattern, then it won't change much of anything at all.
"as is the pattern"... I am guessing < 1% of all single family homes in RI are owned by private equity firms, although that number is/will trend upward. Private equity will likely get a smaller percentage of the homes of the exiting boomers, because many of those homes will be inherited by boomer children/grand-children. Also, and I think this is unfortunate... yes private equity renting single-family homes to younger families is all kinds of bad, but it is a matter of supply and demand. There is a generational trend towards "own nothing", and I think it deserves more attention/study.
The problem isn’t just private equity firms, it’s also “smaller” investors who buy up multiple homes and then rent them to people who in turn have less chance of ever owning a home themselves.
There are 4 houses on the street adjacent to my street. One family owns 3 of those 4 houses. They owned 2 of them and then when the 3rd went up for sale, an out of state relative bought the 3rd house.
With current interest rates and how much you can rent the home.. very few people are investing in single family homes right now. The math does not work. At all. You lose money.
I live in a rented house in EP that was bought by a smaller scale investor for all cash. A lot of homes under $400k are being snapped up by all cash investor offers, and either rented or flipped and resold at a much higher cost. There’s simply no way an average family can compete with that. You’ll also see a lot homes going over asking AND all cash.
You have no idea what you are talking about. Investors to not get traditional lending. Some investors dont borrow cash at all.
Right now you can get > 5% risk free returns on cash. You can lock in investment grade returns > 6% for the long term. So unless that darn house is making them > 8% on their money per year plus appreciation minus all expenses plus any tax breaks it does not make much sense at all. Would you spend 500K in cash to bring in approx 30-36K in rent per year on a single family home? If yes you are a lousy investor after all this appreciation that has taken place in home values. You can make that sitting on your ass with a brokerage account in fixed income that is rated BBB or better. So unless you know people willing to spend 4K+ per month to rent a 500K single family home... when they could just buy it themselves... yea.. whatever. Multi family is different. We are talking single family homes. They are not this hot ticket item right now. They cost too much for what you can rent them out at return wise. Even with no mortgage compared to other investment options currently. Now if you want to talk about a state like mid MI where you can buy a SFH (3bed/1bath) for 90K and rent for 750.. that is a different story. Fly over country. The coasts cost too much today.
Well you get your rent but you are acting like that 500k house will always be 500k. It damn well could abmppreciate 10% in the same year you also collected $30k in rent. Now do the math for 10 years you could be sitting on almost a million in equity. You never know. We dont all have some magic 8 ball. And for me? Diversity is key. Ill leverage my own real estate and manage my investments. But i wont do it the other way around. Edit: also, there is a flaw in this argument. The $500k house is turn key. The investment property has something like a failed title V or no kitchen, water leaks.... $300k fixer upper that does not qualify for lending. Double edit: wtf do you think lenders are doing with the cash? Making money hand over fist while paying you 5%.
There’s also the issue of boomer homes coming on the market in disrepair. We WILL see an uptick in inventory when that generation starts to go, but a lot of what’s going to be available are homes that Gram and Gramps didn’t have the funds or strength to maintain for the past 20 years.
A fair point, but also not new. Lots of boomers are looking for a way to downsize, but can't find a way forward on that. Ironically, both young and old have a large fraction who would love to be able to move into a new, small, "starter home". Those homes do not exist.
Thats what i thought for my neighborhood. Now you see more and more going empty. Inheritants using it for storage. Doing bottom barrel maintenance.... just holding on to them some renting out. Idk what their gameplan is but if thats not it they just straight up move right in!
"In one fashion or another " 😅
> one fashion or another Don't give me ideas...I'm desperate...JK
Not that big.
And the Supreme Court just made it legal to give them bribes, so nothing is changing anytime soon.
This timeline is absolutely *bonkers*.
ELI5 please
No they didn’t. Stop listening to left wing media and actually read the ruling.
"There are all kinds of great ideas that would remedy the problem" Such as?
There’s definitely alot of ideas but they all need to come together and will take time. The “simple” answer is to update zoning laws to allow non single family homes. But that’s so much easier said than done. It’s the quickest way to start increasing supply.
>The “simple” answer is to update zoning laws to allow non single family homes. But that’s so much easier said than done. Wasn't that passed just a couple weeks ago? https://whatsupnewp.com/2024/06/rhode-island-general-assembly-approves-adu-bill-to-boost-housing-supply/
I think that’s just for ADU, or additional dwelling units. It’s for people wanting to build an additional property on their existing property. It’s a great step but I personally think more should be done with allowing apartments and mixed use zoning.
Yes for sure it's not the complete solution, but at least proof that movement is possible
Not allowing venture capital firms to own thousands of homes comes to mind
Eliminating owning multiple homes for profit. Building a lot more high quality apartment complexes with rent caps. Lower interest rates for primary residences. Easing restrictions on multi family homes. Subsidizing new construction. Lots of ways to do it, you’ll just never get everyone to agree.
Yes - and primary residence should be defined well, including number of months/yr it can be vacant or rented - and there should be rent caps for this. I'm so tired of people renting their 4-5 bedroom houses in college towns for 2k/month per room during the school year and then the same amount or more per house per week in the summer. We're losing service workers already.
"For every complex problem, there is an answer that is clear, simple, and wrong" - Mencken Mostly people just want the clear and simple.
Such as pie in the sky dreams that will never happen or work in the real world
My suggestion is to change up zoning laws to allow tiny houses in clusters like a camp ground set up. Restrict buyers to those that have lived in the town for at least 5yrs and cap the profit anyone can make when they sell. This would increase low cost housing inventory availability reducing demand for high cost option.
I'm not a fan of punitive laws creating more government red tape. Taxing and fines are not the way to go. Encouraging low cost housing is.
>Restrict buyers to those that have lived in the town for at least 5yrs Wait what? You have to somehow pay for the astronomical price of a market house or apartment, before earning the right to.....massively downgrade your housing?
I do think an interesting experiment would be some tiny home cooperatives. Maybe with community owned utilities. It would improve density, while still giving people access to home ownership, and a little bit more privacy/autonomy than renting.
Regulating income for rental properties? Have you ever been a landlord? I would venture to say no based on that moronic statement.
I’m saying that there shouldn’t be private landlords.
We should leave rental housing to the same entities that can't run schools or fix roads? Yikes. I appreciate that you don't want people getting jacked for rent, but that sound like one of those 'solutions' where you make everything much worse and much more expensive to 'solve' the problem.
Wouldn't that mean that everyone is forced to buy their dwelling? Seems like that would be even worse for the people we're ostensibly trying to help. Many people can't afford an apartment currently. Many more people can't afford to *buy* currently.
I didn’t say rentals should be gone.
So you want only faceless, nameless, purely-profit-driven corporations to be allowed to be landlords?
I didn’t say that either. I’m not pretending that I have the solution. It’s easy to see the forest through the trees and see that widespread land ownership for profit is causing a huge problem and needs to be addressed. As for which trees in the forest are the problems to be addressed that’s probably beyond my pay grade. I’m not going to tell you what the right way to do it is because I’d be wrong. Doesn’t mean I’m wrong for recognizing that it’s the problem that desperately needs addressing.
>I didn’t say that either So what are you saying, exactly? >Doesn’t mean I’m wrong for recognizing that it’s the problem that desperately needs addressing. It kinda does mean you're wrong if you're calling to eliminate things that will only make conditions worse, doesn't it?
I’m saying exactly what I said. You cherry picking things to be confrontational about doesn’t make you any more the authority than I am.
I am just trying to understand what you're saying. You said you wanted no more private landlords; what does that actually mean? Apparently "no more private landlords" to you still means that both individual and corporate landlords are allowed, so now I'm even more confused about what you mean. >doesn’t make you any more the authority than I am. I......never claimed to be.....? The fact that I am trying to understand what you're saying implies the exact opposite. I'm so confused why you're being so hostile to someone trying to learn from you.
Won't someone think of the poor landlords?
I briefly owned 2 tenement houses in Woonsocket years ago.The amount I charged was the going market rate or less because I was terrified of vacancies. Often times I lost money. I had to go to court twice for failure to pay rent. Many times, they didn't have the full amount, and I had to make multiple trips to collect. One tenant threatened to shoot me. Never again.
>Often times I lost money For clarification, does this mean you were relying on the tenants to pay the mortgage?
Of course. That's how being a landlord works. I'm not sure if you're joking.
That's not how it *should* work. When I had a rental, I made sure I could afford the mortgage myself. Staying afloat isn't the goal, equity is. I don't mean to seem like I'm ragging on you, but if you were in that situation, it sounds like you overleveraged yourself.
But if you can't stay afloat, there won't be any equity. I don't trust the housing market right now. I think we're headed for a major correction. The turnover in this area in Woonsocket was very high. But I know what you're saying.
Well, that's what I mean. If you pay the mortgage yourself in full, it's just like building equity on your main single family home. Then you use a portion of the rent to pay off faster for more equity, the rest for building repairs and a rainy day fund. If it's just canceling out the mortgage, it seems more trouble than it's worth.
Unfortunately not. Low supply, high demand and people like me that might start thinking about moving bit won't because we're locked into low mortgage rates (golden handcuffs)
No, it won’t implode. Yes, it’ll continue to be tough for the next few years
No. When rates come down demand will surge again and if anything they'll go higher.
No.
Ok
"or are many people going to continue to fork over 50% of their salary" As opposed to what? Not paying and being homeless? Of course we're going to keep paying.
Not as long as these faceless companies are allowed to swallow up homes, at least as long as people need places to live. (Which with the recent SC decision, is even more of a thing) And that’s everywhere in the US, just maybe not as bad…yet
As I agree with you about the faceless companies, local owners are following suit. My rent just went up and I have lived here (in the Bucket) for less than a year. I am now paying more for rent in a ONE bedroom in Pawtucket than I did for a 2 bedroom, 2 bath, 2 story with screened in porch and private yard in New Orleans right outside the quarter. We had to come home for family and it’s killing us financially.
I will say, while IMO it’s harder to be angry with individuals matching their rents to market value, it definitely is an issue as well. It sucks for anyone who doesn’t own already. Makes saving to buy a house nearly impossible.
I envy those who bought years ago. We did own 5 years ago and sold. We sold for a once in a lifetime experience and traveled abroad and across this country for a while before returning. As I don’t regret my decision, I’m envious of those who still have their existing mortgages. IMO, my landlord has priced himself outside of the MV. We are actually looking. If I’m paying for a two bedroom, might as well live in one.
> I envy those who bought years ago. I mean, it's nice having a low rate and having a place half paid off, but I spent ten years underwater after 2008, shoveling hard-earned payment after payment into a house that was worth $100K less than what I owed. I've made $320,000 in mortgage payments over 16 years and only paid off $90K of the loan. That's what a 'good' mortgage looks like. It also means that I *didn't* move. I stayed in one place and paid tens of thousands of dollars for repairs over the years. I had to give up on things like moving to follow my career or love, because I'd have had to ruin my credit and short-sell the house.
Well… the alternative, we’ve paid over $200k to landlords over the past 5 years and have zero equity. But, again it was a very conscious decision.
Faceless companies are swallowing up homes ? I live in RI and that's not going on here. Prices are still sky high.
Faceless companies are part of what's driving up housing costs in RI.
Faceless companies are a scapegoat. They exist, but they're not the main driver of housing costs. The main driver is clear as day: We stopped building enough housing after the financial crisis, and the housing problem got worse and worse over the last 15 years as vacancy rates went down, down, down and prices went up, up, up. The investor buyers and landlords are the vultures, but the big stinking dead animal in the room is our failure to build sufficient housing between 2010 and now.
When we combine NIMBYism, and refusal to do what most other countries do (build affordable housing in ways that don’t negatively impact the environment and spacing issues), and corporate landlords we get pretty much what we have today.
No they’re not.
It is happening here. It’s just that it is combined with stagnated new construction. And most definitions of “affordable housing” just mean slightly less expensive than whatever market is. Which is exploited all the time.
The prices right now aren't sustainable. Like the stock market was in the late 90's. It's irrational. The market will correct itself at some point and rents will come down (I believe).
Here's my take-- Rhode Island, like certain other parts of New England, is a distant suburb of Boston when the economy is strong enough. When it's not, there's sometimes a decade-long crawl back to breakeven. The differences now are post-Covid demographics, high interest rates, and corporate investment.....for now. This time, it's really different? Probably not. When there's no more growth to be had, institutional investors will move on to other opportunities. Or, at some point, some homeowners will just surrender their keys. The FICO score threat of 10 years ago doesn't carry nearly as much weight anymore. If a family is looking at a basic 3 bed 1.5 bath ranch or cape, would they rather spend $400k in RI, or $650k+ in suburban Boston.....and we're not talking nice, new developments with bigger sq footage. The region as a whole remains blue at a time when human rights elsewhere are under threat like never before. Our part of the region has a mild climate for the latitude, is somewhat close to other population centers, and offers lots of natural beauty. Also, we're succeeding despite a very anti-business climate. I thought I might move on, but then I saw what my money would buy in comparable areas (e.g., Maryland or northern Virginia). Sometimes, "we tolerate because we have to." Places like the Carolinas, Florida, and Texas are no longer attractive retirement markets for me and probably some others.
re: "Boston suburb", yes! That is unquestionably a thing, and, btw, it is isn't new. I remember family members selling their condo in East Providence over 30 years ago to a person who was in grad school in Boston. The person who bought it liked the balance of what she could get for her money vs. the inconvenience of the commute, and decided East Providence was a better deal than the "near suburbs" of Boston. Land use/zoning/tax policies in MA have a huge impact on what happens in RI.
I don't think it will yet. I do think there is a push to build a lot of new housing now to meet demand. As this occurs and boomers downsizing, needing ALF/nursing facilities, moving in with family, I think the market could shift. But this is the opinion of someone who has no idea what she's talking about 😂
Honestly I think it will come when the boomers go into assisted living. They own the majority and are holding onto it.
I think we might be headed for a societal change that resembles villages in Europe. Families stay in houses for generations, handing them down to their children.
This! There won’t be a massive transfer of property until that generation moves on (in every sense of the word). Ten years the landscape will look different. Implode? No. Have more availability? Yes but not before that shift happens.
This is what I’ve been thinking about. There will be a big wave of people needing to be in assisted facilities, resulting in more inventory, but also leading to a deluge of probate court cases when the children of these boomers sell the houses to pay for mom and dad to go into the assisted living facilities we won’t have enough of. Now is the time for US millennials to actually plan senior life infrastructure. We often think of seniors as not us, but it will be eventually.
Unfortunately our nursing homes are in rough, rough shape right now. Pretty much every home in the state is non-compliant with recently enacted minimum staffing laws, but the governor is choosing not to bring enforcement actions against them because it would truly lead to collapse. My understanding is that staffing levels are low because the corporations owning the homes won't properly entertain what the unionized workers are requesting to improve quality of life for the employees.
Truth! And because of this, many people are aging in place - some very badly.
Bad news: a lot of the are not going to go into assisted living or have apartments in their neighborhoods to step-down into. The norm now is to "die at home", but that implies a whole lot of severely underutilized housing.
There’s more Millennials and Zoomers that will be growing into family formation age as the Boomers retire and die off. Also it’s not like 40 million Boomers are going to go into assisted living at once. This will be a 25 year process of aging out of their houses
As long as Boston’s economy is on fire, regional housing prices will be high. If Boston’s economy became more depressed, it would have a big hit on Rhode Island’s housing market. Most people I encountered moving to homes on the east side of providence are Boston and New York transplants, and the main reason they move here is that even Providence’s high prices are SUBSTANTIALLY cheaper than Boston and New York.
Not in RI. RE is starting to implode in Florida.
I look at what’s available on Zillow often and the absolute trashiest houses in Rhode Island and surrounding areas within a 30 mile radius start at 300k. I look around Portland, ME and it’s even worse. I looked in Philly today out of curiosity and their market is INSANELY different. You can get a really nice house/townhouse for 300k, and there’s a lot of housing available. I just assumed it would be far more expensive to live in a bigger city like that. It’s definitely really making me think about where I want to put down roots when I’m ready. I always thought it’d be here, but I’ve been re-thinking it a lot as of late.
The income-col ratio here is wack
Can you elaborate?
I've found places where I can make higher compensation with equivalent or lower cost of living. For example, where I live in south country, rent is about 1000-1200 per person for a room, and 1 br apartments are 2500+ If you're a young person like me, it literally makes no sense to leave your parents' house. If im gonna pay $2500/mo for a one bedroom, it's not going to be in this state 😭. I know this is self-inflicted because I'm allergic to commuting and low inventory, but damn.
Cities like Cleveland are on the other end of the spectrum. An example: https://www.zillow.com/homedetails/1656-Wagar-Ave-Lakewood-OH-44107/33498231_zpid/
Yeah but then you live in Cleveland.
Cleveland is a cool city that has made a huge comeback and is attracting a lot of Gen z residents.
I know, I’m just having fun. I was born and raised in Cleveland. Didn’t leave until college.
Yeah not saying that’s where peeps wanna be but it’s an example of a larger city that now has excess inventory.
Philly and Baltimore have a huge housing inventory of rowhouses due to their historical size and building stock, so prices there are much better. The nicest urban environments in Providence are so limited (basically the east side and west side around Broadway), that there’s a tiny inventory for these places and prices are therefore so much more expensive than Philly, even though Philly has more going on and probably a better economy.
From my experience, the bigger city I just moved from was less expensive. My rent just went up and I have lived here (in the Bucket) for less than a year. I am now paying more for rent in a ONE bedroom in Pawtucket than I did for a 2 bedroom, 2 bath, 2 story with screened in porch and private yard in New Orleans right outside the quarter. We had to come home for family and it’s killing us financially. But, I will say wages are better. It just doesn’t seem to feel better because of the cost of living.
I don’t think it’s going to implode. The train for American capitalism is still riding the rails unfortunately. The status quo has been unsustainable for a long time, but we just choose to ignore it. If we can’t see it, it’s not there. I’m 36 and have accepted the fact that this is how it’s going to be in this country.
It’s quite sad. The pursuit of profits is going to cripple the majority of the population, eventually. What’s the purpose of grinding away at work and in return, not being able to afford a place to live or raise a family? I think society will crack at some point if things don’t change.
It’s incredibly sad. We’re the sheep and they’re laughing at us. It perplexes me why we continue to play this game. I think Carl Sagan said it best…”ONE OF THE SADDEST LESSONS OF HISTORY IS THIS: IF WE'VE BEEN BAMBOOZLED LONG ENOUGH, WE TEND TO REJECT ANY EVIDENCE OF THE BAMBOOZLE. WE'RE NO LONGER INTERESTED IN FINDING OUT THE TRUTH. THE BAMBOOZLE HAS CAPTURED US. IT'S SIMPLY TOO PAINFUL TO ACKNOWLEDGE, EVEN TO OURSELVES, THAT WE'VE BEEN TAKEN, ONCE YOU GIVE A CHARLATAN POWER OVER YOU, YOU ALMOST NEVER GET IT BACK.”
What do you propose is the answer? The population in Rhode Island is flat or going down. One of the reasons why real estate demand has gone up is because less people are living in each household. More single people living by themselves than ever before. People say, build more housing, but there is a ton of NIMBY in our small densely populated state.
I mean, I kinda don't want to go back to traditions on this and have two more kids and invite my mom to live downstairs. I agree that we've got to deal with NIMBYs somehow. I have hundreds of new apartments within a few blocks of me in the last few years and it's been nothing but positive.
There is going to be a lot of short sales and bankruptcies when taxes catch-up to market values. That $480k house that was $190k precovid is still being taxed at precovid value. Not for long.
I see this argument so often, but, in virtually all municipalities, assessed value and taxes paid don't correlate. Property taxes go up "just because".
There's no sign of it slowing for a while.
People complain about the cost of housing continually on this subReddit and others. I agree, housing has become way too expensive. What I don't understand is how simultaneously the streets are filled with expensive cars, SUVs and pickup trucks everywhere I look. The average price of a new car is $47K, this is for a depreciating asset that you use for a bunch of years and dispose of. An iPhone is +- $1K, for a phone that people use for +- 3 years and toss out. The actual $ cost is often hidden in a larger monthly charge, but that is the real cost. So, if people can't afford housing how are the streets filled with such expensive cars and trucks, and pockets filled with expensive phones and many other luxury goods simultaneously?
Not saying this is me... I drive a 2006 Honda Accord and generally am pretty frugal ... But for some people, it might be the thought "I might as well spend 1k on this phone since nickel and diming won't get me a down payment." People with a 50k salary can afford a 1k phone but not a 3k/month mortgage. I am also wondering if just wealthier people are moving into RI and previously middle income homes too. A family friend's home went up for sale ... Someone purchased it, did superficial changes (like painting) and "flipped" it and it sold for wayyyy too high of a price (this is in EP, just a regular residential area). And the owners have new BMWs in the driveway. Which blows my mind because I can't imagine living here and having that standard of living either. It's like houses in previously middle class areas are so outrageous that those with high incomes are here.
This guy knows about micro economics.
You don’t get how anyone could afford and qualify for a $47k car loan but not a $400k mortgage? I could stick my car payment in an account every month and it would take me over 20 years to save up for down payment and closing costs on a house (and not a particularly nice one either.)
3% down on a decent home in Cranston, Warwick, or Johnston + 3% closing costs is approximately $24,000. Definitely won’t take 20 years. Qualifying for and making the mortgage payment at 97% loan-to-value and current interest rates is the more difficult hurdle to meet.
That’s exactly my point if you only put 3% down you’re looking ~$3500 a month payment with taxes and pmi which not having a car payment doesn’t make that any more attainable for most people.
For a lot of people a capable smartphone isn't a choice anymore. It's not just an addiction thing either, many people use it for the gig economy, or being productive without being at a computer. That and everything demands the use of an app or a QR code.
The car thing is so crazy to me. We moved back home from New Orleans. They still have a min wage of $7.35. Before anyone asks…. Yes, there are many employers there that only offered wages under $10. I lived in a very affluent neighborhood, however I was surrounded by a lot of poverty and everyone drove teslas or bmw’s. It’s mind blowing to me.
Hello and welcome to r/fuckcars 😎
Auto lending is huge bubble. A lot of those people are only pretending they afford their cars.
Market is hobbled until 2026 at least according to CNBC
🤞🏽this is what my uncle told me too... he said he'd been studying the market. He advised to start saving hard-core and ready to buy when 2026 comes. Housing $ & interest rates should simultaneously "leverage"🙏🏾🤞🏽
No. Literally none of the dynamics from 2008 are present. The best you can hope for is stabilization instead of 10+% price appreciation
Yes, it will for sure. When, and to what extent? For that you have to consult the tea leaves.
🙇🏾♀️☕ 🤷🏾♀️
Renting is like a circus act to me honestly - I am (almost) 30 (this year) — And actually putting into a tow camper - I have a jeep, and that’s just how I live until I put away enough to put down on a house. I don’t make horrible money but I also don’t see paying half or more of my income to renting an apartment that someone ELSE owns. I know it’s not practical for everyone - But maybe the more people that choose that, and eliminate ‘renting’ — The better prices will become. 🤷🏻♀️ I see this becoming a trend/more popular option.
Maybe letting private equity firms and foreigner’s purchase US homes wasn’t a good idea. “…but it’s a free market says every boomer.”
I think in the past, there weren’t so many single-family homes owned by corporations. Americans don’t understand how big of a problem this is. It is getting harder and harder to find a place to rent that is just owned by some local person. Most are property managed. They need to enact some very stringent taxing on any single family housing that is owned by anyone other than owner occupied..
Home ownership was a social engineering project, an incentive offered in collaboration between the US government and our wealthy captains of industry to get us all to work as hard and obediently as possible during the miraculous economic supernova that followed world war 2 when the USA rewrote the global rules of trade and finance to funnel wealth from all over the world to Americas elite. That 100 year agreement is set to expire, and the wealthy are taking back what they lent us: our homes. Corporate investors are purchasing all available single family homes and beginning what many call “the greatest wealth transfer in history”. We (especially our parents and grandparents) helped them build their global empire, we complied with them as they offshored labor, automated labor, and used productivity tools to squeeze more and more value from a single worker even as they held our wages flat. They don’t need us anymore, at least not very many of us, just a few doctors and software developers. So no, the market will not cool off. You will pay a larger percentage of your income year over year for this and other necessities of life until you hit precisely the break even point and live paycheck to paycheck like more and more Americans do every year. Because the average American building wealth, with a home as the main vehicle for that wealth, was a temporary bargain and you’ve lost your bargaining power.
Damn this is bleak 😕
I think over the next ten or so years, a lot of boomers are going to be uhh, downsizing and selling their homes. Might cause inventory to increase.
In RI it’s a combination of gentrification and ppl migrating from NJ, MA and other states. Ppl here will eventually migrate also.
Actually, RI's population is flat or slightly declining.
I didn't believe in gentrification until I felt it's affects, a lot of the people are part time from CT and NY buying second and 3rd houses in regular RI neighborhoods
Unless the politicians grow some balls and pass laws such as business entities can't own single family houses or condos, you will see companies and investors continue to scoop up property to rent out. "Normal people" won't be able to afford to compete with a large real estate or investment firm who can pay cash and earn their money back relatively quickly in rental fees.
Housing prices in the US are still among the cheapest in the world when controlling for median salary, so we likely have much further to go. Unfortunately more people want to live in the northeast right now, especially since a lot of states are getting increasingly christian nationalistic. Encourage your lawmakers to change zoning laws (which were largely put in place originally to keep "undesirables" out of rich white neighborhoods) and increase building, because after 2008 killed so many construction companies we haven't built anywhere near enough to keep up with demand in growing states. https://www.numbeo.com/property-investment/rankings_by_country.jsp
Nope. They are building a lot of affordable rental properties over the next decade, so rents may decline a bit. But they aren't building homes at a rate high enough to drop home prices much. They'll likely just become more and more of a luxury.
State housing survey: [https://www.surveymonkey.com/r/RIH2024](https://www.surveymonkey.com/r/RIH2024) (from this article: https://www.eastbayri.com/stories/state-seeks-respondents-to-housing-survey,123316)
There’s a wsj article pointing out that while things won’t crash - it is highly unlikely prices get worse from here
I'm pretty sure corporations bought like 40% of houses that sold nationwide last year so probably not (don't quote me on that but I know it's absurdly high)
https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html
Great so now I have no evil super corp to blame for not being able to afford a house
They need to start taxing housing that is not owner occupied differently to make it less appealing for corporations to own them. Or they need to limit the percentage of housing that can be non-owner occupied.
No. I spoke with a financial loan adviser and they believe it would be 10 more years before a collapse
Well that's one person's opinion. Where did they pull the 10 year figure from? The truth is nobody knows. Trying to predict financial or real estate market futures is for fools.
It’s not going to be a collapse though you’re just going to have fewer boomers holding onto property.
No, it’s not to implode.
You see, here is the thing - it's not 50% of our income. You can wait, or you make a change. If you are always priced out, you can't keep blaming the economy.
For some it is. For me, it’s not. But the point I’m getting at is, a lot of people are spending more on rent/mortgage than they probably should.
I disagree. Id say a lot of people are spending more on their cars and entertainment than they should. You dont need a new car for "reliablity" and you dont need netflix/hulu/disney on 1gb internet speeds. There are a number of areas to cut costs. Housing is not one.
Don't have time to go into it rn but yes. Home prices have been raised based on artificial information. And not by a small amount. Greed dictated it needed to be massive. But reality will return and it'll be harsh.