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America's 'Rent Crisis' May Be Ending (fortune.com)
An anonymous reader quotes Fortune:
A new study suggests that nearly a decade of housing shortages and rising rents in the U.S. may be reversing course... From 2010 to 2016, America added nearly a million renter households a year. But the census showed a decline in that growth rate in 2016, and some early 2017 data shows an actual decline in renters so far in 2017. Recent census data also shows a rise in vacancy rates.
According to Harvard's Joint Center for Housing Studies, that's because foreclosure numbers have declined and young homebuyers are re-entering the market. Home ownership in the U.S. took a big hit from the foreclosure crisis and Great Recession of 2007-2012, while the rental market struggled to meet the new demand. Other insights in the report mostly follow from that shifting reality. Rents are increasing more slowly. Fewer renter households are "cost-burdened," or paying more than 30% of their income in rent, than they were two years ago.
The report also predicts that many high-income households may continue renting rather than buying a home. But it'd be interesting to hear how that compares to Slashdot readers around the world. Are you renting or buying -- and if renting, do you feel that your rent is too high?
According to Harvard's Joint Center for Housing Studies, that's because foreclosure numbers have declined and young homebuyers are re-entering the market. Home ownership in the U.S. took a big hit from the foreclosure crisis and Great Recession of 2007-2012, while the rental market struggled to meet the new demand. Other insights in the report mostly follow from that shifting reality. Rents are increasing more slowly. Fewer renter households are "cost-burdened," or paying more than 30% of their income in rent, than they were two years ago.
The report also predicts that many high-income households may continue renting rather than buying a home. But it'd be interesting to hear how that compares to Slashdot readers around the world. Are you renting or buying -- and if renting, do you feel that your rent is too high?
Umm, no.
California's issues generally affect everyone eventually, but housing, being non-mobile, isn't an exportable issue. Lack of rental housing in California won't really affect the availability of rental units in New Orleans, nor will it affect the prices there.
Yeah, it's going to suck trying to rent in CA for a while, but that's going to be a purely local issue....
"I do not agree with what you say, but I will defend to the death your right to say it"
It's not just driving people out, employers are moving out too where possible. It's creating some trouble, here around the suburbs of Austin there's a lot of consternation about (of all things) the number of democrats moving in, or at the very least some of the demands and conflicting cultural values of people moving in. I do not live in Austin proper, which has been blue for quite some time, but in surrounding counties which had been very, very red. There was an actual fight at a school meeting where someone stood up and said they don't care about the football team, why are our SAT scores so far below the national average.
The irony that red-state is good for business (and giving attractive tax breaks) comes with an inrush of comparatively liberal population is enjoyable to observe. It turns out that you can't have your cake and eat it too.
The millennials are having kids, and finding out that hip loft or apartment in the inner city, along with it’s school district, ain’t all it’s cracked up to be. They are fleeing to the suburbs. Soon they’ll be ditching the Feel the Bern shirts and voting Republican.
I was renting for a long time until a house in the neighborhood came on the market. We did the math and after mortgage, taxes, insurance, and other fees we came up with 300$ less than what we paid in rent. Buying not only saves us a lot of money, it builds equity. As a first time buyer we made use of the available assistance that allowed us to invest into remodel and a new roof. "New roof?" you say, an expense that a renter does not have to worry about. True, but even with the loan payment that will end soon we still pay less per month compared to renting....for a house twice the size.
California's issues generally affect everyone eventually, but housing, being non-mobile, isn't an exportable issue.
People are already leaving California due to housing issues, so it is completely bananas to suggest that it's not exportable. The people will be exported, and they will need housing. You don't seem to understand how long it takes to get this much housing rebuilt. It literally cannot be done fast enough to avoid many people having to leave the state.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Some of you may have noticed that California is, has been, and likely will continue to be on fire. This is driving people out of the state.
That seems like a perfectly reasonable response to me...
We'll make great pets
Some of you may have noticed that California is, has been, and likely will continue to be on fire. This is driving people out of the state.
I hate to burst your little bubble, but folks are not leaving California because Hollywood is on fire...They are leaving because it's too expensive.
Folks are leaving states like IL, NY and CA because of local and state tax rates and because their employers are moving to places like TX and FL where the taxes are lower and housing prices are not crazy high.
How do I know this? Because I live in TX where they are building houses and apartment buildings as fast as they can throw them up. I can see 5 apartment complexes with over 200 units each being built from my office window right now and when I drive around I see a large percentage of license plates from high tax states. It's like an invasion at times.
Not that I mind.... My house's value has been increasing some 10% a year of late. Homes around here are being sold above asking price almost before they get listed. Give it another 5-7 years of this and I'll have a nice profit to help make the retirement better...
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
I doubt the fires themselves will drive people out of the state on the whole. Sure, some people whose house burns down may not build a new house where the old one stood, but with their jobs and most social connections being in the state it's going to take much more to make any significant amount of people leave the state.
As for higher density housing, i.e apartment buildings, the reason so few have been built despite the demand has mostly to do with the NIMBY home owner's associations and the fires won't do much about them. Sure, land to build them may now be easier to come by when people sell their land in fire prone areas and actual burnt down neighborhoods, the home owner's associations and their deep dislike of the lower income people who will be living in those apartments will still be there to torpedo any and all attempts to build high density housing anywhere near a suburb.
"Why should I want to make anything up? Life's bad enough as it is without wanting to invent any more of it."
Just wait 'til everyone who mortgaged their home to buy bitcoins has to pay that mortgage back, that should put some cheap houses into the market.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Housing in California is generally more of a localized issue rather than a state-wide issue. The fires fall into the same category; Marin, Napa, and Sonoma are pretty messed up in housing stock due to the fires (and SF, Alameda, Contra Costa, Santa Clara, and San Mateo were already screwed up).
Southern California is a different issue; the car culture lacks rational limits on commuting time. Temecula is now a bedroom community for Los Angeles, as are several other cities 70+ miles away. The sprawl is what limits rational development.
California logically needs more quality housing stock in self-sufficient, walkable communities; there is a large population that lives here until they have kids, then move "back home." This is a natural situation where renting works, but condos are fine too. Until the problem is addressed you will keep having people move to Oregon, Nevada, and Arizona and spreading the same problems there.
Nation-wide though, the real issue is smart development and anticipating 20-50% higher populations in 10 years in communities. You don't do that with "master planned communities" with thousands of single family homes 50-80 miles from where the jobs are.
In my neighborhood there were a whole bunch of rental homes, all owners who couldn't sell their homes because the home values have dropped (some have been holding onto those since before 2008). This year home prices finally reached pre-2008 levels and a whole lot of those rental homes suddenly went up for sale - owners happy they can finally get rid of them without writing the bank a large check.
You've clearly never been to Flint. I have...I grew up about twenty miles away, and while the city itself sucks, you can live in a very nice home with some of the best year round sports, shopping, and amenities just a few miles away, at prices Californians can only dream of.
I manage a team a team in northern CA, and travel there frequently. You've got nothing on MI except higher taxes.
Just another day in Paradise
Perhaps the idea was that California is so populated that significantly rising rents in California may outweigh on average the decline elsewhere?
No, but it's that too. The rents up here in much of nocal (anywhere you could conceivably commute from) have about doubled. There are literally people commuting through Lake county where I live to get from where they live in Mendocino county to where they work in Napa county, or even the hind end of Sonoma, and that was true even before the fires up here. You can expect essentially the same thing to happen in socal now. Probably central California will not rise too much, but since the rents there are already exorbitant and well beyond the reach of the average family, this is not much consolation.
California has taken on a large number of people from other states, who came here seeking a liberal refuge. Thanks to the way our presidential selection system works, this has had a deleterious effect on political sanity in America. It will be interesting to see what effect some degree of exodus results in, which will depend very much on where those people wind up. That will be fascinating in itself...
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Really? Yeah, those poor landlords had to raise their rents...oh, the horror.
Only a portion of the demand is for higher-rent units. Most of the demand is for units of the same or lower price. Without that demand being filled, people wind up having to commute to work, which is inefficient. The inefficiencies add up, with the commuters adding inefficiency to other businesses depending on the same transportation conduits.
The landlords are clearly not suffering. Everyone else, however...
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
My wife and I had been renting for a few years, paying about $1,350 per month for a 2-bedroom ranch with a fenced in yard. Earlier this year our landlord moved out of state and sold his rentals, giving us 2 months to find a new place. We discovered that our rent was incredibly cheap relative to anything similar: we'd have to pay at least $1,700 to $1,800 to rent anything comparable to what we were living in in the same area.
It turns out that a mortgage for a similar house around here is about $1,800 to $1,900, so we hurriedly applied for mortgages and got an FHA loan and bought a house before we had to leave the rental. So fortunately I am now a homeowner living in a better house than earlier this year, and paying only a little more than if I were renting. The fact that I know so many people around me renting tells me that they have so little extra income that they can afford to rent, but not the little more it would cost to buy.
In other words, yes, around here the rent is way too high when it's barely cheaper than buying a home.
I see new home construction all around us. What I see is a dearth of housing that is suitable for young families as opposed to middle age, dual income families. You want a $600k+ home? No problem. We have a ton of them. What you won't see is anything in the $200k-$300k in major regions that isn't either in the ghetto or looks like it should be.
This is one of the fatal flaws in "free trade." You can't have "free trade" in land and housing. If wages harmonize between the US and China such that an American worker's wage goes down 25%, the cost of land and housing won't go down with it.
You know what would hep with this? School choice - whether full on vouchers so I can send my kids to private school or getting rid of districts so I can send my kids to a better public school.
When I was looking for homes, several areas of town we ruled out solely due to the school district. I can make my home safer but I can't make my kid's school safer. I could have gotten a house 2 times the size of mine if I didn't have to worry about the school my kids would be going to.
Houston has had stable rents and housing prices for decades. Even during the worst of the housing collapse, home values only decreased a few percentage points. This is because they do not have zoning laws. This means that occasionally you have something weird like an office building near a residential area, but you don't end up with factories in the middle of apartment buildings as factories are built where land is cheap, and residential areas are relatively expensive.
So the question is what is more valuable, a stable housing market with a good mix of affordable and expensive homes, or being able to control it? Most of the time you can't have both.
My Other Computer Is A Data General Nova III.
How do I know this? Because I live in TX where they are building houses and apartment buildings as fast as they can throw them up.
That seems like trouble waiting to happen. Oh wait, Harvey already did. Expect more.
Reminds me of Homestead after Hugo. Of course, they've rebuilt, but I know a dozen people who left those communities because they were so soulless and lacking in neighborliness.
Two years ago I owned my own home with over 75% equity in the home. Now I rent. Mainly because I live in NYC and when you live in NYC, the mortgage + taxes + maintenance often exceed the cost to rent.
In other words, rent is cheap compared to buying (although it is very high as compared to most of the rest of the country).
When you buy real estate in most of the US, you are both saving money and doing a reasonably safe, reasonably profitable investment.
But in NYC, particularly Manhattan, you are most likely to be spending MORE money every month to buy rather than less, and investing in a riskier, high profit investment. I decided that it was too high risk for more and I did not have the extra cash to do it.
excitingthingstodo.blogspot.com
It is incredible for 60% of the Americans, the home they live forms more than 50% of their networth!. Homes are very very illiquid. It ties you down. You are not able to follow the economic trends and go where the jobs are. Makes you do stupid things to "protect the value of home". They are expensive to maintain. It is really a dumb way to save money. Renting is a far better solution for most Americans.
This especially true now. The babyboom peaked in 1952, and their retirement is peaking in 2017. The market is awash with four bedroom, three car garage, quarter-to-half acre lots. The demand will fall, not rise for these properties. Younger generation is not as car obsessed as the previous generations. They do not see the point in maintaining lawns or raking leaves. Any fool buying a half a million four bedroom 0.5 acre lot home in the suburb today would be lucky to sell it at cost 20 years from now.
You can add me to that list of fools. I could not convince my own wife about this. "Millions of people can't be fools. We do what they (meaning richer White people) do". Lucky for me, I can secure my retirement even if lock away half a mill in such a non performing asset. So I agreed to be smack dab right in the middle of affluent white neighborhood. Government always takes care of them, so I would not lose much.
But for younger generation starting out, "stay away from owning homes. Wait for a down turn, buy only if the mortgage is less than rent, and you are assured of job safety for 20 years, and you are planning to stay in that neighborhood for 20 years. Always watch the affluent white class is doing and do that". Invest in index funds. Put 33% in SDY, VNQ or such high dividend yield large cap. 33% in MidCap, 33% in SmallCap. Treat your credit card limit as the emergency funds. You have six month lead time to cash in some securities. Don't fall in love with cars. Start with civic, corolla level, and upgrade to pilot, crv, rav4 level. Don't pay for luxury car brands. Enjoy life.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Unless you are claiming that a significant (>33%) of the population is leaving, I don't see it having much effect across the rest of the US. I realize Californians can be a bit myopic when it comes to things going on outside of their state, but the rest of the country is pretty damn big. Unless all those leaving are concentrating in one area when they settle back down, it won't move the needle much. And even then, it would be a localized issue, restricted to the area they resettled in.
I browse on +1 so AC's need not respond, I won't see it.
It happened here in Western Australia with the Mining Boom. Trillions of dollars of metals where pulled out of the ground in the north west and miners where getting $150K+ (And by plus, one guy I know, a metalurgist, was pulling about $300K, although in some respects the man was responsible for turning a $1mil a month pilot mine into a $10 mil a week full mine, so he certainly earned it). The end result was it sent properties through the roof. Whereas 15 years ago, houses costing more than a million made the front page of the paper, by the end of the boom it wasnt that far from the median in the richer suburbs. Hell $300K would barely get you a 1 bedroom flat in the arse end of shitsville, and the rents went up accordingly. Worst of all, in many northern towns rents where going up to well about $1K a week for a bedroom, and in many of those towns there was high unemployment because the mining companies would fly in their own staff, buy up all the real estate and fill *all* of the rentals with fly-in-fly-out miners, which had a horrific effect on the local aboriginal populations which would never get offered jobs and then where unable to find accomodation leading to rural homelessness and basic social meltdown. It was fucked
And then the bom just ended. The chinese discovered you could hire africans to mine metal for $2 an hour and not have to worry about environmental regulations if you just wanted to dump a half million tonnes of cyanide into the ground water.
So now the rents are SORT of better, but I suspect we're in for the sort of crash that struck the US 15 years ago which in many respects was caused by people paying far more for their houses than they can afford. Mortgages are certainly starting to crack as people who thought the good times would last forever suddenly realise they only have skills for manual labor and packing boxes at kmart dont quite pay the same as driving a forklift in kalgoorlie. So they either sell off, and get far less than they paid, rent it out for less than it'll take to pay the mortgage, or leave it empty and hope for the best. Theres a lot of empty houses right now, and a lot of homeless folk.
But fortunately my rents now back down to $300 a week, dramatically less than it used to be. So thats good.
Excuse the Unicode crap in my posts. That's an apostrophe, and slashdot is busted.
Soon you can buy another property in the next crash and rent the old one to some other "good family" for income. BECOME that n*zi landlord.
I love it when liberals who use the word Nazi show so plainly just how incoherent their thought process is. And what terrible students of history they actually are. It explains a lot.
Don't disappoint your bird dog. Go to the range.
I've been a landlord for 25 years (in my 40s now). I've sold my rental assets only once before -- right before the housing bubble popped. That's because I always live by the method of buying properties when they're selling for less than 60X rent, keeping them if they're 60-120X rent and if they breach 150X rent, I sell them.
My areas are consistently edging up towards 150X rent, which means it makes more sense to sell than rent them. They're 100% occupied and stay that way always (I have a waiting list on one or two units consistently).
So right now I am 90% certain I'll sell everything. I bought a new home (for cash) 2 years ago and the comp price in my neighborhood is up 40% -- totally unsustainable. Folks again are competing to buy homes and then paying way too much compared to income.
In the last bubble, I sold a rental I had bought for $43,000 to a bidding war that ended up paying $120K for it. After the crash, the new "owners" foreclosed pretty quickly and I bought it at auction with no other bidders for $60k. Now that same unit 8ish years later is back up to $110K but it only rents for $785 a month (just over 140X rent). So if it edges up a bit more ($120K) in comps, it'll be on the market and I'll be out and hope that I can buy it back in 3-5 years at a significant haircut.
This market is yet again pushing bubble stages at least in my neighborhoods. As I get older, I realize these are the paths to wealth because people are too emotional about "their" home that they don't even have a title to.
Exactly. This is when renting makes sense. You are also single and have no children.
The US is a national market, with freedom of travel a constitutional right.
You have freedom of movement to go about your business --- travel, or the use of a vehicle, or the availability of a place for you to stay away from home (such as a Hotel lodging) is not a constitutional right - and there are various situations where you won't be able to get it. States and Municipalities technically CAN also regulate or restrict who can be the buyer of accommodations, who can rent, or who can be the buyer of a house or land, so even if you are allowed freedom of movement; that doesn't mean you will have a right to park yourself long term in whatever city or state you want, Especially not on an indian reservation and some other highly-restrictive communities, BUT in general most states are welcoming, housing shortages are rare, and as a US person, you can take up residence in Most cities if you want to and can afford it.
Hi. Housing prices are going through the roof up here in Oregon, and there's nothing left to rent, primarily due to the huge influx of Californians. People from California move into an area, eating up all the rentals and driving up home prices, which displace the locals from that area into other areas with lower costs, and the cycle repeats.
Maxim: People cannot follow directions.
Increases in truth directly with the length of time spent explaining them
...which are financed by blue states.
That's right, the country simply could not afford to be all red states, because at some point they would run out of other people's money!
Any sufficiently unpopular but cohesive argument is indistinguishable from trolling.
you are an idiot.... Texas is only blue in the large cities. Rural texas(including most of the area around those large cities) are so red the thought of a democrat running things sends locals into apoplectic shock.
The Texas house has 95 republicans and 55 dems while the senate has 20 republicans and 11 dems.
Gerrymandering has occurred in every state. Both dems and repubicans use it. If you do not believe me look at california senate districts in socal or the Illinois 4th congressional district. look at texas. every party since the early 1800's has used the technique. It is not new nor is it really even controversial.
Hi there, I live just South of Ventura, where the Thomas fire started, and we get to see the brown smoke to the North. So far, about 800 homes have burned. That's not a big number at all, given the affected areas (NW Ventura County/SW Santa Barbara County) have somewhere around 150,000 homes. And I just watched a new development of townhomes, about 80 units, go up within 6 months. That is just one company. It'll take probably 1 year at most to replace those homes lost. Yes, the fire is huge and yes it is terrible, but 99% of the area it's burned is basically vacant State land.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
> Unless all those leaving are concentrating in one area when they settle back down
They ARE concentrated in Denver, Austin, and Dallas. A significant percentage of Austin residents came to Austin from the bay area.
No, not just illegals. Hollywood hyped up California as a magical utopia where ... unicorns fart glitter
See, that's the problem. It's about education. Not enough people realize that unicorn farts twinkle, they don't fart "glitter".
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
The Texas house has 95 republicans and 55 dems while the senate has 20 republicans and 11 dems.
That can be explained by either a huge majority of Republicans or, as the grandparent asserts, by gerrymandering. In the 2016 Presidential elections, Clinton got 43.2%, Trump 52.2% of the vote. That doesn't sound like a huge majority for the red team, but maybe Trump was just unpopular so let's see how that differed in previous elections. 2012, Red: 57.17%, Blue 41.38%. 2008, Red 55.39%, Blue 43.63%. Sounds like it's been around 43%ish for a while.
To put that in perspective, California voted 61.73% Blue, 31.62% Red, so is a lot more Blue than Texas is Red. In fact, of the 34 states or districts that voted Red in 2016, only 9 voted Red by a lower margin than Texas. The six reddest states (Idaho, North Dakota, Oklahoma, West Virginia, and Wyoming) all voted red by a margin of 30% or more (46.30% in Wyoming). Of the red states, Texas is one of the least red.
That said, a Texas Democrat typically has more in common with a Texas Republican than a California Democrat.
I am TheRaven on Soylent News
An obvious solution is to build some more houses.
This sort of article is rarely objective. The people beating the drum most often about the necessity of homeownership are people like real estate agents and mortgage brokers. In the linked article, the interview is with the CEO of a paint company. They make their money from home improvement projects - something less frequent in a rental property. In reality, the purchase vs rent question is closer to 1:1. Here are some of the disadvantages of owning a house.
1. Not an investment, it is a capital asset - over the long term housing tracks inflation almost exactly
2. Highly illiquid asset
3. Variable maintenance costs and also depreciates in value over time
4. Most people will have a large portion of their net worth tied up in a single asset, increasing risk
5. Substantial costs to buy and sell the house, in the form of broker fees, etc.
C'mon it's not that bad - I'm sure the homebuilders have already begun the 6-month long application process and environmental assessment needed in order to begin the 6-month long public review phase required for project approval. Heck, in just a year they'll be on to the specific reviews and approvals for actual building plans!
Socialism: a lie told by totalitarians and believed by fools.
Then lower federal spending. Blue tends to be in the cities which tend to have big capital players like Silicone Valley, Hollywood, or Wallstreet which will help the state average for federal taxation. I have seen the idea about only giving federal benefits in proportion to their federal taxation but that undermines the whole point of a federal republic.
Puerto Rico gives exactly 0 in federal taxes. Should we not send federal aid to them when a hurricane hits? Or what about Louisiana or Alabama? Ok, not during disasters.
Do you think down-stream states (like California) do not benefit from the Bureau of Reclamation helping to manage water in upstream states? Do you think states that have big agriculture, like California, benefit from science to study the effect of wild fires and local pollinators done by the USGS ( I wonder how the science done in Idaho during their annual fire season will help California during this one)? How many federal initiatives are you willing to restrict in various states because some states do not have Silicone Valley to pick up the tab? Do you really think the urban centers do not benefit from from that disproportionate ratio? Those are just two that I know of personally.
Are you going to limit the federal unemployment of someone that has paid taxes their whole working life because they live in a red state?
Personally, I find it to the credit of the Founding Fathers that they were able to predict the largest division the nation would face and were able to create a federal republic to service that division. The urban and rural divide should not be widened because you think you do not benefit from federal spending in other parts of the country. If you don't like the spending of the federal government then you should be arguing to lower that spending not be vindictive to the individual based on where they live.
You must be young. Otherwise, did you take your own advice and invest a bunch of cash in 1970 in S&P500 index funds instead of buying a house? My guess is you didn't. No one does, you can guess why. There is a reason that the vast majority of people who have wealth in this country invest in real estate.
Look at your article: the Red State we're talking about, Texas, gives more than it takes (i.e. same column as California). So while I applaud your greater point, this isn't really the place for it...