| > but the reality is, there's too many people for too few houses Not really... There are 2 big things that are skewing the housing market now: 1. In any given market, all-cash investors make up about 20-30% of the demand. [1] They will buy at almost any price. Even though they make a small percent of existing owners (iirc, its like 1-3%), they make an 20-30% portion of demand right now. 2. Inventory (houses that are for sale now, not just total stock) is at historical lows. This is bc of interest rates going higher - nobody who has 3-4% fixed rate locked in will sell (until they have to). The shortage that people refer to is not a shortage in homes that exist, its a shortage of homes for sale. Now imagine those 2 dynamics flipped the other way - what happens to prices then? Also food for thought - every market boom/bust cycle was caused speculative demand. What happens when 20-30% of demand goes away? More food for thought - the folks that feel like they are locked out of the market and have been screwed (the young) are growing increasingly resentful. How will they vote? [1] https://www.corelogic.com/intelligence/us-home-investor-shar... [2] https://tradingeconomics.com/united-states/total-housing-inv... |
This is a way bigger than non-homeowners realize and is keeping prices high. I would love to sell my midsize (slightly under 2500 sq ft) for something around 3500 sq ft and maybe a little bit bigger lot. I’d pay something like an additional 50% over my existing mortgage for a property like that. Online mortgage calculators show that I’d pay around 2x-2.5x for that property now. I know play the worlds smallest violin for me but this affects people downstream who are looking to become homeowners.