January 24, 20232 yr 18 minutes ago, Lazarus said: I listen to NPR a fair amount and the guests and commentators often have really no idea how rental properties work. Agreed, but I would go further -- most of the general public (whether they listen to, comment on, or host at NPR or NBC or CBS or Fox) does not understand the economics of rental properties.
January 24, 20232 yr 30 minutes ago, bumsquare said: What a groundbreaking finding by a group of landlords! Not a groundbreaking finding but just illustrative that landlords are not a bunch of money grubbing greedy people and that there is a significant cost associated with housing. The majority of landlords are small mom and pops who own 1-4 units and are trying to get by. They are not putting any money in their pockets on a regular basis but rather, they keep the property as a nest egg for their retirement. Tenants who destroy the property, fail to follow the rules, steal housing by failing to pay the rent are hurting many average middle class families who are just hanging in there to survive. The idea that these large apartment owners are fleecing the little guy is just not true and unfortunately it creates a false narrative about property owners.
January 24, 20232 yr 1 hour ago, Foraker said: Actually, as someone who closely follows progressives in politics, this sounds like"gotcha" journalism -- an off-hand comment from a progressive that the media has run with, and Republicans have jumped on board pointing fingers -- rather than a policy being pushed by a broad coalition of progressive groups. It is more than an off-hand comment. Now, are all progressives aligned with this?? No, of course not. Many progressives have other issues to worry about than housing. However, there are many far left progressive groups in the larger cities who work around rental housing and affordable housing that want to advocate for this. Often times, these individuals do not care to understand the challenges and the problem, they see a solution as a zero sum gain. In their minds, if housing or rent is too expensive, then simply pass a law and require it to be lower. This is what happened in Portland, St. Paul and Seattle and what they tried to do in California except they have been smacked down by the voters twice now. Since housing is local, you do not see a mass mobilization of progressive forces because these issues are not handled at the DC level. Congress does not determine housing policy (or at least rental policy) so it makes little sense for the groups to spend big money at a national level and focus resources in DC when the battle to be won is in the local cities. When these cities have rent control ordinances on the ballot, you see a ton of money from outside interest groups (on both sides) flood into that area. It is just not national news because people in Ohio do not really care about a local Minnesota or Oregon ballot initiative.
January 24, 20232 yr 1 hour ago, Foraker said: Agreed, but I would go further -- most of the general public (whether they listen to, comment on, or host at NPR or NBC or CBS or Fox) does not understand the economics of rental properties. Yeah. And a lot of people become accidental landlords and are really nice to their tenants, often leaving huge money on the table. Rent statistics do not capture this data. There are a ton of people out there paying $250 cash to their landlady, month after month, year after year. The rent is not too high for them. This will change a bit since Zillow and others provide rental property management for free. They make money by floating the rent for a few days and also mining your data. I use Zillow Rental Manager and it tells me what other people using the service are renting their properties for. It suggests a range and I am well below it since I'm renting a three bedroom to two people who are family friends under the condition they don't let a third person move in. They're great tenants so I'm not going to try and push them out, so I might be the guy keeping the numbers down near UC for years to come.
January 24, 20232 yr 1 hour ago, Brutus_buckeye said: Not a groundbreaking finding but just illustrative that landlords are not a bunch of money grubbing greedy people and that there is a significant cost associated with housing. The majority of landlords are small mom and pops who own 1-4 units and are trying to get by. They are not putting any money in their pockets on a regular basis but rather, they keep the property as a nest egg for their retirement. Tenants who destroy the property, fail to follow the rules, steal housing by failing to pay the rent are hurting many average middle class families who are just hanging in there to survive. The idea that these large apartment owners are fleecing the little guy is just not true and unfortunately it creates a false narrative about property owners. I would agree with the for the most but, but one only needs to look at the Westfield in North Olmsted for an abject failure of one of those bigger landlords.
January 25, 20232 yr 16 hours ago, Ineffable_Matt said: I would agree with the for the most but, but one only needs to look at the Westfield in North Olmsted for an abject failure of one of those bigger landlords. I am not too familiar with the North Olmstead and Westfield properties However, in Cincinnati, the city is getting aggressive in trying to pass a tenant bill of rights and has been coming hard against the landlords. Sometimes this is justified, but in some cases it is a power play against a landlord who is trying to work on the property but there are significant issues that just take time to address (such as sewer line back ups, etc.). In some cases you have a new landlord buying a 50 year old property with some hidden defects that may not be completely discoverable and the capital is not there to address it all immediately, so they have to triage. That is especially true for landlords who purchased the property in the last 20 months as asset prices have become overinflated. For example, down in Cincinnati, there is the Williamsburg community which is a 1000 unit apartment/townhome community built in the late 60s early 70s. At the time it was very nice but over 50 years things wear out. A new owner purchased the complex in the summer, and although it had issues he took over anyway. There were 160 units that would constitute needing significant repairs. While that may seem like a lot it is about 1.5% of the complex which in the grand scheme is almost expected for a complex of that size. The owner was open about working with the city to address these matters and was making progress. They had cut the amount of units with significant problems down to around 80 (less than 1% when an ice storm came on Christmas and froze a bunch of pipes creating additional problems. The city pounced on this situation to assert a narrative that the out of town landlord was not properly taking care of the property (which was not an accurate narrative). The out of town landlord even flew into town to try and meet with the mayor, city manager, and city solicitor to discuss the issues and repair plan. After waiting around for hours, they were rebuffed by the city and told that the city was determined to make an example out of them.
January 25, 20232 yr I was wrong, its the Westbury. Here is a taste of what the residents have been dealing with: https://www.cleveland.com/community/2022/01/north-olmsted-awarded-400000-in-westbury-apartments-building-violation-fines.html
January 25, 20232 yr 18 minutes ago, Ineffable_Matt said: I was wrong, its the Westbury. Here is a taste of what the residents have been dealing with: https://www.cleveland.com/community/2022/01/north-olmsted-awarded-400000-in-westbury-apartments-building-violation-fines.html it is a difficult position for cities to levy fines like that. On one hand, the landlord was neglecting important matters with the building, but on the other hand, when you levy a fine like that, it likely plunges the property into insolvency. You cant get insurance on such a property and would throw any loan into default. At that point, any chance of immediate attention to the property stops and nothing happens while the property is in litigation and eventually going back to the bank. THe bank does the bare minimum to manage the asset as they just want to find a buyer to liquidate it and cover their losses. Eventually, a new buyer comes in, who has to have a plan to renovate the property to close on it, but often, it ends with all the old tenants having to be evicted so repairs can be done and the updating building coming back online with much higher rents, which does not help the affordable housing stock. I know a lot of times, the city will be patient if the owner maintains a dialogue with them the whole time. I wonder if this landlord quit commuicating with the city?
January 25, 20232 yr It used to be that "going after landlords" meant getting them to maintain vacant buildings. Landlords used to rent buildings in cities until they deteriorated past the point where they could be lawfully occupied, then the property owner would let the vacant building stand there for 10 years until the city had to come in an do an emergency demolition. Things are different now with the housing crunch. No landlord today is purposefully let their building deteriorate like they used to.
January 25, 20232 yr 26 minutes ago, Brutus_buckeye said: I know a lot of times, the city will be patient if the owner maintains a dialogue with them the whole time. I wonder if this landlord quit commuicating with the city? This building has had brick veneer falling off of it since 2000, and the parking garage collapsed for Christ's sake. They have been poor landlords for decades, not months or years, and they need to be held accountable. Something needed to be done to get them to address the very real safety concerns. What would you have the city do?
January 25, 20232 yr 5 minutes ago, Ineffable_Matt said: This building has had brick veneer falling off of it since 2000, and the parking garage collapsed for Christ's sake. They have been poor landlords for decades, not months or years, and they need to be held accountable. Something needed to be done to get them to address the very real safety concerns. What would you have the city do? Has it had the same owner for the last 20 years? Many times buildings like this change hands every 5-10 years and the new owner inherits the issues from the old one. some of the problems get fixed, but new ones arise. Until someone goes in and does a major renovation and complete repositioning with higher paying tenants, the vast majority of the issues are just band aided over
January 25, 20232 yr 29 minutes ago, Lazarus said: It used to be that "going after landlords" meant getting them to maintain vacant buildings. Landlords used to rent buildings in cities until they deteriorated past the point where they could be lawfully occupied, then the property owner would let the vacant building stand there for 10 years until the city had to come in an do an emergency demolition. Things are different now with the housing crunch. No landlord today is purposefully let their building deteriorate like they used to. Everything has a life cycle. Housing too. They go from class A to class B, then C and D over time as they age and the area around it ages (of course a 100 year old building in Cleveland Heights or Lakewood does not necessarily fit this model because those neighborhoods are very desirable, but it is still not a class A building). Overtime, buildings and their systems deteriorate. People's tastes and preferences change. Luxury apartments designed to fit the tastes of the 1980s look gaudy by todays standards. Same with 1990s properties. In 15 years, the new buildings being built today will look dated.
January 25, 20232 yr 43 minutes ago, Ineffable_Matt said: Something needed to be done to get them to address the very real safety concerns. What would you have the city do? I do not disagree with you either, something needs to be done. All I am saying is that the city is not in a great position either, because when the city intervenes and levies heavy fines such as this, it pretty much will cause the property to be condemned and the residents to be forced to move and the property continues to sit in a dilapidated condition until the right redeveloper comes along. If the city tried working behind the scenes and the landlord has not acted as a willing partner, then of course, you seek to condemn the building, send it to receivership, etc. But despite whatever fine a bankrupt LLC will likely never end up paying, the city is ultimately left dealing with the blight for more years to come. (see Terrace Hilton in Cincinnati for example).
January 25, 20232 yr 22 hours ago, Brutus_buckeye said: However, there are many far left progressive groups in the larger cities who work around rental housing and affordable housing that want to advocate for this. Often times, these individuals do not care to understand the challenges and the problem, they see a solution as a zero sum gain. In their minds, if housing or rent is too expensive, then simply pass a law and require it to be lower. This is what happened in Portland, St. Paul and Seattle and what they tried to do in California except they have been smacked down by the voters twice now. Just FYI even as voters rejected stronger statewide measures, California still passed the 2019 Tenant Protection act that limits annual rent increases to no more than 5% + local CPI (CPI = inflation rate), or 10% whichever is lower. There are significant exceptions to this, e.g. "new" housing built within last 15 years and single family homes are exempt. But also cities can impose stricter caps.
January 25, 20232 yr 41 minutes ago, surfohio said: Just FYI even as voters rejected stronger statewide measures, California still passed the 2019 Tenant Protection act that limits annual rent increases to no more than 5% + local CPI (CPI = inflation rate), or 10% whichever is lower. There are significant exceptions to this, e.g. "new" housing built within last 15 years and single family homes are exempt. But also cities can impose stricter caps. Most apartment owners were really only giving annual increases in that range anyway. The rent CAP was not really much of anything. The bigger issue in CA (which some cities have enacted, hey Oakland) as well as a few other places in Oregon and Washington, was the enactment of laws that limited the landlord ability to non-renew a lease. This meant that at the end of a monthly term, the tenant could not be forced to leave if the owner did not wish to rent to them again unless they did not pay the rent or had a significant lease violation that was documented by the landlord. The goal was to prevent people from taking advantage of the hot market by forcing people out and then re-renting the unit for $500 more per month. While noble in its theory, it amounts to nothing more than a backdoor rent control measure, and it also makes it hard to remove bad tenants from the property in a timely manner.
January 25, 20232 yr Not wanting to paint with too broad a brush here, but my experience in San Diego was that prior to 2020 rents were going up at least 20-30% annually in desirable areas.
January 25, 20232 yr ^Everyone knows that coastal California is expensive. It's been that way for 50 years. If you willingly move to the area, you're competing with trust funders and wealthy retirees. No trust funders or wealthy retirees move to Ohio.
January 25, 20232 yr Just now, Lazarus said: ^Everyone knows that coastal California is expensive. It's been that way for 50 years. If you willingly move to the area, you're competing with trust funders and wealthy retirees. No trust funders or wealthy retirees move to Ohio. I never said it wasn't expensive. I'm just pointing out rate of increase and my experience and how people are being affected by the new state law, which I'll point out is helping renters. Whether it's good or bad thing of course depends on who you ask.
January 25, 20232 yr Just now, GCrites80s said: Was the military increasing housing allowances to match that rate in San Diego? My friends in the Navy all live in military neighborhoods about 15 miles inland. Or on their boats illegally.
January 25, 20232 yr 38 minutes ago, surfohio said: I never said it wasn't expensive. I'm just really sick of the national narrative being driven by people in the expensive coastal cities (I'm not talking about you - I'm talking about NPR, NY Times, Twitter, etc.), when much if not most US citizens are doing just fine living in areas that don't have hyper-inflated housing costs. As I mentioned in my previous post, the high costs aren't being driven entirely by people seeking "opportunity" - in many of the most expensive places, there are lots of independently wealthy people who are distorting the market.
January 25, 20232 yr https://www.forbes.com/sites/anafaguy/2023/01/25/biden-proposes-renters-bill-of-rights---heres-what-it-will-do/?sh=737fe21250f3 Now a decent amount of this is just aspirational and much of it is illegal but looks like the progressives are starting to get into Biden's ear
January 25, 20232 yr 19 minutes ago, Brutus_buckeye said: https://www.forbes.com/sites/anafaguy/2023/01/25/biden-proposes-renters-bill-of-rights---heres-what-it-will-do/?sh=737fe21250f3 Now a decent amount of this is just aspirational and much of it is illegal but looks like the progressives are starting to get into Biden's ear Wow, that's exactly what I was talking about in my post from 1-2 days ago - when Joe Biden cancels student debt, when Joe Biden signs a "renter's bill of rights" into law. Look at how they threw a little White House logo on there to make it look like their pamphlet came from Biden himself! This also taps into a sentiment I also remember hearing on NPR a few months ago, the suggestion that renters are a "class". They're trying to foment resentment toward landlords. Look at how they're trying to seal eviction records from future landlords! As someone who has evicted two tenants, both of whom found creative ways to retaliate, I can't help but shake my head and roll my eyes. These people are weasels and future landlords need to be warned. I don't care if these people can't find a place to live - they're crap people who take and take and take. Go set up a tent at a KOI campground.
January 25, 20232 yr 30 minutes ago, Lazarus said: I'm just really sick of the national narrative being driven by people in the expensive coastal cities (I'm not talking about you - I'm talking about NPR, NY Times, Twitter, etc.), when much if not most US citizens are doing just fine living in areas that don't have hyper-inflated housing costs. As I mentioned in my previous post, the high costs aren't being driven entirely by people seeking "opportunity" - in many of the most expensive places, there are lots of independently wealthy people who are distorting the market. That's the difference between being a demand problem like NYC and a supply problem like Columbus. In NYC elasticity of demand is lower because an enormous number of people want to live there but can't. And there's X number of people that aren't rich that have to live there in order to keep the city going. Whereas with Columbus if prices reached too high a level everybody bolts for cheaper places south and southeast of town. They already do. Or they'll go to Indianapolis, Austin, Nashville, Cincinnati or wherever. There is no replacement for NYC in many people's minds. So if Columbus doesn't build enough people stay put or pick another town. The problem is when someone still can't afford to live in Linden or on the Hilltop. And that's a supply problem. But of course national media is going to focus on the areas where the problem is most acute.
January 25, 20232 yr Full disclosure I haven't been following too far back in this conversation, but the "There is no replacement for NYC" jumped out at me. Perhaps I'm interpreting it wrong, but I just spent some time in Philly for work this last year, and my local colleagues have all said there have been huge influxes of NYC residents buying up property in Philly. Nor sure if Philly is looked at as a more affordable alternative but was just something I found interesting.
January 25, 20232 yr Some people are going to take the appreciation and run. It's going on in Cleveland with old guard NYC folks too.
January 25, 20232 yr 13 minutes ago, Lazarus said: Wow, that's exactly what I was talking about in my post from 1-2 days ago - when Joe Biden cancels student debt, when Joe Biden signs a "renter's bill of rights" into law. Look at how they threw a little White House logo on there to make it look like their pamphlet came from Biden himself! This also taps into a sentiment I also remember hearing on NPR a few months ago, the suggestion that renters are a "class". They're trying to foment resentment toward landlords. Look at how they're trying to seal eviction records from future landlords! As someone who has evicted two tenants, both of whom found creative ways to retaliate, I can't help but shake my head and roll my eyes. These people are weasels and future landlords need to be warned. I don't care if these people can't find a place to live - they're crap people who take and take and take. Go set up a tent at a KOI campground. The thing is, these progressive housing advocates look at these as solutions to fix a problem by trying to stick it to landlords whom they perceive as having money and power. They only see things as an "us vs them" battle through their lens. While the policies they promote certainly make it more difficult for landlords to do their business, they harm the people that they claim to want to help most, in the name of equity or whatever buzzword is popular at that time in their circles. The one constant is that the market will always win out. If you throw up roadblocks to limit evictions, then housing costs will go up even higher and conditions in properties will get worse. Policies and procedures will just be updated to make it harder for people to qualify for housing and to rent. Take Section 8 for example. Columbus passed a law a little over a year ago requiring landlords to take Section 8. It has not helped Section 8 acceptance in the city because many landlords understand the loopholes so that they can avoid it. It was a dumb law and the results from the law are demonstrating this. Based on Biden's Renters Bill of Rights - One thing he is going to try and do is to tie Federally backed mortgages into a rent cap. This is about 1/3 of multifamily mortgages nationwide. This was done with the eviction moratorium during COVID and notice requirements during COVID. What it created was a mismash of rules that apply to a limited number of apartments but not others in the same area. It will make it harder for Fannie/Freddie to generate businesses over local banks who are not subject to the same rules. There are a lot of issues that will come from this and they will not really be good for renters in the long run.
January 25, 20232 yr 11 minutes ago, GCrites80s said: Some people are going to take the appreciation and run. It's going on in Cleveland with old guard NYC folks too. Cleveland is not an appreciation market though. It is much more of a yield market. Same with Detroit. Columbus is a good appreciation market, Cincinnati has been more of a hybrid. Columbus and Indy draw more of an institutional investor whereas cities like Cincy, Pitts, Cleveland draw more of a private placement type of investment when it comes to housing Edited January 25, 20232 yr by Brutus_buckeye
January 25, 20232 yr I meant former NYC residents taking the money they got from selling their NYC property then moving to Cleveland and banking the rest. I should have been more clear; it came out weird.
January 25, 20232 yr 26 minutes ago, GCrites80s said: I meant former NYC residents taking the money they got from selling their NYC property then moving to Cleveland and banking the rest. I should have been more clear; it came out weird. Heck, there are a lot of NYC residents who sell their NYC property or choose to buy property in Cleveland and other markets to take advantage of the cash returns that Cleveland rental housing offers. In New York, to own the same type of asset, they have to pay money into it every month but hope it appreciates by 10% a year. In Cleveland they can get 10% return on their cash, but the property does not necessarily appreciate (and this is a simplistic example, and yes you do get appreciation in Cleveland.) Edited January 25, 20232 yr by Brutus_buckeye
January 25, 20232 yr 2 hours ago, Brutus_buckeye said: Columbus and Indy draw more of an institutional investor whereas cities like Cincy, Pitts, Cleveland draw more of a private placement type of investment when it comes to housing Can you please tell this to the institutional investors that text or call me 5x weekly asking to by my Cleveland multifamily?
January 26, 20232 yr 1 hour ago, Cleburger said: Can you please tell this to the institutional investors that text or call me 5x weekly asking to by my Cleveland multifamily? Those are not institutional guys. Those are syndicators. The institutional guys are REITS. They really are not playing in the Cleveland apartment market so much and when they do it is the Class A+ stuff.
January 26, 20232 yr Great job putting every property owner's phone number on the internet, county auditors' websites. You didn't think those guys would web scrape all those names, phone numbers and addresses in like 2 days, did you? Even if you took them off they still had the chance to get them and add them to their databases.
January 26, 20232 yr 10 hours ago, Lazarus said: It used to be that "going after landlords" meant getting them to maintain vacant buildings. Landlords used to rent buildings in cities until they deteriorated past the point where they could be lawfully occupied, then the property owner would let the vacant building stand there for 10 years until the city had to come in an do an emergency demolition. Things are different now with the housing crunch. No landlord today is purposefully let their building deteriorate like they used to. Because there's actual return to be had. Back in the '70s and '80s when everybody worshiped the suburbs only filling a unit only put like $100 more a month in their pockets. It was hard to motivate landlords to deal with all that over a few bucks.
January 26, 20232 yr 24 minutes ago, GCrites80s said: Because there's actual return to be had. Back in the '70s and '80s when everybody worshiped the suburbs only filling a unit only put like $100 more a month in their pockets. It was hard to motivate landlords to deal with all that over a few bucks. also, back in the 70s and early 80s was before the tax code was changed so you had a lot more rich doctors and other highly compensated professionals that would site on a property solely for a tax loss. They did not care if it could not make money because they could deduct the losses dollar for dollar at the time.
January 26, 20232 yr 5 hours ago, Brutus_buckeye said: Heck, there are a lot of NYC residents who sell their NYC property or choose to buy property in Cleveland and other markets to take advantage of the cash returns that Cleveland rental housing offers. I remember watching a youtube video back in 2015~ where a father-son team sold the dad's portfolio of 12-15 rentals in Eugene, OR in 2009 and moved to Kansas City, which they determined to have the highest ROI in the United States. They bought 100+ rental properties in Kansas City with the proceeds from just a dozen properties in Oregon. They were getting houses for under $20k, one after another, for a year or more. It seemed to me that 2017 was the last "cheap" year in the Midwest. After that, the big money showed up and that's when you started to see prices rise in Cincinnati. 4-Families were still selling for like $110k on the West Side until 2017. I personally know a guy who bought a move-in ready house on Helen St. in Mt. Auburn for $30k.
January 26, 20232 yr A buddy of mine currently living in KC and his GIS Analyst wife say there aren't any zoning laws where they live. I don't know if they live within the city limits or not. What I do know is that the development patterns where they live are crazy. There are mansions next to trailers. That may have been artificially depressing values as compared to rental rates in the vicinity.
January 26, 20232 yr 16 hours ago, Brutus_buckeye said: also, back in the 70s and early 80s was before the tax code was changed so you had a lot more rich doctors and other highly compensated professionals that would site on a property solely for a tax loss. They did not care if it could not make money because they could deduct the losses dollar for dollar at the time. The thing is that word of such tax benefits really irritates the public, when they don't understand that the deductions are necessary to incentivize institutions and ordinary people to invest in existing rental properties and new construction. The supply problem is not as acute here in Ohio as it is elsewhere, but things like the Ohio Historic Tax Credits are really helping with office-to-residential conversions in the downtowns. People can resent that the developers are making money, but if the conversions weren't incentivized, the buildings would just be sitting empty and there would be fewer housing units, meaning higher rent citywide. Speaking of which, DT Cincinnati is a forest of big apartment conversions right now. I remember 20 years ago when we were grateful for the Power Building and Krippendorf conversions but now it's just one after another. The Millennium Hotel could have been remade for cheap housing in the business district but it's gone now. Edited January 26, 20232 yr by Lazarus
January 26, 20232 yr 14 hours ago, GCrites80s said: Great job putting every property owner's phone number on the internet, county auditors' websites. You didn't think those guys would web scrape all those names, phone numbers and addresses in like 2 days, did you? Even if you took them off they still had the chance to get them and add them to their databases. Haha, half my calls & texts from these people think my name is "John" and want to buy "my" property in Mentor, OH. Where the hell are they getting this info?
January 30, 20232 yr Author "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
January 30, 20232 yr There is little incentive to pay off a mortgage with rates at 3-4%. Also, Americans move around a ton within the country. There aren't many places to move in a place like South Korea.
January 30, 20232 yr Author 6 hours ago, Lazarus said: There is little incentive to pay off a mortgage with rates at 3-4%. Also, Americans move around a ton within the country. There aren't many places to move in a place like South Korea. Do you have data to back this up? "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
January 30, 20232 yr 1 hour ago, KJP said: Do you have data to back this up? The United States is a big country. South Korea is a small country.
January 30, 20232 yr Author 4 hours ago, Lazarus said: The United States is a big country. South Korea is a small country. To paraphrase Darth Vader, I find your lack of curiosity disturbing! Here's a blank that needs filling in to determine if your assumption is correct… how many annual housing unit sales does South Korea have per capita vs USA? According to Statistia, the USA peaked at 6.9 million houses (new and existing) sold in 2021, after selling 5.64 million in 2020. USA's population was: 2020 - 331.5 million 2021 - 332.0 million Thus, 1.7 percent of America's population bought homes in 2020 and 2 percent in 2021. Data for 2022 was unavailable. In South Korea, housing sales peaked at 2.02 million in 2020, slipping to 1.62 million in 2021. South Korea's population was: 2020: 51.84 million 2021: 51.74 million So 3.9 percent of South Korea's population bought homes in 2020 and 3.1 percent did so in 2021. In other words, South Koreans purchased homes at a rate that's greater than 50 to 100 percent more than Americans' appetite for home buying. So I'd say your assumption was just a tad off. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
February 1, 20232 yr This is the second-biggest home price correction of the post-WWII era—it’s also a fairly mild correction, so far Lance Lambert Tue, January 31, 2023 at 11:37 AM PST· On Tuesday, we learned that U.S. home prices as measured by the seasonally adjusted Case-Shiller National Home Price Index fell for the fifth straight month in November. Since peaking in June, U.S. home prices have fallen 2.5%. On one hand, that 2.5% drop in U.S. home prices marks the second-biggest home price correction of the post–World War II era. On the other hand, through November, it's just a mild correction compared to the 26% peak-to-trough drop notched between 2007 and 2012. MORE
February 2, 20232 yr On 1/29/2023 at 11:05 PM, KJP said: This not a valid comparison. Nearly every country on the right of this chart is a former Soviet republic or Warsaw Pact country, where communist policy mandated that every family have a domicile - at least an apartment, and frequently a summer house. That people "own" this houses is not comparable to the US capitalist housing market. Take out all the former Soviet bloc countries, and the US looks much more in line with other like countries.
February 2, 20232 yr 2 hours ago, westerninterloper said: This not a valid comparison. Nearly every country on the right of this chart is a former Soviet republic or Warsaw Pact country, where communist policy mandated that every family have a domicile - at least an apartment, and frequently a summer house. That people "own" this houses is not comparable to the US capitalist housing market. Take out all the former Soviet bloc countries, and the US looks much more in line with other like countries. Good point. Also, I think in the US, people are generally comfortable with mortgage debt as a price worth paying to get more house. People who could buy a $150,000 house and pay it off in 10 years will buy a $400,000 house on a 30-year mortgage. And to be clear, I'm not endorsing that mindset; one of my earliest conversations with my parents about big-ticket purchases, including homes, was "budget what you can afford on a 15-year." So I ignored them and got a 10-year instead, and my family lives in a substantially smaller home than we could get with a 30-year mortgage. But 10-year mortgages are only a tiny fraction of the American mortgage market. According to Freddie Mac, in 2019, 90% of U.S. residential homebuyers took out 30-year mortgages.
February 2, 20232 yr 11 minutes ago, Gramarye said: Good point. Also, I think in the US, people are generally comfortable with mortgage debt as a price worth paying to get more house. People who could buy a $150,000 house and pay it off in 10 years will buy a $400,000 house on a 30-year mortgage. And to be clear, I'm not endorsing that mindset; one of my earliest conversations with my parents about big-ticket purchases, including homes, was "budget what you can afford on a 15-year." So I ignored them and got a 10-year instead, and my family lives in a substantially smaller home than we could get with a 30-year mortgage. But 10-year mortgages are only a tiny fraction of the American mortgage market. According to Freddie Mac, in 2019, 90% of U.S. residential homebuyers took out 30-year mortgages. I havent been to Australia, but I can't imagine any country in the world having an average house size anywhere close to the US. Many many of those post-Soviet houses are small apartments, so a "home to home" comparison is off the mark. I worked by the same logic when buying a house - I got a 15 year mortgage on my first, modest house, but then we went all out on a historic mansion and now, perhaps foolishly in our 40s, have a 30 year loan on our house. Knowing we won't stay in the house that long, we'll either pay it off early (unlikely with a 2.7% mortgage) or when we sell in 15 or so years. Once we pay off our second car in a few months, we'll divert that money to the mortgage and perhaps pay it off quicker that way, depending what happens with interest rates overall.
February 4, 20232 yr Author On 2/2/2023 at 11:14 AM, westerninterloper said: This not a valid comparison. Nearly every country on the right of this chart is a former Soviet republic or Warsaw Pact country, where communist policy mandated that every family have a domicile - at least an apartment, and frequently a summer house. That people "own" this houses is not comparable to the US capitalist housing market. Take out all the former Soviet bloc countries, and the US looks much more in line with other like countries. I don't know whether it's comparable or not. The data shows interesting comparison between different countries with their own unique histories. I don't know whether it's "good" or "bad" and that wasn't my point in sharing it. My point was that it's interesting to see the differences -- and that national wealth doesn't necessarily correspond to homeownership rates, for whatever reason is applicable in that country. On 2/2/2023 at 1:34 PM, Gramarye said: Also, I think in the US, people are generally comfortable with mortgage debt as a price worth paying to get more house. People who could buy a $150,000 house and pay it off in 10 years will buy a $400,000 house on a 30-year mortgage. Which is another take-away from that chart. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
February 5, 20232 yr 12 hours ago, KJP said: I don't know whether it's comparable or not. The data shows interesting comparison between different countries with their own unique histories. I don't know whether it's "good" or "bad" and that wasn't my point in sharing it. My point was that it's interesting to see the differences -- and that national wealth doesn't necessarily correspond to homeownership rates, for whatever reason is applicable in that country. Which is another take-away from that chart. Im probably not well enough informed about post-soviet housing policy...part of it based on the idea that many people still live in soviet-era housing - ive seen images of capital cities where it is obvious there is a lot of new housing, but the footage of Ukraine over the past year made me think that many people must still live in soviet-era apartments. KJP, you've got a lot more experience in that part of the world than I do - did you see a lot of new housing developed in Eastern Europe, and Ukraine in particular?
Create an account or sign in to comment