Submitted by BumbleBeeVomit t3_ygo5sv in rva
Discuss.
Cities are cyclical. We're on an upward trajectory right now, so the opposite of the white flight is happening. The city is repopulating with wealth and the lower income populace is fleeing to more affordable options.
Soon all this new construction will age and begin to crumble, crime will begin to rise, property value will lower, wealth will leave and the city will be born again as a crust punk haven.
Would hcol area homeowners have houseloads of equity instead of boatloads? Maybe houseboatloads?
Also, thoroughly discussed yesterday: https://www.reddit.com/r/rva/comments/yfumj3/rva_real_estate_ama_what_the_hll_is_happening/
The sky is blue, birds fly South in the Winter and real estate isn’t as cheap as it used to be and probably won’t be ever again.
Duh
cyclical yes, but longer cycles than that. The urbanism trend will last all of our lifetimes I'd bet.
[deleted]
Maybe Joe Manchin is moving out here?
Oh. Hmm. This appears to not be a hot take at all. In fact the opposite. A lukewarm take. Maybe even cold.
For point 3, I’m not so sure that’s a good way to think about new vs old homes. Part of why older homes might have a lower sticker price is because they’re so expensive to maintain and upkeep. If you’ll have to drop 5-10 grand on repairs every year it’s cheaper on paper but in reality you aren’t saving much if anything.
Mixed bag. Lots of transplants flocked here because of LCOL. There are more rentals on the way and still not a lot of inventory for a buyer. Rising mortgage rates will cool the heels of some buyers.
Redfin, Zillow, Airbnb are dumping their inventory. A shitload of toxic assets can absolutely destroy a balance sheet. Corporate homebuyers face the same fate.
The interesting bit will be what happens after earnings reports come out and signal if we're truly headed towards a recession. There have been rounds of layoffs in almost every sector.
If we are headed into a recession. Employers are going to have all the leverage. The old school CEOs who prefer people to be in office are absolutely going to use this as a way to force employees back into the office, "trim the fat"( laying off middle management / "low performers" ), or use it to justify reducing pay to match regional costs. There have already been layoffs or hiring freezes in many sectors. Have you tried applying for a job lately? The process is a fucking nightmare! Now combine that with job scarcity and an overflowing pool of laid off workers.
Those who bought a high priced home based in the past two years planning on two incomes are going to be struggling if one of those incomes dries up. Unless one partner can carry the weight, that RVA grass isn't going to appear as green when they realize there's not a lot of tech jobs here and might be forced to sell. Increasing the inventory.
All we can do is wait and see.
People aren’t as racist as they used to be (white flight) and the economy hasn’t been gutted like it was from the 70’s to NAFTA.
If you really want affordable housing to come back via socioeconomic trends (lol @ the government doing anything like the new deal), root for the collapse of Tesla, Amazon, and (especially for Virginia) military firms like Raytheon. Hopefully you keep your job, but that’s the Coors Light©️ Cold Hard Facts
meh the federal government is going to have to collapse since we have wfm now.
Could easily be fixed by our representatives putting a cap on the number of rentals any one entity can own, especially if end chain ownership is where the count takes place at.
I see no reason why any city/county/town can’t simply legislate what they want their housing situation to look like. 70% owned/30% rentals, for example.
Would require minimal overhead, I’d expect. Simple website to list if it’s “approved” as a rental, same place for registering your rental, and a tie in with the SCC for determining ownership.
Blackrock probably wouldn’t like it though.
I’m confused - what inventory of housing does Redfin, Zillow, and Airbnb control or own?
Thanks Captain Obvious
Oh I think the real estate “class” is going to make people go back to the office lol, but the government will probably just stop functioning anyways, it’ll just be the military/intelligence apparatus/LEO lmao
Further restrict supply, great plan
Central planning always works super well
Zillow is out of the ibuyer market a while back. Not clear redfin now has bought any houses in Richmond
Airbnb has certainly not built any houses in Richmond. And is just not that big a deal, we aren't Austin or Nashville
Not only would that be insanely complicated it's pretty clearly unconstitutional
Not restricting supply in the slightest.
Would actually encourage more supply so corporate landlords can increase the number of rentals they have.
How is it unconstitutional?
You know they don’t hold those assets, they flip them as soon as possible, right? Dumping would imply a liquidation, which I’ve seen no indication of happening. Do you have data?
I think it's more about making it less profitable to scoop up lots of properties as opposed to not allowed.
Oooo
We could make property tax 10x for any ownership over the limits decided.
That would work to make it less profitable to scoop up lots of properties.
You’re welcome Lt Dick Head
Stand down Private Dingus
We could just legalize more housing. The primary constraint on construction is zoning.
I don’t see your collation with tech jobs? Most tech companies are going full remote allowing people to live anywhere. Now some of them (meta, twitter) are will be letting people go, but that is mostly to stupid dealings.
Here’s my hot take, which is really a hot question, which is really embarrassing, because I dumb: but I am curious if enough people flee HCOL areas, will those areas eventually become LCOL?
a 30% cap on rentals is the very definition of a restriction in supply?
5th amendment. Takings clause. That's a huge thing to push through the zoning restriction cases which were a bit shakey to begin with
It wouldn’t be taking though. It’s no more a taking than a zoning code.
A. It can be whatever is needed for the population, as appropriate.
B. If the pie is 1000 housing units, corporate landlords would get 300 of them, leaving 700 for people to purchase and live in. If the corporate landlords want more than 300 units, they can build more units, keep 30% and sell the rest.
yes. Key is enough. But the fact no one is discussing is population growth.
US Population 1970 203million
US Population 2020 331 Million.
Over a 50% more people in the US. Are there 50% more places to live in New York? No. In Richmond? Also no.
The housing crisis is really quite simple. To house 50% more people you need 50% more housing. And we basically banned dense urban housing in 1970 through zoning
Depends on the reason it's a HCOL area to begin with.
DC? No, it will always be HCOL as it's the seat of the federal government.
An oil boom town where the wells have dried up? Yes.
Ignoring those two extremes, yes I think you're right in theory, that less demand should in turn depress prices overall, but that is assuming the people fleeing aren't being replaced by people from an even higher COL area. Or even wealthy people from other countries.
Yeah, I wasn't being particular to those companies in the Richmond market. Just that their moves indicate a trend.
it's actually been going the other way - turned out their models weren't working and they lost a fortune, so everyone is dialing back. Given a down market I expect that will happen even faster
still a cap. Still a restriction in supply. Still a thousand year track record of not working.
Good way to make it impossible to rent though, corporate landlords would love this
It is more like an extreme zoning. Which is a taking. See the relevant jurisprudence.
The jobs that lend themselves to being fully remote with high pay tend to be in technology. Yes, there are companies that are fully remote. There are also companies pushing for hybrid. Like I originally posted, if we go into a recession, employers are going to use this as leverage.
You're only seeing the tip of the iceberg.
Keep in mind when you are remote and laid off. You're competing against everyone in the United States (generally speaking) who are qualified for a position. Would you hire someone from a top 5 tech giant or someone from a company you've never heard of? Lots of companies will bait and switch and say "fully remote" and really mean hybrid. They'll also know that they can get away with offering a lower salary because they'll find someone willing to take the pay cut and they can save money.
Finding a new job is a nightmare in the digital age. Go look at /r/recruiting.
Yeah. Too risky to their bottom line and best to stick to their core business model.
they loved the idea, but they were getting slaughtered. Read up on the zillow mess you might find it amusing. And that was in an up market
Yeah. VCs, tech valuation, and "profitablity" is a fucking wild landscape. Meta is a prime example of that.
I should have clarified that it's the big corporate homebuyers who are going to be the bag holders on toxic home assets. Not the three companies I originally indicated. I didn't mean like wholesale liquidation as in they own thousands of homes, just getting rid of the inventory of what they do own. I don't see it majorly impacting the housing market here or at large. Just pointing out that it's a signaling indicator.
Some of the big corporate homebuyers can carry the float. Only for so long though. At the end of the day though, no one likes going to their boss and saying "Yeah I lost us a ton of money by holding on too long". Even CEOs fear the board.
>Tons of inventory is new construction which is typically the pricier end of the spectrum as it's more profitable for builders
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and its decidedly unprofitable to build low-end stuff given the land use rules here. Kinda hard to justify building a starter home when the lot size is massive and you can only build 1 house. The land price alone puts you out of range of an 'affordable house'
The root question is do we want to become a nation of renters, or of homeowners?
Actually I'd argue masonry homes built up to about 1970 are far better houses in terms of quality of construction than anything built after 1970, unless it's an extremely expensive custom home. Most production new construction it designed to have a lifespan of about 20-25 years. Go check out pretty much anything built in the 1980s or 1990s in, for example, Woodlake.
Meanwhile you couldn't build a 1940s brick and slate cape now without it being exorbitantly expensive.
That’s a bit circular. Yes, more expensive brick homes built in the past are better than cheap wood homes today in some ways.
Unfortunately anything built before the 80s will have major lead and asbestos problems. The 60s and 70s are better, for sure, but if we go back further you’re running into places with bad insulation, cracks in foundations, old wiring, and poisoning like I mentioned earlier. Fixing these means is practically building a new house anyway.
homeowners absolutely.
But US home ownership rate is very good, 65.5% second highest it's been in history.
Doesn't mean we shouldn't stop encouraging it, but we should be realistic about how well we are doing, and what the real issue is, which is a shortage in the places people want to live because of single family zoning. A de facto cap is what created this situation
lead is just not a big deal. Asbestos isn't either in most situations, and is easy to remediate.
Your take on old houses is totally wrong, speaking professionally as someone who has built and rebuilt plenty of houses. It really depends on the house.
Plumbing and electrical are much bigger deals btw. With plumbing usually the biggest pain.
You are wrong about it being the “second highest in history”
https://fred.stlouisfed.org/series/RHORUSQ156N
It’s even worse when you look at cities that have a high proportion of landlords that use yieldstar.
Insulation is a non-issue and easily solved.
Cracks in foundations is not a certainty just because a house is old.
Rewiring a house is less of an issue and expense than you think, and most older homes have updated wiring to some extent.
Lead and asbestos are not the big deal issues that people make them.
Fixing any/all of these issues doesn't come anywhere near "building a new house." That's just not accurate. If you prefer new houses for whatever reason, great. But old houses are not these scary, dangerous, poisonous things that cost a fortune to fix.
Lead as a concern is less about cost and more about giving your kids brain damage. For example, lead that has chipped and fallen into the nearby soil. Related infrastructure is also a problem as it’s not always accessible to the resident.
Perhaps. I’ve also worked on houses but I’m sure less than you have. I’m also aware my condo building has cracks in the brickwork and foundation that are impossible to fix. It also gets tiresome having to pay 5-10k a year to maintain the 100 year old building in general.
After seeing a stairwell begin peeling away from the floor, AC units fail and dangerous knob and tube wiring, and my own experience and research, we’ll have to agree to disagree.
I bet it doesn’t even last for the next ten years. I think could even buy an argument that it’s already over.
Considering I'm probably double your age, grew up in and own old houses, have done full tax credit renovations both personally and with clients, and have over 15 years of full time experience in the real estate business, I agree. We will have to agree to disagree.
I suppose your experience does mean than tens of thousands of young children aren’t being poisoned by “not a big deal” lead right now. Mostly from lead pipes and paint. I do appreciate your condescension of course.
so the site I googled was wrong, that'll take me to take the first hit. Your data set is obviously better.
That said, by your data, its still really really high, within a percentage point ex the ninja loan debacle
it's just not an issue if you don't let your kids eat the house. I was raised in a lead paint house. As, I expect your were. As is my daughter and most of the kids here. You can google incidence of lead paint poisoning, but it's basically all in the projects you'll find.
Given I've been building and remodeling houses, primarily old houses, for 20 years now, yeah, I'm sure you have worked on them less than I have.
There are no cracks that are impossible to fix btw. It may be that you guys don't want to pay to fix them, which is another thing. Condos are famously cheap and pass the buck on repairs, it's the incentive structure
oh I completely disagree with you. And the data backs me up except for the covid epidemic, and it's showing a bounceback.
It's too early to tell, but look at pricing and sales. In 5 years it will be very clear which trend drives things.
But I'm sticking with Richard Florida here.
People were already trickling out of urban areas before the pandemic.
I’m not saying cities will become ghost towns. Just that the peak of urbanism as a trend is probably here or already past and we won’t see the kind of growth we saw from 2010-2015.
Asa small city, I think Richmond will probably stay fairly stable. We’ll gain some population from people moving out of larger, more expensive cities. But we will leak people out to the surrounding suburbs and exurbs.
>it's just not an issue if you don't let your kids eat the house. I was raised in a lead paint house.
Unfortunately it isn't this simple. Unless your only concern is with acute exposure, breathing in dust or other particulates can cause long-term damage during childhood, say, lower IQ, impulsivity and other mental health related issues. Google the lead-crime hypothesis for a broader view of chronic lead exposure. Luckily things aren't nearly as bad now as then, but, children are getting lead exposure from somewhere.
Kids often dig in the dirt and get filth on their hands, which then can end up in their mouths, which is another avenue for lead exposure. Digging in the yard is a normal part of childhood and soil contamination, say paint shedding into the yard over time, is not at all unusual in older homes.
>Given I've been building and remodeling houses, primarily old houses, for 20 years now, yeah, I'm sure you have worked on them less than I have.
I was reflecting on this, and I can see why what you're saying would make a lot of sense from a contractor's perspective. You're likely to deal with known lead issues, with owners (presumably of single-family houses) who are willing and able and aware to address maintenance issues, you are focused on the houses themselves directly and you aren't there for DIY home renovations.
Not everyone lives in a single family home where they're in full control of maintenance, not everyone has access to high quality contractors like yourself, not everyone is as knowledgeable or careful as you or your parents.
>There are no cracks that are impossible to fix btw. It may be that you guys don't want to pay to fix them, which is another thing. Condos are famously cheap and pass the buck on repairs, it's the incentive structure
For sure, although I'm not sure you can lift a multifamily unit for major foundation repairs. The issue here is primarily cost over time. Typically newer homes don't need foundation repairs.
Otherwise I agree. The incentives are pretty fucked for condos. People really, really hate tall buildings which understandably leads to bad policy.
All the data I saw up to the pandemic went the other way. Then the pandemic put up numbers backing your thesis. But if you look at urban rents and sales this year it showed high demand.
I continue to strongly think the drivers remain the same as the last 20 years. But current data is obviously muddled.
Cities remain amenity dense. The big flip is commuting time with wfh. Commutes used to drive a lot of urban moves way back. With traffic not an issue it's going to be interesting.
But think ex commute of why you live where you do and not say brandermill
it really is this simple. We have data. Data trumps anxieties.
No one is saying lead is good to eat. But your fears of consumption are almost entirely irrational. I had regular blood lead checks done on my daughter still, with no issues. Unsurprisingly.
I've worked on plenty of non single family homes. Lead is very easy to deal with. It requires dealing, yes, but it's really not a big deal. A few thousand dollars in equipment. It can be done perfectly safely DIY also. Or unsafely of course. But it's really like crossing the street - you can get killed, but it's easy to cross the street safely. Doesn't mean everyone does of course.
You can lift a multi. But you wouldn't. You'd prop it up and fix the issue. no need to lift. Lifting is a pain even for single family houses. Very few old buildings have foundation issues, they are much more common in the newer places for various reasons.
The question isn’t a matter of what the nation is doing though.
The question is what is Richmond doing. (Or whatever city you want to do this for.)
Richmond appears to be here: https://fred.stlouisfed.org/series/HOWNRATEACS051760
Ownership rate is nearly 20 points below national average, and is at ~44%.
That feels troubling, but I’d like more recent data.
So, does Richmond want homeownership for its population or not?
>it really is this simple. We have data. Data trumps anxieties.
This isn't my understanding, but, I hope you're right. Seems like lead as an issue has been taken more seriously over the 10 15 years so its getting a lot better anyway.
For the rest, sure. I'm skeptical things are as cheap and easy as you're implying, but, perhaps I'm wrong.
Look, I am not trying to be condescending, although on reflection I can see that it certainly came off that way. But continuing to put out inaccurate information helps no one.
Lead paint was a big deal in the 1970s. That's why the federal government outlawed lead in paint as of 1975ish, and there is still a federal lead disclosure required for any home built in full or in part before 1978. But most people who suffered lead poisoning did so when lead paint was easily accessible and peeling off surfaces, and children were eating the lead paint. That rarely happens now. If you buy a house built before 1978 I can almost guarantee there is lead paint in the house. However, it is "encapsulated," meaning it has been painted over so many times the lead paint is not accessible. Now, if you are sanding down wood trim or other surfaces in a pre-1978 home, yes, you need to take precautions because you don't want anyone to breathe or eat lead paint dust. But just the fact that there is lead paint in a home does not automatically make that home dangerous.
Asbestos is similar. Asbestos is dangerous when the fibers are "friable," floating around in the air. If you do not make the fibers friable, there is limited to no risk of asbestos injury. Most asbestos in old houses was insulation around pipes, sometimes mastic in tile adhesive, sometimes asbestos tile. If you leave it alone, the fibers don't become friable. If you want it abated, you can pay to have that happen.
I just don't think implying old houses are inherently dangerous is helpful to anyone.
You’re good. I feel like I wasn’t giving the discussion enough attention. I can see why you’d feel a little offended given your knowledge and experience as well.
I’ll think back on this discussion some more. Housing is a major issue that I’m passionate about, but that also means being open to learning. Thank you for the conversation and I hope it wasn’t too uncomfortable.
No worries at all, I'm sorry for my tone. It's always much harder to have a dialogue virtually vs. in person, when there are no context clues on tone. I'm glad to hear you are passionate about housing. It really is a fascinating subject, in so many different ways.
I just wish that anyone that wanted to buy a house could. And that anyone that could afford to buy a house did.
NotoriousZog t1_iu9ituh wrote
Yep. Agreed.