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Rental Builders Go Berserk: Multi-Family Permits Soar Most Since 1990
Once upon a time the US housing market was mostly about single-family, residential units. Those days are long gone now that the average American can neither afford to save enough money for the down payment nor find a bank willing to lend a mortgage to an Ivy-league educated Millennial whose only job prospect is McDonalds. Instead, in the New Paranormal, it is all about renting.
Moments ago the Census Bureau released the housing starts and permits data for June. And, sure enough, when it comes to single-family starts and permits, there was barely much of a change: in June single-family starts (blue line) declined from 691K to 685K, the lowest level since March. However it was the Multi-family, aka rental housing (red line), where the action has never rarely been more frantic as can be seen on the chart below.
But this was nothing compared to what is just over the horizon, aka in permits, where single-family against as barely notable, rising to 687K, or about half the pre-crisis peak. But, once again, it was multi-family units where all the action was as can be seen by the red line in the chart below.
And here, for perspective, is the longer-term chart of rental housing permits: we are now back to levels last seen in 1990 following a two month scramble that is nothing short of historic.
How this looks compared to single-family housing: this is a problem because while single-family houses can be easily securitized and are thus much more "cash equivalent", rental units will be far more difficult to convert into money-equivalent credit creation:
The silver lining to this latest building burst: once all these rental units come to market, record high rents may finally normalize... which is probably not a good thing for sellers of rental-backed securitizations.
It also means that a conventional housing recovery in the US is now dead: the builders have spoken and what the next generation wants is to rent, not to buy.
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Ghost houses....to go with the ghost cars.
Ford offering $10,000 in incentives for new F-150http://www.autoblog.com/2015/07/16/ford-offering-10000-incentives-f150/
93 million out of work Americans are all about buying new houses and cars.
Build it and they will come.
The 29.5 hr/wk job holders will come to gaze in awe.....they got the time on their hands.
Not much money....but a whole lot of time.
Speaking for my demographic, I will NEVER buy another house again EVER. I will rent. And if I don't like my local/county/state taxes, I will pack up and go.
This may actually be demand driven as large swaths of potential buyers eschew home ownership for renting. Which means all the older folks will have problems downsizing their house due to a lack of buyers (which is fair because they stuck us with the fucking bill anyway).
Or maybe it is all section 8 and they are just planning on hard times and handouts.
Taker yer pick!
Regards,
Cooter
Actually, you are wrong. I bought a 10 acre property outside Ocala FL that is part wooded and part cleared for $6000/acre cash. I spent less than $9000 on a 9 year old in excellent condition 31' travel trailer, another $8ooo on well and septic and electrical, built a 10x18 deck with roof and screens for $800 in wood costs, another few hundred for a stone pad to park the trailer. All in, less than $78,000, and my property taxes are $68 a year with the homestead and ag exemptions. Yes, $68 is not a typo. Monthly expenses - $200 or less taxes and electricity. You can't rent the equivalent for anything near that.
I bought another equivalent trailer and hooked it in, and am renting it to a neighboring horse farm as housing for their seasonal rental housing for working students for 3 months at $900 per month.
With a nearly year-round garden and orchard plus the local feral pig population, raising chickens for eggs and meat and a dairy goat for yoghurt and cheese, my grocery bill is very small. I am living nearly expense free. You just have to be smart about your living arrangement. There's a lot of opportunity out there for those who look.
and have the extra cash.
Did the same recently. Got acreage in the woods in N FL (not far from you). Offed the McMansion...now live in a smaller house with garden. No mortgage - free and clear. Got the well, too. Living is cheap out here.
I am 100% with you, Cooter. I also am renting and purposefully NOT OWNING, ever.
I laugh at the poor losers who play this rigged game. They are likely going to be underwater soon, if they aren't already, and they may end up with nothing (a la Detroit), whereas my money is in gold and silver, and if ever I need to reduce my living expenses (or move for a job), I can do so EASILY, pretty much anytime I want.
Plus, I never have to pay to fix the roof!
Owning shit is similar to voting: you need to believe the lies and the dream for it to be worthwhile - without that, it is like walking into a casino when you understand the con: you just don't want to play when you know playing means getting taken advantage of unfairly.
Every situation is unique. Knowing how to budget and be self sufficient is more important than which living situation you choose, because it provides the luxury of choice. The reason we are seeing a spike in rentals isn't because people think renting is better than buying. It's because they can't afford to buy.
"Or maybe it is all section 8 and they are just planning on hard times and handouts."
The first thing I did on this thread was search for "section," ergo my response to your post. I would add cronyism to hardtimes and handouts, at least in the Bay Area. I Talked with someone in the Section 8 management/construction business a couple of years ago and it was enlightening.
<dupe>
Regards,
Cooter
They're building matrix wharehouses to hold fuel cells...
In my neck of the woods, vacant lots that have had the utilities stubbed out for going on 5 years now are finally being developed by Beazer Homes. The most "affordable" construction will be townhomes. Prices start at $263k for a 1,300 sq ft 3bd 2-1/2ba with a 2-car, alley accessed garage, and no yard. If you want your kids to run around and play, you'll have to haul them down to the community park and pretend to be on a phone call or something so you don't have to get stuck having idle chit-chat with the soccer moms, chirping about the local schools, their love of Costco, and whatever other nonsense.
Anyway, I paid $200k for my 4bd 2-1/2ba 2,000 sq ft home in 2010. The guy that sold it to me paid $488k (ouch). The sheep are piling in to the same McMansions that they were in 2005, only this time they're McCondos. I enjoy watching them increase my equity for me, though, so keep it coming! Maybe my neighbors who paid $400+k for their homes can finally get out from under them.
And....since these new townhome owners won't be able to sell their McCondos after the next housing market crash, they will turn them into rentals and there goes the neighborhood. There are areas of Sacramento that were great upper-middle class neighborhoods during the housing boom that are now renter, ghetto shit-holes.
Rinse, repeat.
http://www.beazer.com/sacramento-CA/fusion-at-capital-village/residence-...
Who wants to pay taxes and insurance anyway? RENT
I sold a place once just to get away from barking dogs, retarded teenagers - white wanna be rappers shall we say, people who could not parelle park a mini and host of other annoyances. I sold at a loss but my blood pressure went down. Renting certainly has its appeal.
How many apartments are handed down from generation to generation?
You're being raised so they can take your nest egg.
Just put me back in the pod.....oh.....and want to be somebody.
Plug me in man....just do it.
Yeah, but there is precious little steak for you in the matrix...plenty of cheap HFCS GMO Consumer ChowTM. Mmmmmm!
Cities exist because that is where the jobs are ... like it or not. It took me damn near 20 years to escape (with reliable work in a smaller town). I don't like the McBoxes that many people live in (and will look like all hell in 20 years), but the health of a city is in its viable economic activity; they are constantly being tore down and rebuilt.
This is good perspective:
https://www.youtube.com/watch?v=8bZG1mAkXcw
NOTE: Slow entry and not professionally recorded, but really good if you never seen it.
Regards,
Cooter
Sure. But I don't have to like the modern planning. In the past, those city jobs were frequently located downstairs on the first level of your home that you owned, or a short walk away.
Now, downstairs is a parking garage, where you park your $50,000 loan, which you occasionally use to drive to another parking garage, and then take the elevator up to your city job in an office that your business rents from a REIT financed by banks.
In addition, they are also putting these multi-family housing units up in rural towns, and not just big cities. Stupid...but the banks and landlords sure love it!
I still think this is Kunstler's best book, which happens to be on this exact topic:
The Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape
Look at those apartments! On top is the sad simulation of a McMansion for the lost genXers. In the middle, is an attempt at avant garde or chiche which looks like a total eyesore monstrosity. At the bottom, is a modern mix of materials which looks like a pile of left over building materials, doesn't even look like a building.
Second is definitely the ugliest. Last one looks prison like/public housing.
Form follows function.
Cluck cluck.
Incest tends to generate results like that. But, that's OK, Oboza had the SCOTUS change the definition of marriage to allow all sorts of abominations.
The next generation wants AFFORDABLE housing, whether buying or renting. I hope those builders CapRates are penciled out to post Housing Bubble 2.0 prices. As SFH inventory increases and the absence of specuvestors puts downward pressure on prices, renting that new apartment for 1600$ may not look so Good when you can buy a small SFH for the same monthly nut. Cycles. They come back around every time.
Front line investor will hold these units on the books for 5 years, dumps them before the stucco starts to bulge from the underlying moisture issues. 2nd holder will repair and raise the rents, at 15 years the roofs have maxed out, more rent increases and the gangs arrive with their 3 bitches and 8 kids. Loud music, rapes and robberies go up, Buffy and Jodi pack their shit and leave. Mexican gangs take complete control, the brothers pack their conestoga wagon with spinner rims and head out, bullet woulds and all. They will all be complete shit holes in 20 years, add on third world status for america and let the apartment to apartment street fighting begin.
IMHO the picture is clouded--being spun to point your thinking in a desired direction----what is really happening here is not that people want to rent or need to rent - it's that people want out of the burbs. The biggest money pit for the middle class is a mortagage-- and that located in the burbs means you are trapped trapped trapped. Very good for them (fucking userers) but not so good for the rest. Eyes are beginning to open--The whole system is predicated on scaring you into a behaviour that allows easy control--- The biggest scare out there is "you'll lose your house"--- So taxes, lending, gov't perks, gov't programs, even the fucking highway system is all about putting you and your's where you can be controlled. ----
Gentlemen and Lady. I took my cheese out of the trap a little over a year ago and moved to Kauai Hawaii. What your all missing is when the big one, EMP, bomb, etc etc hits what the hjell are you gonna do when you can't drive, got no power and the grocrery stores are empty???? I got no need for a utility company cause I got solar so when I want to I can turn the sun on. I got all the fresh water I can drink and all the chickens I can eat running loose island wide. The growing season is 365. I'm off of the mainland by gollly. My biggest problem is what to do when Opricko gets out of office. He bought Magnum PI's old bosses house but it's still to close for comfort....And lot's of 20 year hotties running around in thongs.....
Gentlemen and Lady. I took my cheese out of the trap a little over a year ago and moved to Kauai Hawaii. What your all missing is when the big one, EMP, bomb, etc etc hits what the hjell are you gonna do when you can't drive, got no power and the grocrery stores are empty???? I got no need for a utility company cause I got solar so when I want to I can turn the sun on. I got all the fresh water I can drink and all the chickens I can eat running loose island wide. The growing season is 365. I'm off of the mainland by gollly. My biggest problem is what to do when Opricko gets out of office. He bought Magnum PI's old bosses house but it's still to close for comfort....And lot's of 20 year hotties running around in thongs.....
Do you think that the landlord really pays the taxes and insurance? He just passes those expenses on to the tenant in the price of the rent.
True, there's no getting away from that. The real savings you see from renting is in maintenance and interest on a mortgage.
Without an artificial housing bubble it's ALWAYS cheaper to rent in the long run.
Unless you pay cash. We have purchased our last 3 homes with cash. No mortgage, no interest. If you can sell at a gain then out side of taxes, you made real money. I understand not everyone has 400k laying around to buy with, but if you do it can be a better investment then renting.
Using logic and reason is racist. Knowing things is racist. Being right is racist.
You are about the most racist sonofabitch I ever met. Green arrow.
Be mobile and move where there is a reasonable cost of living and jobs.
The politicians will tax people to death to pay their public union employees.
Long campers!
Round here the realtors got the council to pass an anti-RV parking ordnance. "You want to live here? You'll do it in a house or apartment!"
I still want to buy my paradigm-shifting RV, home-school my kids, and travel the country, but I just haven't been able to convince Mrs. Meat yet. The "comfort" of the matrix is powerful.
The steak is tasty
No mention that single family home starts FELL for the 2nd month in a row, down 1% from May and 7% from April.
Single family homes reflect a true housing recovery. Multi-unit construction reflects a rental economy because people can't afford single family homes.
I don't know if it's that the next generation doesn't want to buy, I think it's more like they can't afford to buy in part time U.S.S.A where we artificially prop up prices to protect the 1% and nobody else can afford to live.
Not sure why you got the down votes Doc. Must be some bankers on the board this morning.
For me its "do not want".
My present thinking is if I am going to borrow a couple hundred cash, I better damn well have free cash flow that comes with it! I am really kind over this whole "borrow to consume" meme that seems to be prevalent in society these days.
Houses are a shitty investment, suck up huge amounts of money, and the entire system to transfer ownership is one notch away from being a slaughterhouse.
I'll rent.
Regards,
Cooter
Houses are too damn big. There is very little new small and affordable housing. Everything by me is 400s and above. 300s are cheap. I see a couple really nice big houses built out in the hinterland and have been shocked to see for sale signs in front of them. Why anyone would build without a buyer right now is beyond me. Seems insane. I see a lot of genX and Ys that can't afford a big house. Boomers love the bigs houses.
I do know a couple builders who refuse to build cheap stuff because building a couple giant houses for the elite is more profitable. A house might just be becoming a luxury good.
Small, affordable, good schools/neighborhood...hard to find, but not impossible. We bought about a year ago, 1100 sq. ft. rancher on a cul de sac, good schools, $170K.
Payment all in w/tax and insurance is $150 less than a roughly equivalent apartment and we have a two car garage and no noisy upstairs neighbor.
Time will tell if it works out for us.
If you live with anyone and want to continue to do so in a lifetime (hope springs) arrangement, then buying a home -----if you can afford to relinquish no more than 1/3 of your NET monthly incomes------and no more, unless you are in a city with historic and current rising home prices, up to 40%, then you need at least 1200 Sq Ft. per person. Otherwise you risk killing one another, and being a candidate for Lester Holt's consideration on an episode of "Dateline", or "Snapped".
Keep that in mind when someone suggests buying or building a tiny house. Do you want to be murdered by or murder the other one living with you?
U must trust me on this, that after 10 yrs together, the chances of homicide rise exponentially, the smaller the home that affords you only 1000 sq ft or less.
Doc, you'll see the "creative financing" return under the guise of government housing programs. It won't be as blatant as 10 years ago with stated-income financing and interest-only loans, but the banksters will be able to use their .gov puppets to get the sheeple up to their eyeballs in debt again for the American Dream, somehow...some way.
The next generation are sensible, you don't buy a house, you put a big debt millstone round your neck. The banksters own it and you pay all the bills. Then when you finally get to say you 'bought' it, they take it away from you to pay for your care, even though you paid all your life for a health service that should include this care at the end of your life.
rent/own rent/own? hmmm.
77024 Houston/Memorial Area- $490,000 condo (you can do the math on payments)
association fee: $490 per/month
taxes: $1,000 per/month
.......I would just rent, taxes make ownership a big rip-off
Property taxes over 2% of assessed value?
Welcome to Texas . . . .
that's the kicker....the "assessed" value on that condo is WAY below $490. If they ever appraise at that sell price expect a 40% increase in your property taxes.
You'd be crazy to buy now. Prices are sky high. Interest rates are at record lows. The world's economies are in collapse. Wages are stagnant. job openings are nil. Hey, sign up for a 30-year contract for a house you can't afford. Pay interest to us until you lose the house, and we take it over. Heads we win, tails you lose.
Stay out of tax-crazy states like Illinois. Cook county's and Illinois goal is have the highest taxes in the world.
Illinois has become a take-everything state. Rents are high as well as living there. Better scenery and weather elsewhere.
Lived in Illionis my entire life.
Yes it's expensive...but we have plenty of water, good people (mostly) and Deep Dish Pizza and Italian Beef. Winter kills everything with more than 4-legs every year like a natural reset...
Ya suck it up and realize that soon the debt madness will be over and we will go back to our normal kind of Crazy.
Come and visit Chicago people....you'll like it!
Best sarcasm ever!
MDB should take notes from you!
Regards,
Cooter
<dupe>
Regards,
Cooter
Murder rate--- per capita--- first. Cook County?
While Illinois has it's faults in governance it's really just a couple decades ahead of every other state in it's financial hell. Older industrial states just got a head start on the debt parade than the sun belt states. That said, Illinois is still only ranked 22nd in tax burden for residents, or basically middle of the pack as far as states go but the media loves to make it seem like tax purgatory. Corporate rate was 5th last I checked. Really, Illinois at least has the potential to marginally increase taxes to pay for past extortion by public sector unions whithout turning into Jersey or California size tax burdens so thats a positive. But winter, man o balls, it get harder each year it seems.
You can say that again!
While Illinois has it's faults in governance it's really just a couple decades ahead of every other state in it's financial hell. Older industrial states just got a head start on the debt parade than the sun belt states. That said, Illinois is still only ranked 22nd in tax burden for residents, or basically middle of the pack as far as states go but the media loves to make it seem like tax purgatory. Corporate rate was 5th last I checked. Really, Illinois at least has the potential to marginally increase taxes to pay for past extortion by public sector unions whithout turning into Jersey or California size tax burdens so thats a positive. But winter, man o balls, it get harder each year it seems.
I am amazed watching Tiny Home Nation being built and promoted like it is something great. It is not.
Must "condition" the masses to believe it is the thing to do...all for sake of the environment. Lets call it for what it really is....Agenda 21.
The average house sq ft in the 70s was less than a 1000. So why is 600 not great today? At todays prices it is one of the only ways to own without borrowing a nonChina manufactored hovel.
Because in the 70's that 1,000 sq ft home cost $30,000 and housing costs weren't 50% of people's monthly income.
Plus a lot of the "tiny" houses I have seen have wheels on them so you can be "mobile"
Let's call it what it is, a trailer. I've seen Ice fishing houses that are bigger.
I used to live in one of the highest property tax counties in Illinios. It seemed the main driver were the teacher's unions. Because of higher propertery taxes...teachers wanted MORE money....then because of the higher costs, property taxes went up and the cycle repeated. I got out over 3 years ago. This situation will explode once home values stay flat or decline and yet property taxes continue their climb higher.
Around here they have to build affordable housing units for teachers because they are paid jack shit.
To support this statement, please provide a table of ALL compensation received by Teachers paid jack shit, based on number of yrs experience and include the health insurance premiums paid by the reseidents of the municipality:
1 yr
3 yr
5 yr
8 yr
10 yr
12 yr
15 yr
20 yr
25 yr
30 yr
40 yr
I'll thank you ;ater.
Check back here every day, I'll get back to you.
i watched as 3 beautiful old houses were demolished on the same street, a block from one another. The first one i put a curse on, because the twin houses on it were so lovely. Then a second condo unit went in, and tore down a nice old house. Get this. The second condo was started after the first one by a month. AND IT IS FINISHED and people are moving in; The first one? I see long periods of nothing happening. as i look in the windows i can still see the 2x4s with no sheet rock in them. Just an empty shell-I smile...bare electrics jutting out of various cavities for lights, plug ins etc. just barely got the siding up; in this hot housing market somethings amiss.
These are standard, not luxury condos...a third, luxury condo (which tore down a restored mansion) is haveing problems. at night i see plenty of dark units and there are balloons all over to lure people in
Then maybe teachers should choose a different career.
What it means to be a teacher:
-Choose a profession where you want to help children, knowing that it doesn't pay well.
-Build a shrine unto thyself and develop a demeanor of righteous indignation.
-Vote to raise other people's taxes to raise your salary, even though you originally chose the profession for noble purposes, not money.
-Claim that people who don't want their taxes raised are anti-education.
-Shout down opposition through unions and politicians.
Sound about right?
As housing costs go up so do rents.
Remember that even if you pay off that house you really don't own it.
You lease the property from the municipality. Stop paying property taxes and see how fast they take that house from you and auction it off to get their money.
Yeah, just wait until they move in to see how they like it. Paper thin walls, dog friendly complexes with dog crap all over the place, barking dogs at all times of the day and night. Or, maybe its cat friendly and you'll get to move into a unit that had a cat that pissed everywhere and management didn't want to replace the rug. Or, living in a unit with a kids above, below, or next to you slamming doors all day and night. Or maybe you'll get lucky and you'll have a heavy walker over your head stomping constantly. Young adults blasting stereos, or maybe you get to hear the couple bouncing on their bed at midnight. Or some old hard of hearing geyser blasting his TV all night to help them sleep. Yes, the joys of apartment living are endless.
And, don't get me started on the minorities.
Wanna get an idea of the crap you have to put with from asshole management, to aggravating neighbors, to thieving maintenance workers entering your apartment visit apartmentratings.com to read some of the hilarious bitchin and moanin.
What more evidence do people need to understand why so many Republitards and Dumbocrats support increased immigration. Every single new immigrant that shows up on U.S. soil will need food, clothing, health care, and a place to live etc. More immigrants leads to more multi-family construction. Increased immigration spurs consumption. Corporations want more consumption, and corporations own both parties. Corporations don't give a damn if you like it or not. They might just be planning to build a new Sam's Club next door.
With the added bonus of having another source of cannon fodder to further circumvent any blue blood from being shed.
Spot on. I am a millenial who has rented since graduating from college. The vast, vast majority of people renting in my area fall into several categories:
A) Military members, who have their housing completely paid for in tax-free stipends;
B) College students, who are paying with student loans; and
C) L-1 and H1-B visa workers who are here "temporarily."
The latter cannot be understated. I think this is one of the chief driving forces in the explosion of rental properties. The rental properties are all in the wealthiest part of town, as demanded by these workers. There have been 2-3 new, massive properties built in my area the last 5-10 years.
The local college graduates who can't find jobs are screwed, but the housing industry people are delighted.
Thanks for sharing that information. That is very interesting.
What is most likely happening is that the builders are currently taking advantage of, perhaps, the last chance at "free money". Building rental residential properties now with the probability of condo conversions in the future makes sense.
Wash, rinse, repeat.
J
I am counseling my kids to stay away from home ownership. They are an anchor that limits mobility/flexibility and constant drain of both tiime and money.
And after taxes, escalating insurance,home maintenance, yard and grounds upkeep you and the little Mrs. get in all those little money spats between trips to Home Depot and she starts talking to her expert advisor friends about leaving that sorry SOB while he's out working his butt off to make the monthly nut on the lil "Love Nest" w/granite counter-tops.
Then your in court and the man really finds out just how much of this little endeavor he really owned. NONE. The courts take one look at your nutsack and says, hit the road buddy. They might be lenient and let you take the dog house and your fishing pole if you agree to finish paying it off for her and the new unemployed live-in boyfriend.
And that my friends is called Living the Dream, in Suburban Americana. They call it a Dream for a reason.
"It also means that a conventional housing recovery in the US is now dead: the builders have spoken and what the next generation wants is to rent, not to buy." What it means is we want the market to clear so we can buy at a reasonable price.
Of course, because nobody can afford a house in the suburbs anymore.
Taxes, maintenance, driving to work. Have to live in a 1 bed/1 bath near McD's or Best Buy where you work 29.5 hours/week.
I sold my house made some good coin out here in southern Ca. and now I'm renting. 100% debt free and loving it.
>I sold my house made some good coin out here in southern Ca.
I sold my house made some good coin out here in northern Ca. And then I left the state for good.
Personally, while I still have a small mortage, I prefer my 20 wooded acres out in the country, with a 3/4 acre stocked pond, a huge outbuilding (which houses my woodworking equipment) and an 1800 sq ft home with a full basement.
Standard Disclaimer: I have a small patch of paradise, you have California and only a wall separating you from someone you don't know.
I plan on doing the same my friend. I will not be buying until after the crash. I was looking at the Oregon coast or Costa Rica I'll flip a coin for it. I surf so I must have waves in my life. Just the North hase cold water and radiation ahh Costa Rica it is. Prices there have come down over the past year.
Awesome. I envy you.
ah yes, more "tiny homes" are on the way it seems. now for rent.
here's the thing that happens with this, you have seen it over and over again.
Get more efficient with electricity? The rates go up
Get more efficient with petrol? Higher taxes to make up for loss of revenue
So the millenials want to live car free in the city in tiny apartments. Any "savings" they see from this lifestyle will be sucked out of them ASAP, one way or another, they simply will not be allowed to hang onto that money. Be it via increased rental costs, increased food and living expenses, increased taxes, what have it. They merely have to be trapped in place with the barrier to upgrade just large enough that they ignore it.
Renting is for suckers. As a landlord it's easy to win the game. Provide a decent place at a decent rate, and then jack the rate by enough that it's cheaper to pay it than move. Then do it over and over and over again. You can make it really easy by spamming rental ads for places that do not exist at above market rates. All landlords follow the market trends and adjust accordingly, making it easy to raise. It's not worth the time if you have only 1 property, but if you have a dozen or so in a market.....
stick a big dick up a landlords ass---go with a co-op renter owned non profit housing unit---six families in unit with ten year contract to rent and the new construction loan will come instantly-- just guessing--
The system needs to keep us all permanently poor, near-starved and 'hungry' for their work and abuse.
But the smartest people will always the quickest to adapt, and that's where I try to be. So what if they are trying to screw me? I've adapted and I keep looking for better adaptations.
I live GREAT for 15k a year. I rent a nice enough place in a nice area, I don't drive, don't drink, don't party (LOL), but I do lots of cool personal projects and I keep improving. It's a great life and there isn't much TPTB can do to wreck it, since I'll always be far more adaptable than all those poor obese pods I see flailing about.
you think you live great on 15k a year? sorry but you're not, you are being left further and further behind. you are RENTING, you dont own anything and can be kicked out on the street pretty damned fast. if you were injured or lost your income for 2 months where would you be? Im guessing not in your nice area anymore.
Lots of new 'illegals' moving in and need a place to stay. What else could be driving this?
Butt, of course. As the U.S. moves down to third world status, all the signs are coalescing and soon will be obvious to everyone that you might as well live in a yurt.
https://www.google.com/search?q=yurt.jpg&espv=2&biw=1600&bih=799&tbm=isc...
Signs of declination:
Men with facial hair they groom for a half hour every day
Tatoos that depict the end of the world as we know it, including full limb body, and facial tatoos that are all the protest that the new 20-40 somethings can muster.
Women changing their gender because of a perceivec bias that men have it better, and getting rid of the monthly period.
Men changing their gender because they have WAaaay tooo much time on their hands and don't have much success in getting into women's panties with their hands which drives them insane.
The Jewish Mafia in New York and around the world taking over every single important financial nexus in the world. And inventing some of their own.
Men and women, and hilary clinton running for POTUS because their IQs have drifted lower as they age and now they are among the few who will chance an assassin's bullet all for the honor of being the next actor in a supporting role to the Jewish Mafia in New York.
The move to a genuine third world country that already has their chops together with generations of experience in how to survive.
The best investment I made 30 years ago was buying rental duplexes. I rent to blue collar people in my town. They will always have jobs in every kind of economy. I am upgrading the properties now because the rents are good and the demand is strong.
For those of you who want to own something, buy a duplex - move into the worst of the two apartments. Fix yours up and then switch apartments. In 5 to 10 years you will have the property upgraded. Then, either stay there and pay your mortgage off with the rental income or do another property. If you are not somewhat handy, then this is not for you.
exactly--rent and own--renter owner-- but make sure its a "corp" of some kind--thats the free pass zone in the USA---
The Government has screwed up the housing market beyond belief by subsidizing mortgage debt, Fed MBS purchases and ZIRP. Home prices are just too expensive and not being allowed to correct to affordable levels.
Not true at all. In most places homes are cheap as all fuck and falling. The problem is that those places have no fucking jobs. Anywhere with a healthy economy is in such high demand now that even the shittiest properties are skyhigh.
I live in Silicon Valley. I can attest to the apartment building boom. Every patch of available dirt is being converted into rental units.
When the stock market tanks and unemployment surges with all of these apartments coming on the market, the rental rates are going to plummet. It happened in 2000. 2016 looks like a repeat.
Horse hockey, frankly. What the new buyers want, and the market has to sell, are two different things. Moreover, new multi-family housing starts have increased in direct proportion to the new full time employment increases across the board. Part time McJobs do not allow for savings in a downturned economy. No down payments saved means that rental properties are the only way to warehouse the up and coming generations without having them living in the streets like debt serfs without a roof over their heads.
This is the beginning of the end for the age old 'building industry' in North America. The USA must create 1.5 million to 2 million single family home new housing starts to bring the building industry up to pre-2008 new housing start figures. What the beancounters have noticed is that they can't even get close to that figure. In brief, the 'American Dream' now appears to be a shotgun shack in a multi-family slum of renters that have no skin-in-the-game, and are one paycheque away from living under a bridge in a city near you.
FUCK YOU, RENTAL BUILDERS!!!!!!!!!! BASTARDS!!!!!!!!!!!!!!!!!!!!!!!!!!!!
LOL
"what the next generation wants is to rent, not to buy ..."
Want is the wrong word. Folks don't want to rent; they have no choice. I'm in the industry and the switch happened a few years ago. People like suburban living, but they are forced to rent closer to work to save money or else go into bankruptcy. They sell one of their two cars and use that money as down payment and cushion money - i.e., they downgrade and penny-pinch just to get by. But the options in the NE U.S. are still expensive, so these people aren't saving as much as they'd like. I predict that soon developers will build condos that are filled with what are the equivalent of tiny home apartments where the renters are seeing a substantial reduction in housing costs and the developers can fit more units and still make their profits.
Natural market progression. 29 hours at minimum wage gets you about $210 a week. If affordable is no more than 30% of income for housing then that would make the bottom rung affordable housing about $275 a month.
Can you provide 9 X 12 rooms with shared baths for that and make a profit? Say 1 bath for every 2 rooms?
108 sq. ft. for each room and maybe another 80 sq. ft. for a generous bath = 296 sq. ft. average construcion $125 a square foot = $37,000 plus insurance/maintenance/tax/management.
$550 incoming from rent on two units less vacancies
Less than $550 outgoing on investment+ expenses...slim chances. Could you clear 10% even?
Minimum wage workers comprise a tiny 4.7% of the job market. Most are high school or college students living at home or in dorms.
The few living away from home in such a situation qualify for various housing subsidy programs.
BTW, few rental properties return 10% on investment today. I have 4 apartment units that I built which are free and clear. They return 6%. I have one rental house that I stole from a bank that returns 11% but that was an unusually great buy made at the last market bottom.
Here's what your average landlord is thinking. The renter will pay the mortgage with increasing rents. I can squeeze blood from a turnip. If they don't pay the rent they can live under a bridge or in a van down by the river. I don't give a fuck.
You are a know-nothing dumbass.
Hey Tyler, if building rentals is so strong then why are lumber prices in the tank?
Lumber Price: Latest Price & Chart for Lumber - NASDAQ.com
Are we building rentals out mud and thatched grass now?
It depends upon where the building is happening. Some parts of the country have a severe housing shortage. This is a knock-on effect of the financial crisis which brought building to a halt for years.
Consider the suburb of Denver called Lakewood. It has a population of 147,000. There are a total of 35 condos currently available to buy in that city, and rental units are few and far between also. The vacancy rate is basically zero, with lines of people showing up at rental properties when they come on the market. Properties for sale receive multiple offers above the price the day they hit the market.
It's a big country with many submarkets. Generalizations about those markets are useless.
They are stacking shoeboxes for the people of the future to live in.
Not a bubble.