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Some market research done using F# (see Fig 1)
Main Post: Some market research done using F# (see Fig 1)
Top Comment: 11K subscribers in the fsharp community. This group is for people interested in the F# language, the functional-first language targeting .NET...
What the F is happening to the housing market?
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In 2019 my wife and I bought our first "beginner home" for 150k at a 3% interest rate. It is now worth 270k. We couldn't afford to live here now if we didn't already own it. So what the f is happening? I know they raised interest rates to like 8% which should bring down home prices but the home prices haven't gone down almost at all. Why? What happens if they bring interest rates down again? Will home prices go up even higher? I try talking to my mom or someone about this and they always say "well back in the 90s interest rates were high and always have been etc etc" and I'm like well yeah but housing has gone up like 300 percent in the last ten years so it doesn't make it better or make sense. Also throw into the mix that property taxes are going up as well, amd this is just a shit situation for pretty much everyone. So what gives? Will it get better?
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I'm a homebuilder/developer. I have my real estate agents license. And I have a bachelor's and Masters in real estate. I wrote my master's thesis on institutional single family rentals, before it became a thing.
To put it in technical terms: this market is a clusterfuck.
We have a bunch of macroeconomic trends that are all intersecting at one time.
The big bottom line TLDR is that we have a supply issue. We are several million houses short of where we should be at the current population. The short supply is keeping prices up, even with higher interest rates.
The biggest reason for that was the housing crash in 2008. It drove many homebuilders out of business entirely. Demand and prices were down, so there was no profit to be made for several years.
As things started to come back, the number of houses built per year stayed well below the historical average. So, we basically skipped a few years worth of houses being built, even as the population grew. Which was fine for a while, because millennials couldn't find good jobs or afford houses anyway.
But then demand started to pick up. We already had a shortage. But the market can't respond with more supply because it's much harder to build a house now than it was before the crash.
Banks are much tighter on their construction lending. For a given capital level, you can borrow roughly half as much. In 2004 if you had $100k to bring to the table, you could borrow a million or more from a bank. Now it's 500k or less. So, you can only build half as many houses. (Before accounting for cost inflation!) With higher interest rates, that's even worse. Builders can afford to build fewer and fewer houses.
We have a massive labor shortage, especially in skilled trades. Just like builders, the plumbers, electricians, carpenters, masons, the old guys retired and the younger guys changed careers. The Trump administration also cracked way down on immigration and the Biden administration has (quietly) continued that. Since COVID, the overall labor market is just tight. So, it's harder and more expensive to get a house built and takes longer since you're usually waiting on someone to get to you.
Cities have passed a lot of restrictive zoning, raised building codes and just generally added red tape to getting a house built. The number of reviews and hearings you have to go through to get a permit has skyrocketed. Often times, the city won't let you build anything that makes sense to the market. One city I looked at, the council is on an affordable housing kick. But they don't want townhouses or condos. They want smallish houses under 300k, but the lots in the city cost 250k. Impossible to build what they want.
Costs of materials have gone up even beyond inflation. Concrete, timber and mining industries are hated by environmental groups (tbf with good reasons). And they're being more and more regulated. Nobody likes cutting down forests. But if we don't, there's no wood to build houses with. Having to import more and more from places like China who don't care about the environment. Which costs more and there's quality issues.
Rising interest rates are supposed to cut into demand and help bring it back into balance with supply. But we don't have a demand issue, we have a supply issue. On top of that, the higher rates are discouraging people with fixed lower rates from moving or selling, reducing the supply of existing houses in the market.
Big companies buying houses to rent, Airbnb, , etc has some impact. But it's really minor in most places. They aren't big enough to shape the market, they can only magnify broader issues. They have an arbitrage opportunity, because supply is so far below demand already. Reddit buys into that because it's a simple narrative with an easy villain. In some local markets, like tourist destinations: New Orleans, Austin, Orlandob; it's distorted the market.
This won't get fixed until we have a massive boost in supply. Which isn't likely to happen. We'd need major reforms in regulations and immigration. A massive investment in training workers. Increased domestic production and manufacturing. Financial reforms... These housing prices are probably with us long term.
F*** the UK job market
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I've been looking since Monday and it just feels hopeless (I know, that's 4 days, which is nothing)
The UK just feels so opportunity less atm. There appears to be so few jobs around, loads more people looking, salaries are shit compared to CoL and any job needs 1 years experience.
I'm so so fed up with it all; I'm inteligent, educated and have FA to show for it.
I'm seriously tempted to jump countries at this point, the Uk is just soul destroying atm :/
Top Comment:
There are people here who have years of experience and haven’t found a job in their field for several months (including me).. It’s mentally draining but you gotta keep applying.
Unfortunately the job market has a lot of discrimination and have been misusing “entry level” till you see the description they are asking for 2+ professional years experience.
Some companies even post of a particular role but want you to know the whole of the department (e.g a front end dev needs to know backend, Azure, Linux etc). It’s sad but recruiters know how desperate people are so they take advantage.
Okay, who you guys f'ed the Market?
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I have no idea how the price of QN from 88-80 GJN turn so down in only 4 hours. Did any of you here try to broke the market?
Okay, enough ranting. But why the price is so broken? Eventhough this is community market, aint no way people doesnt want to cash out....
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Supply versus demand? You've got a heap of people selling at once with far less buyers.
F**k housing market
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My husband said that it is how people make money in US. They buy cheap house live in it, fix it and then selling it for more. I am not US native so for me it’s just feels wrong towards people who simply can’t afford to buy it bc of a price increase.
Top Comment: Nobody running for office is willing to step in to stop the speculation in housing that is putting having a decent quality of life out of reach for most people in the US because they are too corrupt. The best you can get is someone willing to subsidize the speculators with rental and first time homebuyer assistance that goes toward the inflated rental and housing costs. There is no genuine representation in the US.