So a slightly more sophisticated analysis would be "how does housing appreciation in each market compare to stock market appreciation over the same time period" - but the description in the article leaves that out, looking just at historical incomes/costs/rents. In a world where homebuying is increasingly out of reach of a larger percent of people, you'd expect it to be more disconnected with average or median income/rent, and more pegged to higher percentiles.
I mean, just about every house has an owner that lives in it.
Homes are expensive. Most people just can’t afford a big slice of land and home. They have to accept they will have to make do in an apartment that may be shared. Should the home they deserve just magically appear?
You can look at the percentage of people in the under 45 bracket, and it's been trending down for decades. The total is probably remaining high because the lifespan was going up.
What does this mean, exactly? They do have the right to purchase on at fair market value for structure + land - it's just they can't afford it. The land is crazy expensive.
I'm assuming "have one commissioned" is suggesting something about supply/zoning, but it's not clear to me what, exactly - if someone could afford to build or buy a house 3 miles from Dallas, should they also have the right to pay the same price to build something in the middle of Dallas?
Fair is the key word. The present government enforced scarcity is neither a free nor a fair market. A free market lets participants take the economically optimal choice[0]. A fair market cannot require kowtowing to the arbitrary and capricious whims of a planning board.
Ergo I hold that the respective governments and their zoning/construction policies are trampling on the individual right to a fair market and worse are creating grotesque amount of economic inefficiency, and by extension social damage, in the process.
[0]Trivially: adding units to a lot to capitalize on a high price of land relative to materials + labor.
Who is going to build these structures? Tradesmen today are already overbooked. And they’re going to work on projects that pay the best. That’s probably not affordable housing projects at scale.
The point is between land, materials, and labor, a lot of people can’t afford what they think they deserve.
They could be overvalued relative to rent which is a much more compelling case, since renting a property is a near exact (not perfect, but close) substitute for owning one, on a practical utility level.
Where I live (not USA), monthly rent is about 0.1% - 0.2% of the price value of an apartment. For example, I pay about 350 USD/month and the owner is (trying) to sell the apartment for 180,000 USD.
The Moodys analysis, as I understand it, is house prices relative to median incomes in a market.
I don’t think it’s a fluke that the overvalued markets correlate to regions that a lot of tech has moved over the pandemic like Boise, FL, TX and Nashville.
If they’re measuring current house prices to 2020 and 2021 tax data then they may be missing an influx of income in the denominator as well.
Stocks would be an obvious point of comparison. They’re down but real estate prices remain up.
The argument for overvalued housing is that everyone got antsy during the pandemic and wanted to change houses and change neighborhoods, but that will settle down now that the pandemic is waning.
Tech stocks seem to be falling because the pandemic-driven surge of screen time is fading now that the pandemic is waning.
So: is real estate entirely different from stocks? Or will it see a similar post-pandemic slump but just has more lag?
Tech stocks falling won't necessarily lower home prices. The number of tech employees is growing rapidly, but the number of houses for sale isn't, so if ten years ago it was enough to win the bidding war against the top 10%, now you compete with the top 5% and their finances, even with lower stocks, are a lot better. By 2050 it will be a competition among the top 1%.
