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Lock downs weren't a cost, but a down payment, so they could paper over the system with a few trillion without the velocity of people going out ... It bought down personal debt and increased household savings over years. Also served to soft launch the China decoupling and install a fake president who could eat the inflation. Completely staged by the national security state... All part of the plan.
Housing is an interesting animal, all the variables of macro and then some because of migration even within the US, local regs, and demographics. Prices have been pretty flat a few years to break the ponzi cycle, building happening, now net-negative migration. I suspect lower rates will go hand in hand with boomers downsizing and it'll remain flat for the foreseeable.
Trump just said the quiet part out loud that supports my theory they try to keep them flat while raising wages
If he were to declare a housing emergency and build a bunch of houses it would evaporate the net worth of people who currently own them, that's in conflict with younger people to get housed.
If he were to declare a housing emergency and build a bunch of houses it would evaporate the net worth of people who currently own them
Not necessarily. If he forces neighborhoods to allow more density, it instantly increases the value of any plot of land that previously held a single family home but now can hold enough condo units for 6 families.
A lot of homeowners still wouldn't be happy, since they want to be able to control the "character" of their neighborhood---but the increase in land value will at least make that pill easier to swallow.
That would be increased unit supply and still create downward price pressure on units, doubling the density thereby doubling the units makes the land is less valuable if you need less of it to build a structure
Density is still a local thing generally since there's roads/parking/water/sewage/power to consider, can't imagine that working at scale.
Character is a factor too yea that would really crater land/home values, if my neighbors cattle pasture all of a sudden became a subdivision I would be incentivized to buy a bigger parcel of my own somewhere else. That'd lower the value of my current house further, both by unit, and the desirability of the land underneath it.
He seems to be focused on the mortgage scam, using Fanny/Freddy and Treasury policy to let buyers (exit liquidity) in.
Yeh the mortgage approach is dumb. Just another demand subsidy not coupled to any supply increases.
In any case, if it's coming down to local zoning issues, I don't see how the federal gov't can really influence that other than to threaten to withhold federal grants to states who don't force cities to change their zoning laws.
I think that's the correct approach, there's not a true supply issue, and there's only so much pre-empting of local issues you can do and not crater prices.
Keeping prices flat is already a good first step, we've chopped for a few years now already so wages can start to catch up.
Net-negative migration is also unlocking supply.
Also jawboning and flat prices will shake out a lot of speculative demand to unlock more supply, combine with boomers downsizing, existing supply can transfer.
I also suspect things like Florida are doing to gain more traction elsewhere, maybe with a federal nudge... really big homestead exemptions that let property taxes punish investment units but not single-families. Good for Bitcoin if this happens, better to hold coin than pay property taxes that are likely to go up on houses you don't live in.
Bookmarking to watch later.
Its clear to me that today we are still seeing the reprocussions of the global lockdowns and massive fiat printing. Few people even mention this. I remember talking to my sane coworkers about the bill coming due for that obviously terrible policy over the next decade.
One reason the rulers and bankers can get away with it is because of short memories. Others include the overall ignorance of how the fiat/government and crony capitalism systems work. The other is that the blowhards just make it into a personality thing. Trump blames Biden, Biden blames Trump. The masses get focused on the players and not the game. The masses are like fans of pro-wrestling that believe it's all real.
I'm not sure how it breaks but the farse seems unsustainable to me. The problem to me seems that the idea of socialism seems to have more legs with younger people than the real path forward. Reflecting state monopoly and embracing freedom, liberty, and responsibility.
Housing Crash FalloutHousing Crash Fallout
At least in California the supply of homes has never recovered. My friends in the real-estate market tell me that even with a net decrease in migration in California we have a housing shortage which drives prices up. Prices that are already inflated due to monetary policy.
California has insane regulations and oppressive permitting for home builders as well as commercial builders. This is across the state but worse in the large metros. It's a big reason many are leaving the costal cities to live in smaller interior cities in the state. Which is driving up costs there as well.
There is a lot of debate about what will happen if interest rates are cut. It will result in more houses going on the market but it won't magically make more housing appear. But it could help as many people that are empty nesters are sitting on their big houses because it would be stupid to sell now.