The Economy

I know quite a few millenials with savings who can't find a decent home they can afford, even with varying freedoms to work remote, and are resigned to renting for the forseeable future. Renting market isn't great now, either. This is different from the late 2000s bubble, and wages don't seem to be increasing at near enough of a rate to keep up with housing prices and scarcity, so when will things change? Between this and the childcare industry's economic problems, it doesn't sound like a good time to be a growing a young family. Just seems like the pandemic is widening the already shameful gap between the haves and the have-nots in this country.

Will Real Estate Ever Be Normal Again?

For Amena and Drew, their Austin home-buying odyssey was just beginning — a monthslong ordeal that would teach them quite a bit about the cruel realities of America’s housing market, in which home prices nationwide have risen by an astonishing 24.8 percent since March 2020. And this first lesson, appropriately enough, demonstrated just one of many ways that the old, measured rules of home-buying no longer applied — that the cutthroat competitiveness that once defined only a few U.S. markets (San Francisco, New York, Los Angeles) had now become standard across the country, as the median home price in small- and medium-size metropolitan areas rose by jaw-dropping levels: Boise, Idaho, 46 percent; Phoenix, 36 percent; Austin, 35 percent; Salt Lake City, 33 percent; Sacramento, 28 percent.

By bidding on two properties she had never visited, in a city nearly 2,000 miles away, Amena joined the 63 percent of North American home buyers in 2020 who made at least one offer on a home that they had never stepped into.

 

That article makes it sound like deciding to live in Austin, Salt Lake City or Phoenix is choosing a backwater.

Those are red hot markets.

I assure them if working remotely, there are a bunch of mid-sized cities that are affordable.

New York Times writers….

 

LOL ... EWWWWWWW ...

 

Because FoMoCo wants to worry only about trucks, SUVs and crossovers. I vehemently disagree with the approach, but someone in marketing and/or the beancounters have convinced the family that they produce bigger profit margins and have more interest from buyers.

Nissan discontinued the Z for years, until the Altima sold enough units to get the manufacturer out of trouble. It realized that people wanted more than just trucks and SUVs. Wondering how long it will take FoMoCo to realize the same?

 

My parents bought a house three years ago in a town of 1600 people, located 70 miles from downtown Nashville and 10 miles from the county seat. We are talking certified country.

And yet in three years their bog-standard 3 BR 2 BA has appreciated a little over 40 percent. It is insane.

 

But, again, we’re talking the Nashville region.

Remote work gives people the option of now choosing affordable places. They choose to live in hot markets. Which is fine. But let’s not declare America wholly unaffordable because houses near places that have Whole Foods markets are expensive.

The best choice for a lot of Americans, and frankly our democracy, would be for a lot of young adults to move into areas that don’t feature $10 coffees. Their quality of life would improve and we’d reshape the electorate.

I’m not holding my breath, but it would be a revolution if it was done en masse.

 

The only thing Nashville about where they live is the TV lineup. The biggest business in town is a Love’s truck stop.

 

The pandemic real estate bubble (and the boom/bust mentality that goes with it) looks national.

How long before it pops is anyone's guess.

Feels like we're only about halfway through whatever it is Covid will do to the economy.

 

The bubble already deflated out here in the sticks. My wife deals with a lot of estates, and home prices are down 25-30 percent from their summer highs.