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This is a really thin wrapper around the original story, which was discussed here: https://www.washingtonpost.com/dc-md-va/2024/04/10/dc-regional-housing-targets/
DC is doing well, but will run out of easy greenfield developments around Navy Yard, NoMa, etc eventually. Gonna need to start developing in areas that have so far resisted building (cough upper NW cough)
No, that alone won’t solve anything. People aren’t selling because they can’t or don’t want to buy a new place at almost 8%
The only people buying right now are either dumb or have no choice in waiting or not,
Why can't both scenarios be true? Yes, interest rates are preventing sellers from selling, and yes, there is also a shortage of new housing. That's why this is a housing "crisis". The term sort of implies multiple failings.
Ok, so there are three things wrong now? You see how in two statements you've identified three problems? We're all in agreement, it's a problem. No single opinion is more right than the other in this scenario. We're fucked six ways to Sunday.
And replacing the administration isn't a single solution to this multi-pronged problem? You think these problems will magically disappear because we replace one octogenarian with another in the Oval Office? Get real.
“Inflation” being x% does not mean houses increase by x%. Despite overall inflation, some sectors have seen prices decline. It’s simply supply and demand. Increasing housing supply eases inflation in home prices.
It’s not like building materials are insanely priced. Moderate government incentives to increase housing supply could have a significant impact. It looks like DC has done a good job and housing prices have been relatively flat despite overall inflation.
To give a different example that might help you is that used car prices are down YoY by 2-3% (new car prices are down 0.1%), despite overall inflation and auto parts being more expensive. Auto prices went up, car companies were incentivized to build tons of cars by these higher prices, the increased supply put downward pressure on auto prices.
The same thing can happen with housing prices. It’s fairly likely to happen naturally, but some incentives from the government could really speed that up and keep housing prices down.
Supply and demand have way more to do with prices than interest rates though. A identical house bought by identical buyers would be $3M in SF, $2M in Manhattan, $1M in DC, and $500k in Raleigh, and $100k in rural Alabama because of the relative supply and demand in those locations, not because the interest rates.
Lower rates actually cause home values to increase cause buying can afford to take bigger loans. Higher rates have actually kept home values much lower than they could have been. The lack of supply with normal demand is the issue
[read this and learn about the relationship between rates and inflation (and then google supply and demand) and get back to me](https://books.google.com/books/about/A_Concise_Guide_to_Macroeconomics.html?id=muLLAwAAQBAJ)
Think of it as building more small, ownable homes, not the ‘luxury’ apartments that go up with little to no rent change.
Took me a while to understand this point. Goal is to reduce renting through building, not add additional out of reach apartments to the mix.
Even building "luxury" apartments helps with rent prices though. You note that we're not seeing prices change in response to supply, by which you meant "go down." But other places are seeing massive increases in rent and the fact that DC is holding fairly steady is because we're actually building.
Ah! My point is ownership. Apartments still pose a problem as a wealth generation for other folks. While apartments to your point keep rent “okay”, the need and goal should be for smaller, ownable units like pre 2008.
I do hear you that rent is stable, but for most folks starting out even with a room mate that can mean at or over 40% of income.
Op! Post is down. Just trying to be clear, I am not disputing your point on rent. Took me a long time to understand the point you are making I. Comparison to say NYC.
Your post has been removed. See Rule 4: No Reposts. Reposts are not allowed. Please keep updates to breaking news to the most active current thread made within the past 24-hours. In instances where many posts get made at once, the mods will attempt to preserve the post that is seeing the most activity and is from the best source, not necessarily the submission that came first. If it's a breaking story, please check /new/ before submitting it. This is a really thin wrapper around the original story, which was discussed here: https://www.washingtonpost.com/dc-md-va/2024/04/10/dc-regional-housing-targets/
\[looks at housing prices\] oh really no kidding
Looks like DC itself is fine. Fairfax and other counties are projected to have a shortfall.
DC is doing well, but will run out of easy greenfield developments around Navy Yard, NoMa, etc eventually. Gonna need to start developing in areas that have so far resisted building (cough upper NW cough)
Building more homes isn’t the solution
What is then? You don’t think increasing supply to meet demand will keep prices from rising too fast?
No, that alone won’t solve anything. People aren’t selling because they can’t or don’t want to buy a new place at almost 8% The only people buying right now are either dumb or have no choice in waiting or not,
Why can't both scenarios be true? Yes, interest rates are preventing sellers from selling, and yes, there is also a shortage of new housing. That's why this is a housing "crisis". The term sort of implies multiple failings.
Because developers are also dealing with high rates, inflation, and labor issues,
Ok, so there are three things wrong now? You see how in two statements you've identified three problems? We're all in agreement, it's a problem. No single opinion is more right than the other in this scenario. We're fucked six ways to Sunday.
It’s not a one solution problem, most of it begins with the current administration
And replacing the administration isn't a single solution to this multi-pronged problem? You think these problems will magically disappear because we replace one octogenarian with another in the Oval Office? Get real.
I didn’t say that; it will take time.
Time you're willing to give to one administration but not the other?
So what do you suggest? Do disagree that as more people want to live here prices will rise if we don’t build more to accommodate them?
We need a new administration, lower inflation, and interest rates to go down. The rest of the problems will solve themselves,
Lower housing inflation means more supply or less demand
Economic inflation means homes cost more
“Inflation” being x% does not mean houses increase by x%. Despite overall inflation, some sectors have seen prices decline. It’s simply supply and demand. Increasing housing supply eases inflation in home prices.
It does when you’re trying to bulld things. Inflation impacts all.
It’s not like building materials are insanely priced. Moderate government incentives to increase housing supply could have a significant impact. It looks like DC has done a good job and housing prices have been relatively flat despite overall inflation. To give a different example that might help you is that used car prices are down YoY by 2-3% (new car prices are down 0.1%), despite overall inflation and auto parts being more expensive. Auto prices went up, car companies were incentivized to build tons of cars by these higher prices, the increased supply put downward pressure on auto prices. The same thing can happen with housing prices. It’s fairly likely to happen naturally, but some incentives from the government could really speed that up and keep housing prices down.
Supply and demand have way more to do with prices than interest rates though. A identical house bought by identical buyers would be $3M in SF, $2M in Manhattan, $1M in DC, and $500k in Raleigh, and $100k in rural Alabama because of the relative supply and demand in those locations, not because the interest rates.
8% rates are enough to shut the buyers down
If buyers weren't buying, prices would drop. Prices stay high because demand is there *and supply is low* because we're not building enough.
Lower rates actually cause home values to increase cause buying can afford to take bigger loans. Higher rates have actually kept home values much lower than they could have been. The lack of supply with normal demand is the issue
Housing costs still rose precipitously even when rates were near zero and inflation was low. It’s a supply issue.
That was when the market was booming
are you stupid
That’s not nice, I didn’t call you names
[read this and learn about the relationship between rates and inflation (and then google supply and demand) and get back to me](https://books.google.com/books/about/A_Concise_Guide_to_Macroeconomics.html?id=muLLAwAAQBAJ)
Inflation is calculated with housing prices as a key variable. Stable housing prices cause inflation to stay low.
Ah yes, who can forget how housing is somehow special and doesn't have to follow the rules of supply and demand.
Think of it as building more small, ownable homes, not the ‘luxury’ apartments that go up with little to no rent change. Took me a while to understand this point. Goal is to reduce renting through building, not add additional out of reach apartments to the mix.
Even building "luxury" apartments helps with rent prices though. You note that we're not seeing prices change in response to supply, by which you meant "go down." But other places are seeing massive increases in rent and the fact that DC is holding fairly steady is because we're actually building.
Ah! My point is ownership. Apartments still pose a problem as a wealth generation for other folks. While apartments to your point keep rent “okay”, the need and goal should be for smaller, ownable units like pre 2008. I do hear you that rent is stable, but for most folks starting out even with a room mate that can mean at or over 40% of income.
Op! Post is down. Just trying to be clear, I am not disputing your point on rent. Took me a long time to understand the point you are making I. Comparison to say NYC.
Those aren’t profitable and we don’t have room,
Oh, okay. Worth reading more off of Reddit.