A recognition (debate, but at least some recognition) of what is called "The Missing Middle" (medium density housing, alternative options, not just SFHs and "high rise").
A proposal is put forth, and there are screams from homeowners, because the study shows that the Average Property Value in the urban growth area will _slow_. Not decrease. But instead go from 12% YoY growth (which is insane) over the past 10 years to, if all measures are put into effect, an estimated 7% YoY growth.
Somehow these homeowners have got it into their head that they "have a right to" property value growth which, at its worst, will outpace inflation _by a factor of TEN_.
So back to the drawing board we go...
But so far, that hasn't really created a housing affordability crisis... yet. A lot of the impact has been mitigated by falling mortgage rates and rising wages. Let's just take Tampa, as one of the hotter housing markets. Since 2014, median listing prices have gone up 57%.[1] Adjusted for inflation[2], that's 49% real price growth.
But over the same period, average mortgage rates have fallen from 4.49% to 2.95%[3]. Meaning for the same house cost, the monthly payment on a 30-year fixed mortgage has fallen by 18%. In addition national median incomes have gone up over the period by 10.5%[4]. (And almost certainly more in Tampa specifically.)
Therefore housing affordability has only declined by about 14% for the median household in Tampa. All during an extremely hot housing market. Again, that's still indicative of some recent bad NIMBY policies. If housing supply was perfectly elastic, things like lower mortgage rates and higher wages would benefit consumers instead of inflating property prices.
But there's no indication that housing has become drastically more expensive in "flyover country". This conclusion can be spot checked by comparing national consumer expenditure surveys over time. The percent of after-tax income spent on shelter has actually slightly declined from 17.8% to 17.0% during the 2013-2019 period.[5]
[1] https://www.zillow.com/tampa-fl/home-values/ [2] https://www.bls.gov/data/inflation_calculator.htm [3] http://www.freddiemac.com/pmms/pmms30.html [4] https://fred.stlouisfed.org/series/MEHOINUSA672N [5] https://www.bls.gov/cex/2019/standard/multiyr.pdf
In decades past, this might not have been so evident because the entire US was growing and opportunities were available everywhere, but as the disparity of economic growth between regions of the US diverges, it makes sense for people to value real estate in those regions more. And if you think the disparity is going to grow in the future, then you might be willing to risk even more to buy in.
I have noticed an irony that if housing in an area is really cheap you probably won't be able to afford to live there unless you are already a retiree who doesn't care about long emergency response time - because the highest paying job in the area is say a resturant manager at the local diner.
Before the pandemic economic growth was very urban concentrated - remote working normalizing might reverse the trend but there are still some service and infastructure demand constraints - chances are they need reliable high speed internet.
Take Dallas Texas as an example. It wasn't affected very much by the 2008 bubble (probably because of high property taxes). The median price in 2000 was ~$100k and is now ~$240k [1]
Interest rates in 2000 were 8% [2]. They're currently 2.94%.
=PMT(0.0294/12, 30 * 12, -240000) # TODAY
$1,004.10
=PMT(0.08/12, 30 * 12, -100000 * 1.025^20) # 2000 with 2.5% inflation
$1,202.36
WOW! House prices are cheaper today! Not really. Let's take taxes into account.
Property taxes:
=240000 * 0.0208/12 # TODAY
$416
=100000 * 1.025^20 * 0.0208/12 # 2000
$284
Insurance is about $30 a month more today. And since the mortgage interest today is less than the $12k standard deduction, it probably won't get any tax benefit today. In 2000, it'd be about $100 a month.
But then there's the opportunity cost, too. Today your down payment is ~50% larger. The opportunity cost is about $100 more per month.
$1,004 + $416 + $30 + $100 = $1550 # TODAY
$1,202 + $284 - $100 = $1386 # 2000
It's only a ~12% difference. If you're in a more pricier market, the tax deduction was much juicier. Real monthly payments are ~50%+ more expensive. If you're an investor, cap rates are trash. Plus you're taking out debt to income that at any other point in history would seem insane.
The monthly payments aren't the big issue. The real trick is that by lowering interest rates from ~8% to ~3%, the Fed created $14T in real estate wealth out of thin air. That's where most of the inequality really stems from. For most people, their house represents the majority of their life's savings. If you're older and own a home, the Fed doubled your wealth. If you're younger and don't own a home, the Fed make increased your housing price by 5-20%, devalued whatever savings you had, and forced you to take on extreme levels of debt for a similar monthly payment on a house (which you probably don't have, because in real terms you need a ~50% bigger down payment).
https://www.bloomberg.com/amp/news/articles/2020-09-16/the-t...
The media talk of diaspora, which is based on narrative and anecdote, needs to be measured and quantified before we can treat it as something that drives housing prices.
That's a misleading statistic. It simply means that the houses getting sold has shifted towards the higher end of the market. If you look at the price for the same house it's gone up somewhere around 3% YoY.
And sorry, but in markets like mine, over the last year the average house has spent about 72 hours on the market and "the same house" has been sold multiple times in the last decade each time for approximately a 20% increase.
If you come with enough money down, you can get a hard money loan with 70% loan to value (30% down) 1 day after bankruptcy or foreclosure.
Maybe if you stop looking at like 2018. But my on-the-ground analysis living on one of these cities is cost of housing has fucking exploooded. I built a house just two years ago, which I thought was incredibly expensive at 2 times the median home price in the area. I had it in the back of my head that I was insane to pay so much for a house, but since I could easily afford it, I went ahead with it.
Now, the median price has shot up by 25% and there are literally no new houses available for what I paid. My neighbors are relocating after only a year in their house and sold their house for 20% over what they paid new. The new construction 3 miles down the street from me starts at 30% more than what I paid, and a few are double or more. Meaning, 3-5x the median for the area.
All of this is trickling down to the rest of the area. Houses that went for $130k in 2015 have sale prices in the $200k range. We're talking 60s era ranch houses that haven't been updated since the 90s.