Nothing in between

From NPR:

The Housing Shortage Is Significant. It’s Acute For Small, Entry-Level Homes

America’s roaring real estate boom is leaving millions of would-be homebuyers out in the cold. The problem is most severe in that corner of the market that once propelled the American dream: the small entry level home. 

“I would like to a have a space with a yard, like 900 square feet,” says Mat Pergens, 39, who repairs and installs garage doors in and around Reno, Nevada. “Simple cabinets, simple countertops, Shag carpeting. I don’t care. I just want four walls and a roof that I can afford.”

But his aspiration for a modest starter home is completely out of reach. The country is nearly 4 million homes short of demand, according to the mortgage giant Freddie Mac.

Pergens and his wife Amanda have a six-year-old daughter and another child due this month. She stopped working as a pastry chef during the pandemic. They rent a small two-bedroom apartment. “We build all these fancy homes,” Pergens says. “Fancy, fancy houses…and low income apartments. And there’s absolutely nothing in between.” 

That no-frills entry level home that Pergens describes is just about vanishing in America. Once it was the stepping stone on a path to upward mobility for a huge swath of younger Americans. In 1982, 40% of the country’s newly constructed houses were entry level homes. By 2019, the annual share had fallen to around 7%. 

With a few brief exceptions, the decline has been as steady as a metronome, says Sam Khater, Freddie Mac’s chief economist. “It’s a huge problem if you think about the fact that home equity accounts for the bulk of wealth for the overwhelming majority of Americans.”

This entry was posted in Economics, National Real Estate, New Development. Bookmark the permalink.

60 Responses to Nothing in between

  1. Hold my beer says:

    First

  2. grim says:

    It’s important for the right and the left to find consensus, so I’ll just leave this one right here..

    https://www.newsweek.com/will-liberal-hypocrisy-over-vaccine-mandates-wake-woke-opinion-1625048

  3. Hold my beer says:

    The price of raw land and cost of putting in the infrastructure makes it impractical for new construction starter homes. People could buy condos as a starter home pre 2003, but even those are hard to find nowadays. No wonder so many people are rolling the dice and buying digital currency and tech stocks. Speculating maybe the only way they can pay off student debt or get a down payment

  4. grim says:

    We did the math on that a few years back, to show it was simply impossible to build a starter home on a costly piece of land. Can’t find the post, but you ended up with the an incredibly small price difference between a McMansion and 1000 square foot starter home.

    The marginal cost increase on another 1000 square feet was so minimal, it would be absurd not do build it.

  5. Hold my beer says:

    Like a cult, Cognitive dissonance is strong on both sides.

  6. Hold my beer says:

    5 or 6 years ago a builder was putting up 3,300+ Sq feet houses from the mid 300s in my town. Same builder is now putting up same houses on a busy street across from a high school from the 600s. Crazy

  7. Grim says:

    https://jamanetwork.com/journals/jama/fullarticle/2784013

    83.8% of the population with antibodies?

    Is the delta wave what gets us to herd immunity?

  8. leftwing says:

    “Lib…You don’t need to be admin to run a visual basic script…Here it is…”

    I truly love this blog sometime LOL.

    Followed of course by “The Great Pumpkin says:”

    Be quiet Michael, the adults are talking.

  9. 40 + year realtor says:

    In the early 90’s I was involved in a partnership that built entry level housing in Bergen County. Mostly built in Teaneck and Englewood. A 36 × 24 bilevel on a 50 × 100 lot sold for around $180,000. Lots were around $50,000 and construction cost of around $75,000. House had 3 bedrooms, 2 baths, garage, central air, cathedral ceiling and deck.

  10. leftwing, fighting filters again says:

    “We did the math on that a few years back, to show it was simply impossible to build a starter home on a costly piece of land.”

    Funny, I pulled together a file of houses we did for my youngest as he is looking at careers…cleanest example was a kn0ckdown purchase of 840…direct costs of build was 843 and that was dirt cheap…flat lot, minimal hardscaping, etc. Soft costs of c0mm1ssions, closing costs (2), and interest/finance about 250….We used a lot of borrowing on that one so that number could come down….

    [1 of 2]

  11. leftwing, fighting filters again says:

    Eh, I give up, too nice a day to fight these filters….bottom line unless you can get lot cost down to 200 or so and a tract to disperse direct costs over many houses I don’t see how you can get into starter territory….and at that point from a profit perspective you’d be better off jamming two lots into one and doubling the house size and purchase price….

  12. BRT says:

    left,

    we need to bring back l337 speak.

  13. leftwing says:

    LOL

  14. The Great Pumpkin says:

    Ahh, the adults..

    I’m one of the few people in America questioning why so many people are moving to the south and west in an environment of massive climate change. Most adults are idiots. Go move to Florida with all the other geniuses.

    leftwing says:
    September 4, 2021 at 8:51 am
    “Lib…You don’t need to be admin to run a visual basic script…Here it is…”

    I truly love this blog sometime LOL.

    Followed of course by “The Great Pumpkin says:”

    Be quiet Michael, the adults are talking.

  15. 3b says:

    I’m one of the few people in America, blah, blah, . His total lack of self awareness and illusions of grandeur never fails to shock.

  16. Pumpkin Pie says:

    He’s probably the only person in America to brag about tigerwood decking.

  17. BRT says:

    Yes, the only place safe from climate change is in NJ, preferably next to a swamp.

  18. 3b says:

    BRT: Interesting opinion piece in the WSJ today on climate change. It’s worth a read.

  19. The Great Pumpkin says:

    Yup. It’s not a bubble.

    “John Paulson’s investing advice: “Buy a home for $1 million”

    The man who became a billionaire by betting against the housing market in 2008 has declared it’s a good time to invest in real estate.
    John Paulson, an investor best known for his “big short,” gave his investing advice in the Sept. 2 episode of “Bloomberg Wealth with David Rubenstein.”
    Paulson said that if you have $100,000 to invest right now, you should put it in real estate — despite the wild market.
    “I always say the best investment for an average individual is to buy their own home,” he said. Paulson recommended putting that hypothetical $100,000 toward a down payment. “If you take that $100,000, put 10% down and get a $900,000 mortgage, you can buy a home for a $1 million,” he said.
    He also pointed out that home prices are surging, citing a report from last month that home prices have risen as much as 20% recently: “So if you bought a home for $1 million with $100,000 down and the home was up 20%, that’s $200,000 on a $100,000 investment.””

    https://apple.news/AkVx1LRIHThCYlEmACOEJwQ

  20. The Great Pumpkin says:

    Based on the amount of people moving to these locations, I am in the “few.” It’s a bad long term move, esp people moving to the desert during a massive drought.

    3b says:
    September 4, 2021 at 10:29 am
    I’m one of the few people in America, blah, blah, . His total lack of self awareness and illusions of grandeur never fails to shock.

  21. The Great Pumpkin says:

    I said northeast. You are not getting the massive category 5 hurricanes and you will have access to water. Water matters, esp this century.

    BRT says:
    September 4, 2021 at 11:33 am
    Yes, the only place safe from climate change is in NJ, preferably next to a swamp.

  22. The Great Pumpkin says:

    Man, imagine valuing dollar bills over lowering carbon emissions. You can’t help individuals obsessed with money to the point in blinds them into dumb positions like this guy.

    “Bet­ter in­frastructure, fed by im­proved tech­nol­ogy and wealth, does more to pro­tect lives and prop­erty than cut­ting car­bon emis­sions. To­day, hur­ri­canes around the world cause dam­age worth 0.04% of global gross do­mes­tic prod­uct. And even ac­count­ing for the re­cent es­ti­mate by the U.N. In­ter­gov­ern­men­tal Panel on Cli­mate Change that the pro­por­tion of strong hur­ri­canes will in­crease, the de­struc­tion dealt by these storms is still pro­jected by a study in Na­ture to drop to 0.02% of global GDP in 2100 as the world econ­omy gets richer, mak­ing in­frastructure more re­silient. Elim­i­nat­ing cli­mate change would only slightly speed up that de­crease to hit 0.01% in 2100.”

    https://www.wsj.com/articles/hurricane-ida-henri-climate-change-united-nations-un-galsgow-conference-natural-disaster-infrastructure-carbon-emissions-11630704844?st=y8aq3dmbnkcchjf&reflink=article_copyURL_share

  23. Juice Box says:

    Don’t tell Dr. Fauci.

    Not a single mask to be seen in the crowd at the Penn State @ Wisconsin game. 80,321 capacity at Camp Randall Stadium………

  24. Juice Box says:

    Closer to home @ Rutgers vs Temple game in Piscataway…Masks are not required in outdoor seating locations. …only indoors…

  25. Juice Box says:

    Masks are not required in outdoor seating locations @ the Rutgers home game today vs Temple…Crappy FIOS TV in not broadcasting it either.

  26. Libturd says:

    Stream Fox Sports.

    It is on Fios, just a wacky channel in like the 700s. Check the scarlet knights footuball forums at rivals-dot-net.

  27. leftwing says:

    “He’s probably the only person in America to brag about tigerwood decking.”

    But, but, but….the COLUMNS!!! People stop to take pictures!

    LOLOLOL.

  28. leftwing says:

    “83.8% of the population with antibodies?”

    “Don’t tell Dr. Fauci. Not a single mask to be seen in the crowd at the Penn State @ Wisconsin game.”

    Fauci is an incompetent lying fcuk. I watched a presser of his a few weeks ago where he was still stating we need VAX levels of 85+% of the population to “beat this thing”.

    The lack of recognition – still – on immunity conferred by infection is astounding.

    But, the gub’mint had a sole focus in mind and it and its minions and sheep were there to silence any discussion of facts or contrary evidence.

    Jab, baby, jab! And if you don’t agree you are public hazard number one, killing our babies….

    Fcukers.

  29. The Great Pumpkin says:

    I was not bragging. I had to justify the price to the haters bashing the price I paid. Open your eyes.

    leftwing says:
    September 4, 2021 at 1:13 pm
    “He’s probably the only person in America to brag about tigerwood decking.”

    But, but, but….the COLUMNS!!! People stop to take pictures!

    LOLOLOL.

  30. The Great Pumpkin says:

    And God forbid you like and have pride in your home…

  31. grim says:

    Fauci vs. the FDA is looking all sorts of stupid.

  32. Ex says:

    The Wild West is lovely right now. Cool breeze coming off the Channel Islands down the fertile valley across the fifty acre farm and into my backyard.

  33. Juice Box says:

    Two weeks now with this RSV cough…..won’t go away. Kids are fine just me and my wife….Its annoying mostly… People think you have covid if you cough….`

    Seems to be spreading too…
    https://www.nbc15.com/2021/09/02/uw-health-warns-explosion-rsv-patients/

  34. BRT says:

    Those long persistent coughs do as much lung damage as covid. It’s not good, but also not the end of the world because your lungs have extra capacity built in.

  35. grim says:

    Blame the illegals for the rsv, it’s a good thing we have a vaccine in stage 3 trials.

  36. BRT says:

    All the shielding ourselves from pathogens since last march has put a wrench in seasonality trends and the transmission of RSV is likely worse because of it. Robust immunity is stronger with continual exposure to pathogens. I think the flu is due for a major comeback this year.

  37. The Great Pumpkin says:

    States That Cut Unemployment Benefits Saw Limited Impact on Job Growth
    Half of U.S. states ended enhanced unemployment insurance payments early ahead of nationwide termination of benefits for millions of people

    https://www.wsj.com/articles/states-that-cut-unemployment-benefits-saw-limited-impact-on-job-growth-11630488601

  38. The Great Pumpkin says:

    That’s a part of it, but make no doubt about it, the baby boomers leaving the labor force is having an impact on the supply of workers leading to a higher cost. Read this.

    https://www.everycrsreport.com/reports/RL33661.html#_Toc205283107

  39. The Great Pumpkin says:

    “The quit rate for U.S. workers is the highest in decades. Baby Boomers are leading the exodus.”

  40. 3b says:

    Mu variant of corona virus identified in California.

  41. Grim says:

    There has got to be a revenge of the nerds joke in here somewhere.

  42. Grim says:

    Omega Mu – so close

  43. Juice Box says:

    Funny movie could never be made today….

  44. Grim says:

    House around the corner listed for $130k more than they paid for it 10 months ago.

    Heard another snarky realtor commercial on the radio. We are in for a world of hurt.

  45. 3b says:

    Grim : It’s different this time, surely you understand that.

  46. Ex says:

    Llambda Llambda Llambda

  47. 3b says:

    CBS News is reporting we have planes ready to evacuate Americans and Afghan Green Card holders but the Taliban won’t let the planes leave. That sounds like a hostage situation.

  48. The Great Pumpkin says:

    I was telling people Wayne was a great value couple years ago. It’s only the beginning of this run.

    Grim says:
    September 5, 2021 at 3:56 pm
    House around the corner listed for $130k more than they paid for it 10 months ago.

  49. The Great Pumpkin says:

    6. “This is the echo of the baby boom. I lived through the baby-boom years and that equity-market move, it was magnificent. I do feel we are in the same place now.” – predicting the bull market will continue for another decade.

    7. “We have never been in a period in history where we’ve had five major innovation platforms, involving 14 different technologies, all moving into “S” curves, the curves feeding one another. We’re in a period of explosive innovation. ”

    8. “Are we in a bubble? We couldn’t be further from it. The average investor doesn’t understand how provocative these next five to 15 years are going to be, as these S curves feed one another and enter exponential growth trajectories that we have never seen before.”

    https://markets.businessinsider.com/news/stocks/ark-invest-cathie-wood-tesla-zoom-robinhood-crypto-bubble-paulson-2021-9

  50. The Great Pumpkin says:

    Unique opportunity to invest. Take advantage of the time and place people. It’s a great time to be building a base for your long term investment.

    My recommendation is ark funds. Don’t have to be a genius, don’t have to do anything special. We are just at the right time and place to follow the smartest person in the room in a time of extreme growth due to major disruption.

  51. 3b says:

    Pumps: I think you may have missed Grim s point. Just an observation .

  52. The Great Pumpkin says:

    Grim, can be wrong, no?

    I’m telling you this is no top of the bubble. Laugh it off, but how many times have I been correct? If this was peak, I would sell my multi right now. It’s not anywhere close.

  53. The Great Pumpkin says:

    This is a time to put money to work. It’s going to be hard to get ahead in the future as human labor becomes less and less valuable. Start investing so you are on the right side of the table.

  54. Grim says:

    This isn’t the top, but we are closer to the top than the bottom.

  55. The Great Pumpkin says:

    ARK Invest’s Cathie Wood on Thursday defended her innovation-focused strategies in the wake of investors betting against her funds.

    “I don’t think we’re in a bubble which is what I think many bears think we are,” Wood said Thursday on CNBC’s “Tech Check.” “In a bubble, and I remember the late ’90s, our strategies would have been cheered on. You remember the leap frogging of analysts making estimates one higher than the other, price targets one higher than the other. We have nothing like that right now. In fact, you see a lot of IPOs or [special purpose acquisition companies] coming out and falling to earth. We couldn’t be further away from a bubble.”

  56. The Great Pumpkin says:

    If this is a bubble in stocks or real estate, it will be the first bubble I have seen where the majority were expecting it.

  57. Juice Box says:

    Cancel culture and the millennials have infected my favorite show Billions…episode ain’t over yet… I doubt they win it’s TV after all….

  58. The Great Pumpkin says:

    For decades, China pur­sued a brand of cen­trally planned eco­nomic poli­cies that the U.S. was happy to stand back and watch.

    But a sub­tle yet crit­i­cal re­cal­i­bra­tion by Bei­jing be­gun al­most 15 years ago has re­cently set off alarms in Wash­ing­ton about Chi­na’s goals and tac­tics—not least be­cause China is catch­ing up in many cases by adopt­ing past U.S. ap­proaches.

    Chi­nese cen­tral plan­ning once high-lighted tar­gets for farm and fac­tory pro­duc­tion, So­viet-style. Bei­jing still uses five-year plans but now di­rects re­sources into ba­sic sci­en­tific re­search with in­dus­trial ap­plications.

    Chi­na’s foray into ar­eas like ar­ti­fi­cial in­tel­li­gence and robotics once dom­i-nated by the U.S. helps ex­plain the Biden ad­min­is­tra­tion’s tilt to­ward in­dus­trial de­vel­op­ment poli­cies, like spend­ing gov­ern­ment money to re­assert com­pet­i­tive­ness in semi­con­duc­tor pro­duc­tion.

    “Decades of ne­glect and dis­in­vest­ment,” Pres­i­dent Biden lamented in June, “have left us at a com­pet­i­tive dis­ad­van­tage as coun­tries across the globe, like China, have poured money and fo­cus into new tech­nolo­gies and in­dus­tries, leav­ing us at real risk of be­ing left be­hind.”

    Bei­jing also em­u­lates Wash­ing­ton by pour­ing gov­ern­ment in­vest­ment into its own ver­sions of U.S. gov­ern­ment re­search pow­er­houses such as the Na­tional In­sti­tutes of Health, the De­fense Ad­vanced Re­search Projects Agency and the Na­tional Aero­nau­tics and Space Ad­min­is­tra­tion.

    “China as­pires to be the first ‘gov­ern-ment-steered mar­ket econ­omy,’” Uni­ver­sity of Cal­i­for­nia, San Diego, pro­fes­sor Barry Naughton writes in his newly pub­lished book, “The Rise of Chi­na’s In­dus­trial Pol­icy, 1978 to 2020.”

    https://www.wsj.com/articles/chinas-industrial-planning-evolves-stirring-u-s-concerns-11630850402?st=fvfcx6ncid1qomt&reflink=article_copyURL_share

  59. The Great Pumpkin says:

    Last paragraph is poweful sh!t.

  60. The Great Pumpkin says:

    Can’t wait till “cancel culture” cancels itself out. Need positive energy in a fight for a better future, but “cancel culture” is driven by negative energy. F that. You can’t erase history, and shouldn’t, you should only learn from the mistakes of the past.

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