Renting out a single family home for longer than 3 months at a time without living in it should be an actual crime, or at least extremely (50-80%) tax heavy (the taxes then going towards house subsidies). Owning an unoccupied home should be taxed even worse. A corporation can count as a single person, so a property management company can own a single house OR as many apartment complexes as they want before tax punishment.

The modern version of Airbnb as a business model (people owning 5+ houses to rent for daily prices often in excess of hotel prices with none of the hotel benefits + “cleaning fees”) should have millionaires hanging from trees.

I foolishly believe the above two policies alone would cut home prices by at least half.

I think that’s part of it, but a larger part–having been a local reporter–is that government is run by people trying to keep property values high. In cities, that’s real estate developers and landlords. In suburbs, it’s typical homeowners.

Most construction brings down property values: increase supply=lower demmand=lower prices. There is therefore a strong political will to oppose ALL new construction.

The second concern is: how do we keep poor people out? Things like minimal lot sizes are designed to keep the prices up and limit the amount of new citizens.

The third concern is: how can we spend the most of our money on OUR children’s education. Many suburbs are spiritually and economically designed to do ONE thing: get kids into good colleges. That means high property valuations across the board so the most money can go to individual children’s education. There are very many suburbs people don’t even move to UNLESS they’re having children, and they move out when their kids leave school.

If you build an affordable apartment building in one of these suburbs and children start moving in, what happens? THe money from the rich houses is now diverted away from the rich children and towards the poor children, who are now paying much less in taxes. With schools less valuable, the property value of ALL the houses go down. “We’re all in this together,” the rich people realize, refering only to themselves, of course.

I do like the oligopoly narrative, but we have to face that we are facing MASSIVE FAILURES on a social and political levels. Everybody is scrapping for themselves and building walls and pulling up ladders and basically being as self-interested me-and-mine as possible, at the same time money is becoming the dominant form of political activity with which the masses of regular people can not compete.

They realized someday people pay off mortgages. No one’s ever paid so much in rent that they stopped having to pay.

This is nonsense. Corporations own 10% of housing. There is pressure but it’s not a primary driver people need to stop parroting this

Homes are treated as speculation and investments. NIMBY ism abound when it comes to density. Expensive labor for new home construction.

These are the primary drivers.

Really basic 100m2 house is 450.000€ here. No basement no lot. Construction is stupid expensive since ukraine war started. Add to this, everytime there’s a sale several people demand processing fees in % of the value including state… This drives prices only up.

Doesnt help that china built their economy on real estate in the last decades, consuming lots of the raw materials. Also ever stricter regulations like insulation, heating, electricity is a point.

Companies buying homes shouldnt exist but we are at 650-750k for a 4 person home with barely any lot without that already.

for a brief description this is very impressive.

Eh… I think this puts a bit more emphasis on the economic impact of US Steel to the overall economic outlook during the post war period.

The steel industry was more important to the US economy from the later 1800s to the post war boom, but a lot of the growth in the US market started to diversify way before the Vietnam war. Automation and the popularization of mini mills hit the US steel industry harder than anything.

The same thing goes for the accusation of “printing money” being the real cause of inflation. In reality the rapid rise in inflation was one of the reasons Nixon moved to fiat currency. The Brenton Woods system was leading to American gold reserves being drained by other nations right when Germany and Japan began to recover during the post war period.

Tax cuts for the rich and bank deregulation create an artificial boom in the 1980s that lead to a stock market ‘correction’ in 1987.

Tax cuts and deregulation is probably the most significant reason we see the wealth gap start to take off. As well as a general change in attitude of CEO like Jack Welch who popularized the shareholder value movement in American business. He pioneered mass layoffs, cuts to pension, and investment cuts to increase paper prophets. Combined with the legalization of stock buy backs and you have today’s modern economy.

So… Jimmy Carter is to be blamed? /s

Yes our earning power is trash compared to the 70s, and I think there are more reasons for that than what you stated. But your answer didn’t really address why homes specifically have dramatically outpaced the general rate of inflation.

The 1974 Tax Code re-write, that baked Trickle Down Economics into our tax code, created the Oligarch class

Read a history book. The class war spans human history.

Why use nearly decade old data though?

That article is 6 years old, and uses data through 2018.

Median household income today is $83k.

And that’s adjusted for ”productivity”. Not exactly a concrete metric.

that’s not broken though. this is how capitalism works at a temporal scale. we were marketed to and sold lies. on purpose. by monsters who have spent centuries making us think we can achieve a “dream.”

…and it screwed EVERYTHING up;

1. People can’t afford kids because the rents are too high,

2. Rents too high for cool spaces to hangout in, so everybody’s at home and miserable.

3. Rents too high for a cheap restaurant to open, so everybody’s mad and pointing fingers,

4. Can’t find daycare, because it’s too expense for the daycare to rent a commercial property,

Even before that there was a boom in people using houses as an investment opportunity instead of just a place for people to live. Land ownership became the get rich quick opportunity that people who don’t play the stock market could put their money into. Then the people who do play the stock market got into it.

Yep. With the repeal of Glass-Steagal, the commercial banks used for things like mortgages, checking accounts, and car loans were able to merge with investment banks. The Act was out into place in 1933 because having retail banks mixed with investment banks was why Black Tuesday lead to the Great Depression.

That allowed houses and mortgages to be combined into investment packages for the speculators, and lead to prices skyrocketing.

It’s what caused the 2008 crash, and in all the aftermath of that, nothing was actually done to fix the issue. The fix was simple - re-divorce them and reinstate Glass Steagall.

Not trying to refute this at all, but I’d love to see this same graph normalized for inflation.

Needs log scale

People should be taxed up the wazoo for any property they personally do not occupy.

It’s not just size and quality though - my house is the same size as my mom’s house was, hers was 13,000 in the 1960s. It’s the same size as the old one I bought for 36k in the housing crash in the 1990s, and sold for 80k in 2010ish, after an addition and metal roof. It is actually for sale again now by someone else after more renovations, they are asking half a million and will probably get close to that.

The one we have now (same square footage, half built in 1940, addition in 1990s) we had to pay almost 300k and is “worth” (market, not underlying value obviously) like half a million, we did improve it with hurricane windows and metal roof and roof attachments.

I have never bought as an investment, only as housing. Something is broken, I DO think my house is worth maybe 200k as a real value, I think we overpaid. but the prices now are so much worse than that.

Yes Florida building code is serious so new houses do have additional utility. But I have only lived in older houses and they are also out of control price wise.

The big new ones around here go for 1.5 million now - I could have bought every house on my block in the 1990s for less than that.

Housing became an investment so people bought more than one.

Second homes are far less of an issue than tenth homes or hundredth homes, what with the rise of rental property consolidation and AirBnB-ification.

Houses are twice the size they used to be. So they cost twice as much for that.

That’s not how homes are priced, though. The real raw materials for construction are a fraction of the total cost. Which is why you’ll see old ranch homes broken up into clusters of three-story townhomes the closer you get to growing downtown districts. Also, why you see increasingly shoddy construction jobs in new-builds, as compressed lumber and stucco replace concrete, steel, and hardwood. Nevermind the cost of labor, which is all over the map depending on whether ICE has decided to raid you recently.

Houses have a lot more regulations and codes they must comply with.

They’ve also become more cookie-cutter standard. Far fewer custom homes. Far more big developers who get a rubber stamp (or pay bribes to the right people) to roll out a thousand-unit development.

We build less houses now than we did in the 1970s.

We have less undeveloped real estate connected to highway access points than we did in the 1970s. And we have more Boomer-vacated housing re-entering the market.

The single biggest proximate cause to the housing price boom has been the ZIRP interest rate policy, flirted with after the Dot-Com bust of '01 and bought whole-hog after '08. We’ve been living in an era of low wages and cheap lending. This has resulted in a historic consolidation of private ownership under banks and hedge funds that have proximate access to the Fed credit window.

The end result is housing units being bought for a market rate and rented for a profit, until the market saturates and you have a sudden forced liquidation. These long drawn-out real estate famines punctuated with sudden windfalls reward people who just happen to be in the market at the right moment. But they otherwise stack the deck in favor of people with the most borrowing power.

Yeah there just isnt a ton farm land at the edge of towns you can quickly flip into a new community.

We have tons of land, but not much that can quickly hook into existing utilities. Creating a city from scratch is expensive.

I do have to agree with you. It’s a demand issue, combined with the rate that it is being built.

I think it would be fully okay to have the cost of a house be multiplicative, based off how many you own after the second house. So, if you are looking to buy a third house, the price is actually double than what you would be expecting, and then your fourth house would be triple what you’re expecting, etc.

The price of the house will be the cost the seller lists it as, and the seller gets the cost that they listed it as. However, anything over the cost it was listed, if you are affected by that multiplier, has that money go straight into the government.

The reason I say after the second house is because I do personally think it’s fair for someone to want a vacation home somewhere, I just don’t think it’s fair for someone to have an interest into having a second, third, fourth, or sometimes even fifth vacation home. And there are many cases where you would want to own a second property such as if you run a self-employed job such as a computer repair specialist, you will probably own a shop, and having a office that’s at twice the cost of what it normally would be is extremely cost prohibitive to someone wanting to get into the market.

I also firmly believe that there should be quite extortionate taxes for buildings that are labeled residential but have an owner who primarily rents it out for more than a quarter of the year. The whole Airbnb our property is technically zoned residential but are actually commercial loophole is absolutely ridiculous and a huge problem. If you aren’t allowed to put a motel or a hotel there, you shouldn’t be allowed to have an Airbnb there.

Also Urbanization, guessing there is quite a few houses where people don’t actually want to live

So your claim is that things were perfect before 2008?