Will Bitcoin Solve the Housing Crisis? \ stacker news ~bitcoin

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2099 sats \ 44 comments \ @kepford 5 Dec 2023 bitcoin

Bitstein posted this on the bird app.

The housing crisis will be solved by #bitcoin adoption deflating the cost of the average American home to 0.02 BTC.

What do you think?

1430 sats \ 14 replies \ @k00b 5 Dec 2023

There's reason to believe it should if we assume the housing crisis is created by real estate being used as a store of value.

486 sats \ 7 replies \ @kepford OP 5 Dec 2023

Another factor with housing is supply being low. I believe it is complicated but a part of it in many areas in my state is zoning. Mostly in cities.

Then you have the recent hike in interest rates which has (I've) heard doubled the cost of buying a median priced home vs a few years ago.

Then on top of this, supply chains for housing materials are still not to pre-pandemic levels. The only reason I hear that this isn't an issue is because of the interest rate hike is pricing people out so there aren't enough houses being built.

I can see how bitcoin could change things but also how that could be a negative change for some. Those that have invested in their properties and view them as a primary asset.

But, transitions are always hard for some.

778 sats \ 5 replies \ @k00b 5 Dec 2023

Another factor with housing is supply being low.

Is housing supply low due to factors like population growth though? Population growth in the US has been pretty flat and is even beginning to taper:

https://m.stacker.news/6824

I suspect the housing crisis is caused by less "natural" demand on housing and more so factors like commercial use of homes for airbnb-type lodging and homes being used as a store of value.

I've done zero research though.

127 sats \ 0 replies \ @Solomonsatoshi 25 Oct

Here in NZ there are suburbs of ghost houses which are built and owned primarily for the purpose of speculation- they are sometimes used for rental like AirBnB or just left empty- they are high spec and often debt leveraged. IMO a large part of the housing crisis is due to housing being used as a speculative SoV commodity...certainly here in NZ where CGs on housing are not taxed...and almost certainly in other economies where housing can be a better safer SoV than other investments. A lot of this goes back to 1971 and to the later neoliberal deregulation of banking- which allowed commercial profit motivated bankers to isssue new fiat debt toward any purpose, not just productive purposes as was required prior to the neoliberal 1980s 'reforms'. In NZ the ratio of non productive lending by commercial banks has gone from close to zero to over 60% since the 1980s and most of that non productive debt is secured by housing assets.

422 sats \ 3 replies \ @kepford OP 5 Dec 2023

I've just heard a few investment types talk about it. I don't think it is population growth. What I've heard is that post 2008 new housing hasn't kept up with pop growth. Then in the last few years it started to pick up and then the Covid response gummed it up. I know in my small town a new development stalled for at least 5 years and just started back up in 2018. They finished it in 2020.

422 sats \ 2 replies \ @kepford OP 5 Dec 2023

The other thing I heard was since the pandemic more millinials are desiring single family homes so that is increasing demand. Seems like interest rates should slow that though. Gotta suck though.

10 sats \ 1 reply \ @Undisciplined 5 Dec 2023

The other part of millenials desiring single family homes since the pandemic, is people moving out of major cities. Both things have been happening for a while, but migration out of the biggest cities and into smaller cities has been the major trend in American domestic migration for many years now. That's why housing is in short supply in the places people are moving to.

0 sats \ 0 replies \ @kepford OP 5 Dec 2023

Yep. My experience is anecdotal but I've seen it in Texas, Tennessee, and even in California.

10 sats \ 0 replies \ @TwoLargePizzas 6 Dec 2023

To me this is two sides of the same coin. If the supply increased to meet the demand the store of value aspect would diminish.

Don't get me wrong, despite having most of my net worth in real estate I would love to see housing become more affordable. But all of these phenomenon are a result of broken money and government policies.

In a free market economy higher prices would naturally drive more supply, but regulations and government set interest rates distort natural market forces.

12 sats \ 0 replies \ @ek 6 Dec 2023 freebie

This post really resonated with me and the best part is, it doesn't even mention bitcoin: Maybe Treating Housing as an Investment was a Society-Shattering Mistake

It's like what I've been thinking about for some time but could never point my finger at.

But then someone like Lyn Alden shows up and explains my own thoughts to me, lol

So obviously, I am very biased since this confirms my biases.

But it's definitely a nice thought that housing does not have to be so expensive.

The housing crisis and the influence of fiat on war should be discussed and mentioned the most when it comes to bitcoin, imo. They should be our biggest leverage to get society on our side at some point.

1 sat \ 0 replies \ @DeltaClimbs 6 Dec 2023

WRONG! It will fix it because bitcoin fixes everything. That may be part of the reason.

0 sats \ 0 replies \ @south_korea_ln 6 Dec 2023

I just happened to think about this today. Although I like this thesis, humans tend to love speculation. So even if bitcoin stores value, it'll probably do it at increasingly diminishing returns. So once/if volatility becomes less profitable than betting on housing/NFTs/GameStop/... those will keep on existing for speculation purposes.

0 sats \ 2 replies \ @BitcoinIsTheFuture 6 Dec 2023

It’s funny real estate has a perceived store of value. When you look at true value, inflation adjusted there is often little to no value being stored or maintained. Oh to answer the question, yes Bitcoin fixes this!

10 sats \ 1 reply \ @TwoLargePizzas 6 Dec 2023

Well yeah, but I think that's the point. Real estate is keeping up with true inflation and hence "storing value". In other words, your dollars have the same purchasing power in the future.

Contrast this with keeping those dollars in a bank account. That's definitely not keeping up with inflation and therefore losing purchasing power over time.

0 sats \ 0 replies \ @BitcoinIsTheFuture 6 Dec 2023

Fair point. Vehicles have held value better though.

703 sats \ 1 reply \ @DarthCoin 5 Dec 2023

the housing is a very complex thing and I am not an expert in this. So I will STFU and just watch what others say.

224 sats \ 0 replies \ @kepford OP 5 Dec 2023

Humble Darth. I dig it.

359 sats \ 0 replies \ @m00ninite 5 Dec 2023

My hope is that Blackrock stops buying up all the houses once it's clear bitcoin is a better investment with no upkeep cost.

339 sats \ 4 replies \ @Bitcoinisawesome 5 Dec 2023

When money was very cheap in 2020 you couldn't buy a house easily because someone (redfin, Zillow, BlackRock, others) had already offered 30% over asking in cash (which funnily enough is now the current value of the average home, go figure) site unseen before you and your real-estate agents even walked through the door. These people are using homes en masse as a store of value. The second the gain the confidence, understanding, and/or permission to use a better store of value, they will. My uneducated opinion is that cheaper homes are on the horizon.

bitcoin is just so cool eh?

0 sats \ 2 replies \ @kepford OP 5 Dec 2023

Many believe cheaper housing is on the way regardless of bitcoin actually. At least in the short term. The issue is that if you can't afford a large down payment you won't be able to get in on it. I suspect many investment and rental prop businesses will be scooping up houses.

10 sats \ 1 reply \ @Bitcoinisawesome 5 Dec 2023

I think the amount of scooping they're doing is relative to interest rates. I only say that based on word of mouth of pleb home buyers. When they had free money every perspective home buyer you spoke to had put 4-5 offers on different houses with no luck. You aren't hearing that from the plebs currently. Housing market really is a wild beast and it's fun to discuss and speculate.

0 sats \ 0 replies \ @kepford OP 5 Dec 2023

Its also very different depending on location. It always is but it really has been since 2020. If you live in Texas, Tennessee, Florida, or Oklahoma the story is much different from states like California or New York. And within states like California certain counties are seeing increases while others are losing residents.

0 sats \ 0 replies \ @okpj 5 Dec 2023

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85 sats \ 2 replies \ @orthwyrm 5 Dec 2023

I agree that Bitcoin will eat somewhat into housing's SoV premium.

However, housing's insane valuation is also propped up by low rate mortgages. If the rate is lower than real inflation then it's basically a short position on fiat.

Until normies can take on a 30yr 3% $500k loan to buy BTC, housing will always have that short-fiat premium too.

10 sats \ 0 replies \ @bzzzt 5 Dec 2023

very true.

50 sats \ 0 replies \ @kepford OP 5 Dec 2023

Yep. Really interest rates are still low historically if you take the longer view.

https://m.stacker.news/6847

Source

21 sats \ 0 replies \ @piecover 5 Dec 2023

Yes in a long enough time frame but no in the short term. Bitcoin is likely to demonetize real estate, precious metals, stocks and bonds. This will drag these things down to their utility value so making them cheaper or more affordable as they should be.

48 sats \ 2 replies \ @pillar 5 Dec 2023

People who look forward to just living somewhere nice and not die financially in the process will definitely benefit from Bitcoin taking away part of the store of value premium that real state currently has.

Having said that, in my places the craze of housing cost will be gone when more houses are built. Government regulations in some areas just put so many sticks in the wheels it's impossible to get the amount of housing demanded by the market built. Hence, the price acts as the release valve.

This article is an interesting reflection on this topic: Expensive Housing is Governments fault.

10 sats \ 0 replies \ @tomlaies 5 Dec 2023

I agree with this. The issue is complex and intertwined. But government regulation is preventing so much new building. Lack of building causes lack of supply. Lack of supply makes supply/demand asymmetric and shoots prices up.

0 sats \ 0 replies \ @kepford OP 5 Dec 2023

Yep, that's basically how I see it. For the US at least.

13 sats \ 7 replies \ @fm 5 Dec 2023

Is there any math behind or are we just throwing random numbers?

426 sats \ 5 replies \ @bzzzt 5 Dec 2023 freebie

I work as a mortgage broker. Anecdotally from what ive seen in 2020 you could buy a home for lets say 375k and you could expect a mortgage probably around $1800 monthly payment for mortgage, taxes, insurance.

In 2023 you are probably looking at $3300 monthly payment for that same home and there has been surprisingly little home value depreciation ( most cities its continued to appreciate).

10 sats \ 4 replies \ @Undisciplined 5 Dec 2023

I've been saying that it's implicit home value depreciation, in the form of slower rates of sales. If sellers were still taking same-day or same-week offers, they'd be getting much lower prices.

437 sats \ 3 replies \ @bzzzt 5 Dec 2023

This is true no one with a 2.5 % 30 yr fixed from 2020 is going to sell their home and buy back in at current rates.

20 sats \ 1 reply \ @Bitcoinisawesome 5 Dec 2023 freebie

I am in the <2.5% camp and feel currently incentivized to make minimum payments for the entire life of the loan. I feel extremely fortunate because I could not afford to enter the market in anyway in todays climate.

20 sats \ 0 replies \ @bzzzt 5 Dec 2023

This is every client i helped buy or refi from 2020 to feb 2022. Normal folk aint buying homes rn.

10 sats \ 0 replies \ @kepford OP 5 Dec 2023

Makes it a tough call for sure.

1 sat \ 0 replies \ @kepford OP 5 Dec 2023

Good question.

21 sats \ 0 replies \ @DeltaClimbs 6 Dec 2023

It very obviously will.

If you don't understand why bitcoin fixes everything, you don't understand bitcoin yet.

People will know you are serious when your initial question is written as "how does bitcoin..."

0 sats \ 0 replies \ @jeff 6 Dec 2023

Deflationary money alone, doesn't fix it. It will slow/fix it by reducing the power of the state to print & regulate new supply.

Country by country, housing supply is restricted for different reasons. But many of these reasons tie back to government throttling/intervention.

0 sats \ 0 replies \ @OT 6 Dec 2023

Would be nice....

Probably not in my lifetime though

0 sats \ 0 replies \ @BlokchainB 5 Dec 2023

Supply and demand. To me it is as simple as that. If the US government deregulated the market and injected the money spent on Ukraine on making the housing market efficient prices would technically fall because builders can have the confidence they can make a profit.

0 sats \ 0 replies \ @piecover 5 Dec 2023

The government creates the housing crisis by printing the money making everybody poorer and by getting on the way of the free market

0 sats \ 0 replies \ @Xlindo 6 Dec 2023 freebie

Bitcoin solves everything