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486 sats \ 7 replies \ @kepford OP 5 Dec 2023 \ parent \ on: Will Bitcoin Solve the Housing Crisis? bitcoin
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.
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:
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.
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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.
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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.
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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.
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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.
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Yep. My experience is anecdotal but I've seen it in Texas, Tennessee, and even in California.
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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.
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