Work Reform

this happened and we never recovered: https://en.wikipedia.org/wiki/Subprime_mortgage_crisis

https://wtfhappenedin1971.com/

Accountability

If you actually look at the cost of labor and materials to build a house today, its not far off. The difference you see is the cost of allowing enormous corporate development companies to exist and do business in this country. The false scarcity on top is a product of the greed that keeps people out of housing to begin with.

Nothing broke - the capitalist system is working exactly as designed. We're just not the tiny sliver of the populace that benefits from it.

Nothing broke. It's working exactly as intended.

There have always been two distinct economies.

• There is their economy (meaning the billionaires economy of venture capital, real estate investment firms, speculative markets, etc...) It's a market that exists on paper only. Theoretical billionaires with assets instead of bank accounts, capital instead of paycheques. Money isn't a real concept in that economy, it's simply a measure of profit and loss. It's just a score keeping device and something used to leverage power.

• Then there is our economy. (meaning the rest of us, who get a paycheque, spend that paycheque, etc...) Maybe we'd be able to put something aside for retirement or college for the kids. . Money itself has a real, tangible impact in our lives. It's not theoretical.

Maybe we have enough to play in the paddling pool of the speculation market, telling ourselves that "we're shareholders!" like our 10 shares means squat against the 10,000 shares owned by the investment firms and LLCs run by the billionaires. Employers like to do things like offering you stock options, selling it as "you'll be an owner and have a say in the company". Yeah...no...you'll have a piece of paper and a sense of self-importance because you "dabble in stocks".

The idea being that if we invest hard enough, and risk enough, we'll make enough to jump us from one economy into the other. But we won't. That's the lie they tell to keep us mollified.

Because the truth is that their economy, only works at the expense of our economy. Profit in their economy, only comes from loss in ours. A corporation can't make more profit without taking it from somewhere. And that somewhere invariably is us; our health benefits, our cost of living, the quality of the products that we use, our lack of raises, etc...

Nothing's broken, least of all the laws of physics. Detached, single family homes are low density housing. The land that makes up any given metro area is basically a two dimensional plane. That plane is a finite amount of space that can only be filled with so many buildings. Detached homes are almost always limited to just a few stories at the most, and they can't be stacked on top of each other, so vertical expansion is essentially non-existent. The only way to build more detached homes is to spread out horizontally along the two dimensional plane. But the further you go out horizontally from the metro center, the further you are from the jobs and amenities that are associated with an urban core. The detached houses that are nearest to that center are in the highest demand, so their prices go up the most. You can continue to just build out horizontally, but after a while you simply run out of land. Or, the houses get so far from where the jobs and amenities are that it's not viable.

There are areas in the US where you can buy a home for $138,000, but most people probably don't want to live there, which is why the homes only cost $138,000. Areas in greater demand will have higher home prices. In the areas that are in higher demand, again, the only option is horizontal sprawl away from the metro center, if you're building only detached single family homes.

Houses should be investments... in the same sense that a good, durable pair of shoes is an investment.

In a well designed system, the value of property should stay pretty flat over time, and the value of a structure built on that property should slowly go down over time as wear and tear sets in.

It's ridiculous that it makes sense to buy more home than you need, and to hold onto a house longer than you need it because it's one of the best and safest money-earning investments you can make. It's especially annoying as someone in a position to make that investment gets to live inside their investment and enjoy it even as it appreciates in value.

Nothing else works that way. Can you imagine if you bought a classic car and drove it on the road as a daily driver and it went up in value? Or, if you bought a rare Magic the Gathering card, used it in your regular deck, and somehow it only became more valuable?

Nothing broke, this is capitalism working as intended

We insisted on our homes being investments.

The only way for that to work is for houses to appreciate faster than inflation.

Otherwise, people would have to sell their houses for less than the inflation adjusted cost of what they put in.

Multiple things broke and anyone, including and especially politicians, trying to sell you on a single narrative is a lying POS.

Capitalism has always been broken.

But an underlying problem is the pseudo-scientific ideology of "economics". It's what fuels these kind of dumb questions. Nothing broke. The denial of human needs has always been a feature, not a bug.

The average home

I mean, no offense to the OP, but this is a constant game of bullshit in a country as large and sprawling as the United States. The problem with housing prices isn't simply "median price", it's "proximity to the work site" and "proximity to public services" and "size sufficient to host my whole family". You can show me a house for $80k out in the de-industrialized Midwest or the boonies of rural Wyoming. I won't buy it, because I have nowhere to commute to work or send my son to school or a grocery store to shop at or potable water that won't kill me. You can show me a high rise in walking distance to everything I need, but if it's $1.5M I can't afford it.

If it's $100k for one of a hundred vacant rotted out homes in the slum and $300k for a single unsold 70 year old ranch house in the burbs and $500k for one of the fifty newly built 600 ft condos in city, taking the "average price" doesn't answer the question "Where am I going to live?"

Among many other things, people now vote in local elections according to “what will be good for my property value” and this often (usually) doesn’t mean making more affordable housing available. It’s a very specific case of NIMBYism. Luxury condo building with 15% affordable units? Not where it will affect my property value!

I fully agree with the point but is "a erage" the right metric? I also have to imagine even the average house is much larger than in 1970.

3% mortgages did this. If mortgages were kept around historical averages of 7 percent, the asset inflation wouldn't have occurred. The monthly costs at 7 percent currently are unaffordable except for the top 20%.