Monday, June 19, 2017

Building the perfect pressure cooker.

"The Commerce Department said Friday that housing starts fell 5.5 percent in May to a seasonally adjusted annual rate of 1.09 million units. This comes after a 2.7 percent monthly decline in April and a 7.7 percent drop in March. Home construction is still 3.2 percent higher year-to-date, but that increase has been too modest to address the dwindling supply of homes." Source.

Back during the recession there were all these articles about how people were not going to want to buy houses ever again. It made more sense to rent. I'd read those articles and think..... whatever. Because when I look at the world, all. I see is an economy that is creating a nation of latent home owners. 

When I grew up we moved every year. And now that' I'm older I realize it was because landlords raised the rent. My mom didn't ~want~ to move every year. She had to. I had actually become so accustomed to it that when I did put down hard roots it made me feel uneasy.  Moving gives you a fresh start and how is that not a little exciting? I'd gotten a little addicted to it.

I generally feel like after you've been a renter for a while, all you will want is a house where you can have a pet without a 700 dollar deposit. Hell, you could have two, three or ninety-five pets. Well, I'm being dramatic on the last one - but you get the idea. If you are smart, you don't have to worry about your rent going up every single year. And you don't have to deal with that neighbor who lives upstairs that clearly is walking around with shoes made of concrete. Not to say you still won't have neighbor issues - you will just have different neighbor issues. The people who write stories never talk about the snap inspections renters have to go through. Hell, I'm a landlord and even I can't believe the crap renters put up with these days. And my people are on two year leases! But the property management company comes in twice a year to take photos so they can prove my renters are taking care of the place. And they get drivebys every month or so.

So when I read that housing starts are back in the 1 million unit range - I start to get really nervous about the world. That is basically at the low end trend line historically. We should be building about 1.5 million units to keep up with population growth. And for sure in the Bay Area, there is really not much land left to build the kind of housing we need. So I think this could become pretty ugly.

The other day I told Mr S. - I remember when owning a house didn't make you a wealthy person. It made you normal. Hell, even owning a rental didn't make you wealthy. Lots of normal people had rentals. Mr S. was like yeah - when I was growing up I knew a bunch of people with rentals. Did you think they were wealthy I asked. He said no. I didn't know how they afforded it, but I never felt they were wealthy. And both of us grew up in single parent households. So neither of us came from rich families.

But now, if you are fortunate to own a house - you are baller rich apparently. Well...I guess in my case I was fortunate enough not to lose a house. Because growing up in rentals made a huge impact on me. I drew a line in the sand and said - over my dead body. The recession did take a bunch of years off my life - it was the hardest thing I've ever had to do. But now apparently I'm baller rich. Even though after all these years I'm just breaking even on my rental. I have equity. But on the outside looking in - no one sees that. People never see the struggle. They just think you got lucky.

No comments:

Post a Comment