The End of Homeownership?

Or: How I Learned To Hate The Housing Market

(Originally written in early 2022.)

Americans love houses, to an irrational degree. The idea of owning your own home is part of the "American dream" that seems to be more often derided today, and rarely embraced in earnest. Along with cars and credit cards, the love of houses approaches cult-like obsession in the United States. Americans from all walks of life pursue home ownership with a maniacal glee, as though it were the only financial goal worth achieving, and always worth the sacrifices required to achieve it, even if doing so brings you and your family to the brink of financial ruin.

It is difficult to look past the cult of home ownership and the emotional reactions that the term "home owner" provokes. I believe this is part and parcel with the growth of the entitlement state. It has been politically expedient to talk of housing as a "right" given that shelter is almost universally the highest expense for most people, and people tend to have more personal feelings about their shelter compared to their kitchen appliances or shoes. For the past fifty years, legislators and the Federal Reserve have played around with borrowing costs to stimulate or (in rare cases) cool housing demand. As a result, the housing market, more than any other market, is subject to distortions and strange behavior that, under more "natural" conditions, would be unlikely to occur for any prolonged period of time. In more concise terms, borrowed from B. Bernanke, it is a market prone to "irrational exuberance."

But the era of "playing around" with housing prices may be coming to an end. Despite media attention on housing prices, I don't think there is yet an understanding of just how bad the situation is becoming. Let us take a look at some simple math to see how dire the situation has become. I will also hesitantly share some of my own personal experiences looking at homes available for sale during what has been -- objectively and inarguably -- the worst buyer's market of all time.

The Costs Are Rising

There seems to be a general cultural acknowledgement that there is some kind of "housing crisis" underway in the United States. But I don't think that the media or the average person has internalized just how bad it is. First, I want to lead with some simple math to demonstrate just how bad the situation is becoming.

According to the Wall Street Journal, the median home price in the U.S. rose from $340,700 to $391,200 in the last year. That is an increase of about 15% in a single year. If this rate continues, home prices will have doubled by May, 2026. We can check with some simple math using Python.

import math
math.pow(1.15, 5) # Year one is 2021-2022; the full term is 2021-2026
Output: 2.0113571874999994 

Into The Heart of Darkness

I want to share a bit of my own personal experiences as a would-be buyer during the period of 2020-2022, to inform and persuade.

Buyer Motivations

First, let's look at the psychology of buyers today. Today's home buyers are (or have been) heavily motivated by the following factors, most of which did not exist prior to 2020:

1. Due to lockdowns in most U.S. cities caused by the pandemic, urban-dwellers are seeking larger lots, more space, and square-footage for additional rooms that buyers in 2019 and earlier would not have placed as a priority. Home offices are now commonly desired by white-collar workers stuck at home during the pandemic. That's an additional 300-400 square feet. Those who would have been content with a two-bedroom condo are now seeking larger 3-4 bedroom homes with a yard; those in small apartments are seeking two bedroom condos. The desire for space overall has increased.
2. Buyers today have an unusual affinity for less populated metro areas, such as Idaho, central Michigan, and northern Florida. Typically these areas are unappealing due to a weak local job market, along with lack of access to entertainment and amenities. Larger cities such as New York and Los Angeles are bleeding population fast, as mid-size cities such as Austin and Nashville absorb their fleeing populaces, indicating a nationwide trend of population migration from larger population centers to smaller population centers. In the past, Americans were closely tied to their local geographic area due to the difficulty of finding a new job in another state. With remote work suddenly becoming common for many American workers, it became feasible to relocate without changing careers. As the pandemic crisis became prolonged, and the cost of housing in larger metro areas increased at a faster pace than the median national price, this only further rewarded those who were willing to relocate to small satellite cities and exurbs. The extreme example of this trend is C'Oer D'Aline, Idaho, a satellite city with no job market to speak of, and yet real-estate in the area has increased 30-40% year-over-year during the pandemic, more than doubling since this period began. Even states like Nebraska, which is home to fewer than 2 million souls, has seen surging real-estate values despite a lack of any significant local non-farm economy.
3. Historically low interest rates during the height of the pandemic super-charged the housing market by making borrowing costs incredibly low. Those who bought during the lowest point were able to lock in a 2.5% interest rate on a mortgage. The interest rate drop triggered massive demand for housing to take advantage of the rates. Rates were already pretty low before the rate drop, but this action by the Federal Reserve really poured gasoline on the fire of housing demand. Would-be buyers were suddenly being told by mortgage loan officers that they could secure an incredibly cheap monthly payment, which meant they could afford to spend a little more, get a little more land, have a little more square-footage, etc.
4. A sudden increase in perceptible crime for various reasons led to a trend of buyers moving from areas close to city centers to areas further away from city centers, within the same metro area. It is no secret that crime is typically higher near city centers. The population density and typical concentration of lower-income residents combine to predictable results. The pandemic conditions and political chicanery surrounding law enforcement funding also exacerbated pre-existing conditions of crime concentration in city centers. Those with the means have tended to respond by moving to more suburban areas where crime is typically lower. This increases demand on limited stock of suburban single-family homes.
5. Rent has increased dramatically in the last two years. Rent prices have followed the zig-zag model we saw in other costs throughout the pandemic era. In 2020, rents decreased briefly as furloughed workers left apartments to live with family or friends, students stayed home as university classes went online, and so on. Then it came bounding back in a terrible way, increasing in some places 40% year-over-year. This causes renters to re-evaluate their plans to rent instead of buy, since they are being squeezed either way. (Note: we can do some exponential math here to find that if this trend were to continue, rent would increase over five times from its 2020 level by 2026, so someone paying $1000 for an apartment in 2020 would be paying more than $5000 for the same apartment in 2026. This exercise will be left to the reader.)

I was personally affected by all of these factors. I began looking at homes almost immediately once the pandemic began. I had almost no desire to buy a home in my area prior to the pandemic. Once the pandemic began, and my once-thriving urban neighborhood became transformed in a matter of months into a dystopian hellscape, I began to dream of wide lawns and spacious two-car garages. I had never felt unsafe in my neighborhood before, but with political protests, riots, and property crime increasing rapidly in the area (including a very credible, direct threat to my safety) I began for the first time in my adult life to feel a desire for a more quiet, pastoral existence -- i.e., the life one might live in an affluent suburb or a sleepy town outside a major metro area, precisely the places that gained population over the last two years. I have also experienced rising rents and have at least some possibility of working remotely for an indefinite period. This is of course anecdotal but my experiences seems to align well with broader social trends.

Above are the psychological and behavioral effects of the pandemic on buyers. On top of this, there are also new factors, external to buyer behavior, that have a dramatic effect on the housing market.

1. Government response to the pandemic has been to increase social benefits to workers, which has had the effect of incentivizing workers to stay home instead of seeking work. Many of these workers are involved in the production of housing. For example, lumber mills require workers to produce lumber. As lumber prices rise, home prices rise, and remodels become more costly as well. Reducing the number of workers thus slows access to supply.
2. The U.S. reliance on cheap imported labor from Central America has also been reduced due to the pandemic. American construction companies have become accustomed to a steady supply of low-wage foreign workers, often paid under the table.
3. A wage-price spiral has formed as historically high inflation eats into savings and increases the cost-of-living, while low unemployment means that workers can demand higher wages. This is good temporarily for workers, but bad for the economy because rapidly rising wages fuel inflation, and the only fix for that is to deliberately engineer unemployment to reduce labor supply.
4. Home builders got severely burned by the 2008-2009 housing collapse. When the 2020 market collapse began, home builders dumped their supply and suppliers have not caught up to the current level of demand in the market.
5. Home building materials, like lumber, are at historically low supply levels due to the exogenous supply shock of the pandemic. Combine this with a lack of labor supply and you have a recipe for low levels of new homes being built, and slow progress on remodels, both of which could increase the housing stock. This has a direct impact on the amount of supply in the housing market, not only now, but in the future. Most people predict the housing shortage to continue for the next ten years or more, which public perception only increases the demand as buyers reason that if they do not buy now, they will never be able to afford a home.
6. Finally, with prices going up, and supply more or less guaranteed to be short for the next decade, speculators have gotten into the market and driven up prices even higher, by bidding against real people who intend to live in the house, cater to local area businesses, send their kids to the local schools, and so on. Many of those historically low interest rates, which politicians imagined would help low-income households, are actually going to financial institutions, individual investors, and professional landlords, who will simply turn around and rent the houses to the low-income households but at a higher cost.

To summarize, before I begin my tale of darkness and woe:
During the pandemic era, beginning in early 2020, various factors converged to create the worst buyer's market for housing that the country has ever seen. Navigating it is an absolute living hell that I would not wish upon my worst enemies.

My Tale of Darkness And Woe

I began with a simple desire in April, 2020. I wanted a bit more space to myself. I was working from home, exercising from home, and -- well, doing everything from home. Additionally, given my life circumstances, I was culturally conditioned to feel that "it's time to buy a house." I did not logically need a house, but my emotions and my pandemic-era fear-motivated psychology told me that I did. (Though I often claim to be rational, I am a mere mortal, subject to the same whims of fancy as anyone else. To put it in other terms, "it seemed like a good idea at the time.")

It's also important to note that these feelings preceded the massive rise in housing prices that is the subject of this essay. In other words, I was motivated mainly by the psychological factors unique to the pandemic era. I find it unlikely that I would have ever considered buying a home without these unique circumstances. If we assume that my experience is not atypical, then we may conclude that it's likely that none of this would have happened without the pandemic. This implies that the current housing market conditions are as temporary as the pandemic-era itself. If and when things "go back to normal", buyer psychology should logically drift back toward the mean. If, on the other hand, the pandemic-era has permanently altered many aspect of our lives, society, and our psychology, then we can expect the present (horrible) circumstances to continue forever.

Now, on to the woe!

So It Begins

My experience began positively enough, as I toured a few houses in the area during some of the darkest days of the pandemic. During this period, in summer of 2020, there was very limited inventory because sellers were simply afraid to have strangers in their home, coughing and touching doorknobs. Masks were typically required to enter the listed property. Often it was easier to have a Redfin 1099 employee walk through the house with a camera in what was generously described as a "virtual tour", than to try to see it yourself.

Once it was possible to actually set foot in a house, the mania began. I got in touch with a local agent through a friend. At first, it felt like a magical experience to talk about what home features I was looking for, how many bedrooms, what I was going to use the house for. Wow, imagine me, owning a home! Gee golly! This honeymoon period would not last more than a few weeks. My agent began by explaining that one part of town had the best "valuation" for the money. I nodded in assent but didn't quite understand what she was talking about until later. I was mainly motivated by the psychological factors described above -- namely, the largely irrational desire for more space. I wasn't really thinking about making money from the house.

My agent, like many real-estate agents today, was a real-estate investor. Many ordinary buyers also are accustomed to hearing houses referred to as "investments." I disagree that a primary residence is an investment, because investments must generate income. Your own house does not do that while you're living in it. Rather, it is part of your living expenses. Stocks and bonds are investments because they pay yields. If you own a house as a rental property, it is an investment because you are paid rent every month.

In any case, for better or worse, this "investment" language is commonly bandied about during the process. My agent seemed to make the assumption that I would be flipping the house. This means buying a house, doing some cosmetic improvements, and selling it at a profit. Again, this had never really occurred to me.

Under normal conditions, the home-buying process is one of negotiation between buyer and seller. Additionally, there are a set of checks for both buyer and seller that protect either party. There is also usually a third-party involved, namely the mortgage lender. They have their own checks and validations, many put into place legally after the 2008-2009 housing crisis brought the global economy to its knees. Usually this is how it works:

1. Buyer applies for pre-approval for the approximate mortgage amount. The mortgage lender looks at buyer's income, assets, debts, credit rating, etc. and either approves or doesn't. This gives the seller confidence that the buyer isn't a dead-beat and will actually have financing ready to complete the sale. (In the distant past, you could buy a house without mortgage pre-approval, but this is basically a non-starter nowadays.)
2. Buyer puts in an offer for the listed price, along with a 1% earnest money deposit on the sale value.
3. Seller accepts offer. Buyer is now under contract and in a 30-day "option period" during which the buyer gets to inspect the home, look at mortgage appraisal information, and negotiate with the seller for things like roof repairs, A/C system, HVAC, and so on.
4. Buyers learns about the neighborhood, the street, perhaps visits at different times of day, and times out their commute. Buyer gets this time to "think about it" and decide if the house is quite what it seemed when they toured.
5. An inspection is performed during the 30 day period. If the buyer discovers major problems, and the seller is unwilling to address them, the buyer can cancel the contract, get their earnest money back, and any option fees are refunded.
6. A mortgage appraisal is done. The mortgage company looks at the property and its sale price and looks at sales for similar homes in the area. If the appraisal comes back low -- indicating that you overpaid for the house -- you have the option to cancel the contract. This is to protect the buyer from an overpriced lemon house.

Since 2020, the following insane conditions now apply in all transactions in the housing market. If you try to buy a home as of this writing, you will have to consent to many of these conditions:

1. The buyer must decide within 24 hours of a house hitting the market whether to make an offer. Most offers are significantly over asking price. Very often this results in a "bidding war", during which multiple buyers submit escalating offers to out-bid one another. The actual sale value that the seller accepts may be $100k or more over the listed price. The actual price of any house on the market is much higher than the listed price. It's a lot more like buying something in an auction, and not at all like buying anything normal like a computer, where the price is transparent up front.
2. The option period is not 30 days. It is now seven days at most. Sometimes only five days.
3. The inspection is frequently waived. If the buyer does have time to do an inspection, the contract is amended so that the buyer cannot back out of the contract if the inspection report comes back with significant problems.
4. The appraisal contingency is waived. If the appraisal comes in low, the buyer must cough up additional cash to cover the difference. This means that the actual closing costs are unpredictable since homes have been rapidly inflating in sales prices.

Buyers have very little clarity on the actual price of any particular house on the market. All that we know is that the house is very likely going to sell for significantly more (20-40% more) than the listed price. The seller knows this, and they are pricing the house "low" simply to instigate a bidding war between potential buyers. Buyers have no choice but to submit to this humiliating process, or else accept that they will not be buying a house.

In Which I Dodge A Lemon House

After months of discouraging losses, I finally saw a house pop up in my area that looked like a nice version of a basic "starter home." It was older, and in a crime-heavy area, but it was available and the listing price was relatively low for the area. And it was cute! A simple ranch-style home, it reminded me of the house where my grandparents had lived. This house was available because it was a rental. The tenants had a small child and refused to allow the landlord (the seller) to let people tour it.

My agent suggested that we make an offer on the house without even touring it. This strategy was Machiavellian and genius. She reasoned that the situation with the tenant constituted a "motivated seller" situation. It was an aggressive move in the chess game to get us under contract for the house, and thus remove it from the market. This allowed us to avoid a bidding war -- which is what the sellers all want. I was hesitant to make an offer without even seeing the house, but my agent insisted. We were playing 3D chess right out the gate.

Because the house was still being rented, we had no access to the house for half of our miserly seven day option period. During this time, I drove past the house, viewed aerial photos, and looked at some pictures posted online. But I wasn't allowed to enter it until the tenants were out on day four.

On day four, we did the inspection. I was present for the inspection. There were contractors painting the house at the same time, which made for some awkward moments. The contractors were understandably confused by our presence, glaring at us as we walked around the paint cans and rolling brushes.

Once I was inside the house, I realized what a terrible risk I was taking on. I knew nothing about this house. I knew nothing about any house. I began to feel a terrible knot in my stomach that would grow for the next week. If I had gone to my doctor for a checkup during this week, I am sure he would have told me to update my will because I was about to die of an aneurysm.

After reviewing the inspection report, I realized my error. This old house, which was about to be sold to me for an amount far exceeding what I would have normally been willing to pay, was in terrible condition. It would cost me tens of thousands of dollars to fix it up. And I was already over my budget.

I listened to that knot in my stomach, and said "no." My agent was furious. Her trojan horse, Sun Tzu, 3D chess play was going to waste. Worse still, she wouldn't get paid.

As luck would have it, an epic, once-a-century storm ripped through the area months later. I am certain the house was destroyed by that storm. I probably dodged a $50k bill the day I said "no" to my agent.

In Which I Am Nearly Talked Into Buying A House That Was Recently On Fire

After this experience I took a few months off to focus on work and forget about housing for a while.

Several months later, I was back on the horse. I still had a small amount of hope left, and was itching for it to be beaten out of me. Right off the bat, I received my beating. My agent informed me that while I was "wasting time" performing my job function, the market had jumped up 30% in a matter of three months.

This time I tried to aim for newer construction homes. There were not many in the area, but there were at least some houses that had been been built in the 1990s or 2000s, which would not have the same problems seen in 1960s-1970s era homes. I figured that I was perhaps not ready for the responsibility of an older home. My agent agreed.

I found a decent looking 2000s home with quite a lot of space. But once again, I fell into the bidding war trap. My agent suggested we "play ball" and offer $80k over my "maximum" price, and more than $100k over the listed price. I took the bait, and we wrote up an offer. The seller chose a different, higher offer. If only I hadn't been such a cheapskate!

Something odd then occurred. I had just processed the loss of this new house, when my agent called me with exciting news. The deal with the other buyer had fallen through, and the seller was interested in our offer. Oh boy! Wait, what was the catch? Why had the deal fallen through? There had been a fire in the house during the option period. A contractor had installed the oven incorrectly, and the kitchen went up like a bonfire.

My agent was giddy at this amazing opportunity. I was... less enthusiastic. But my agent, with her Sun Tzu-like killer instinct, was certain this was a great strategic advantage to get the house on "discount" from the seller. The house was still an incredible asset, and could be rented out for $X cash flow because a four bedroom house in this area would produce... And on and on like that. My agent, genius though she was, could not understand why I would be hesitant to buy a house that had recently been on fire.

Nevertheless, I was somehow talked into making an offer on the house that had been on fire. The seller accepted our offer (which again, was way, way over what I told my agent I was willing to pay). We hadn't even had time for an inspection -- not really -- because the house was being cleaned after the fire during our seven day option period. But I did get to tour the house after the fire. The fire damage was in the kitchen mostly. But the fire department had damaged the wall in the kitchen and the roof above it while putting out the blaze. I had to check out this fire damage while contractors awkwardly cleaned up the debris.

I almost went through with it, just to be able to say, fine, look, I have a house. Look, I did it. Please shut up and leave me alone now.

What made me pull the plug was this. My agent had not disclosed to me that the contract contained a appraisal waiver clause. What this means is that if the house did not appraise to the price that I was going to buy at, I would immediately owe the bank my entire life savings. I only noticed this because I read the contract very carefully and called the mortgage lender to try to understand it. It was a huge risk to me, and my agent had not even mentioned it before -- but technically I had signed the contract, so I had agreed to it. Thankfully, I was still under the final day of the option period when I figured this out, so I immediately told my agent to cancel the contract. This was my right under the contract.

My agent never spoke to me again after that. And thus ends my aborted journey into the U.S. housing market. I would sooner trek into the bowels of hell than go through that experience again.

Now you understand my personal conviction on the severity of the crisis that is brewing. Many thousands of Americans have gone through the same torturous, confusing, and humiliating game of financial Russian-roulette that I have described here. Some of them came out with houses, some of them didn't. Who is the luckier group, only time will tell.

Two Possible Futures

Next, I will try to understand the possible outcomes of the events of 2020 to the present, as it relates to the housing market. As I see it, there are two broad possible outcomes of this state of affairs, and neither one is great. In the first scenario, the market "crashes" in some sense -- i.e. values correct back toward a pre-2020 mean -- and people who bought during the home-buying frenzy lose money. In the second scenario, housing never corrects, but the whole economy drags for a decade or more, and those who own the housing stock make money while exploiting the scarcity crisis. Both scenarios are depressing. Let us examine each.

A Crash And Further Deepening Economic Divide

The Federal Reserve and politicians have once again created a system that benefits the wealthy and allows them to accumulate even more wealth, while setting up lower-income and middle-class people for financial ruin. They have done so, yet again, in a manner that allows them to pretend that they are helping lower-income people by extending credit to them.

The most likely scenario I see unfolding is one of falling economic fortunes for lower-income borrowers. Those in the bottom 50% of income earners will be the most likely to default on mortgages when unemployment rises amid the "quantitative tightening" experiment being architected as we speak by J. Powell. These are the people most likely to have little equity in their home, and a large mortgage payment relative to their net income. If they bought during the run-up of prices in 2020-2022, then they paid more for their home than they expected. They may have had to "cook the books" a bit by having one spouse listing their full-time job in the mortgage application even though they planned to leave that job in the coming years. They may find that they do not have the financial flexibility they thought they would.

Lower-income borrowers are also most likely to have an adjustable rate mortgage. Yes, they're back! And just as dangerous as before. ARMs allow lower-income people to temporarily enjoy a lower mortgage payment for a year or two -- then the payment suddenly jumps. Many of the same types of borrowers will have enjoyed two years of forbearance on student loans. Their bills will thus increase significantly in a short period of time -- perhaps in 2023 or 2024 -- and at this point will realize that the house isn't as affordable as they had perhaps imagined when the mortgage loan officer offered them the ARM.

Meanwhile, higher income middle-class borrowers could get smacked by the pandemic-era factors unwinding over the coming years. This would look something like the following:

Remote work comes to an end

In the past, remote work was always a possibility. I've personally worked with a few teams where we had one or more remote team members, long before 2020. It was always possible to get some kind of job, move to a small town in Nebraska, and enjoy the lower cost-of-living. However, nobody really took the offer. There were two reasons for this.

1. Remote workers were the first to be laid off.
2. Remote workers had far fewer career opportunities relative to those in areas with a large local job market, leading to lower compensation in the short and long-term.

Many of the smaller markets that enjoyed housing price inflation during the pandemic-era were able to rack up those gains because remote work became normalized overnight.

But there is no reason to believe that this situation will last indefinitely. When Covid fears fade, and unemployment rises, employers will have plenty of power to demand workers return to the office. Some firms may make exceptions for some employees, but new hires may be required to relocate to the local office HQ. Even this would have a massive ripple effect on the housing market in satellite cities where remote workers flocked. If there is no other remote worker with a $300k Silicon Valley salary coming to buy your house, guess what? Your house is no longer worth what you paid for it.

Rising mortgage rates cool demand

The Fed dropped mortgage rates to the lowest in history in January, 2021 with real rates in the negative. As we have seen, that super-charged the housing market and set of a chain reaction of spiralling housing prices. And in the classic fashion of the Fed since Bernanke, they did so without really thinking through the consequences.

One possible consequence is that "what goes up must come down." Or in the case of mortgage rates, "what goes down must come up." As rates continue to rise, now around 5.4% for average 30-year mortgages, there will be fewer borrowers. Typically when housing market sales drop, the Fed has lowered rates to stimulate borrowing. But they can't do that now since the inflation dragon must be slain or they will have a much, much worse problem on their hands.

As rates rise, the cost of buying your house at the same price you paid for it is ever higher. In some high-flying markets like San Fransisco that might not matter. But in smaller markets, and in areas with lower-income borrowers, it could mean that prices drop significantly. As economic conditions worsen nationally, homes on the lower end of the market would be most likely to go underwater.

This scenario feels impossible today - but that is only because we have just lived through the biggest run-up of home prices in a century, and there is a public perception that "housing prices always go up."

Stagflation

Stagflation occurs when high inflation coincides with worsening economic conditions. The last time this happened was in the 1970s, as profligate government spending combined with exogenous supply shocks in the oil market.

For the average person, it will feel like you are in the trash compactor from the original Star Wars film. From one side, you have inflation eroding your savings and wages declining unless you happen to be able to negotiate 10%+ raises every year. On the other side, you have a weak job market, with little growth occurring, and fewer people spending money. There will be little or no home construction occurring, except perhaps high-end luxury housing.

In this scenario, housing prices never drop. Instead, they continue to rise relative to the average working wage. This is entirely plausible given current conditions. Recall my Python math from earlier in this essay. Even just a 15% increase results in prices doubling every five years. This very quickly leads to a scenario where the home ownership rate rapidly declines.

People need somewhere to live, of course. We might see a temporary increase in homelessness. People living out of their cars, vans, and campers might become more common as housing becomes more and more of a luxury. Home ownership really becomes a privilege that only a small minority of the country ever experience, perhaps 20-30%. The majority of the housing will be owned by wealthier individual households, investors, and professional landlords.

Eventually, we may see changes in zoning laws to try to increase the amount of housing stock. Single family homes are an outrageously wasteful use of land. They could be "cut up" into multi-family apartment houses with several apartments per house. There is a historical precedent here. Many older homes in Chicago were built in the 1890s-1920s as multi-story luxury homes. Following the depression there was a widespread housing shortage, and a lot of sub-standard housing. In the years to follow, these homes (beautiful classical style mansions) felt into disrepair and were purchased by investors and converted into apartment buildings, with a basement containing shared coin-op laundry and utilities. If stagflation and economic rot takes hold, perhaps we'll see today's suburban-style housing become tomorrow's cheap apartment stock. Suburban neighborhoods would begin to more closely resemble the inner-city in the 1980s and 1990s.

Retrospective

If You Own A Home, Please Shut Up About It

I've grown pretty tired of hearing people brag about owning homes. For some reason, this is seen as acceptable, while opening up your Etrade account at dinner would be considered quite rude, although the two acts are roughly equivalent. One of the reasons that the housing market is so subject to "irrational exuberance", according to Robert Shiller, is that people love to talk about their damn house. It has always been a source of annoyance for me to listen to suburban coworkers talk ad-nauseum about raking leaves and other boring domestic chores. I observed with a scientific curiosity the strange custom of men building expensive and elaborate wood-working facilities in their garage. And I have long felt befuddled by the strange obsession with interior decorating. I always observed such behaviors through a detached anthropological point of view. Since going through my experience looking for a home to buy in 2020 onward, however, I now find this practice intolerably rude, even sadistic.

Predicting The Future Is Hard

I may be completely wrong. In any case, this is a problem that will likely not disappear anytime soon. I hereby take credit for the things that I got right, and for the things that I got wrong, I wasn't being that serious anyway.