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third ring suburbs
Millennials May Be Entering the Housing Market in a Big Way

Amidst all the dysfunction and decay in Washington, some good news about America’s long-term social and economic prospects: Millennials are finally starting to get a foot in the housing market. The Wall Street Journal reports:

After sitting on the sidelines for a decade, millennials are buying homes en masse, promising to kick the already strong housing market into higher gear.

Virtually all major builders are migrating away from the luxury homes that dominated the early years of the economic expansion and are focusing on lower price points to cater to this burgeoning clientele.

“There’s an increasing confidence level in that part of the market,” said Gregg Nelson, co-founder of California home builder Trumark Cos. “The recovery is finally starting to take hold in a broader way.”

Since the 1940s, homeownership has been a major engine of American middle-class prosperity. It encourages family formation, helps people save for retirement, and strengthens civil society. It also tends to make voters more moderate; the uptick in millennial home purchases may be another indication that the rising generation of young adults may follow in the path of the Boomers—dabbling in radical politics in their youth before moving to the center as they buy into the system and lay down roots.

But we should not get complacent. There are still far too many artificial regulatory and environmental obstacles to healthy home construction in many states and regions. And the nation lacks adequate infrastructure to sustain a Third Ring of Suburbs—or the needed housing development further outside of city cores where land is more affordable. As millennials start to zap out of their post-recession hangover, we need to make sure that the a healthy and accessible housing market is waiting for them.

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  • ——————————

    Forced density doesn’t work for our society…Americans don’t want to live that way, and shouldn’t have to.

    There will have to be a 3rd ring of suburbs, just like there had to be suburbs at all. The US population has more than doubled since the end of WW2, when suburbs really began to develop, so….

    • seattleoutcast

      Forced density is being forced on Seattleites by the communist city council. Magic choo-choo trains will take people everywhere! The result? More are fleeing into the ex-urbs.

      • ——————————

        I lived in Portland Oregon for 13 years until ’05. Do I know what you are going through!
        Portland was the first city to create an Urban Growth Boundary, as a national experiment to see how it could work. You can drive down roads filled with subdivisions on one side and farmland on the other. And they also did a billion dollar choo-choo train from the Western burbs along hwy 26, and into downtown…they even blasted a tunnel through the west hills.
        I don’t think I ever saw more than about 4 people riding in it….

        • D4x

          What neighborhood? I was in Portland in 2000-01, really fun house hunting. Finally picked Mt. Tabor, but my job disappeared. I could have used that train to get to work. The banning of big box stores from that UGB was weird.
          Driving thru SE was very interesting…

          (I am avoiding posts on housing due to too many moves since Portland)

          • ——————————

            Actually I lived in several houses when I was there. I am mainly a home builder so I was always building or renovating, moving in for 2 years, and then selling to take advantage of the capital gains rules on primary residences.
            I first lived in NE, but only a few blocks from Mt. Tabor. I had a friend that lived in Mt. Tabor…nice area. After that I moved across the Willamette into the SW hills areas. The last house I built and lived in was in the Sylvan Highlands area.
            SE had some interesting streets in that some were gravel and filled with huge potholes, but the housing stock was from the early 1900’s. I couldn’t figure out why they were never paved. It’s not like Portland had cheap taxes.
            I was an okay place to live, but I got tired of the rain/clouds/fog for 9 months out of the year….

          • D4x

            TY. I was glad to leave after the Tacoma earthquake in 2001. Did not want that experience any closer than 90 miles! Realtors had tried to sell me brick houses; I learned about the risk before they succeeded. It was so much fun finally house hunting where I could afford every neighborhood except some of the SW.

            SE kept trying to secede, for the weed. Perhaps that was why the streets were unpaved!

          • ——————————

            I had forgot about the SE weed thing!
            Well, they’ve got their weed now!…which is why the streets are probably still not paved…they’re all too wasted to do the work.

            There was a 5.3 there around ’92 or ’93, I think. It happened at about 5:30 AM. I had just woke and was sitting on the edge of the bed when it let loose. I stood up and rode it like I was on a surf board. It was fun. My girlfriend was freaked out and frozen in silence. We were on the second floor of an old 2 story wood frame house, so it moved pretty good.
            There was a bit of damage to some brick homes, and a brick school I remember, but that was about it.

          • D4x

            When the Tacoma earthquake hit, I was in a 1st floor ap’t. Thought a washing machine in the basement had an unbalanced load & had started to ‘jump’ around. Standing up to go see was like having no legs (your ‘surfboard’), so I turned on the news. I recall hearing >75% of the brick chimneys in Tacoma had been damaged.

            Being from Hurricane Florida, I do not know how so many people live with earthquakes, or in Tornado alley.

            Siberia is the next big Real Estate play! Rumor has it (ok, I am starting this rumor), Putin will offer an oblast to the palestinians… 🙂

          • ——————————

            Hmmmm, Ice Arabs.
            Well that will free up a bit of land in Israel!

            Mozart…that’s good.
            I was feeling Mendelssohn a bit today.
            Violin Concerto in E minor….

          • D4x

            The Light Classical station here has Mendelssohn. Very peaceful.
            Mozart really does do something positive to the brain, and, I love the sound of the clarinet. A friend of Mozart invented the clarinet. Imagine that collaboration!

            That rumor about Siberia, might change, once I finish reading and digesting this essay:


            My full comment was to leoj, in the Comey thread. Because we have sidebars on Hezbollah.

            TY for the upvote on the Inaugural photo at the culture war thread. Perfect family shot for one who refuses to want to see THAT family.

            Good night!

          • ——————————

            Sound-wise in Classical I’m first a violin guy…but the oboe and clarinet are tied for a close second behind the violin.

            Thanks for the link! It is going to be an awesome read! Great subject matter. I just started getting into it. It’s going to take me a few days to get through it.

            I always wish I had more time for reading….

          • D4x

            Joshua Bell on violin! Still, no one better than Benny Goodman on clarinet. So glad he recorded Mozart at Tanglewood.

          • ——————————

            Bell is great!
            Liking Hilary Hahn too…plus you get a little eye candy while you are listening!

  • Unelected Leader

    Millennials are better positioned to succeed in the housing market than perhaps anyone else. We (should) know precisely what not to do! Those of us paying attention to the very oldest of millennials and Gen-X’ers watched them make absurd decisions with mortgages that they couldn’t afford, and bought in ridiculously high priced areas.

    For any millennials reading! It should be a 15-year, FIXED RATE mortgage. And you should be spending absolutely no more than 1/3 of your take-home on your payments. In fact, if you really want to succeed it should be 1/4 of your take-home, or less. Any more than that and it’s too much house for what you earn. Take it from a 26-year-old who is not broke, bought a house, and has no debt besides the house (now). Lived in a trailer and ate beans for four years to pay off student loans asap.

    • seattleoutcast

      While all of this is wonderful advice, it was also the boomers who fell for the housing boom. A generation that (for the most part) did not save anything for retirement, were trying to turn their houses into ATMs and were buying homes just to accumulate capital. This “irrational exuberance” led to their downfall.

      • Unelected Leader

        Oh yeah, no doubt about that. 75 million people and it seems like 98% of them just wanted everything in the moment. Worse yet, most of us millennials have boomers for parents, but they didn’t have enough of us. So, tiny generation X is expected to pay for the boomers for at least the next 15 years until millennials !hopefully! takeover, but there still aren’t enough of us.

        • Jim__L

          The worst are those GenX careerists who figured, “My career is too important, so I won’t be a mother. Now feel sorry for me that I have to take care of my aging parents!”

          Yeah, how about those of us who have to do both? And we’re not making what they’re making, because we need to juggle both kids and parents. Boo-frickin’-hoo to those careerists… who are doing nothing but making the problem worse by not having kids.

      • FriendlyGoat

        I always wonder whether the final blow-off of the housing boom was caused in part by the government’s decision to exempt from taxation the gains made on sales of most principal residences. Talk about a magnet to the mania,…

        • ——————————

          No, it had nothing to do with it really. That rule became law in the early 90’s. I have been taking advantage of it since then.
          Anyway, what caused the boom, as we have discussed before, was the loosening of lending standards to the point where everybody could buy a house, and much more house than they could afford. They could also buy unlimited rental houses for no money down, even with bad credit.
          When all that started, it snowballed and changed the real estate culture…everybody was a home owner and a landlord, just as the stock market culture changed before the 2000 crash…everybody was a trader….

          • FriendlyGoat

            Whatever is low-taxed is where the trading money goes. Then explosions happen.

          • ——————————

            If your talking about the stock market crash, it was not fueled by capital gains from house sales. It was fueled by trading rules being changed so people could trade by themselves directly into the market without going through a broker. The creation of software that allowed people to trade their own portfolios. And the internet, which made the previous 2 things possible. Those things happened at the same time as the tech companies took off. Everybody began trading their own stocks, didn’t know what they were doing, and it all got out of hand.

            The stock market part of my previous comment was only meant as a comparison to what happened in the real estate market when everybody piled in to the new fad.

            Neither had anything to do with capital gains, nor any other type of tax….

          • FriendlyGoat

            We’ll have to agree to disagree on that. I see taxes having gone lower, the wealthiest classes pulling FAR away from everyone else, the USA government in deep debt and a lot of austerity job cuts still coming in future years. Some in the stock market are flourishing. Most in the labor market have not seen the bottom yet. Things can get a lot worse below the median and they will. You just can’t structurally eliminate the “good” jobs on a daily basis and think call centers (or something) will fill they void.

          • ——————————

            I just want to stay on the original points.

            So before we wrap up, I want to be clear here.

            1.) Do you think the capital gains law that allows up to 250K if single, or 500K if married, of profit on primary residence, caused the housing bubble?
            Yes, or no?

            2.) Do you also think that that same law also caused the stock market bubble?
            Yes or no?

            3.) Do you think that law should be eliminated?
            Yes or no?

          • FriendlyGoat

            I do think that the exclusion of these gains fueled irrational exuberance in residences. Of course it is not the sole cause of the housing bubble. Of course it is not the cause of the tech stock bubble of 2000 or the stock bubble we are in now—–because it was about houses.

          • ——————————

            I wasn’t trying to get you to agree. We will never agree on anything that we don’t already agree on…which we do on some things. You and me are far to old and set in our ways to simply roll over because of a few paragraphs a stranger writes on the net.
            I have never known anyone on the far left in my life, so just trying to see where your head is at on this.

            Actually we do agree on some of it, anyway….

          • FriendlyGoat

            Funny thing. I actually have known (in real life, not just here in comment section) lots of people on the far right. Still do. Some of them have been and are genuine friends. Beats me why they never switch, though. I flipped left in the Reagan era because I simply did not believe Republican rhetoric, even then. In more recent years, I never could identify with Fox, Hannity, O’Reilly, Limbaugh, Palin, Breitbart, any of it. Now there is Trump (and Pence who is worse than Trump), Ryan, McConnell, the Freedom Caucus of Congress. Some ears are always eager for the things they have to say. Mine never are.

          • Anthony
          • FriendlyGoat

            There is something eye-opening in there for everyone. Thanks. For me, among other things, I did not really know that a full 3/4 of the people who could qualify for rental assistance do not receive it.

            On the mortgage interest deduction, we have to consider that interest is generally deductible as a business expense in other types of money-making activities. And for the last 50 years, home ownership has been a gain-maker for a lot of people (certainly not all homeowners due to the 2008 crash, but a lot.) I think we may have a more questionable tax matter with the low-taxing of capital gains or the no-taxing up to 500K for a couple on gains on sale of personal residences with flipping of those technically possible every two years. Just sayin’.

          • Anthony

            Yeah, the Cap gains exemption and the skewed concept of who housing developers benefit (per your earlier discussion) is why I linked a very informative article.

            With you, I opt to avail information that only adds to your substantive humane point of view – to make your retorts that much more grounded.

            But lately, I’ve seriously thought about how do we restore civic health to the “whole nation” (another reason I linked article). To my mind, the crisis of inequality is not taken seriously enough in public policy areas, especially since inequality certainly infers that the country just may be failing many of its citizens (including many Millennials). I say the aforementioned recognizing that you and I will be both materially and physically OK as we are on the other side of the mountain – descending gracefully down its opposite side. But both country and following generations ought to have benefit of a healthy societal compact. So, if you have ideas, suggestions, thoughts, etc. please share them going forward as I attempt to ponder and work to improve our civic national health with what’s left.

          • FriendlyGoat

            Funny thing as you know, Black Lives Matter was met with “all lives matter” to erase the black part. Similarly now, any mention of inequality seems to be met from the right with the idea that we can talk about equality of opportunity, but NOT about any measures designed to promote more equality of outcome.

            YET, with the Trump-shtick messaging, they SOLD the idea of “we’re not going to forget the working people any more”—-even as virtually everything done or floated in GOP circles since November is anti-worker. People know that the “societal compact” between corporations and workers has been slip-sliding away over decades, but they don’t seem to know it is sliding downhill faster since Nov 2016 than in any recent time. I can’t really explain it.

          • Anthony

            You know, if anyone truly wanted some context (American) and frankness about what you imply, they only have to objectively read the linked article. But in the age of polarization and confirming news sources to be reinforced, reading that article objectively requires intent.

          • FriendlyGoat

            I kinda think we now have slightly more than half of the folks in the country who cannot be separated from the Mad as Hell button because they are no longer able to process more than one, or two, or three, or four issues at a time.

            In the age of Trump, there is a political parallel to something Donald said off the cuff.
            He infamously explained to Billy Bush that when famous enough, rich enough, celebrity enough, a man can get away with nearly anything with certain women (maybe a lot of women). When a majority can be assembled with blind loyalty on a few pet issues, they don’t seem to notice that “drain the swamp” actually means pull the plug on the lake that is floating the boats of the supporters themselves——or something like that.

          • Anthony

            When I read your comment, I immediately thought of something an old friend and mentor told me years ago in his University office: “while all men may have been created equal, whatever that eans, what strikes the most casual observer is their disparity of age, circumstance, capability and conditions. And, considering people in general with respect to their judgmental powers, what is most unequal about them is their intelligence.” The aforementioned, I believe, is apropos to your point.

            More to the point (or at least underscore it), where the voting public goes wrong is in whom it accepts as plausible candidates (that apple orchard from last exchange) – not men/women of proven knowledge, ability and purpose but men (very few women) who appeal to various unexamined prejudices: ethnic, religious, regional, personal. etc.

            People in general, apparently, are far more responsive to blandishments than to reason – they love obvious charlatans. So, let’s begin!

          • Anthony

            Trust me, I hesitate to interfere but line segment claimed he blocked me (according to his reply to one of your antagonist). Now, that’s insignificant (the blocking yet it was news) but the claim is what raised my eyebrow – the implication being that he and I have had regular engagement (though since his arrival Nov. 2016 we have had probably less than 10 including replies). I only mentioned it (the touting of the block) because he referenced you (FG). Still, the entire exchange I found revealing and instructive despite commentary focusing on Anthony who is suppose to be irrelevant to both. 10 contacts is all it took for me to be relieved, if only the same magic worked elsewhere.

          • FriendlyGoat

            Sorry if I have started some mess by blocking certain pesky people and revealing that I did. I simply found that it’s better to break completely off from some of these folks than wake up every day to their derision. The truth is that on any given day, we can stop playing this comment-writing game completely. My first step toward that has been to inform JR, Jim_L, Tom, texasjimbo, and today D4X, that I’m not their entertainment. I’ve even invited a couple to block me. No sense talking with people who hate us.

          • Anthony

            I concur and they don’t know us so I would suggest the hate, if it exists, is within whether they know it or not. But that’s unimportant for us and my update is more an attempt at mirroring than your agency. Jeburke summed it up when he told one of them “it’s a shame TAI’s comment board has fallen into the depths inanities.” Finally, you do the talking (writing). I do the adamant cut off and avoidance (despite the infantile name calling). However, there still exist both respectful and intelligent contributors with much to share and we cannot lose sight of that. That other S**T let it find its correct level (as it manages to do more often than not). Finally, check this out: and

          • ——————————

            I tried your blocking method a few weeks ago on odd-ball Anthony, and you are right, it works great. You know the flea/s are around because the ” This user is blocked” symbol is there, but you can’t see’em, hear’em, smell’em, or taste’em….

            Thanks for the info!

          • Anthony

            You’re quite trite and common because Disqus has allowed blocking usage for more than a year now. Any one with limited intelligence would not need that info from a commentator. So, don’t leverage FriendlyGoat to spew your manufactured excuse to flew from discomfort or exposition of your true limited skills at 59 years of age. Life give very few do over and calling Anthony names does not change that reality for you – now this is to you line segment not for you.

    • Suzy Dixon

      And even if you’re reading and stuck with one that’s not fixed rate DONT keep refinancing. Sure, you can get a better rate maybe, but you’ll find yourself underwater by setting yourself back.

    • FriendlyGoat

      When I was about the age you describe, my wife and I were paying off our mortgage—–BUT—-it was a very small mortgage on a old, smallish and VERY non-fancy house in a very non-fancy place we bought while newly married and still 20. That was done with a seller who gave us owner financing—–no hoops. That lady signed us with no credit report and the simplest of forms and terms. (1972)

      We were both raised on the idea of “borrow as little as possible”—–for anything. So, we liked “paid for”, but what we had “paid for” in the 1970’s did not appreciate in value as well as better homes on which other people had borrowed a lot of money. In those times, an older realtor told me: “Buy as much house as you can possibly qualify for”. Sounded to us like risky advice, so we didn’t do it. But, he was right——THEN. The 1970’s, 1980’s, 1990’s, early 2000’s gave a LOT of appreciation to people who bought the right homes—–even if they were dangerously leveraged. And, as you know, the 2007 peak “killed” a lot of people financially on residential properties. It’s always hard to know when a house is an investment and when it is not.

      • Unelected Leader

        Yeah, well this is not 1972 unfortunately. My grandpa was working in a packinghouse in 1970 making about three dollars per hour, and that was okay in 1970. His take-home was a little over $9000, but in 1970 he bought a nice house for $15,000. Needless to say it’s now worth many times that. However, the ratio is most important. That house is worth between 200,000 and 220,000 today. Even if somebody is making $50,000 a year the ratio is way off. In 1970, the $15,000 house was just 1.65 times his income!

        Add to that the dollar has lost more than 70% of its buying power since then. Add to that millions of jobs have been lost in just the last 20 years alone. Those wages are lost, and those workers depress the value of labor in other sectors scrambling to find work often with a significant pay cut.

        • FriendlyGoat

          You are describing the effects which have befallen USA citizens since we decided to mainly celebrate the upper crust by leaning to conservatism in economics. I’m aware you don’t see it that way, but unless you’re in or on the way to that upper crust, you probably will in time. Reaganism was bad and had a long tail of destruction for real folks. Trumpism is going to be worse.

          • Unelected Leader

            You’re overcomplicating things. We both know economics is not Democrat or Republican. It’s a lot like science. There’s good science and there’s junk science. Democrats and Republicans have primarily been doing junk economics since before I was born. Even after I was born, Bill Clinton signed NAFTA, put in the elbow grease that led to China joining the WTO, and deregulated the banks. GWB started an unnecessary war. Obama expanded it from two to seven countries we’re bombing and was trying like the devil to push TPP through. Bad bad economics for main street.

          • FriendlyGoat

            If economics was not divided between Democrat and Republican, you would not have Republicans planning their own (OWN) tax reform for the exclusive benefit of the richest people in the country without a single left-side vote. Sorry, but I’m of the opinion that I’m not the one over-complicating the scenario. It really is a left/right thing. Prepare for the average folks of your generation and those younger to be royally screwed over beyond their present plight. From here, it looks as though little else is possible. Even if Trump is impeached over something or other, Pence is still there and he is not better.

          • Unelected Leader

            It’s an economic decision, and we’ve had it before. You think taxes should be higher, and I disagree. You know American and German rocket engineers were both doing science, too, but the Germans were a little better at it. Dems are wiped out at all levels of government except maybe dog catcher and there’s a non traditional republican POTUS (who spent decades rubbing shoulders of Dems). Why do you suppose that is?

  • WnRedworth

    It is not that hard. A smart millennial will work a job or two during college and get through in 4 years with only minimal debt. In grad school it is not that hard to work full time and attend school full time -it seems tough at first but usually only lasts 2 years. By the age of 25 they should have minimal student debt and by 28 have enough saved for a decent home and car.

  • Fat_Man

    Your paen to the wonders of home ownership is a false basis for policy.

    The Instapundit, Glenn Reynolds wrote:

    “The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But home ownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.”

    Dubbed Reynolds’ Law

  • Anthony
  • Fat_Man

    It could be worse:

    “Hong Kong shoebox, coffin homes a challenge for new leader” By Kelvin Chan, Associated Press, Hong Kong — May 10, 2017

    “Li Suet-wen’s … reality is a one-room “shoebox” cubicle, one of five partitioned out of a small apartment in an aging walkup in a working class Hong Kong neighborhood. Into the 120-square-foot room are crammed a bunk bed, small couch, fridge, washing machine and tiny table. On one side of the door is a combined toilet and shower stall, on the other a narrow counter with a hotplate and sink. Clothes drying overhead dim light from a bare fluorescent tube. … Li, a single mom whose HK$4,500 ($580) a month in rent and utilities eats up almost half the HK$10,000 ($1,290) she earns at a bakery decorating cakes.

    “Some 200,000 of Hong Kong’s 7.3 million residents live in ” subdivided units .” That’s up 18 percent from four years ago … The figure doesn’t include many thousands more living in other “inadequate housing” such as rooftop shacks, metal cages resembling rabbit hutches and “coffin homes” made of stacked wooden bunks.

    “Hong Kong regularly tops global property price surveys. Rents and home prices have steadily risen and are now at or near all-time highs. The U.S.-based consultancy Demographia has ranked it the world’s least affordable housing market for seven straight years, beating Sydney, Vancouver and 400 other cities. Median house prices are 19 times the median income.

  • Fat_Man

    “The Economic Implications of Housing Supply” by Ed Glaeser and Joe Gyourko.

    “In some parts of America, there has been a revolution in the regulation of home building over the past 50 years … For most of U.S. history, local economic booms were met with local building booms, so labor could follow shocks to local productivity. However, between the 1960s and the 1990s, it became far more difficult to build in the nation’s most desirable locations, especially those along the coasts. Higher economic productivity in San Francisco now leads to higher prices, not more homes and more workers … This change has both led to a transfer of wealth to a few lucky homeowners and to a distorted labor market where people move to regions such as the Sunbelt that make it particularly easy to build …

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