Friday, April 5, 2024

I think individual people being greedy and wanting to get rich are at the root of the housing crisis.

I'm going to go on a bit of a rant that I'm just going to label as "unpopular opinion." And it is my opinion. All of my evidence is anecdotal at best. However, sometimes the lived experience and what I've seen over the last few years means a lot (especially to myself). But before I go into this "controversial opinion," I'm going to post a picture (a snip) from a Facebook article in which I found a commenter who shares my very same opinion regarding the housing crisis in Utah, and to an extent, the housing crisis in the United States. Here it is:

I totally agree with what this person is saying. I don't think that the housing crisis was caused by Blackrock and big corporations. I don't think it was caused by "libtards" as my fellow Utahns like to refer to anyone as if they are a member of the democratic party (or vote democrat). I don't think it was caused by "Bidenomics." I don't think it was caused by wokeism. I don't think it was caused by low interest rates. I don't think it was caused by "Well, stuff is just more expensive!" and "what about all those gubmint checks that got issued?"

It was caused by people who sold their homes to other really well-paid people (many of them are in the tech sector) who suddenly could work remotely and could afford to get the hell out of wherever they were living and had the income to just buy houses up and gobble them up like they were nothing. It's the same thing as having a loaf of bread and some guy walks in and has a thousand dollars in his pocket, and he asks, "How much for that loaf of bread?" And the guy selling the bread shrugs and says, "I about fifty bucks?" And the guy that's loaded has more money than sense and just shrugs, tosses him a fifty and starts making a sandwich. Then the other people with bread go..."wait a minute? He got fifty dollars for that loaf of bread? Well that's how much mine costs!" and it is that over and over and over.

The people pushing all of this? Realtors who made tremendous bank for a few years. They kept pushing the prices on houses higher and higher and locking in those gravy commissions. I know half a dozen realtors who lived high on the hog making $40,000 a month during those two years. They went on vacations, bought new cars, spend spend spend...hired gardeners...sent their kids to private school... I mean, holy crap! They were living better than surgeons. These are people who don't even have a bachelor's degree who are on Instagram making photos of their fifth vacation in a year swimming with the whale sharks. Gimme a break. Now, nearly all of them are in "consulting" having fled the real estate sector because their money has collapsed...the gravy train has slowed to a trickle, and all the bills are coming due. I expect that "consulting" will dry up too because most of them were not the savviest group of individuals, but for others the "grift" is strong especially when propelled by the fear that "good grief, I can't go work at McDonalds can I?" But they were in the right place at the right time to make a killing. And consulting is always where narcissists land because regular jobs don't pay $100 or $1000 per hour (which is what a consultant can charge for whatever vapid wisdom they have to parcel out to whomever still has more money than sense).

But as far as all of those chickens that got put to field (I'm using "chickens" as a metaphor for high housing prices) they are now coming home to roost! It was a ridiculous era that we just lived through where a person could literally buy a home without even looking at it for $495,000 live in it for two years paying the mortgage, and then sell it for $600,000 making their living expense for that two years completely free and paid for on someone else and then pocketing a little. It's like they got paid to live there. The people that did this (I know/knew quite a few) think of themselves as clever and smart. They aren't. It was an unusual situation, and honestly doing that screwed over everyone else. It was the most selfish thing to do, and entire generations of people are not going to be able to afford housing (including those people's children and grandchildren) because of those selfish choices. It's a fascinating thing to have watched in real time...the greed of all of these people who really believed that this is how life was supposed to be and that housing prices would just go up and up and up with no limit at all and that there would always be a house for people and that everyone would be just fine. 

Real Estate should never have been a way for anyone to get rich. It shouldn't have been that easy to just buy a house, squat in it for a couple of years, and make a million dollars. How anyone thought that was sustainable, and how that could possibly last for years on end and that your kids wouldn't suffer, is beyond me to imagine. The entire time that I was watching it happen in 2019 through 2022 I thought to myself, "This is complete madness" and "It's going to get to the point where only those with really high incomes can afford a dump." And then all of that came true. Here in Salt Lake City, people need an income of $134,000 a year in order to buy an average dumpy house with a one car garage. What in the actual hell?

The kinds of jobs that pay $134,000 a year have titles like Deputy Administrator Physician of Intermountain Health and crap like that. But in 2016...which wasn't that far could buy a house and have a title like "assistant baker." That's how broken everything is. The thing that needs to happen (and it won't) is for housing prices to be cut in half, or wages need to rise so that $134,000 is what the assistant baker makes. The Deputy Administrator Physician of Intermountain Health...their wage should rise to $300,000.

The out of whack crazy that the modern world has become has been fascinating for me to watch, especially when I watch all of the conservatives around me with houses full of kids stress over what they are going to do with everything being so expensive. Some of them are self aware enough to know the truth. Some of them saw a sister or a cousin make off like a bandit when a trades person with a stay at home spouse suddenly became millionaires owning a ranch because they sold two houses and now they can drive around town in a Mercedes G-Wagon. But anyone who looked (historically) at that kind of thing would realize that this isn't how it was supposed to be.

It's like a huge truck of money got crushed on the freeway and people ran over and started grabbing and some got rich that were right there and stashed it all away and there was enough that got it all that it literally ruined prices for everyone everywhere. Ugh...what a mess. I'm glad I don't have kids who need to try and sort all this crap out and try to figure out a way to make that magical $134,000 salary fresh out of college as a "good place to start." In the meantime (and with it not sorting out) there are more homeless people than ever. Downtown Salt Lake looks like an episode of The Walking Dead because there are so many homeless people shambling around, looking filthy and muttering to themselves. This is what all of that greed bought. I guess I should count myself lucky that I got a home prior to all of this, and no greedy person can just jack up my rent "because the market says I can!"

That's the end of this rant and my "unpopular opinion." If you have a different opinion or want to call me out for "being wrong," feel free to do it in the comments.


  1. I hope this housing bubble bursts soon. My rent went up $180/month for the same dump with the same 50-year-old toilet. It's pretty ridiculous.

    Real estate has always been a way to make money. Course back in the old days you could just have your army take a bunch of land and then sell it.

    1. @PT: I'm so sorry that happened to you. $180 is an enormous amount of money to have it go up all at once. This is just gouging. Gouging by greedy people who are taking advantage of others knowing that moving is really difficult to do and requires (actually) a lot of money.

  2. Greed is at the bottom of most of what's wrong in the world. The greedy and the power-hungry cause more than their share of grief all around.

  3. No, you're not wrong. This is what happens when the guardrails are taken down (via deregulation) and greedy people descend. It's time to reregulate everything, although that's not going to help anyone in the short run.

  4. Ya think? When one of the dominant themes in TV programming is literally flipping houses for a profit, you can pretty much assume people think housing is just another way to raise some money. They don't even think of houses as homes. Why would they? And then they pretend that obsessing over every detail matters, as if someone actually living in the house, rather than trying to sell it, obsesses over these things. I don't see the point. If it's got my stuff in it, I don't need to quibble. It's people with too much time and money on their hands. And it distorts the market. Of course it does.