High-income job losses are cooling housing demand

Original Article ↗ Hacker News Discussion ↗

Are we in a recession? Markets vs real economy

  • Some insist the economy is already in (or just emerged from) a recession based on tech layoffs and personal experience; others point to GDP data and argue we’re “objectively” not in one yet.
  • Repeated refrain: “stock market is not the economy.” A narrow set of mega-cap tech/AI stocks is driving indices up while many sectors and regions feel weak.

Personal finance reactions

  • Several commenters rotated from equities into bonds, value, or international stocks, then watched US tech soar; timing the market is broadly criticized.
  • There’s debate over conservative 60/40 portfolios underperforming in this cycle, and over shorting high-fliers like TSLA or trimming AI beneficiaries.

Housing prices, interest rates, and sticky markets

  • Core question: will high rates plus falling high-income employment actually cut prices, or just freeze transactions?
  • Many describe “price stickiness”: sellers delist rather than cut, houses sit for months, volumes drop more than prices. Forced sales (death, divorce, relocation) set the eventual lower comps.
  • Some argue any serious downturn is the only path back from ~7x income price ratios toward historic ~4x, but others note recessions also kill incomes and credit, so affordability doesn’t improve for most.

Local housing anecdotes and polarization

  • Austin, Vancouver, Oslo, Boston, DC, Silicon Valley, New England: recurring pattern of cooling demand, longer listings, selective price cuts, and sharp differences by segment.
  • Luxury and “10/10 school district” homes in top metros often still bid up; mid-market homes and starter condos are struggling. K‑shaped housing market and “hollowed-out middle class” come up repeatedly.

Investors, private equity, and algorithmic rent setting

  • Disagreement over how much institutional ownership matters: some claim investors now buy ~⅓ of single-family sales (often small landlords), others emphasize overall share of stock is still low.
  • RealPage-style rent-optimization software is widely blamed for elevated rents and cartel-like behavior; DOJ settlements are noted but skepticism about enforcement remains.

Rent control vs. building more housing

  • Long heated subthread:
    • Critics of rent control cite empirical work tying it to reduced supply, worse maintenance, and higher rents for non-controlled units.
    • Supporters frame it as humanistic stabilization (preventing 100–150% jumps) in a market already distorted by zoning, NIMBYism, and speculation.
    • Several note that in many US cities, rent control exempts new builds, so they question how much it really deters construction versus zoning and permitting.

Affordability, generational and class divides

  • Multiple commenters run numbers: with average US household income, current prices and rates only support ~$200–350k homes, far below many markets; 1/3‑of-income “rule” is seen as obsolete as many pay 40–50%+.
  • Rising median age of first-time buyers and anecdotes about boomers/Gen X using equity and inheritance versus younger “forever renters” reinforce a generational wealth gap.
  • Investors leveraging housing as collateral (HELOCs for consumption) and using homes primarily as assets, not shelter, are seen as structurally supporting high prices.

Job mix shifts: healthcare and government

  • Commenters react negatively to healthcare’s outsized, faster-than-normal growth: viewed as a cost center extracting ~20% of GDP, driven by aging demographics, obesity, and Medicare incentives.
  • Moral and economic debates surface over how much society should pay for rare-disease cures and late-life care, and whether any explicit cap is politically or ethically acceptable.