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Comment by chadash | Hacker News Reader

There are definitely markets that are doing well and will continue to do so for a while. Rural housing for sure. This will probably cause a push for some people to move out of the city and into the burbs.

BUT, it's really too early to know what effects this is going to have on the housing market. Right now, most unemployed people are getting fairly generous unemployment benefits. Meanwhile, in many states, you aren't allowed to foreclose right now.

Once the foreclosure moratoriums and unemployment benefits end, it's anyone's guess what's going to happen to housing.

Edit: my uncle is a contractor who builds multi-family residences. I remember he stopped building and moved to house remodeling when there was a building boom in 2006-2008, when he felt that his local market was being overbuilt (turned out to be a great decision in retrospect). Houses being built does not always mean a strong housing market. Plenty of home builders are short sighted.

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I've been semi-closely watching the rural RE market in NorCal lately (both empty lots and very "off-grid" locations) and all I'm seeing right now are price cuts, some very dramatic. Nobody can predict the future but something is definitely changing.

What do they say? Real estate is hyper local.

You can see that in SF right now. Certain neighborhoods (downtown core) are seeing a ton of people leaving and other neighborhoods are seeing increased prices (further from core, higher % of single family homes).

How many of the unemployed are wealthy enough to own though?

Canada is facing surging real estate prices and while there are also masses of unemployed, few of those people had the money for home ownership anyway.

In Oklahoma right now you can be unemployed and earning $58,240 in annualized unemployment pay. That number will drop to $27,040 (still annualized) at the end of July unless the Congress intervenes. However, even $27k in Oklahoma would be enough to afford a small house in the suburbs of a city.

Do lenders let you get a mortgage if your income is unemployment payments that run out in 20 weeks? I would assume not, but maybe there are regulations that require them not to consider the source of the income if its from unemployment.

It’s not unemployed people getting new loans, it’s that they can continue to pay their existing loans preventing foreclosures and a drop in housing prices. Banks absolutely consider source of income, length of employment, type of employment.

>However, even $27k in Oklahoma would be enough to afford a small house in the suburbs of a city.

Sounds like I need to move to Oklahoma... I'm making about $44k in rural South Dakota but with the way housing prices have been around here the last few years, I am nowhere near being able to comfortably afford a mortgage (I can afford one, for a cheap, old, needs-a-lot-of-TLC-or-30-miles-out-of-town house, but not while also affording much else).

I have friends who live there and go on and on about the cheap cost of living. I’ve visited and it wasn’t a place I wanted to live. To each their own. It does seem absurdly cheap.

Because the unemployment % number isn't calculated in a way that represents the real-world unemployment situation.

I think the point is that they weren't previously unemployed. In rural areas housing is vastly more affordable than urban or city areas. In my home town in West Virginia there are multiple homes and mobile homes with land in fair condition for < $100k.

Unemployed people probably aren't buying new homes. But if they are getting unemployment check, they might be paying their mortgages on existing homes. Also, even if they stop paying their mortgages, they can't be foreclosed on in many states. Also, banks are deferring their payments, because it's not in their interests for people to foreclose, but they will only delay those payments for so long. My point is that once those unemployment checks cease and foreclosures resume, prices can drop significantly.

it's really too early to know

I find myself wondering if we could see the opposite flight too. If you've been completely alone in your countryside manor for the last four months, might you start thinking fondly of living in closer quarters with others?

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