'Cheap Old Houses' on Instagram Are an Aesthetic, But Are They Good Investments?

Plus, Supply, supply, supply + Sorry to burst your bubble

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  May 21, 2022 | Issue #43

Good morning! This week we're talking about old homes, Biden's plan to increase housing supply and the great bubble debate.  'Cheap Old Houses' on Instagram Are an Aesthetic, But Are They Good Investments? Franziska Barczyk for Money Scrolling through the popular Cheap Old Houses feed on Instagram this week, I found myself fantasizing about buying a mill in western France. Situated on a river, the charming property boasts a stone facade, exposed wooden rafters and the low, low asking price of €69,950 (about $74,000).  The problem — if you don't count my abysmal French — is that the place is falling apart. I couldn't even begin to estimate what it would cost to make it habitable, let alone nice. For me, that's a deal breaker. But not so for the people my colleague Kristen Bahler profiled in her latest feature for Money. Kristen dove deep on passionate homeowners who are, as she puts it, "opting out of the modern housing market."  Instead of using savings for a down payment on a large mortgage, such buyers are getting whole houses for as little as a few thousand bucks. They often find for sale homes on social media and then spend years fixing them up as their budgets, skills — and, lately, supply chains — allow.  Accounts like Cheap Old Houses have been around basically as long as Instagram, but the trend of people buying homes like the ones featured on these pages really took off at the start of the pandemic. Lockdowns, of course, sent city dwellers in search of space, and the endurance of remote work has meant people can move to remote places long term.     "It feels like a complete pipe dream, buying cheap and not killing yourself on the closing costs," says Elizabeth Finkelstein, one of the account's curators. "It's been interesting to see people who are suddenly able to invest in homes who wouldn't have had a prayer otherwise." Have these homeowners found the secret to mortgage-free living, or are they sinking their savings into a money pit? Read their stories and decide for yourself. Supply, supply, supply Can't find an affordable home? The White House has a new plan to help "ease the burden of housing costs."  Experts offer a dizzying number of explanations for the growing cost of keeping a roof over your head — it's the millennials; it's remote work; it's Airbnb's fault. Whatever the theory, there is near-universal agreement that a severe shortage of homes is exacerbating the problem.  According to the White House, fewer new homes were built in the decade following the Great Recession than in any decade since the 1960s. The problem grew during the pandemic, and now the shortfall is more than 1.5 million homes nationwide, according to a Moody's Analytics estimate. So what does President Joe Biden want to do about it? Proposals include…   Encouraging local governments to reform zoning and land-use policies to allow more building — and reward those that do. Making it easier for people to get loans to buy and build manufactured houses, accessory dwelling units and small apartment buildings. Selling government-owned homes to people who will live in them — or non-profits who will rehab them — rather than big investors. Addressing supply chain issues.   If all goes as hoped, the administration says these actions would lead to more new homes in 2022 than any year since 2006 and help solve America's housing supply shortfall in five years. Sorry to burst your bubble Ben Mounsey-Wood for Money Speaking of rising costs, the near-20% increase in home prices over the past year has a lot of people wondering if we're in a housing bubble. The scary part of a bubble, of course, is the possibility that it might burst and send prices down too far, too fast. The fear is understandable, given the destruction and lingering effects of the last housing crash. (See: The slow pace of home-building, as mentioned above.) However, as Leslie Cook explains in a new article this week, those worried about a 2008-style housing bubble may be better served looking further back in time for clues as to how today's market may play out. For more: Bubble or No Bubble? What History Tells Us About the Likelihood of a Housing Crash This Year Chess prodigy turned real estate villain? A childhood chess prodigy who lives in Florida is the top-performing real estate agent in Atlanta — which, in case you need reminding, is in Georgia.  According to The Wall Street Journal, without ever visiting, A.J. Steigman bought or leased $86 million worth of homes in Atlanta in 2021. He did another $40 million in business in Pennsylvania and Florida and likely earned more than $2 million last year.  Jealous? For some, that emotion might turn to anger when they learn that Steigman's clients are all investors that plan to rent out the homes rather than live in them. As such, most of the responses to this story on Twitter are not suitable to publish in this newsletter, but it's worth a read for a glimpse of what's going on under the hood of this wild market. Happy hunting, P.S. Have an old home? Share pictures and stories with me on Twitter @samsharf or via email at sam.sharf@money.com. P.P.S. Have a friend who loves real estate or is looking for a home of their own? Please forward them this email or send them to the Money Moves subscription page. Money's Essential Home Buying Resources: Spring 2022 On the hunt? Check out Money's Mortgage Calculator, list of The Best Mortgage Lenders and look at the latest mortgage rates Thinking of refinancing? Our list of The Best Mortgage Refinance Companies can help. You can also use our Mortgage Refinance Calculator or these refi tips Key question: How much house can I afford?

This newsletter is free because Money earns a commission when you click or make purchases from the links in this email and on our site. We also receive compensation for some of the products and services featured in this message. Offers may be subject to change without notice. Learn more about how we make money. Privacy Policy • Advertise With Us • We're Hiring! To stop receiving these emails, unsubscribe or manage your email preferences. Copyright ©2022 Ad Practitioners, LLC. All rights reserved. Metro Office Park Calle 1, Building 7 Suite 204, Guaynabo, Puerto Rico 00968, USA