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Graham’s Newsletter

Your Biggest Questions on Housing


What’s up Graham, it’s guys here :-)


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"Is now the right time to buy a home? Are housing prices going to drop anytime soon? Should I buy or rent?" — These are questions people ask me all the time. As someone deeply involved in real estate since 2008 — as an agent, investor, and landlord — I’ve seen the market shift through booms and busts, and right now, there's a lot of uncertainty.

With so much uncertainty in the market, learning the answers to these questions can help you make better decisions. In this newsletter, I’ll break down the factors influencing the housing market in 2025 and what they mean for you.


Here’s what I think about the US Housing Crisis

1. Why Do Rents Keep Rising While Salaries Don't?

Many people wonder why rent increases year after year while salaries remain relatively stagnant. The truth is that costs for landlords have risen dramatically. Insurance rates have jumped by over 20% and property taxes have risen by 7% in recent years. Labor and material costs for repairs have skyrocketed, forcing landlords to pass these expenses on to tenants.

Adding to the problem, there’s a lack of new affordable rental development. When existing units are renovated, they command higher rents, pushing costs even further. The solution? More development at lower price points to balance supply and demand, but it’s easier said than done given the time period and cost of construction.

2. Why Are Home Prices So Expensive?

The housing affordability crisis boils down to a supply and demand imbalance. The U.S. is currently short about 4 million homes to meet demand. High interest rates and development costs make building homes difficult, and developers focus on luxury units that provide better returns.

Unfortunately, building affordable housing without government support is often not profitable. This means most new projects cater to higher-income buyers who can afford steep prices.

The Problem of Low Housing Supply

In a healthy housing market, vacancy rates should be above 5%. But in cities like New York, rates are dangerously low — around 1.4%. Rent control policies encourage tenants to stay put indefinitely, even if they can afford more. As a result, demand keeps growing while supply remains tight.

Rent control, while well-intentioned, often benefits those who were lucky enough to secure low rates decades ago, forcing new renters to pay significantly higher prices. This mismatch creates market inefficiencies and prevents natural turnover, further tightening supply.

3. Can Modular Homes and 3D Printing Lower Housing Costs?

In a world where technology is making everything from electronics to transportation cheaper, it's frustrating to see housing prices rise. This is why innovations like modular housing and 3D-printed homes have the potential to reduce construction costs and speed up the building process. These methods let builders manufacture components off-site and assemble them quickly. This reduces labor costs and minimizes disruptions in neighborhoods, reducing the overall cost.

4. Why are Corporations Buying Up Homes to Rent?

Some reports claim that institutional investors now own over 35% of rental units. But this figure is misleading. Many of these "corporate landlords" are actually small investors who hold properties under LLCs for liability reasons. In reality, large-scale corporate investors with thousands of units make up a fraction of the overall rental market.

There has been speculation that corporations like BlackRock are buying up single-family homes, reducing availability for first-time buyers. However, most of these large firms are investing in multi-family apartment complexes, not individual homes. While corporate involvement in real estate has grown, these investments often add to the housing supply rather than taking it away.

The Impact of Airbnb on Rental Prices

Short-term rentals like Airbnb have undoubtedly reduced the number of long-term rental units available. Originally meant for homeowners to rent out spare rooms, Airbnb has turned into an investment opportunity where entire homes are purchased solely for short-term stays.

This shift has driven up rental prices, particularly in tourist-heavy areas, as property owners prioritize short-term profits over long-term tenants. While Airbnb provides flexibility for travelers, it has inadvertently contributed to housing shortages in many cities.

5. Why can’t the Government Just Build More Houses?!

A major obstacle to building more homes is the slow approval process for new developments. For instance, in cities like Santa Monica, it can take up to four years just to get a project approved. Bureaucratic hurdles, zoning laws, and local opposition all contribute to delays, driving up costs and limiting new construction.

To solve this issue, policymakers need to streamline approvals, relax zoning laws, and encourage higher-density developments in urban areas. Reducing regulatory burdens could lead to faster construction and more affordable housing options.

Looking at Global Housing Solutions

Some countries, like Austria, have implemented successful housing policies that provide affordable public housing for a large portion of the population. In Vienna, for example, 60% of residents live in public housing, compared to less than 1% in the U.S.

This model ensures long-term affordability and stability, but it requires significant government investment — something that has yet to gain traction in the U.S. Expanding public housing could free up renters’ income for other spending, potentially boosting economic growth.


Policies That Could Lower Housing Costs

The only true way to lower housing prices is by increasing supply. Relaxing zoning laws could allow for higher-density housing. This will eventually bring down prices. Some other solutions could be offering tax incentives for developers to build affordable housing and allowing homeowners to transfer low mortgage rates to new properties making it easier to move. If these policies were implemented, we could see more balanced housing markets with affordable options for all income levels.

Final Thoughts

The U.S. housing market is facing significant challenges, but there are solutions — ones that need policy changes, financial incentives, and a shift in how we approach housing development. Encouraging new construction and incentivizing affordable housing could help alleviate some of the current pressures.

If you’re looking for a house, whether to rent or buy, always stay informed on the current trends and do thorough research to make the best financial decision.​


That's it for this week. I hope you enjoyed this article. Let me know your thoughts by responding to this email - I read every single comment :)

Stay safe, stay invested and I will see you next week – Graham Stephan.

113 Cherry St #92768, Seattle, WA 98104-2205
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Graham’s Newsletter

A 33 year old real estate agent and investor with over $120M in residential real estate sales. This is my way of sharing actionable ideas that will make you a smarter and wealthier investor.

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