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The Shock of Sweden's Housing Market Is Hitting the Country's Currency

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Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#111

Post by astura »

samsonradu wrote: post #89
Gustomaximus wrote: post #57

Earlier quoted context omitted.

Homes are important to people and they tend to buy as good as they can afford. When employment is stable and interest rates are low people will spend more because they can and feel safe doing so. Early movers purchase a higher grade of home than they could have previously. Eventually this shifts the market as a whole as income distribution remains stable. Then people buy the same house they would have previously at a…

Isn't it inherently bad to buy "as good as you can afford"? Employment is rarely stable throughout a 30-year period. Shouldn't people be much more careful when maxing out their mortgage relative to 'the good times'?

Yes, I think so, but only because "as good as you can afford" usually means to people "as much money as the bank will loan me" instead of "as much as I have carefully budgeted."

I bought as much as I could afford, but my budget included savings and a cushion. The bank would have loaned me plenty more than what my budget could afford. And my budget included repairs and maintenance. I also included in my budget a 4 bedroom house costs more than a 900 sqft town house to heat and cool. The big thing was I wasn't willing to give up maxing out our retirement accounts.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#112

Post by Retric »

lisper wrote: post #107
opportune wrote: post #14

When will we learn that a "strong" housing market is not necessarily a good thing? High housing prices are great for those who already owned houses but terrible for everyone else (e.g. the entire generations born after prices became inflated). Not to mention people are greedy and will over leverage themselves when interest rates are good. No country should let the "landed gentry" hold them hostage over interest rates…

> High housing prices are great for those who already owned houses Not really. Rising prices (not high prices) are great for people holding houses as investments . But for owner-occupied houses, rising prices are as bad for the owners as they are for everyone else. my wife and I own a house in Northern California, which we bought during the sub-prime crash. Since then it has nearly doubled in price. It is also too bi…

#3 is real, but more a sign of California's disfunction than an inherent problem with high property values.

PS: #1 only consumes a percentage of profits, so it can't make a sale unprofitable.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#113

Post by s_kilk »

dfhdfhfdh wrote: post #73
baursak wrote: post #17

I don't get it. When prices are high, it's a housing crisis. When prices are going down, it's a housing crisis. It's almost as if news articles just need to be written regardless of the reason.

Maybe housing shouldn't be a market system. Instead, housing should be free and landlords should be abolished.

The word you're looking for is Decommodification.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#114

Post by Dylan16807 »

lisper wrote: post #107
opportune wrote: post #14

When will we learn that a "strong" housing market is not necessarily a good thing? High housing prices are great for those who already owned houses but terrible for everyone else (e.g. the entire generations born after prices became inflated). Not to mention people are greedy and will over leverage themselves when interest rates are good. No country should let the "landed gentry" hold them hostage over interest rates…

> High housing prices are great for those who already owned houses Not really. Rising prices (not high prices) are great for people holding houses as investments . But for owner-occupied houses, rising prices are as bad for the owners as they are for everyone else. my wife and I own a house in Northern California, which we bought during the sub-prime crash. Since then it has nearly doubled in price. It is also too bi…

That's more because prop-13 is a garbage fire than any other factor.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#115

Post by ppeetteerr »

opportune wrote: post #40
maxxxxx wrote: post #25

Earlier quoted context omitted.

Totally agree. It seems one of the factors that helped the US until the 90s was that housing was affordable so people could move around easily. A "strong" housing market seems to indicate that there are no productive places for investing and no wage growth so people need to gamble on houses to rise instead.

I think a strong housing market may be the result of lack of productive capital, but I think it has more to do with supply and demand. Most average people pay for a house using a mortgage payment, so when buying a house, they'll be looking for a house that has an affordable mortgage payment. Let's say Joe wants to spend / can afford a $1000/month mortgage payment. If interest rates are 5% and the maximum mortgage per…

I agree with everything except for the "make them and their other rich buddies even richer." Let's not bundle all politicians into this. :)

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#117

Post by SiempreViernes »

staticelf wrote: post #47
wjnc wrote: post #45

Earlier quoted context omitted.

I upvoted. I guess it's the first few words that suggest a racist / popularist post, but it's ontopic IMHO. You point to an influx of people in the age range that usually rents an apartment. Such local equilibria are quite instable. It only takes a few hundred excess renters to destabilize a local (regulated) market for housing. That leads to crowding out where those that usually would rent, but can afford to buy wil…

Well, if you are increasing the population a lot, all of those people are going to need somewhere to live. It isn't really hard to figure that out but most people don't seem to make that connection. Don't understand how it could even be remotely racist or popular. The statistics of housing prices correlates very well with increases in immigration. Of course, correlation does not imply causation but in this case I'm p…

In 92 there was a five times jump in asylum applications from the previous year (to 69 000 people), can you guess what inflation adjusted house prices index did at that time, and some time on?

It takes great effort to see a correlation between yearly applications (between 2000 and 2008 an average of 25 k persons varying with at most 30%, 7 years below that average and 3 above) and house price index (steadily up 62 % from 2000 to 2007, never failing to increase from one year to another).

https://www.ekonomifakta.se/Fakta/Ekonomi/Hushallens-ekonomi...

https://www.migrationsverket.se/download/18.585fa5be158ee6bf...

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#118

Post by ptaipale »

margorczynski wrote: post #6

Are the regulations blocking the development? Considering the demand is so high wouldn't the supply follow by e.g. scaling vertically?

Sweden has rent controls, which has caused long queues to apartments (we're talking wait times of 20 years) as well as a significant grey/black market in second, third and even fourth hand contracts, because the regulated first contract is so valuable that people keep them and rent them onwards.

It has also created situations where e.g. trade unions and other organisations (who own rental apartments) arrange nicely-located apartments to friendly politicians (and their relatives) ahead of the queue at very advantageous rents.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#119

Post by sigi45 »

lisper wrote: post #107
opportune wrote: post #14

When will we learn that a "strong" housing market is not necessarily a good thing? High housing prices are great for those who already owned houses but terrible for everyone else (e.g. the entire generations born after prices became inflated). Not to mention people are greedy and will over leverage themselves when interest rates are good. No country should let the "landed gentry" hold them hostage over interest rates…

> High housing prices are great for those who already owned houses Not really. Rising prices (not high prices) are great for people holding houses as investments . But for owner-occupied houses, rising prices are as bad for the owners as they are for everyone else. my wife and I own a house in Northern California, which we bought during the sub-prime crash. Since then it has nearly doubled in price. It is also too bi…

'nearly doubled' is more like gambling than investing. Investemnt would be fine if your money is little above inflation. 1-8% with renting it out.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#120

Post by Dylan16807 »

samsonradu wrote: post #89
Gustomaximus wrote: post #57

Earlier quoted context omitted.

Homes are important to people and they tend to buy as good as they can afford. When employment is stable and interest rates are low people will spend more because they can and feel safe doing so. Early movers purchase a higher grade of home than they could have previously. Eventually this shifts the market as a whole as income distribution remains stable. Then people buy the same house they would have previously at a…

Isn't it inherently bad to buy "as good as you can afford"? Employment is rarely stable throughout a 30-year period. Shouldn't people be much more careful when maxing out their mortgage relative to 'the good times'?

Especially when "good" means "big". The ability to pay for an 8 bedroom house does not imply that it's a good idea to buy one.
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