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There is more to high house prices than constrained supply

economist.com

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Re: There is more to high house prices than constrained supply

#221

Post by conanbatt »

wpdev_63 wrote: post #220
conanbatt wrote: post #194

Earlier quoted context omitted.

I think its a fine way to save money, but that is basically choosing to be homeless and live like a pauper. When you have 200k+ salaries and you find it appealing to live like a minimum-wage worker with no family, it should raise a red flag.

Many people live alot more comfortably within a van than they do in their stationary home. They can go to the beaches during the summer weekends and go out to colorado during the ski season and bring their home with them. This is one of the many couples that are doing it these days: https://faroutride.com If you get 90% of your home comfort in a finished conversion van and you save 50% if your wealth, it's a no brain…

You'd be living in an illusion to believe living in a van is a higher quality of life than having a proper place. Its a ridiculous comparison, no matter how hipster some modern choices can become.

Would you raise a child in a van? Down by the river?

Re: There is more to high house prices than constrained supply

#223

Post by EliRivers »

esotericn wrote: post #55
Theodores wrote: post #45

Earlier quoted context omitted.

Years ago in the UK there was a considerable quantity of council owned properties, these were nice places to live with nice rents to pay. There was no shame in living in a council house, but you wouldn't be buying it, so it was not yours. You wouldn't be evicted either or forced to pay through the nose. This worked as a baseline, if you had more money or wanted to live in a posh area (or just the countryside) then yo…

Right. In the UK, societally, we've decided that we don't value everyone having a decent place to live. We don't seem to really have a "goal" for our society, I think. Maybe "everyone should have a job". But that's indirect; people want jobs because they (ideally) result in outcomes like feeling like you're contributing and receiving a stable life in response. "Everyone gets a house if they want" is a really solid go…

Maybe "everyone should have a job".

I think that's just a spin on the real "goal", or at least the feeling behind it; people don't deserve any help when they're down because they could have a job.

Re: There is more to high house prices than constrained supply

#224

Post by wpdev_63 »

conanbatt wrote: post #221
wpdev_63 wrote: post #220

Earlier quoted context omitted.

Many people live alot more comfortably within a van than they do in their stationary home. They can go to the beaches during the summer weekends and go out to colorado during the ski season and bring their home with them. This is one of the many couples that are doing it these days: https://faroutride.com If you get 90% of your home comfort in a finished conversion van and you save 50% if your wealth, it's a no brain…

You'd be living in an illusion to believe living in a van is a higher quality of life than having a proper place. Its a ridiculous comparison, no matter how hipster some modern choices can become. Would you raise a child in a van? Down by the river?

Well then living in a conversion van wouldn't be for you. For many young professionals who can work remotely in the west coast, it's a very compelling option. Especially with the fact you throw away a significant portion on your income on rent. With a van it's significantly cheaper(less than half) and at the end of the day, you own it.

There are other issues but many people have figured it out and there's a vibrant van(life) community that's thriving due to the sky high property prices.

Re: There is more to high house prices than constrained supply

#225

Post by ttul »

Jack000 wrote: post #112
ttul wrote: post #94

Earlier quoted context omitted.

Of course it’s impossible to say with complete certainty, but... Vancouver’s housing market has stalled since the foreign buyer tax and vacancy taxes started to bite. Inventories are high and stubbornly stuck there rather than falling as they do toward the end of the year. Prices on high end homes are down a great deal - 20-30% for homes priced higher than $3M. I would say that at this early stage it looks like the n…

I think the confounding factor is that the tax would move the market whether or not foreign buyers are an issue. The price drops are also mostly at the top end of the market, which benefits wealthy buyers.

The drops are starting to happen lower down as well. The market stall is across the board.

Re: There is more to high house prices than constrained supply

#226

Post by nasalgoat »

RhodesianHunter wrote: post #191
mikekchar wrote: post #185

Earlier quoted context omitted.

If interest rates go up causing people not to be able to afford their payments, those condos will sell -- after the mortgages have been foreclosed. Was in London in 1992, just before the pound was removed from the European exchange rate mechanism. Very instructive. Now is a particularly dangerous time to overextend yourself on a mortgage. For any realistic scenario, interest rates will never be lower than they are no…

Does anyone get floating rate mortgages any more? I thought (could be very wrong) that these had mostly gone the way of the dodo due to exactly what you're describing.

In Canada, you have the option of taking a fixed rate or variable rate mortgage, with the latter offering a more attractive rate (for example 3-year fixed was 3.14% while 3-year variable was 2.85%).

You can roll the dice on increasing interest rates but I locked in on a fixed rate because I knew the rates would be going up 3-4 more times in the next 3 years.

Re: There is more to high house prices than constrained supply

#227

Post by brailsafe »

mabbo wrote: post #209
brailsafe wrote: post #107

Earlier quoted context omitted.

I'm guessing you're in Toronto or Downtown Vancouver, mind breaking down approximately where/what your condo is out of curiosity? I'll never hope to own something here, but I'm always curious how far out these insane prices are getting and what you would get for 1m.

Toronto. We're double engineer income with no kids, and spent years saving up. We were also fortunate in finding this place, the unicorn of condos: 1400 sqft, near a subway station, well-built building, responsibly managed condo board. Is it worth $1m? Oh heck no. I don't think it's worth what we paid even, once the market readjusts to reality.

Damn. That certainly is a unicorn. Congrats on finding it.

Re: There is more to high house prices than constrained supply

#228

Post by paulddraper »

Retric wrote: post #205
closeparen wrote: post #131

Earlier quoted context omitted.

It’s an informal social program. The rich subsidize everyone else.

Not so much the rich as like social security the cost caps out fairly low. Save on the low end ~100$ to high end ~500$ a month from birth and collage is mostly paid for via compound interest. That’s expensive, but students with 100+k in debt mostly don’t go to affordable schools.

> ~500$ a month from birth

That is literally half my mortgage. For a single child. For years.

Re: There is more to high house prices than constrained supply

#229

Post by snarfybarfy »

fallingfrog wrote: post #118

I have to say I just don’t understand why anyone would willingly pay the kinds of prices for housing that I see people paying. It seems like the consensus is that you should pay 2.5 times your household income on a house; I see people around me paying 5 times or more. That’s bonkers . We paid 1.25 times our household income and we’d never have considered more. I’d rather live in a double wide than put that much of my…

Which consensus are you talking about?

US? Northern Idaho? Thailand? Saudia Arabia? SV??

Where I live the long term average is 6-7x household incomes.

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