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A Growing Problem in Real Estate: Too Many Too Big Houses

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Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#211

Post by spamizbad »

pbuzbee wrote: post #97

This article claims that these homes are going because buyer preferences have shifted towards smaller homes in walkable areas. I don't disagree with this, but I'm surprised the article didn't factor in the cost of these homes. These homes are priced in the millions and are generally not in areas known for high salaries. Coming up with that much money is out of reach for most members of younger generations. Some peopl…

The article is generalizing a bit, and focusing on just one aspect of boomer housing matters.

For example, it's also quite common for baby boomers to hold onto their existing 3-bedroom homes, and in the process restrict housing supply of what should be affordable, reasonably-sized homes for millennials seeking to put down roots and start a family. I don't think there's anything wrong with this BTW, as it can be quite prudent to do so.

I think people were gambling on baby-boomers moving back to the cities and "downsizing" to a decent 2 or 3 bedroom condominiums. Instead, those units ended up selling to cosmopolitan millennials and Gen-Xers.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#212

Post by sfkdjf9j3j »

maxsilver wrote: post #98
hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

I also hate maintaining a detached single family home with a yard. I also hate being responsible for the fixes. But that situation is still far better than renting. When we rented, we were subjected to eviction at any time, for nearly any reason, for basically no notice (60 days, which in the US is effectively zero notice). Your subjected to every whim the crazy wildly-irrational housing market throws at you (we've h…

Were you a month to month tenant? If not, why would you sign a lease that lets the landlord break it with 60 days notice? Doesn't that kind of defeat the purpose of having a lease in the first place?

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#213

Post by npongratz »

TheOtherHobbes wrote: post #49
smcl wrote: post #21

Earlier quoted context omitted.

You need to be careful when dismissing caution about the elderly who have - through whatever means - found themselves living in a valuable property. The following are just as likely: - a wealthy individual with many properties who can easily afford a few extra hundred quid a month - someone living just above poverty level in a property in a previously modest area that, thanks to a gentrification, has exploded in valu…

I think if someone is in a huge house they're barely using and possibly not even maintaining, there isn't a massive issue with gently incentivising them to move somewhere smaller. There especially isn't an issue with a redistributive land tax rather than a property tax. That would take money from corporate landlords and move it back into the rest of the economy. You have to balance your caution with the reality at th…

> There especially isn't an issue with a redistributive land tax rather than a property tax. That would take money from corporate landlords and move it back into the rest of the economy.

I commend you for being honest about such a tax: it is indeed someone (perhaps those who call themselves "the authorities") taking what is not theirs. Taking it, without permission.

I disagree that noble ends can justify such means.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#214

Post by elsonrodriguez »

cblum wrote: post #208
maxsilver wrote: post #98

Earlier quoted context omitted.

I also hate maintaining a detached single family home with a yard. I also hate being responsible for the fixes. But that situation is still far better than renting. When we rented, we were subjected to eviction at any time, for nearly any reason, for basically no notice (60 days, which in the US is effectively zero notice). Your subjected to every whim the crazy wildly-irrational housing market throws at you (we've h…

>housing security There is no such thing unless your home is paid off. If you have a mortgage and are hit by a catastrophic life event that leaves you without a job and depleted of your emergency fund, your home is gone.

If you stop paying rent your ass is on the street in days.

Stop paying your mortgage and it can be months or years.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#215

Post by drtillberg »

treis wrote: post #179
LarryDarrell wrote: post #108

Earlier quoted context omitted.

The thing I've noticed is that in my area all the modest neighborhoods (2 bed, 1 bath, sub $200k) are being bought up by landlords. This leads to a neighborhood of renters, which is a lot different than a neighborhood of owners. The Havers can buy a lot more houses than the Have-Nots and I'm left wondering what the price of single family homes would be if renting them was illegal and they were all placed on the marke…

It's another example of the high cost of being poor. The rent on my town home is several thousand more per year than what a mortgage (5% down), taxes, HOA fee, PMI, and home insurance would be.

Think of it instead as a player closer to the money printing machine that is the fractional reserve banking system. This is the inflation the Fed created directly, and these institutions probably are thinking: 'housing prices only go up, so the duration of my borrowing doesn't matter, borrow short term buy long term, it's all gravy!' If you're over 30 and feel like you've heard this story before, you have....

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#216

Post by sfkdjf9j3j »

newsoul2019 wrote: post #139
hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

Am I the only one who has always seen renting as a temporary arrangement only? If you don't own something, somewhere, doesn't that mean the same as being homeless? Not trying to offend anyone. Genuinely wondering, are there people who really don't want to own real estate ever in their lives?

Renting an apartment is actually the opposite of being homeless. Homeless people have no secure housing and need to sleep on the streets, in cars, or in shelters. If you are renting a place, you have 24/7 access to it and can stay there for shelter.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#217

Post by segmondy »

The property taxes are horrible too. They are the equivalent of a mortgage! Older folks have the money, young people don't, most are struggling to afford a mortgage, let alone taxes that is the equivalent for a mortgage. Not to talk about the cost of heating/cooling such houses.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#218

Post by EpicEng »

thorwasdfasdf wrote: post #203
hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

One way to think about it is the Spread between the cost of owning vs the cost of renting. For example, in SF, the spread is very small and hence favors the renter. Here's an example: In SF, your cost of ownership is roughly 2% per year (1.4% property taxes, 0.5% for Earthquake Insurance, 0.3% for repairs and depreciation and HOA), which comes to a total of 2.2%. The average Rent for an equivalent house is roughly 3%…

You're right, but this also requires the renter to actually make their extra money work for them. Sounds simple, but so many people don't. It's similar to why people like tax refunds; it makes no sense financially, but it acts as a quasi forced savings account.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#219

Post by bwb »

segmondy wrote: post #217

The property taxes are horrible too. They are the equivalent of a mortgage! Older folks have the money, young people don't, most are struggling to afford a mortgage, let alone taxes that is the equivalent for a mortgage. Not to talk about the cost of heating/cooling such houses.

Other countries tax differently there, some do a upfront tax during the purchase and then very little property tax.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#220

Post by madengr »

maxsilver wrote: post #98
hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

I also hate maintaining a detached single family home with a yard. I also hate being responsible for the fixes. But that situation is still far better than renting. When we rented, we were subjected to eviction at any time, for nearly any reason, for basically no notice (60 days, which in the US is effectively zero notice). Your subjected to every whim the crazy wildly-irrational housing market throws at you (we've h…

From a different perspective, 60 days is too long if you are a landlord trying to evict a drug user who has not paid rent in 60 days.

I’d like to invest in rental property, but would never want to be a landlord. My mother rented out a house and the renter trashed it.

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