I need to start facing the fact that I am going to be homeless for the rest of my life.
If it can go up it also can go down.
House prices surpass housing-bubble peak on price-to-rent ratio
101–110 of 139 posts
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#102Earlier quoted context omitted.
When rates were higher total interest payments tended to dominate over the life of the mortgage. In most cases the interest payments would exceed the entire value of the principal over the life of the loan. Over the life of a loan the interest portion is negotiable while the principal payments are not. A buyer in improving financial circumstances can accelerate payment on the principal and avoid future interest payme…
My main concern right now is that an increase in interest rates is going to cause a drop in home prices and possibly trigger another crash. For example, the relatively modest rate increases in 2018 caused a fairly noticeable swoon in the SF/Bay area housing market. For those that think buying a house is a good hedge against inflation, it is worth considering that the best tool to combat inflation is to raise interest…
Increased rates in the future will drop purchase prices, but it's likely that it either slows the rate of increase or doesn't drop them to below current prices. There aren't many markets even after 2008 that weren't at or above those levels 5 years later. You might get lucky in timing the housing market on a 1-2 year scale, but it won't matter at the 10+ year scale.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#103Of course, this is a massive arranged crime akin to and having it's roots in the sub-prime mortgage crash. Rates are low. corporations can borrow unlimited cash and buy a residence, then rent it out to get 4-5% interest and pay 1.5 to 2.5 = risk free make the spread with no limits. I would like to borrow 10 billion and buy a zillion homes and make the spread ~~3%. They hire property managers and that costs .5% to .75…
Another idea, make it so that the more single family homes someone or a corporation owns, they pay a higher tax rate on all their properties. So someone who only owns two or three SF homes they maybe pay 1.5%, but if they own 20 they pay 5%. Similar rules could apply for apartments or condos but with different multipliers.
If set properly it'll be impossible for large landlords to pass those taxes on to tenants, because they'll be undercut by smaller ones and buyers who just want a place to live.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#104Earlier quoted context omitted.
The claim is that Bill Gates has bought too much farm land. If someone is making that claim surely they can clarify exactly what too much is and why. How do you expect anyone to take this suggestion seriously? How do you expect actual policy to be set without clearly defined boundaries of acceptable behaviour?
It’s a lot like the famous “I’ll know it when I see it” concept. Also none of us here are lawmakers… But hey, you seem very sure of yourself. Do you think there is any amount you consider too much?
To be clear here you're advocating for a law that forbids the private ownership of an unspecified quantity of property. How do you intend for this law to be enforced?
Will every single private transaction be subject to scrutiny by some sort of administrative panel that takes into account the current holdings of the prospective buyer?
It's curious to me that there is such a visceral opposition to Bill Gates owning some farm land in a place neither of us have ever heard of when he has so much more direct power over all of us through Microsoft.
I don't think that there is a specific quantity of stuff that is too much stuff for one person to own. I think that there are issues with wealth concentration but I don't think it's absolute.
The issue isn't that one person owns a lot of stuff the issue is that one person owns a lot of stuff while most other people own nearly nothing or are in debt.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#105Clearly there are a lot of variables including interest rates, desire for better space due to Covid lockdowns and more recently FOMO. One thing that should not be overlooked is the basic economics of supply and demand. Right now the supply is extremely low compared to much of our historical data. This at the same time as demand has been red hot (due mostly to Covid). Check out the data below, especially over the last…
Lack of supply is precisely the issue causing panic buying through bidding wars. You need to go 10% over asking to be guaranteed to be close. Low demand and continued increases of buyers coming to market cause the snowball effect.
[deleted]
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#106Earlier quoted context omitted.
If only there was a law that allowed you to deduct a significant amount of mortgage interest from taxes on a home but not on other property.... Oh wait...
Trying to be sarcastic and clever? Any taxes that you pay on your second home onwards simply gets factored into the rent and gets passed on to the tenants. It is just cost of doing business, nothing more. The tenants suffer, not the buyers.
[deleted]
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#107The Fed has turned us all into gamblers. If you've ever wanted to know what living in something like the .com bubble was like, we are in something much bigger now. The next Fed chair will have no choice but to pull a Volcker
The forest is so incredibly overgrown, sooner or later someone has to set it on fire.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#108Earlier quoted context omitted.
Dude, this is not some weird fine line slippery slope situation. Normal people don’t often buy 269,000 of acres of land, only influential people like Bill Gates can.
The claim is that Bill Gates has bought too much farm land. If someone is making that claim surely they can clarify exactly what too much is and why. How do you expect anyone to take this suggestion seriously? How do you expect actual policy to be set without clearly defined boundaries of acceptable behaviour?
Usually there are anti trust and competition laws that prevent one entity from amassing so much market power that it would hurt consumers.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#109Earlier quoted context omitted.
It’s a lot like the famous “I’ll know it when I see it” concept. Also none of us here are lawmakers… But hey, you seem very sure of yourself. Do you think there is any amount you consider too much?
To be clear here you're advocating for a law that forbids the private ownership of an unspecified quantity of property. How do you intend for this law to be enforced? Will every single private transaction be subject to scrutiny by some sort of administrative panel that takes into account the current holdings of the prospective buyer? It's curious to me that there is such a visceral opposition to Bill Gates owning som…
The issue here isn't that one person owns lots of stuff, the issue here is that one person is in the process of accumulating something that is vital for humans to live, something that is also limited in supply. I mentioned Ferraris etc, you conveniently keep ignoring it.
There are alternatives to every Microsoft product. Comparing vital resources like food/water supply etc with a computer operating system makes no sense.
I don't think anyone is proposing any laws here, at least not yet. Simply pointing out the fact that one individual is in the process of amassing insane amounts of a vital resource which will result in him having insane influence on something as basic as food. You seem to be more concerned about causing a minor inconvenience to someone with crap ton of money (if and when some laws are enacted) than the risk of one individual having power over vital resources. Already some 80% of meat in US is controlled by 3 companies, 50% of seeds are controlled by one company and so on. The situation is only getting worse.
I am going to stop arguing. By all means, please support billionaires with hideous monopolistic past/insane amounts of money and let private, unelected individuals influence policies etc if that is what you believe in.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#110Earlier quoted context omitted.
>And because getting the % deposit is a big factor in whether you can afford a house, it pushes lower income people out of the market. Median downpayment is 6%, a common low end is 3%, some places and programs go lower. Median house price sold in 2020 was 347k, well over 25% of houses sell for under 250k [1]. So, for a starter home, saving 3% of say 200k is 6k. If someone can pay this mortgage without killing themsel…
> If someone can pay this mortgage […] then they can save a 6K downpayment Not if they are paying rent - there would be no surplus every month to save.
>there would be no surplus every month to save.
IF someone is so on the edge that they have zero extras, then they should not get a mortgage, because they're one hiccup away from losing it all.
This is why I put in the phrase "without killing themselves."
And, if you want to save that 6K mortgage downpayment, downsize life by a little - it really is not much to do. If you're so poor you cannot do this, there are federal programs to assist.
Again, this is a non-issue for pretty much every person that is also capable of paying a mortgage.