If you sell a house these days, the buyer might be a pension fund • Hacker News Board

Re: If you sell a house these days, the buyer might be a pension fund

#91

Post by em-bee » Wed, Jun 09, 2021, 4:05 PM UTC

adflux wrote: post #70

xapata wrote: post #51

Earlier quoted context omitted.

> Its only the most expensive thing in most people's lives that has doubled in cost in about 10 years. Most people pay for housing by monthly payments, making the nominal value of the house irrelevant if the monthly payment stays the same. Further, you should consider the home owner's "basket of goods" to include the hypothetical rent they'd be paying for an equivalent house. Their mortgage payments and home ownershi…

Non homeowners are paying way more whilst getting less in return. I really dont understand the logic of being OK with paying double for a house, just because the buyer can sell it for the same amount (or higher) afterwards. I could purchase a 150m2 house with my salary a decade ago. Now I could find a 75m2 house that would be too expensive for me. I dont care about being able to sell the house for more money afterwar…

i am confused by your first sentence. what do non-homeowners sell?

Re: If you sell a house these days, the buyer might be a pension fund

#92

Post by dragonwriter » Wed, Jun 09, 2021, 4:05 PM UTC

commandlinefan wrote: post #4

This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized houses in your area sold for most recently. My property taxes have increased 10% every year for the past several years (and it would have been more if not for a legislative 10% annual cap). I worry that there will come a day when I've paid off my mortgage but…

> This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home,

Actual asset values increasing aren’t a harm, and there is basically no place in the US with property taxes high enough that them increasing due to market value can possibly offset the utility (and realizable benefit) of the increase in value, even without the (common, if not usually as ridiculously low as California’s) caps on annual assessment increases that assure that properties that don’t change hands are systematically undertaxed when rapid sustained market increases occur.

Modern financing provides plenty of ways to access equity, so this is very much a non-issue. Though its an issue the property-rich like to pretend is real, because it supports policy that cuts them more breaks and makes things that much worse for everyone else, e.g., CA Prop 13.

Re: If you sell a house these days, the buyer might be a pension fund

#93

Post by mirker » Wed, Jun 09, 2021, 4:06 PM UTC

adflux wrote: post #44

mirker wrote: post #31

Earlier quoted context omitted.

Location matters too. I don’t think the problem is making a log cabin in the woods.

Sure, we can't print more ground to build on. But it's another cause of increasing real estate prices here in the Netherlands. Probably need to zone some of that agricultural land (60% of land usage in the netherlands) into housing, if we want to give young homeowners a chance at owning property.

Oof… trading food for shelter seems like a problem I wouldn’t want to think about

Re: If you sell a house these days, the buyer might be a pension fund

#94

Post by xapata » Wed, Jun 09, 2021, 4:07 PM UTC

adflux wrote: post #70

xapata wrote: post #51

Earlier quoted context omitted.

> Its only the most expensive thing in most people's lives that has doubled in cost in about 10 years. Most people pay for housing by monthly payments, making the nominal value of the house irrelevant if the monthly payment stays the same. Further, you should consider the home owner's "basket of goods" to include the hypothetical rent they'd be paying for an equivalent house. Their mortgage payments and home ownershi…

Non homeowners are paying way more whilst getting less in return. I really dont understand the logic of being OK with paying double for a house, just because the buyer can sell it for the same amount (or higher) afterwards. I could purchase a 150m2 house with my salary a decade ago. Now I could find a 75m2 house that would be too expensive for me. I dont care about being able to sell the house for more money afterwar…

> paying double for a house

Are you talking about monthly payment or lump sum? When the lump sum doubles yet the monthly payment is the same, has the cost really changed? To me, no. I was never going to buy lump sum, so I only care about monthly payment.

Re: If you sell a house these days, the buyer might be a pension fund

#95

Post by RGamma » Wed, Jun 09, 2021, 4:07 PM UTC

krona wrote: post #17

coverband wrote: post #5

This doesn't make a lot of sense to me. Why would an entity trying to maximize profits pay an extra 20-50% to purchase an illiquid asset?

It's the least risky asset on the time horizon that they're operating on.

Not that risk really matters much because Blackrock is too big to fail anyway.

Re: If you sell a house these days, the buyer might be a pension fund

#96

Post by opsecweather » Wed, Jun 09, 2021, 4:07 PM UTC

coverband wrote: post #5

This doesn't make a lot of sense to me. Why would an entity trying to maximize profits pay an extra 20-50% to purchase an illiquid asset?

They certainly get better mortgage rates than their middle-class competitors or maybe they just buy it outright which would save $100k's in the long-run.

Re: If you sell a house these days, the buyer might be a pension fund

#97

Post by rich_sasha » Wed, Jun 09, 2021, 4:07 PM UTC

commandlinefan wrote: post #4

This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized houses in your area sold for most recently. My property taxes have increased 10% every year for the past several years (and it would have been more if not for a legislative 10% annual cap). I worry that there will come a day when I've paid off my mortgage but…

This can be fixed somewhat by excluding primary residence from such taxes (essentially a tax-free allowance of 1). This cuts at hoarding real estate as investment, is a nice extra tax on people buying second homes, and doesn't (directly) affect 99% of homeowners who only ever own one house.

I'm not sure I support land taxes etc. but this at least deals with your objection.

Re: If you sell a house these days, the buyer might be a pension fund

#98

Post by adflux » Wed, Jun 09, 2021, 4:08 PM UTC

em-bee wrote: post #91

adflux wrote: post #70

Earlier quoted context omitted.

Non homeowners are paying way more whilst getting less in return. I really dont understand the logic of being OK with paying double for a house, just because the buyer can sell it for the same amount (or higher) afterwards. I could purchase a 150m2 house with my salary a decade ago. Now I could find a 75m2 house that would be too expensive for me. I dont care about being able to sell the house for more money afterwar…

i am confused by your first sentence. what do non-homeowners sell?

Some people say "Well, you're paying more but you can also sell it for more afterwards". But non-homeowners are still paying more for less. That's the argument I am trying to make (poorly)

Re: If you sell a house these days, the buyer might be a pension fund

#99

Post by Splendor » Wed, Jun 09, 2021, 4:08 PM UTC

pixl97 wrote: post #37

habibur wrote: post #24

Sidestepping all the emotional comments. It's open market. Adopt to it. 1. Build more homes. 2. Sell to Blackrock or whatever at 2x or 3x your cost. 3. Profit!

Have you tried 1 in most places? No lot availability. No materials to build the house. No workers available to build the house. Etc.

And zoning laws designed to keep houses expensive.

Re: If you sell a house these days, the buyer might be a pension fund

#100

Post by wffurr » Wed, Jun 09, 2021, 4:08 PM UTC

xapata wrote: post #90

> Home equity is the main financial element that middle class families use to build wealth, and black rock, a federal reserve funded financial institution is buying up all the houses to make sure that young families can’t build wealth. Faulty logic. First, though historically people have used home equity to build wealth, that hasn't been the best method of building wealth. Most of those people would have been better…

>> Most of those people would have been better off continuing to rent and investing in the stock market instead.

It's hard or impossible for individuals to get 5 to 1 leverage at low interest rates for investing in stocks.