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Home Price to Income Ratio

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161–170 of 704 posts

Re: Home Price to Income Ratio

#161

Post by km3r »

ashtonkem wrote: post #147
giantg2 wrote: post #123

Earlier quoted context omitted.

Increasing supply can help some. But when you do that, you increase demand for material and labor, which can negate some of the benefit depending on what markets we're looking at. The real problem isn't supply at all, it's the distribution of supply and the choices of people to live there.

> The real problem isn't supply at all, it's the distribution of supply and the choices of people to live there. I’ve said this plenty of times; America has plenty of homes, it just doesn’t have enough homes where people actually want to live. You can get a home in my parents home town (which they left) for $60-100k right now. The issue is that there are no jobs and even fewer services. It was probably a great place…

The same problem of the house price to income ratio shows there is as much of a housing shortage in rural America as well. "Solving" housing by moving all high CoL people to rural America is just going to price out all those with lower CoL area salaries. Our vacancy rate nation wide is low, likely well within the frictional margins that need to exist for a healthy market.

Re: Home Price to Income Ratio

#162

Post by exporectomy »

jandrese wrote: post #124

How much of this is a result of our "don't tax the rich" policies that created a staggering amount of wealth at the top that has nowhere else to go? So many ultra rich investors are looking for something, anything, to invest in. Plus there is the feedback loop of massive growth you get as the bubble inflates. Is this a direct result of our fiscal policy? Have we destabilize the economy in order to create the richest…

It's fun to blame the super rich but I'd say it's fundamentally due to a combination of population shift from rural to urban areas

https://ourworldindata.org/grapher/urban-and-rural-populatio...

and normal homeowners stopping densification out of fear of reducing the value of their own home or just not wanting the riff-raff living near them. These people are really the ones doing a directly harmful thing for pure selfish greed. They're not super-rich, they're just people's parents. But they're trying to make money by excluding others instead of doing anything useful.

Re: Home Price to Income Ratio

#163

Post by giantg2 »

ashtonkem wrote: post #147
giantg2 wrote: post #123

Earlier quoted context omitted.

Increasing supply can help some. But when you do that, you increase demand for material and labor, which can negate some of the benefit depending on what markets we're looking at. The real problem isn't supply at all, it's the distribution of supply and the choices of people to live there.

> The real problem isn't supply at all, it's the distribution of supply and the choices of people to live there. I’ve said this plenty of times; America has plenty of homes, it just doesn’t have enough homes where people actually want to live. You can get a home in my parents home town (which they left) for $60-100k right now. The issue is that there are no jobs and even fewer services. It was probably a great place…

Remote work could solve a lot of this. I would love to live in a more rural area with cheaper housing.

"... a long distance from any of the amenities that most Americans now demand."

Like what? Many amenities and services have been moving to the at-home or online model for decades - arcades, movies, shopping, car buying, telehealth, etc. It seems there should be less reliance on physical amenities now than in the past.

We are starting to movement from HCOL and high tax areas. Companies are moving for tax and regulatory purposes and most people seem happy to follow when the cost of living is significantly lower.

Re: Home Price to Income Ratio

#164

Post by flyinglizard »

jandrese wrote: post #153
flyinglizard wrote: post #148

Earlier quoted context omitted.

This is happening outside of the USA, in countries with more progressive taxation too. Canada, UK, Israel - all with much worse house price to income ratio compared to the USA. These homes are not owned by billionaires either. It’s an asset class that’s very broadly distributed by its definition; most people own their homes. I think it’s mostly driven by macroeconomics. Near zero interest, population growth (organic…

It doesn't matter so much if a country is taxing their own rich if they allow rich people from other countries to buy real estate.

I’ve never seen any data showing that housing bubbles are attributed to “the rich”. The housing market is made of tens of millions of individual home owners, not some moguls cornering the market.

Re: Home Price to Income Ratio

#165

Post by nostromo »

jandrese wrote: post #124

How much of this is a result of our "don't tax the rich" policies that created a staggering amount of wealth at the top that has nowhere else to go? So many ultra rich investors are looking for something, anything, to invest in. Plus there is the feedback loop of massive growth you get as the bubble inflates. Is this a direct result of our fiscal policy? Have we destabilize the economy in order to create the richest…

What "don't tax the rich" policies? 61% of Americans pay zero income tax.

Why are the rich getting tremendously rich? Because the Federal Reserve has printed money at an astonishing rate, which inflates asset prices. Who owns the most assets? The rich do.

People are so focused on taxation (because it's something the average poor or middle class understands) when the real issue is the Fed (something most Americans aren't even aware of).

Re: Home Price to Income Ratio

#166

Post by haskellandchill »

willcipriano wrote: post #160
the_gastropod wrote: post #143

Earlier quoted context omitted.

Right, vs REAL inflation, which is measured by whatever I think happens to be too expensive right now.

I mostly just look at the money supply. Print 10% more money, that's 10% inflation. It may not be uniform throughout the economy, or take effect immediately but that's 10% more money chasing the same assets. It's all has to go somewhere.

Money supply in theory is chasing actual economic effects such as growth, so your view of just one side is not very meaningful. The flaw is in considering assets static.

Re: Home Price to Income Ratio

#168

Post by russx2 »

noneeeed wrote: post #116
tharne wrote: post #108

Earlier quoted context omitted.

It consistently shocks me how rarely this is brought up as a solution. Price of something too high? Increase the supply.

It's been so frustrating watching people celebrating UK governments who have repeatedly failed to really tackle the supply side issues while propping up the demand side with tweaks that just increase the prices. The most amazing example of this was the stamp-duty holiday to help stimulate the market for a few months during covid. The maximum you could save was £15k. The average house price increased during that time…

They were still likely benefiting to be fair. Remember stamp duty is paid externally to the mortgage so it effectively comes off your deposit, not your loan.

Re: Home Price to Income Ratio

#169

Post by exporectomy »

jandrese wrote: post #153
flyinglizard wrote: post #148

Earlier quoted context omitted.

This is happening outside of the USA, in countries with more progressive taxation too. Canada, UK, Israel - all with much worse house price to income ratio compared to the USA. These homes are not owned by billionaires either. It’s an asset class that’s very broadly distributed by its definition; most people own their homes. I think it’s mostly driven by macroeconomics. Near zero interest, population growth (organic…

It doesn't matter so much if a country is taxing their own rich if they allow rich people from other countries to buy real estate.

It happens in countries which don't allow that too.

Re: Home Price to Income Ratio

#170

Post by munk-a »

willcipriano wrote: post #160
the_gastropod wrote: post #143

Earlier quoted context omitted.

Right, vs REAL inflation, which is measured by whatever I think happens to be too expensive right now.

I mostly just look at the money supply. Print 10% more money, that's 10% inflation. It may not be uniform throughout the economy, or take effect immediately but that's 10% more money chasing the same assets. It's all has to go somewhere.

What is the actual money supply though - if I earn 1k and put it in a bank and it gets loaned out to someone else is there now 2k in circulation since my money is insured?

Only a teensy tiny portion of "value" in the economy is actually on printed bills - but even the abstract value we can track won't tell the whole story.

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