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Home Price to Income Ratio

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Re: Home Price to Income Ratio

#221

Post by HeyLaughingBoy »

rjbwork wrote: post #154
Doches wrote: post #133

Earlier quoted context omitted.

> For 99% of you that means living far away from your preferred locale among people you probably loath. Parent comment is vitriolic but not actually wrong. Myself, I take great comfort in the idea of huge swaths of liberal, well-educated millennials and xennials migrating out of coastal cities and into small towns across the South and Midwest. Can you work remotely? Want to own your own home on a multi-acre lot for $…

I was ready to buy an estate in the Georgia mountains earlier this year - then I saw the internet connection options. Then I looked up how much it would cost me to get a decent wired connection out there. Totally unviable for tech workers to live in most of the solid red areas of the country strictly due internet capabilities, or lack thereof.

Then keep looking. I'm a liberal, minority techie living on a farm: one of my base requirements for moving here 15 years ago was at least a minimal amount of wired broadband.

This summer the phone company has been pulling fiber all over the place. I was told that it's not going to be put in use until next year, but at least they're planning ahead.

Especially after the last year and a half of distance learning and working from home, there is a big push all over the place to get faster internet connections because the people already living out here are demanding it.

Re: Home Price to Income Ratio

#222

Post by m_ke »

splistud wrote: post #210
m_ke wrote: post #28

Earlier quoted context omitted.

Simple solution would be to put a property and sales tax ramp on additional homes. Make landlords who own N homes pay 1.5^N the normal rate.

What other ideas do you have for drastically raising the price of rent?

I'd expect this policy to tank the real estate market, causing rents to fall along with it.

Since you asked, another idea would be to slap a vacancy tax on top of this.

Re: Home Price to Income Ratio

#223

Post by throw0101a »

dpweb wrote: post #118
gp wrote: post #32

While it doesn't directly affect the average person's purchasing power, the same dramatic increase is happening in other asset values as well. [0] One interesting thing to note is that 2019 EV / EBITDA values were already "high," before the coronavirus was spreading. I suspect these two phenomena have different causes overall, but low interest rates are a common factor that cause all asset prices to increase. On the…

When it's all assets going up, it's not the assets cost more, it's the dollar is worth less. So for all the help and assistance. Housing is LESS affordable than ever before. You cannot infuse trillions of extra dollars into the economy without inflation. There's no magic pill - there must be consequences.

Lots of money supply in Japan, and are their asset prices going up?

* https://fred.stlouisfed.org/series/MYAGM2JPM189S

Their central rate has been Stocks and equities in the US have been going up for 10+ and the infusion of "trillions of extra dollars" wasn't present for all of those years. Canada has had increasing home prices, barely slowing down in 2008, and it hasn't had QE.

Re: Home Price to Income Ratio

#224

Post by jdavis703 »

drunkpotato wrote: post #200
nostromo wrote: post #165

Earlier quoted context omitted.

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 are…

That income tax statistic is misleading. Most Americans do pay social security payroll taxes, which are income taxes, they’re just not called “income tax.”

Even though social security is administered as a pay-go program, the amount of social security you can withdraw is based on how much you put in. This makes it much more like a forced savings account than a tax.

Re: Home Price to Income Ratio

#225

Post by mywittyname »

munk-a wrote: post #189
dpweb wrote: post #118

Earlier quoted context omitted.

When it's all assets going up, it's not the assets cost more, it's the dollar is worth less. So for all the help and assistance. Housing is LESS affordable than ever before. You cannot infuse trillions of extra dollars into the economy without inflation. There's no magic pill - there must be consequences.

Even when the world ran on the gold standard not all value was actually backed by anything - now we're not even close. You can pick a stick up off the ground and whittle it into a boat - you have, by doing so[1], made the dollar worth slightly more since, for all the dollars in existence, there are now more goods to purchase. Inflation is spurred to increase over time for a variety of reasons - but asset accrual is n…

> 1. In a very very infinitesimally unmeasurably minor manner.

Great point. And to explicit what you're alluding to: we live in a world where factories around the world are running 24/7 producing trillions of items with infinitesimally small values relative to global wealth. But none-the-less, these goods at up to real value.

Re: Home Price to Income Ratio

#226

Post by shados »

drunkpotato wrote: post #200
nostromo wrote: post #165

Earlier quoted context omitted.

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 are…

That income tax statistic is misleading. Most Americans do pay social security payroll taxes, which are income taxes, they’re just not called “income tax.”

Social security is more of a forced 401k. You will get back the money (in theory), but yes, it's not progressive and impact the poor more than the rich. It's a bit of an iffy one. If the social security system rolled up into federal income tax, it would be much more progressive, but it would likely receive significant pushback in the political space (not knowing its history, I assume it was structured as a separate thing exactly for that reason. I should read up).

Still, the point still stand: federal income taxes are quite progressive, and would surprise most people who wave their angry fist asking for the rich to be taxed more. The problem is mostly at the state and local level.

The top 50% pays 97% of federal income tax.

If you include most types of taxes, including social security, you end up with something a little less polarized: the top 1% have an effective tax rate of a little under 34%, while the poors are around 20%. One could easily argue it's not progressive enough, but it's still not the usual narrative of "I pay more taxes than millionaires".

A a handful of ultra rich abuse loopholes to death to pay very little, and these people are averaged in the statistics (so the average rich person actually pays more than the stats show, if only a little). It's a minority though.

Re: Home Price to Income Ratio

#227

Post by m_ke »

corpdronejuly wrote: post #150
m_ke wrote: post #28

Earlier quoted context omitted.

Simple solution would be to put a property and sales tax ramp on additional homes. Make landlords who own N homes pay 1.5^N the normal rate.

The issue then becomes silly games with shell corporations hiding how many homes people own, which pushes homes into the hands of larger landlords who can afford to pay someone to play those silly games.

Make it pass through to the shareholders.

Re: Home Price to Income Ratio

#228

Post by kube-system »

nostromo wrote: post #165
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 are…

Tax is the solution, though, because we should treat owner-occupied homes differently than investment homes. Owning a home to live in it should be more accessible than owning it for capital gains. The market doesn't and can't price in this externality any other way.

Re: Home Price to Income Ratio

#229

Post by xibalba »

taurath wrote: post #157
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…

The amount of private equity in housing is really underreported I think - still the vast majority of people owning second homes or additional property are doing it for investments, but there is nothing stopping an “uber for housing” where they use VC money to buy up massive amounts of properties and influence pricing. I believe this is one of Zillow’s primary models. My take is that we need to treat housing as an act…

Anecdotally, I live in rapidly growing, tech-friendly metro and track housing data in the area. The county assessor's office exposes homeowner's names and you can easily spot the "private equity" owners. They are very few and far between.

> The amount of private equity in housing

I think this issue is, at least at the moment, overstated. Could be a problem in the future though.

Re: Home Price to Income Ratio

#230

Post by JoeAltmaier »

HeyLaughingBoy wrote: post #221
rjbwork wrote: post #154

Earlier quoted context omitted.

I was ready to buy an estate in the Georgia mountains earlier this year - then I saw the internet connection options. Then I looked up how much it would cost me to get a decent wired connection out there. Totally unviable for tech workers to live in most of the solid red areas of the country strictly due internet capabilities, or lack thereof.

Then keep looking. I'm a liberal, minority techie living on a farm: one of my base requirements for moving here 15 years ago was at least a minimal amount of wired broadband. This summer the phone company has been pulling fiber all over the place. I was told that it's not going to be put in use until next year, but at least they're planning ahead. Especially after the last year and a half of distance learning and wor…

Got mine a month ago! In rural Iowa.
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