Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

This real estate bubble won't pop

jaredabrock.substack.com

Post reply on HN
Print view View original

71–80 of 110 posts

Re: This real estate bubble won't pop

#71

Post by JanisL »

anm89 wrote: post #32
TameAntelope wrote: post #16

One aspect of articles like this that I've noticed is the absolute certainty the author seems to have that these terrible outcomes are inevitable, with no expression of a confidence interval or possible less world-ending alternatives. I just... can't take articles like this seriously. It's the political equivalent of gore porn, and it feels like a waste of time to think about. When Nassim Taleb wrote about "Black Swa…

100%. This guy has a couple good observations sprinkled in between paragraph after paragraph of hyperbolic ranting. Also lol at citing 40% annual real estate inflation across Canada unqualified which just links to some other opinion piece which states the exact same case as this guy's.

Canada has seen staggeringly high real estate inflation in many places lately. There have been places that have seen 100%+ increases in prices over just the last few years.

Re: This real estate bubble won't pop

#72

Post by A4ET8a8uTh0 »

paulpauper wrote: post #21

For over a decade pundits have been calling for the housing market to fall, yet prices keep going up to no end. Even Covid could not derail it. Although homes are more expensive than ever before , thanks to historically low 30-year mortgage rate and low inflation, real estate is probably a better investment now than ever before, although the down payment is more expensive. But despite this, the returns are very good,…

One minor point. Covid did not derail it, because Covid made housing market red hot. The pandemic made owning a house an extremely useful asset just from mental health pov.

Re: This real estate bubble won't pop

#73

Post by asauter »

8teapi wrote: post #15

So wrong. 1. Population is growing -> sure worldwide, but projected to start declining by mid century. In addition, Japan, Italy and other places are already in decline. Japanese home prices have been almost flat for 30 years. Tokyo has no zoning and you can build what you want. If you live in the developed world, East Asia, China, etc you are going to witness declines if you don't have immigration 2. People are movi…

Ideally you don't want prices to go down, less we get a deflationary spiral, you want more equal distribution AND inflation to be greater than the interest rate, which reduces Debt burden.

First time home buyers can put down 3% for conventional loan, provided it is not a jumbo loan maybe it should be more aggressive to advantage new entrants who haven't had housing debt during this remarkable rate decline (price increase) over last 40 years... I think we should invert the regressive taxes: prop 13, MITD (trump partly fixed) and capital gain exemption, others?

Re: This real estate bubble won't pop

#75

Post by TMWNN »

refurb wrote: post #58
zz865 wrote: post #35

At least the US had a small housing crash in 09/10, most of the rest of the world hasn't seen that so its been 3 decades of non-stop boom. It has to add badly. I thought the baby boomers retiring would cause a lot of downsizing but that just hasn't happened.

Exactly. I'd say the US housing market has less risk than other countries. Canada barely saw a blip during 2008. The average house price peaked at over $700,000 this summer. That's not Toronto or Vancouver, that's Canada as a whole , including places like god damn middle of nowhere BC. It did drop to the mid-600's after that. In the mean time the US average house price went from mid-$200k to mid-$300k over the past f…

>In the mean time the US average house price went from mid-$200k to mid-$300k over the past few years.

This is also why Canadians continue to flock to the US. They get higher salaries and lower housing cost. Further, while it's impossible in Canada to reach the top of one's profession without living in Montreal, Toronto, or Vancouver (add Edmonton and Calgary if in energy), it's entirely possible to reach the top of many industries in the US without living in NYC/LA/Chicago/SF.

Re: This real estate bubble won't pop

#77

Post by MrMetlHed »

mistermann wrote: post #62
MrMetlHed wrote: post #29

Earlier quoted context omitted.

Eventually an exponential-style tax would be too prohibitive for them to buy the nth house and they'd have to tap out, no? Can't pass off those costs forever, eventually it's too much for even the most well-off renter.

Look at all the discretionary spending out there that can still be sucked into rent though: restaurants, clothing, movies, all food other than rice and beans, etc. Yes of course it's easy to call this hyperbolic, worst case scenario fear mongering, but then look at a long term chart for Canadian housing prices, and also the political response to it: essentially nothing , other than a bit of standard political rhetori…

I think (fear) you may be right about a lot of this. My worry is that if enough houses get bought up by large corporations there won't be the political will to let them fail or impose restrictions on them. The time to act seems to be now, and lord knows we don't do much of anything until the crisis point has already passed.

Re: This real estate bubble won't pop

#78

Post by baron816 »

resonantjacket5 wrote: post #8

The author lists every reason under the sun while missing the most important one: zoning or aka restricting buildable land that is causing the housing shortage

There’s a whole lot of suspicion that these kinds of zoning laws that are upheld by leftists are cynical—they really just want to protect their property prices. But I think the left really believe what they are doing in blocking liberalization is good for communities. They’ve gotten into this mode of thinking that markets can’t solve problems of resource scarcity. Markets aren’t perfect, but one thing they surely can do (if not impeded) is to efficiently match supply with demand.

If we wanted, homelessness could easily be ended with freer housing markets. Yes, some people would be living in very small, ugly, somewhat unsafe (though far safer than the streets), and fairly uncomfortable spaces, but it would certainly be better for everyone if it were legal to build those kinds of spaces.

Re: This real estate bubble won't pop

#79

Post by Geee »

timmaxw wrote: post #42
1ark wrote: post #13

Earlier quoted context omitted.

Shadowstats[1] shows more than 10% in '80s-based measure. 1. http://www.shadowstats.com/alternate_data/inflation-charts

Shadowstats's 80s-based measure says we've been having 10% YoY inflation for two decades now. If that were true, prices would've 5x'ed since the year 2000. That doesn't pass the 'sniff test' to me; e.g. the Big Mac Index [1] says a Big Mac cost $2.50 in 2000 and $5.50 today, equivalent to about 4% YoY inflation. [1] https://www.economist.com/big-mac-index

It's not the same Big Mac. It's smaller and lower quality.

Check out https://www.reddit.com/r/shrinkflation/ which has posts about products that get smaller.

Re: This real estate bubble won't pop

#80

Post by thaumasiotes »

drfxyjhdyfrhgc wrote: post #50
thaumasiotes wrote: post #12

Earlier quoted context omitted.

> The price of the average house in the USA is based primarily on the government-guaranteed 30 year fixed rate mortgage. For a given interest rate and income, the house will cost exactly the maximum amount of loan the borrower can get. This implies that very poor people can buy houses for very cheap. The price of a particular house is not set by reference to the person purchasing it. The price comes first, and the bu…

>The price comes first, and the buyer second. The price is determined by the intersection of supply and demand. With a bull market in real estate, demand is greater than supply. Buyers have a greater effect on price than sellers. In the extreme, market prices converge to the maximum loan as GP described. In practice, people with higher incomes, liquid investments, or previous home equity can out bid individuals who a…

> The price is determined by the intersection of supply and demand. With a bull market in real estate, demand is greater than supply.

These two sentences cannot simultaneously use the same meanings of the words "supply" and "demand". In the sense of supply and demand required by the first sentence, the second is gibberish.

> In the extreme, market prices converge to the maximum loan as GP described.

What is the maximum loan? Prices cannot converge to "the maximum loan" because there is no such value. Different people can obtain different quantities of financing.

Post reply on HN