Will real estate ever be normal again? • Hacker News Board

Re: Will real estate ever be normal again?

#101

Post by handmodel » Mon, Nov 15, 2021, 2:09 AM UTC

boplicity wrote: post #99

There should be a law (in a city, or state, etc) that says housing costs should be a fixed percentage of income -- and outline the measures needed to make that happen, in terms of actual policy requirements. As part of that, if the right policies fail to be enacted, courts should be empowered to enforce them. In other words, legislatures should require themselves to fix the problem of high housing costs, and if they'…

I sadly don't think that is practical. Housing costs would go down if it was legal to build 20 story apartment buildings in areas currently zoned for single family homes. As a political YIMBY I would love to see this happen - but don't see how a court could be given discretion on its own to decide which zoning measures should be eliminated and which have legitimate reasons to exist.

Re: Will real estate ever be normal again?

#102

Post by toss1 » Mon, Nov 15, 2021, 2:09 AM UTC

mikem170 wrote: post #82

lostdog wrote: post #44

Earlier quoted context omitted.

> Why do you feel entitled to live at any particular location (that was not actually inherited)? For me, it's less about my own life, and more about how terrible the world is when people get pushed out of their homes. Most people need stability to have a good life. They do better when they understand their neighborhood. Their kids do better when they can go to the same school system until they are 18. Plus, the emplo…

I agree. I believe zoning is a big impediment. People wouldn't be priced out of their communities if there was more supply of housing at varying prices. Instead current regulations restrict the supply of housing and seem to prioritizing uniformity and property values.

Right, so destroy the village to save it.

>>People wouldn't be priced out of their communities if there was more supply of housing

Many of the communities you find attractive would not exist at that level of attractiveness if the supply were massively increased by abandoning zoning.

People live in communities and make their sets of zoning regs to design, build, and maintain the quality of life that makes that community exist, and pay significant-to-massive extra taxes over the course of decades to build that quality of life, which makes the community attractive.

Other communities see development and lower individual tax loads as attractive, and build at higher densities.

Simply saying that 'zoning restricts supply and is thus unfair because I want in' is over-simplistic and, to be blunt, greedy and entitled.

While I don't know what sort of towns you are talking about, the ones that I'm familiar with would see massive environmental destruction if built as you seem to want, since the spacing and open space was specifically created to maintain a healthy ecosystem in which to live. Declaring it is merely about "uniformity and property values" seems like very shallow self-centered thinking.

Re: Will real estate ever be normal again?

#103

Post by boplicity » Mon, Nov 15, 2021, 2:14 AM UTC

handmodel wrote: post #101

boplicity wrote: post #99

There should be a law (in a city, or state, etc) that says housing costs should be a fixed percentage of income -- and outline the measures needed to make that happen, in terms of actual policy requirements. As part of that, if the right policies fail to be enacted, courts should be empowered to enforce them. In other words, legislatures should require themselves to fix the problem of high housing costs, and if they'…

I sadly don't think that is practical. Housing costs would go down if it was legal to build 20 story apartment buildings in areas currently zoned for single family homes. As a political YIMBY I would love to see this happen - but don't see how a court could be given discretion on its own to decide which zoning measures should be eliminated and which have legitimate reasons to exist.

Courts don't have to make these types of decisions, however they can issue increasingly steep fines against governments until the problem is solved. This happened, for example, in Washington State with funding for schools not being adequate, and in violation of the law. The courts issued massive fines, and increased them, until the legal funding requirements were met.

Re: Will real estate ever be normal again?

#104

Post by naveen99 » Mon, Nov 15, 2021, 2:14 AM UTC

User23 wrote: post #65

naveen99 wrote: post #58

Earlier quoted context omitted.

Fed controls only nominal interest rates on treasuries. The real / effective rate is set by the market at auction by adjusting the price on the bonds.

No, no it's not. USD denominated interest rates are whatever the Fed wants them to be. The Fed controls the entire USD yield curve, although that control does weaken a little as maturity goes out into the future, but not more than about 10%. Treasury auctions are kabuki theater[1]. Thanks to the Primary Dealer system it's impossible for an auction to fail. While the nominal rate may bounce around a few basis points,…

The fed tried to predict the market rate at auction. It probably leaves money on the table if the nominal rate is too far from real rate.

Re: Will real estate ever be normal again?

#105

Post by Spooky23 » Mon, Nov 15, 2021, 2:14 AM UTC

uejfiweun wrote: post #45

The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently pr…

The die was cast for option 2 30 years ago. Once policy flipped to “we will provide capital to prevent bad things”.

Half the economy is based on real estate… people building buildings to avoid taxation (if you have $) and borrowing against equity (joe homeowner). You cannot break equity values without breaking the economy.

The people who are getting screwed are the same people who have been getting screwed since the Vietnam era. Go watch “clerks” and read early 90s op/ed pieces - it’s the same cycle.

Re: Will real estate ever be normal again?

#106

Post by purplepatrick » Mon, Nov 15, 2021, 2:14 AM UTC

uejfiweun wrote: post #45

The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently pr…

It’s not that simple: https://blogs.cfainstitute.org/investor/2021/04/19/myth-bust...

Re: Will real estate ever be normal again?

#107

Post by throwvirtever » Mon, Nov 15, 2021, 2:17 AM UTC

uejfiweun wrote: post #45

The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently pr…

I don't quite understand the obsession with homeownership.

If a large enough percentage of people rented from property management companies, there would be more impetus to have strong tenant's rights laws to protect residents, and people would have more flexibility to move around. Moreover everyone would have an interest in increasing supply to keep their own rent down, pushing prices down toward cost-of-materials and upkeep.

As it is people willingly submit to homeowners associations that are in many ways worse than the laziest landlord. I don't see what gets worse by just becoming a nation of renters.

Re: Will real estate ever be normal again?

#108

Post by Spooky23 » Mon, Nov 15, 2021, 2:20 AM UTC

mrfusion wrote: post #79

mercy_dude wrote: post #71

Earlier quoted context omitted.

Also if they do 1) just imagine how much interest payment that would mean for US Govt and all the dollar denominated debt. I think a mere rate raise to 5% will cause the US Treasury to have to pay for another military.

I’m wracking my brain trying to figure out how we’ll ever raise interest rates again due to this issue. Does anyone know? Any tricks I’m not aware of? Was there way less gov debt in the early 80s when they massively raised rates?

Not only less debt, but surplus payroll taxes from Social Security were flowing in and basically landing on the government balance sheet. (Via a special non-marketable bond series)

We no longer have a surplus there, and the issues around it were kicked down the road 39 years, when we had a Senate run by adults instead of the current pack of dull knives.

The military stuff will just get cut. We separately run 4 of the top ten air forces.

Re: Will real estate ever be normal again?

#109

Post by rootsudo » Mon, Nov 15, 2021, 2:20 AM UTC

throwvirtever wrote: post #107

uejfiweun wrote: post #45

The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently pr…

I don't quite understand the obsession with homeownership. If a large enough percentage of people rented from property management companies, there would be more impetus to have strong tenant's rights laws to protect residents, and people would have more flexibility to move around. Moreover everyone would have an interest in increasing supply to keep their own rent down, pushing prices down toward cost-of-materials an…

Then you don't have an asset. You paid for the option of living there for the duration of your leas, but you have no control on the property, or your future.

Re: Will real estate ever be normal again?

#110

Post by hapticmonkey » Mon, Nov 15, 2021, 2:21 AM UTC

WarOnPrivacy wrote: post #5

Renters and buyers are increasingly in the same boat - the one where people with money in the bank are finding there's nowhere to live. In the case of renters, many with savings are facing homelessness - once those savings are burned up on hotels. This isn't a dramatization or overstatement. It's what I'm witnessing personally and very nearly happened to us. We were one of the few to beat long odds and score a place…

I have friends who were impressed to see their house has gone up in value by 20-30% or more since they purchased it. But selling is pointless, since they would have to buy another overpriced house to move into.

It doesn't really seem like there are many winners in this current scenario. Unless you're selling to "downsize" or move somewhere cheaper. Or an investor...