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Will real estate ever be normal again?

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Re: Will real estate ever be normal again?

#221

Post by TulliusCicero »

DannyBee wrote: post #94
lotsofpulp wrote: post #64

Earlier quoted context omitted.

And this is why I do not think carbon emissions will or climate change will ever be curtailed barring the discovery of a new emission-less, highly efficient energy source. The effects of anyone who does individually sacrifice will be offset by the plenty who will opt for 1/2 acre or even 1/4 lots and the energy consumption that must follow.

Why is the right answer to increase the population to unsustainable levels, try to make it up with increased density, and then blame the people who want something different? You do realize that densifying will not in fact, fix the problem either, it only buys you some time, at the cost of different resources.

Densifying actually helps quite a bit. Not sure why you're suggesting otherwise.

Sure, you need to fix other things too, it's not a panacea, but what is?

Re: Will real estate ever be normal again?

#222

Post by sgtnoodle »

mylons wrote: post #113
rootsudo wrote: post #109

Earlier quoted context omitted.

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.

a house isn’t a particularly good investment. it’s just the one everyone, in america, makes because they’re financially illiterate. anyone can buy ETFs now with zero commission and zero gate keeping.

Believing people are stupid for owning their homes is a rather interesting opinion, especially with the implication that putting the same money in the stock market instead is smarter. It certainly seems higher risk and potentially more lucrative as a result, but you can't live in an ETF. As someone with both a mortgage and ETFs, I've been pleased with the return on both over the years.

Re: Will real estate ever be normal again?

#223

Post by mylons »

sgtnoodle wrote: post #222
mylons wrote: post #113

Earlier quoted context omitted.

a house isn’t a particularly good investment. it’s just the one everyone, in america, makes because they’re financially illiterate. anyone can buy ETFs now with zero commission and zero gate keeping.

Believing people are stupid for owning their homes is a rather interesting opinion, especially with the implication that putting the same money in the stock market instead is smarter. It certainly seems higher risk and potentially more lucrative as a result, but you can't live in an ETF. As someone with both a mortgage and ETFs, I've been pleased with the return on both over the years.

illiterate in finance is ignorance, not stupidity.

Re: Will real estate ever be normal again?

#224

Post by epicureanideal »

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 economy keeps humming along but young people, including myself, are permanently priced out of home ownership and many other things.

I’m going to start calling this “generational red-lining”.

Re: Will real estate ever be normal again?

#225

Post by seanmcdirmid »

TulliusCicero wrote: post #206
seanmcdirmid wrote: post #184

Earlier quoted context omitted.

> The real problem as always is zoning. If the real problem was always zoning, wouldn't dense cities like NYC and Shanghai be cheaper than average, not way over average? > Check out Japan housing CPI - a market where supply meets demand thanks to federal zoning rules, and is also centrally banked. Japan went through a huge bubble in the 1980s. Also, housing (the structures at least) rapidly depreciates in Japan, whic…

> If the real problem was always zoning, wouldn't dense cities like NYC and Shanghai be cheaper than average, not way over average? It's not about supply by itself, it's supply vs demand. Big cities have big populations and economies, which means a lot of demand. But as far as zoning goes, note that like other metros, NYC has actually effectively downzoned areas over time; in fact, a huge proportion of buildings ther…

NYC housing has pushed outwards into Queens and the Bronx, manhattan is less populated these days because it lacks full time residents (the apartments are still sold, but their owners list upstate/Connecticut/long island properties as their permanent addresses, and they have many less occupants in them even when full, not like the turn of the century when more than a few people were crammed into small apartments).

> A lot of NIMBY's tend to go, "well, there's still some areas where it's possible to build more, so there's no real issue there". This is approximately like restricting car manufacturing to one state, and then when car prices go through the roof, saying "well, there's still more land to build car factories there, so I don't see the problem, it couldn't possibly be this rule".

My only point was that making cities more dense seems to make them more desirable, causing more people to want to live there. Yes density is a great thing! But it doesn't solve affordability problems on its own. Can you imagine if San Francisco (6.2k/sqm) had NYC-level density (27k/sqm), would it be more or less affordable? I'm going to go with the less.

What is really holding us back are the American libertarians who are afraid of a public housing system like the one in Singapore.

Re: Will real estate ever be normal again?

#226

Post by sgtnoodle »

klipt wrote: post #181
setr wrote: post #125

Earlier quoted context omitted.

It’s money you have to spend (shelter is non-optional), and mortgage is definitely a better investment than renting (you’ll get at least some of it back on selling, unless it dips very far) whereas rent is guaranteed to be burnt. And the difference between rent and mortgage as a monthly payment isn’t that far for same-lifestyle, assuming you can put up the standard up-front capital requirements. As far as I can tell,…

> And the difference between rent and mortgage as a monthly payment isn’t that far for same-lifestyle That doesn't seem to be true in the Bay Area which has a very high buy/rent ratio because everyone expects housing here to be a great investment. The property tax alone on a townhouse can be higher than the rent on a similar apartment. And property tax, mortgage interest, HOA fees/utilities like garbage and water, ar…

Anecdotally, I live in the bay area and bought a house 4 years ago in a very desirable location, and my mortgage + property tax is cheaper than the equivalent rent would be.

Re: Will real estate ever be normal again?

#227

Post by toss1 »

Plasmoid wrote: post #149
toss1 wrote: post #102

Earlier quoted context omitted.

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 communi…

Why do you think communities shouldn't change? If the population growth rate is 1.8%, why should a city be able to decide that 0% growth is completely acceptable? Would you be willing to pay an uncapped land-value tax on your nicer area? A lot of people are vehemently opposed to paying the full externalities of their choices.

I do not think communities shouldn't change - they do change and grow all the time. Have you ever been to a town meeting?

>>Would you be willing to pay an uncapped land-value tax on your nicer area? Of course —WE ALREADY DO—, as pointed out above, everyone already pays much higher taxes - based on land and building value, uncapped - to maintain the environment. (Please do try to keep up and have a clue what you are talking about.)

Those changes are fine and should be decided by those affected, not some set of interlopers who just want to basically steal the value that has been created and maintained over decades or centuries.

The externality here is yours - if you want to come in and destroy the value that has been created and maintained, are you willing to pay the costs of that - both the costs of decreasing the value in place, and the excess costs paid to maintain the value- i.e., pay the delta in taxes as if the town had had the higher population the whole time?

Re: Will real estate ever be normal again?

#228

Post by 01100011 »

listenallyall wrote: post #147
blip54321 wrote: post #121

Earlier quoted context omitted.

There's a world of difference between high interest rates (which are good and healthy) and rising interest rates (which implode the economy). You gotta look at the derivative. Rising interest rates are really, really bad. Anyone who relies on revolving business debt, credit card debt, or other non-fixed-rate debt goes bankrupt. I kinda wish I entered the economy when we still had 12% interest rates. Each time a reces…

> Anyone who relies on revolving business debt, credit card debt, or other non-fixed-rate debt goes bankrupt. This is hyperbole. Rising interest rates aren't fun, but they aren't cataclysmic. Rates have gone up and down for decades. Further, if you signal that you're taking the option to raise rates off the table, risk tolerance and asset prices will explode (some would say this has already happened due to Fed signal…

I really don't know if this is correct or not, but one thing I've heard is that low rates disincentivize lending by banks because loans are less profitable. Higher rates will actually encourage lending. Much of the money in circulation comes from the banks because of fractional lending and not from the fed's printing presses. I'm curious if anyone has a take on that.

Also, I think rates need to be looked at in comparison to GDP growth. High rates are fine when GDP growth is greater. If rates shoot higher because the fed is trying to stop runaway supply-side driven inflation while GDP growth is low it could easily kick off a depression.

Re: Will real estate ever be normal again?

#229

Post by rattlesnakedave »

bogota wrote: post #215
drdec wrote: post #173

Earlier quoted context omitted.

Inflation can be good for young people. If you really think there will be significant inflation, go buy a house, borrow more than you are comfortable with it necessary. Inflation will make the debt easier to deal with in time.

This is wildly irresponsible and terrible advice

I’d argue it’s more irresponsible to not lever up given current fed policy.

Re: Will real estate ever be normal again?

#230

Post by seanmcdirmid »

mapme wrote: post #219
TulliusCicero wrote: post #206

Earlier quoted context omitted.

> If the real problem was always zoning, wouldn't dense cities like NYC and Shanghai be cheaper than average, not way over average? It's not about supply by itself, it's supply vs demand. Big cities have big populations and economies, which means a lot of demand. But as far as zoning goes, note that like other metros, NYC has actually effectively downzoned areas over time; in fact, a huge proportion of buildings ther…

It’s wild that manhattans population was ~2.5 million in 1910 and is now only ~1.6 million.

Doesn't it make sense though? In 1910, manhattan was expensive but a lot of people still lived/worked there. The apartments would be crazily subdivided so you could fit 10 people into a 3 or even 2 bedroom. Now they are all owned by wallstreet bankers with small families, and they spend much of their time somewhere else (they might not even list their manhattan apartment as their "main domicile" during the census).
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