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

Re: Will real estate ever be normal again?

#311

Post by peter303 » Mon, Nov 15, 2021, 5:32 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…

I live in Denver. My monthly housing costs of a fully owned home is $600 a month. The house next to me, very similar, is renting for $2400 a month. Do the math.

Re: Will real estate ever be normal again?

#312

Post by gogopuppygogo » Mon, Nov 15, 2021, 5:32 AM UTC

nine_k wrote: post #293

letitbeirie wrote: post #280

Earlier quoted context omitted.

The problem from the manufacturers' perspective is that the gear required to meet 2021 safety, emissions, and fleet efficiency standards by itself almost pushes a new car's price over $5000, and that's without leaving any budget left over to make it a car anybody would want to buy. They do sell vehicles at that price which get around all of those standards, but they lose two wheels in the process.

You can still easily buy a decent used car for $5k. Try buying a half-decent used home for 25% of its initial sticker price.

You used to be able to buy a decent used car for $5k but as of recent you can't find any without connections. I've been telling folks interested in Japanese cars that it's $10k at this time to buy used with low mileage for a sedan and $15k to buy used with low mileage for an SUV.

Re: Will real estate ever be normal again?

#313

Post by peter303 » Mon, Nov 15, 2021, 5:36 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 aFef is broken and two years behind the open market in terms of interest rates. Its like a broken record to see such mismanagement repeat every decade.

Re: Will real estate ever be normal again?

#314

Post by option_greek » Mon, Nov 15, 2021, 5:36 AM UTC

mgh2 wrote: post #302

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…

There seems to be a possible, overlooked cause & effect in the current landscape: If FIRE followers scale the strategy of investing and renting multiple homes, are they not limiting housing supply for other potential homeowners or exacerbating homelessness? It is not just that houses are not being built, but that a shortage of supply is caused by the FIRE generation: buying houses as investments rather places to live…

> leech the society for the rest of their lives

Would these houses even be built if someone is not paying for them. They are not leeching but investing. May be we could call it leeching when they form a cartel and start raising rent prices in unison (which only biggies like black rock can do).

Re: Will real estate ever be normal again?

#315

Post by jurassic » Mon, Nov 15, 2021, 5:44 AM UTC

alexose wrote: post #298

Robotbeat wrote: post #274

Earlier quoted context omitted.

So, I’m 36, and I promise you don’t want a deep recession. Cheap housing doesn’t matter if you don’t have a job. We dodged a freaking bullet economically with COVID. We recovered quickly. Heck, even in 2008 we did better than the countries that tried fiscal or monetary austerity. And yeah, the real enemy is zoning. It’s fun to blame Blackrock, and they deserve it, but it’s regular homeowners trying to restrict more h…

Hello fellow 36 year old! I think graduating into the 2008 mess gives us peculiar point of view. Two years older, we might have already had burgeoning careers. Two years younger, we might have avoided it altogether. I remember so much impending doom from those years. Pretty different than the current sentiment.

Two years younger reporting in, things were still terrible for the Class of 2010 graduates. New grad unemployment didn't recover until 2012.

Re: Will real estate ever be normal again?

#316

Post by john_moscow » Mon, Nov 15, 2021, 5:47 AM UTC

JamesBarney wrote: post #260

bogota wrote: post #215

Earlier quoted context omitted.

This is wildly irresponsible and terrible advice

It's only bad advice if we don't have a spike in inflation.

The way asset prices work, expectations of future growth are already priced in. So you are effectively talking about timing the market.

Re: Will real estate ever be normal again?

#317

Post by dzhiurgis » Mon, Nov 15, 2021, 5:49 AM UTC

Nition wrote: post #216

dzhiurgis wrote: post #70

I'm no expert, but seems there's some sort of feedback loop going on: * leverage existing property to get new loan (sometimes at mere 20%) * rent goes up because "market adjustment" * first home buyer dreams inches further way since less disposable income & higher initial deposit * property owners accumulate equity even quicker At least in NZ, PM Jacinda Ardern said multiple times no one's equity should go negative e…

One factor that makes things even worse here in New Zealand is, from what I've heard in the US a home mortgage is usually at a fixed interest rate for the entire term - is that correct? Whereas in New Zealand the rate will usually be fixed for a maximum of five years. So you might have a 30-year mortgage fixed at 3.5%, but if interest rates go up, then in year five you might start paying 5%, and maybe you can't affor…

From what I've heard US is more of an exception with 30yr fixed. Most of the world runs on variable rates.

Also, when you apply for mortgage your income is tested against something like 5-7% interest rate.

Re: Will real estate ever be normal again?

#318

Post by latchkey » Mon, Nov 15, 2021, 5:53 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…

I have rented my entire life. I just bought my first 'home' which is a condo (with a reasonable HOA). I bought it with savings and no debt. I feel lucky.

I can't tell you how nice it is to not have to worry about rent. How nice it is to feel like if I want to change something about my home, I can and I'm not just improving someone else's capex. How nice it feels to know that I can travel and leave the place empty for a year without worrying about subletting it.

You seem jaded.

Re: Will real estate ever be normal again?

#319

Post by arcticbull » Mon, Nov 15, 2021, 5:54 AM UTC

deathanatos wrote: post #257

arcticbull wrote: post #122

Earlier quoted context omitted.

This is only part of the problem - and a small part of the problem at that. The real problem as always is zoning. Houses cost roughly the same on a $/sqft basis, adjusted for inflation, as they did in the 1970s. They're more expensive now because outside of town they're twice as big on average [1] - in part due to zoning rules. In town, zoning rules preclude densification necessary for supply to meet demand [2]. And,…

While I agree zoning is a huge issue (I think that interest rates being so low doesn't help, either, but I concur with your thesis that zoning is the bigger problem), this, however: > Houses cost roughly the same on a $/sqft basis, adjusted for inflation, as they did in the 1970s. Sorry, but no. My parents bought their first home for $72/sq ft. real¹. They sold it for $99/sq ft. The same house last sold for $208 sq f…

The inflation adjusted $/sqft statement is a blended average across the US. It’s lower outside of towns and higher inside towns. This is tracked by the Census bureau but as always with averages there are values on both sides of the mean. [1]

One caveat is it does reflect only new construction.

[1] https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5

Re: Will real estate ever be normal again?

#320

Post by seanmcdirmid » Mon, Nov 15, 2021, 5:56 AM UTC

mbesto wrote: post #276

seanmcdirmid wrote: post #199

Earlier quoted context omitted.

> You should also check housing prices in states like Kansas, they're all through the roof - https://www.zillow.com/ks/home-values/ How is a $184,486 average "through the roof?"

I guess you missed the 13.6% delta increase in the last year...I meant through the roof relative to previous years. Not sure how you interpreted that any differently given the context...

So your statement was about 2nd order price growth vs the first order prices themselves? You literally said “the prices were through the roof”, not the growth. Yes something that is really cheap can experience rapid price growth and still be relatively cheap.