411–420 of 620 posts
I see a lot of fellow millenials thinking that the only way to escape the poverty trap that is being chronically burdened by onerous rent payments is to "play the game", i.e. to do all of the house hacking stuff to by MFUs, live-in-and-flip, or whatever the thing to do is. There is no doubt that this stuff can work. If you become a very savvy investor, you can start seeing net positive on your housing as an investmen…
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…
This sort of idea is often posted but rarely do anyone explain why. Asset prices do not have this effect on the brick-and-mortar economy that most people live in.
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 doesn't even really seem like any of the high paying jobs are enough to keep up with this insane market. Compared to two years ago, it’s much more likely that you can get paid a coastal tech salary yet live in an affordable city. These still exist in America. Here’s one that I just pulled out of a hat: Ames, Iowa. College town. Median house price $265k, which you can have for less than $1k/month with a 30 year m…
Just the asset price rise could rival a full wage in certain areas/times.
So the cities were actively pulling people into them because of their stupidly high property prices and so worsening the problem in a bubble like spiral.
On the other hand, if this bubble does pop, it'll be the people who just recently bought in that will carry the brunt of it, so maybe now is a good time to not relocate and wait for the pop. Could have said that 10 years ago though.
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…
As Adam Smith said, the true price of everything is in human labor. Inflation generally raises the cost/price of new labor at the expense of historic labor. Demand for labor is still high, the price will likely continue to increase. Housing is also not a great comparison metric because it was so perturbed by 2008. New unit starts dropped precipitously and still have not fully recovered: https://fred.stlouisfed.org/se…
In the case of asset inflation, it is literally the opposite.
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 agree your generation is pretty f-ed (even here in "socialist" Netherlands) and I hope they will raise taxes on my generation until something good can happen for yours. At least here they are really cracking down on my generation owning multiple homes and renting them to yours for a super high price, among other things. That said, your generation is digital native, you don't need to live in an expensive city, you c…
I'm in the top 1.4% of income in the country, yet I cannot buy a house, because I don't have the savings required to overbid by 100k. There's a lot of things causing this overbidding, my parents for example sold their house because they wanted something smaller, but because they now had 475k in the bank, they were able to overbid by 80k on a house listed at 250k which ruins any chances for younger people to buy them. There's no way I can match this, let alone less fortunate people of my generation. I'm currently renting for 1600 a month, my landlord rented the place out to pay for his new house's mortgage. They're unwilling to sell it to me, because they plan to retire here in the next 10 years. The house is worth 300k in the current market, it's a very small starter home, but I literally had no other option because there's absolutely nothing available. And this is in a small town in the east of the country, my commute is over an hour as I work in the west.
There's nothing your generation can do, apart from just owning one home. It's not your fault, it's horrible policy making (such as getting rid of the VROM ministry) among other things.
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…
Unfortunately for you 24 year olds have no power.
Earlier quoted context omitted.
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…
People buying houses and renting them to others to live changes ownership stats but does not increase homelessness, at least not in an obvious way. If a housing unit is occupied by N people, that’s N people who aren’t homeless because of that unit. Buying additional houses and then not renting them out would contribute to homelessness as that unit would be housing 0 people.
He might be referring to the problem that the landlord has a subsidized mortgage whereas the renter is paying by earning money from the circulating economy.
Earlier quoted context omitted.
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…
It seems pretty simple, I can spend money to rent a place, and after 30 years (rent), have nothing to show for the money I put in, or I can buy a house (mortgage), spend money for 30 years, and then have an asset I own. Not to mention the freedom to do whatever you want to your home / house without having to ask for permission, or being in a position of putting money into an asset that you don't own.
Earlier quoted context omitted.
This is borderline romantic at this point. What bank do you think would ever possibly agree to this? Most people can’t even prove to their banks that they can afford a mortgage that’s less than the rent they’re currently paying.
There’s a lot more expenses as a homeowner than the mortgage (even the PITI (principal, interest, taxes, and insurance)). I can’t think of a year where I didn’t have $5K of crap that needed fixing/replacement/improvements*, the year with the fence was 6x that, and I’ve got a boiler coming due that will be a $15K project in all likelihood, $25K if I go higher-end and improve the piping configuration for more even heat…
Therefore its better to use taxis.
My mortgage cost are half the rent for same property I dont see myself loosing money anytime soon on my deal. Plus nobody will kick me out on the whim of truing rental into AirBNB like my parents got few months back.