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

Will real estate ever be normal again?

nytimes.com

Post reply on HN
Print view View original

441–450 of 620 posts

Re: Will real estate ever be normal again?

#441

Post by tcmart14 »

TulliusCicero wrote: post #193
noahtallen wrote: post #138

Earlier quoted context omitted.

Part of the problem with the first item you mentioned is that developers don’t really want to build cheap housing (I guess this is an assumption, but it makes sense financially.) They can make way more money catering to the people who can “afford” to build a $500k home, and people who want a very custom design and lots of space. On the renting end, “luxury” apartments will make more money than really basic cheap unit…

> Part of the problem with the first item you mentioned is that developers don’t really want to build cheap housing (I guess this is an assumption, but it makes sense financially.) This is like saying that Toyota would rather sell Lexuses than Camrys. Yes, it's true, but they sell Camrys anyway. Why? Because the market for luxury is only so big. They can make more money total addressing other parts of the market. So…

One theory, and this may just apply to my location, starter homes supply is being eaten up by firms who are going to turn around and rent it out. So they are essentially grab what little supply there is of new construction starter homes, then turning around and renting them out for quiet a bit of a sum that still prices quiet people out of them unless they are fine eating shit.

We don't seem to have an issue with Hertz coming in and scoping up all the camrys.

Re: Will real estate ever be normal again?

#442

Post by ilikerashers »

_huayra_ wrote: post #325

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…

As someone who saw all this go wrong with the Irish property market in 2007, this is actually a good option. Stop listening to everyone telling you that you need to buy in to win. Personally fixing renter's light bulbs and cleaning up after their mess sounds tortuous.

Re: Will real estate ever be normal again?

#443

Post by nly »

sokoloff wrote: post #405
refurb wrote: post #289

Earlier quoted context omitted.

Precisely. People really underestimate the costs of home ownership. You need to include everything like: 1) mortgage interest, 2) property taxes, 3) insurance, 4) maintenance, 5) opportunity cost of down payment, 6) transaction costs buying and selling. Clearly if you see major appreciation in the value of your house you'll clearly come out ahead of renting, but I've been in two situations (one while renting, one whi…

Most homes are bought with 5x or more leverage. In a year where the stock market is up 50% and houses up 20%, recent homeowners probably did better than renters, not worse.

Of course that leverage works against you if the market tanks.

People just believe that this is impossible in the property market

Re: Will real estate ever be normal again?

#444

Post by imtringued »

seanmcdirmid wrote: post #186
arcticbull wrote: post #141

Earlier quoted context omitted.

It doesn't really matter if you add new stock at the top end or at the bottom end, people from the bottom move up, and make space at the bottom for new entrants. Any new stock you add increases supply, which leads to lower prices across the board. [edit] and btw, I think builders aren't tripping over their shoelaces to service the low end of the market because they know the city is so aggressively capping how much th…

> It doesn't really matter if you add new stock at the top end or at the bottom end, people from the bottom move up, and make space at the bottom for new entrants. Only if the old housing stock isn't torn down to make room for the new housing stock. Thankfully property taxes aren't driven in the potential value of land (rather, they are tied to actual value), but most small scale landlords of affordable housing right…

>property taxes aren't driven in the potential value of land (rather, they are tied to actual value)

That means multifamily properties have higher tax bills for absolutely no reason. Expensive locations need to provide more housing per area so charging a fixed fee based on the value of the land is a much better approach. You get to build a single family home and pay through the nose or split the bill with a multi family home.

Re: Will real estate ever be normal again?

#445

Post by nly »

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…

The argument for home ownership in a nutshell: if you're spending 40% of your take home pay now on rent, and your pension will pay a fraction of what you earn now, say 40% again, how the fuck will you ever be able to retire?

Home ownership is a sensible part of retirement planning

Re: Will real estate ever be normal again?

#446

Post by imtringued »

lmm wrote: post #341
seanmcdirmid wrote: post #186

Earlier quoted context omitted.

> It doesn't really matter if you add new stock at the top end or at the bottom end, people from the bottom move up, and make space at the bottom for new entrants. Only if the old housing stock isn't torn down to make room for the new housing stock. Thankfully property taxes aren't driven in the potential value of land (rather, they are tied to actual value), but most small scale landlords of affordable housing right…

> Thankfully property taxes aren't driven in the potential value of land (rather, they are tied to actual value) That's not a thankful thing at all, it incentivises using the limited land in wasteful (low-value) ways. > Once the high end is say satisfied, money (investment) could simply move away from housing if it can't make any money there. Money chases the highest returns between all of the markets, not just one m…

>Available capital is practically unlimited these days, anything that's profitable and legal to build will get built.

And it's mostly chasing monopolies like location.

Re: Will real estate ever be normal again?

#447

Post by option_greek »

anonymoushn wrote: post #354
lmm wrote: post #342

Earlier quoted context omitted.

They invest in housing specifically because there's a bunch of tax avoidance loopholes for small-time landlords. There's nothing wrong with honest investing, but tax breaks are for leeches.

This is why I make sure to turn over my portfolio every year, to avoid favorable tax treatment.

Assuming this is not sarcasm, why not make that extra buck and donate whatever savings you make to what ever cause you see fit. It's odd to trust the government to use your money more prudently than yourself.

Re: Will real estate ever be normal again?

#448

Post by imtringued »

JamesBarney wrote: post #255
noahtallen wrote: post #138

Earlier quoted context omitted.

Part of the problem with the first item you mentioned is that developers don’t really want to build cheap housing (I guess this is an assumption, but it makes sense financially.) They can make way more money catering to the people who can “afford” to build a $500k home, and people who want a very custom design and lots of space. On the renting end, “luxury” apartments will make more money than really basic cheap unit…

We have the same problem with the car market. I can only afford a $5,000 car, but the car manufacturers make all their money building $20,000 cars. I just can't see how Honda making another $20,000 fit is going to help me afford a $5,000 car.

Are you forgetting that used housing and cars are cheaper? Nobody is forcing you to buy a brand new car.

Re: Will real estate ever be normal again?

#449

Post by coldcode »

nostrademons wrote: post #272
wombatpm wrote: post #114

Earlier quoted context omitted.

In the early 80s a 13% mortgage rate was not uncommon. People survived. Very little blood was spilled

I think people forget just how bad the early 80s recession was, possibly because most of the people affected then are dead or senior citizens now. Nationwide was 10% (on par with the 2009 recession), and in some cities it went up to 25%. Farmers drove their tractors into Washington DC and blockaded the Eccles building. Car dealers sent coffins containing the keys of unsold vehicles. Construction workers sent 2x4s to…

I owned a house shortly after that period, I knew people with 18% mortgages who just walked away from the house when rates went down again.

Re: Will real estate ever be normal again?

#450

Post by imtringued »

TulliusCicero wrote: post #306
seanmcdirmid wrote: post #225

Earlier quoted context omitted.

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). >…

Demand isn't unlimited, and you have the causation mostly backwards. Cities being successful causes people to flock to them, which means there's demand for density. The problem is that it isn't just those on the right opposed to density -- the left is little better. Sure, progressives are largely okay with what density already exists, but propose upzoning and they flip out. Just look at the California state legislatu…

Demand is pseudo unlimited. The real problem is betting on a single location. All 300 million Americans won't fit into new york. Why not build more new yorks?
Post reply on HN