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Will real estate ever be normal again?

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Re: Will real estate ever be normal again?

#451

Post by willis936 »

sokoloff wrote: post #403
willis936 wrote: post #157

Earlier quoted context omitted.

I'm not even 30 and have a strong desire for RO water and an EV. Nope, that is for a higher echelon of society.

If you’re already paying for the electricity and are willing to pay your landlord to have an electrician to install a 14-50R outlet in the parking area, I’d imagine most landlords would take that deal. That’s a cost that you’d pay even as a homeowner. Plenty of people own EVs without owning a house. I own a house, but still almost always charged at work before COVID. As in “I’d plug in at home maybe 2x per year in to…

It is absurd to pay to increase the value of a property I don't own and will not live in after a few years. Should I just spend this money every time I move?

My work doesn't have EV chargers and I'd need 20 hours of slow charging a day to make up for my commute. Relying on superchargers is reasonable though.

I had not heard of portable RO systems before. I'm definitely hopping on that. Cheers.

Re: Will real estate ever be normal again?

#452

Post by teekert »

sweaty wrote: post #415
teekert wrote: post #387

Earlier quoted context omitted.

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 25, and I live in The Netherlands as well. My parents managed to buy a house for 110k with government subsidies back in the 90s, they didn't need a deposit, they didn't even need any money. All they had to do was earn just above minimum wage, and they could include any costs from the buying process into the mortgage. Their house sold for 475k last year, a 90s starter home for low incomes. My grandparents had it e…

Yeah I'm happy I have a nice home but we also have some annoyances (minor compared to yours), we have been ready to move on to a bigger property for about 5 years now, very little comes up though. And when it does, we are often too late (they cap at 80 viewers for example, this is talking about 500k+ properties, I swear, 10 years ago you got a couple of viewers for each property, the realtor told me back then he negotiates with 1 person/couple at a time (unimaginable now!) and I think the number of properties for sale in my city easily dropped by 60% over the last 10 years).

Recently we finally got to view a nice property with some land (more rural, 545k) and someone overbid by 105k without and further reservations on the contract. So we are also pretty stuck.

Still it baffled me that when I talked to my bank I can probably sell my 2012 bought house (195k, modernized for 50k) for 330k! And then, I can repurpose my old mortgage to make it repayment-free ("overgangsregeling"), bla bla bla, and I can move to a 600k property with an increase of only 250 euro net per month. It's crazy!!! Yeah your generation doesn't pay transfer-tax but that's a drop in the bucket. Add to that that increasing a bid by 20k only costs you about 60 euro net per month (low rent, 30 years mortgage) and you get into a crazy bidding race really easily.

I feel like we need to build many more affordable houses ("starterswoningen", 200-300k). But I guess that 400-700k properties are where the money is at.

I'm now thinking about buying land and putting a prefab or standard house on it. Still, land is also not easy to find.

Edit: Oh a nice fact about my house: The woman living in it before us bought it for 19500 Guilders (~9k euro's) in the sixties...

Re: Will real estate ever be normal again?

#453

Post by nly »

drdec wrote: post #173
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…

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.

In most countries mortgage rates are variable and go up with the central bank rate.

And nothing will save you if your salary doesn't keep up with inflation

Re: Will real estate ever be normal again?

#454

Post by imtringued »

Spooky23 wrote: post #105
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…

A lot of large corporations are basically real estate companies. You know, companies like McDonalds.

It's actually funny how the efficient market hypothesis makes no sense once you consider the role that land has played in human history. It's the biggest unsolved problem in economics that no politician really acknowledges.

Even anti government or extreme free market ideologues still insisted that land should be heavily taxed or regulated in the name of efficiency.

Re: Will real estate ever be normal again?

#455

Post by yourapostasy »

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.

Some analysts believe that in another 5-10 years in the US, you'll get if not quite a $5K USD car off the Internet, a $10K USD car from a Chinese manufacturer, and the Detroit automakers will reprise their arrogance-into-bankruptcy role from the 70's again when Japanese cars entered the US market, when they famously remarked the new entrants can have that cheap unit market.

Watching the Detroit product roadmaps, I'm inclined to agree with that analysis at this time.

Re: Will real estate ever be normal again?

#456

Post by imtringued »

drdec wrote: post #173
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…

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.

Most people benefit after the fact. Only a tiny minority bets on real interest rates (interest after deducting inflation).

Re: Will real estate ever be normal again?

#457

Post by nly »

wombatpm wrote: post #114
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…

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

Yeah and houses were only 3x a single income, not 10x

The people who bought in the 80s and 90s refinanced as rates fell and saw massive appreciation in the value of their homes.

People buying today will see the opposite

Re: Will real estate ever be normal again?

#458

Post by sokoloff »

willis936 wrote: post #451
sokoloff wrote: post #403

Earlier quoted context omitted.

If you’re already paying for the electricity and are willing to pay your landlord to have an electrician to install a 14-50R outlet in the parking area, I’d imagine most landlords would take that deal. That’s a cost that you’d pay even as a homeowner. Plenty of people own EVs without owning a house. I own a house, but still almost always charged at work before COVID. As in “I’d plug in at home maybe 2x per year in to…

It is absurd to pay to increase the value of a property I don't own and will not live in after a few years. Should I just spend this money every time I move? My work doesn't have EV chargers and I'd need 20 hours of slow charging a day to make up for my commute. Relying on superchargers is reasonable though. I had not heard of portable RO systems before. I'm definitely hopping on that. Cheers.

If I added a 14-50R to my house, its value would increase by maybe $100 versus the same house without that outlet. (It could very likely be exactly $0.)

Have you approached them with an offer to increase the rent you pay by $25/month if the landlord is willing to fit an outlet that you can plug a charger into? Or by $40/mo if they’re willing to put a 40A capable fast charger in so you don’t have to buy anything but can just use the service you want?

Just as you don’t want to spend money for something that you care about using for a couple years but someone else might also later get benefit from, the landlord doesn’t want to spend that same amount of money for something that they don’t even care about at all.

Re: Will real estate ever be normal again?

#459

Post by imtringued »

rattlesnakedave wrote: post #229
bogota wrote: post #215

Earlier quoted context omitted.

This is wildly irresponsible and terrible advice

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

I admit, it's rational to speculate on land. However, that just means our tax policy is terrible.

Re: Will real estate ever be normal again?

#460

Post by imtringued »

ubercow13 wrote: post #416
john_moscow wrote: post #316

Earlier quoted context omitted.

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

So, never invest in anything?

In theory you're supposed to invest according to your risk tolerance and yield expectations.
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