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Will real estate ever be normal again?

nytimes.com

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Re: Will real estate ever be normal again?

#541

Post by willis936 »

paulcole wrote: post #536
willis936 wrote: post #153

Earlier quoted context omitted.

Screw the apartment. You could save so much money living out of a van. I honestly don't understand this line of thinking. "Why do people even want [tangible good]?" If an explanation is really needed: it's nice to have a large, private space. People like cars in garages, a room for their work, a room to cook, a room to relax, a room to sleep, a room to store stuff, etc. Why do people bother with any of these things?…

You're doing the same thing though. The whole argument against apartment living is that nobody can imagine that anyone would want to live this way, "Why do people not want [tangible good]?"

The argument against apartment living is the lack of choice in the matter. More people are living in apartments now than before and it isn't because of preference.

Re: Will real estate ever be normal again?

#542

Post by WarOnPrivacy »

thefounder wrote: post #8
WarOnPrivacy wrote: post #5

Renters and buyers are increasingly in the same boat - the one where people with money in the bank are finding there's nowhere to live. In the case of renters, many with savings are facing homelessness - once those savings are burned up on hotels. This isn't a dramatization or overstatement. It's what I'm witnessing personally and very nearly happened to us. We were one of the few to beat long odds and score a place…

Why don't you move to a cheaper place/smaller city? I don't understand why there are some many homeless people in big cities (i.e NYC). If people would just move to cheaper areas/cities the whole issue of housing would be fixed.

A local move (cheap market) is 4k out of pocket after factoring in 1st/last/sec, utility deposits & endless move/cleaning expenses. The local move (cheap market until this year) we just did was ~5x that.

Moving to another city where savings have to be firehosed until enough jobs are secured (us:3-4) can easily burn thru ten/tens of thousands of dollars. A pretty big chunk of America doesn't have that much cash sitting around.

Re: Will real estate ever be normal again?

#543

Post by t-writescode »

jshen wrote: post #530
t-writescode wrote: post #355

Earlier quoted context omitted.

Well, I tried to put 5% down; but, then I realized how much higher above asking things were selling for; and how people skip out on things like inspections. But I still want inspections, so I ask for them. This puts me down on the list of desireable buyers. I went into a place that was selling for around 300k. I was going to offer as much as 325. I was also willing to go 5k above what the place would appraise for. Th…

You aren’t making a typical engineering salary if you can’t afford a $500k place.

I make 150k / year. I'm an SDE 2. The problem isn't the monthly payment, the problem is the down payment.

And you've said in several places how engineers make 200k+ after 5 years. Maybe in total compensation and only in FAANG; but there are a loooot of engineering companies in Washington and the Seattle area that aren't getting hundreds of thousands of dollars in stock that's increased 5-10 fold in the last 2 years.

Re: Will real estate ever be normal again?

#544

Post by aeternum »

zohch wrote: post #533
mebassett wrote: post #435

Earlier quoted context omitted.

Wealth of nations, book 1, actually. "toil and trouble" could be interpreted as "labour". I certainly take that interpretation. though Smith really didn't make much use of the labour theory of value, as he thought it would be less relevant in an advanced economy. Riccardo and especially Marx developed and used it much more. (For Marx see the first part of Capital)

> Wealth of nations, book 1, actually. "toil and trouble" could be interpreted as "labour". I certainly take that interpretation. You are free to interpret it any way you like, but then taking your interpretation and saying that is what Adam smith was trying to say, when it is quite literally not what he said, nor even close to what he said, is called lying, and that is not really okay.

There's no need for interpretation, Smith makes it quite clear with nearly an entire chapter dedicated to it:

> The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour therefore, is the real measure of the exchangeable value of all commodities.

> It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command.

> But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated.

https://www.gutenberg.org/cache/epub/3300/pg3300-images.html...

Re: Will real estate ever be normal again?

#545

Post by staticman2 »

nostrademons wrote: post #279
hammock wrote: post #267

Earlier quoted context omitted.

The rule of thumb I have heard is 3x. If you buy a house 10x your income and put 20% down, your monthly payments are 40-45% of your income before tax. That's a lot

3x is based on early-80s interest rates (12%). I did out the math [1] for someone on Reddit and it turns out that if you buy 3x your income @ 3% interest, you'll only be spending about 12% of your income on housing. To get to 30% of gross on housing (the other common rule of thumb), house prices need to be about 7x income. [1] https://www.reddit.com/r/investing/comments/oawyqu/is_there_...

3x is not based on 80s interest rates. And the mortgage is only part of your expenses, you need to budget for home repair, taxes, and insurance. Plus any other savings that are needed, like putting yoyr kids through college or retirement.

Re: Will real estate ever be normal again?

#546

Post by t-writescode »

jshen wrote: post #528
t-writescode wrote: post #170

Earlier quoted context omitted.

I live in Seattle. I have an engineer’s salary. I cannot presently afford a condo, let alone a house. By the time I have enough for the down payment, I will again not be able to afford a home.

I call bullshit unless you are entry level. The average engineer at a big company with 5 years experience is probably making >$200k all in. I can easily find 2bd 2bath condos and townhomes in Seattle for ~$800k.

There are lots of engineers in the Seattle area that do not work for Google, Facebook, Amazon or Microsoft. I make about 150k / year. I have 10 years experience. Were I a senior, it'd be 180k. Still not much more. It's also the most I've made at any job I've ever worked. My previous company, I was one of the highest paid employees at 115k.

Forgive me, but I think you need to check your privilege when you speak about regular matters for people like millenials trying to buy houses.

And I can't imagine a place on the planet where 800 thousand dollars is a reasonable price for a 2 bedroom, 2 bath. In the Work-From-Home days, 2 bed, 2 bath is decidedly a 1-person household (the other room is an office), *maybe* a married couple that get along well.

edit: typo

Re: Will real estate ever be normal again?

#547

Post by aeternum »

bumby wrote: post #522
aeternum wrote: post #350

Earlier quoted context omitted.

https://fred.stlouisfed.org/series/EOWNOCCUSQ176N

Thank you. Maybe you can help me understand this correctly. Your link shows the "owner-occupied" housing was relatively flat during the housing crises. The link below shows new housing units were still increasing during that time.[1] Does that imply most of the new builds were investment properties (i.e. not owner occupied) during this time period? [1] https://fred.stlouisfed.org/series/HOUST

Vacancies were also (relatively) high during that time.

https://fred.stlouisfed.org/series/ESALEUSQ176N

I think this is what matters most. It's good to have some vacancies so that people have options but too many likely indicates there's some speculation/over-building going on that the market doesn't support.

Re: Will real estate ever be normal again?

#548

Post by jjav »

wan23 wrote: post #208
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…

> Only if the old housing stock isn't torn down to make room for the new housing stock This is about zoning too. Normally, if the demand is there for it a smart land owner would build more housing on the same plot, e.g. turning a single family into a two family, but of course that is illegal in many places.

> a smart land owner would build more housing on the same plot

This is an uncomfortably extremist position, should maximizing revenue per investment be the one and only consideration society takes into account?

I do many things that provide joy in life in other ways, even if I know they don't maximize revenue or savings. I wouldn't want to go through life thinking about nothing else than ROI for every action.

Re: Will real estate ever be normal again?

#549

Post by jjav »

gogopuppygogo wrote: post #312
nine_k wrote: post #293

Earlier quoted context omitted.

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.

Is is true that the used car market has gone way up, but it is nowhere near that bad yet.

Tons of perfectly good used cars for under 5K on CL. And this is SF Bay area where prices tend to higher.

https://sfbay.craigslist.org/search/cto?purveyor-input=owner...

Re: Will real estate ever be normal again?

#550

Post by wyre »

blip54321 wrote: post #126
throwvirtever wrote: post #107

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…

1) Renters are a captive audience. If you have kids in a school, I can raise rents until I hit your utility cost of moving, which can be high. 2) Home owners are more likely to maintain homes well (and efficiently). 3) We have a nesting instinct. I'm more likely to customize my own home. One I rent is a throw-away.

> If you have kids in a school, I can raise rents

This is evil predatory landlord behavior. Plz don’t do this.

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