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Will real estate ever be normal again?

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Re: Will real estate ever be normal again?

#591

Earlier quoted context omitted.

My community is here. How is it just that I be forced into exile because “the market” says so? I’ve done no wrong.

How is it you've fallen so far behind the rest of your community's median income?

That can happen all kinds of ways. In my case, the economic crisis, then Obamacare's impact on small medical biz, then embezzlement by a biz partner, then my wife developed psychosis & left me w/o a vehicle for a year, eventually agism and most recently housing has increased 70% from last year while transportation costs have tripled.

Re: Will real estate ever be normal again?

#592
post #368
post #173

Earlier quoted context omitted.

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.

Rich people with significant asset portfolios can borrow more and at lower rates than young people. They have been doing so. Forcing young people to take more and more debts to buy assets at now over-inflated prices has no happy ending.

If you take out a huge mortgage and buy a house, and then there actually is massive inflation, then you will have a very happy ending.

Re: Will real estate ever be normal again?

#593

Earlier quoted context omitted.

You are only giving this advice because we've had a 10 year bull market. You feel excuberant and you are justifying it with fancy words. Meanwhile capital is at an all time high in terms of price to earnings. There's no reason to think you know what the future holds.

> There's no reason to think you know what the future holds. Prior behavior is the best predictor of future behavior. The world has become complacent and dependent upon cheap capital, and no one - and I mean no one - is ready or willing to turn off the faucet yet.

Prior behavior includes the 50% stock market crash in 2008 and ten year periods of negetive real stock market retutns. A financial plan that doesn't include a probabity of these events recurring isn't one I can get behind.

No expert recommends dwelling on only the most recent behavior.

Re: Will real estate ever be normal again?

#594
post #194
post #117

Earlier quoted context omitted.

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.

It's not that simple. Right now the interest portion of my mortgage, plus my property taxes, plus my HOA dues, not to mention maintenance and upkeep, is more than what I was paying in rent right before I bought my house. That money is "thrown away" in the same sense as rent is; only money going toward mortgage principal gives me something to show for it. It absolutely would have been more economical to rent than buy.…

With rent, it's a guaranteed loss, with a mortgage on a property there's a high possibility of a return of investment, in addition to a return on investment.

Re: Will real estate ever be normal again?

#595
post #102

Earlier quoted context omitted.

Right, so destroy the village to save it. >>People wouldn't be priced out of their communities if there was more supply of housing Many of the communities you find attractive would not exist at that level of attractiveness if the supply were massively increased by abandoning zoning. People live in communities and make their sets of zoning regs to design, build, and maintain the quality of life that makes that communi…

I have absolutely no problem with people voting for zoning policies that decrease the supply of housing. I have a major problem with incentive structures that are setup such that the people that own houses in that environment become wealthy through no effort of their own. George figured this out 100 years ago[0]. Implement the Land Value Tax. Go ahead and restrict supply, that's your right. But it's going to cost you…

>> I have a major problem with incentive structures that are setup such that the people that own houses in that environment become wealthy through no effort of their own.

This is simply wrong.

People are not becoming wealthy with no effort.

If they collectively vote in the zoning conditions that restrict supply, they are ALSO creating a situation where they MUST pay more in taxes to maintain those conditions. Everything becomes more expensive, and is amortized over fewer people.

The residents literally pay every month for those upgrades in higher taxes, longer commutes, higher maintenance costs on larger houses and yards, etc.

In real time, those investments pay off in higher quality of living (which is what you want to access for lower cost).

Over time, those investments MAY, but do not always, result in larger increases in value. I can tell you that values in my town has barely increased in 15+ years, whereas nearby towns have increased 30-100%, and our town has probably the most restrictions.

People are NOT doing this to become wealthy without work. They are doing it for their and their families' quality of life. Sure, there are a few that are flipping houses as a side gig, but the majority of people living in any area I've seen are there building a life and INVESTING in quality of life.

Re: Will real estate ever be normal again?

#596
post #535

Earlier quoted context omitted.

>>Those "interlopers" are ... I notice that your example start with actual locals growing out of a locale to people who have nothing to do with the locale. Whether someone is enemy or friend all depends on attitude. Are you trying to work with and build upon what the previous generations have built, or are you trying to merely appropriate it because you don't like the price of single-family zoning? >>That depends on…

Your note above contains a lot of assumptions about what I think, and vitriol, words like steal, destroy, trash, etc. This seems to be something that you are emotional about. Lots of people think it's immoral for neighbors to be able to micromanage the living spaces of other neighbors outside of basic safety issues. I'm not sure how you'd defend imposing your will on other people just because you can at any given mom…

One more fallacy you have posted:

>>Lots of people think it's immoral for neighbors to be able to micromanage the living spaces of other neighbors outside of basic safety issues. I'm not sure how you'd defend imposing your will on other people just because you can at any given moment.

No one is micromanaging the living spaces of other neighbors. As you say, it's a democracy.

I have lived in towns that had zoning, and voted it out. Some years later, there were meetings where people were asking "If we had zoning, this siht would not have happened, would it?", but they did decide to create zoning, then abolish it, then reinstate it.

It is simply false to imply that I have some micromanaging power over my neighbor, beyond the democratically agreed rules that require them to apply for variances to the zoning rules, and allow abutters to submit comments on those variance requests, which must also be considered.

In Switzerland, you will drive around and see poles standing on land. These are marking the corners of a proposed new building and must be erected for months before a hearing on the building, so everyone can comment and post objections, requests for adjustments, etc. before permission is granted to build.

This is not some kind of unfair micromanagement, it is taking into consideration everyone's local concerns before making a decision.

Zoning does not exist as you imaging because of petty concerns over property value and fear of unknown people. It exists because too many people will build things that negatively affect their neighbors, and are democratically introduced. I get to vote on them in my town, and you in yours. I don't get to vote in your town, and you don't get to vote in mine, any more than I get to vote in Switzerland, or some Swiss guy gets to vote here.

Re: Will real estate ever be normal again?

#597
post #47

Earlier quoted context omitted.

In the current system not everyone is entitled to a job for their profession. People should get used to it.

So you're saying that instead of optimizing for the job I am qualified for and have experience of, I should move to somewhere where the labour market is more subdued, and move to an industry where I have no experience?

Basically, yes. Local (and global) market only has so many positions for a specific profession. If there are more qualified people, than positions, you are out of luck and might need to do exactly what you described.

Re: Will real estate ever be normal again?

#598
post #47

Earlier quoted context omitted.

In the current system not everyone is entitled to a job for their profession. People should get used to it.

> People should get used to it. Historically, this line of thinking never ends well.

That's true, but it is also true, that this is (at least partially) a self-imposed problem. Many people are giggling when they hear about a liberal arts graduate who struggles to find a descent job, but they never think the same might apply to their profession too.

Re: Will real estate ever be normal again?

#599
post #47

Earlier quoted context omitted.

In the current system not everyone is entitled to a job for their profession. People should get used to it.

So instead of optimizing for efficient allocation of labor and capital, we should instead optimize for the short-term benefit of the landed gentry class? Seems like a likely path to either economic ruin or political revolution. Probably both. Since you don't seem like you're be sympathetic to an ethical argument, here's some real-politik: "fuck the poors" works well enough when the poor are actually poor. Less well w…

I don't see an ethical argument going against what I said in the parent comment.

Here's a non-hypothetical scenario: Boeing lays off thousands of mechanical engineers in Greater Seattle Area. What do you suppose the local government has to do exactly to find jobs in mechanical engineering for them? What does it have to do with ethics?

Re: Will real estate ever be normal again?

#600

Earlier quoted context omitted.

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.

What exactly is the problem with a downpayment on a 350k (or, heck, 500k) unit? Obviously there are exceptional circumstances, e.g. you're supporting multiple people on your salary alone, which might make it difficult to save up 70-100k quickly. But if you're single, your annual after-tax take-home is ~95k, assuming you max out your 401k contribution, and ~110k, assuming you don't contribute at all. Saving 50% of tha…

In 2 years, the housing prices will be even higher. I just presently don't have much saving, but that's what I'm planning on doing, yes - well, not saving 50%, I do spend more than that per month; but saving at a fast rate.

Even with saving, though, I should probably save at least one more year to have an emergency fund again, so it's probably more like 3 years, but your point still stands.

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