Homes in 97% of U.S. cities are overvalued, Moody's says • Hacker News Board

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#471

Post by nivenkos » Fri, May 06, 2022, 7:37 AM UTC

t_mann wrote: post #449

nivenkos wrote: post #397

Earlier quoted context omitted.

A more practical solution is housing coops like the BRF system in Sweden. Individual landlordism is mostly banned (there are some company rentals though) - you buy the place you live in, and there are restrictions on renting it out (no more than 2 years in a row, etc.). It's helped a lot here. I don't think that social housing is a good solution. It's a complete disaster here in Sweden, with 12+ year waiting times, a…

Has it really helped? I remember talking to a young Swede a while ago, just a few years out of college. He said he bought a flat in Stockholm pretty much as soon as he had a job, and that the price appreciation since has almost outstripped his salary.

Yeah, but my brother lives in Barcelona - and there it's even worse, on lower salaries.

We ended up paying the same price for relatively similar flats, but in BCN that's much harder to achieve, and they are older and need renovation - and there are thousands of AirBnB slumlords buying up everything.

So yeah, the price increases have been a problem (and hit me badly combined with the interest rate increases) but it's still better than most of Western Europe.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#472

Post by nabla9 » Fri, May 06, 2022, 7:37 AM UTC

Housing economics is old and studied field. When you consider all the different countries over the world, it also means that you have multiple parallel experiments running at once.

That means we know what works. High prices are the result of supply and demand not meeting.

There is very strong evidence that just these work in combination.

1. Building enough housing into cities (by compact zoning, with good infrastructure). Japan is main example. Tokyo has no housing crisis. They just kept building houses until everyone had one.

2. Taxing empty apartments extra (nobody registered to live there for over a year). Taxing undeveloped properties in zoned areas extra.

After these two have been implemented. It just works. It does not matter if it's luxury or not as some claim. When luxury house is build, one frees up somewhere (as long as they are permanent residences). One new luxury house starts a chain where only 3-4 hops away someone with low income gets a new house.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#473

Post by immigrantheart » Fri, May 06, 2022, 7:40 AM UTC

88840-8855 wrote: post #310

immigrantheart wrote: post #301

Sorry this is just another dumb me trying to see what solution could be. Maybe 3rd world countries could start opening up their citizenship/PRs for US/Western Europe/Canada/Japan/Korea/1st world citizens. i.e, Give up your origin citizenship, say US, for Indonesia for example (because Indonesia doesn't allow dual citizenship), and gain these benefits for you: - Extremely cheap cost of living - You can own a house and…

Most people will not give up family, friends and roots for a house in some third world country. People have jobs where they live, they know the city or at least the country. The language is not a problem, they are familiar with food, laws, standards, processes. I worked in many different countries before, developed and less developed. It's "fun" for a while, but in my experience people don't want to stay, they only s…

But the peril of being a developed country is that housing costs will always be expensive.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#474

Post by shetill » Fri, May 06, 2022, 7:41 AM UTC

turtledove wrote: post #345

The sooner we collectively decide that housing shouldn't be a market, the better. We all need it, and we should figure out mechanisms to make it available to all. Practically that means paying to build and maintain housing stocks, changing tax incentives so developers are incentivized to build more housing and less luxury housing, charging a premium for unused land in desirable areas (parking lots don't house people)…

The reason the housing has turned into such a market is not because the evil overlords are deciding. It's due to overwhelming demand and the supply cannot keep up, so landlords have the freedom to choose any prices. The reason there is so much demand is because there are way more people on this planet now than there ever used to be. So if you want cheaper houses, solve the overpopulation problem first.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#475

Post by turtledove » Fri, May 06, 2022, 7:44 AM UTC

shetill wrote: post #474

turtledove wrote: post #345

The sooner we collectively decide that housing shouldn't be a market, the better. We all need it, and we should figure out mechanisms to make it available to all. Practically that means paying to build and maintain housing stocks, changing tax incentives so developers are incentivized to build more housing and less luxury housing, charging a premium for unused land in desirable areas (parking lots don't house people)…

The reason the housing has turned into such a market is not because the evil overlords are deciding. It's due to overwhelming demand and the supply cannot keep up, so landlords have the freedom to choose any prices. The reason there is so much demand is because there are way more people on this planet now than there ever used to be. So if you want cheaper houses, solve the overpopulation problem first.

Landlords don't need to raise rent if their costs aren't rising.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#476

Post by brnaftr361 » Fri, May 06, 2022, 7:45 AM UTC

MichaelBurge wrote: post #451

jokethrowaway wrote: post #420

Earlier quoted context omitted.

What you say is absolutely correct. While you have governments that can legally steal everything from you just because they can, you'll never really be free. That said, there are degrees of freedom. Property taxes in the US are very high so I consider it an inferior degree of freedom compared to owning a house in a country where I don't have property taxes. The more corporation / income tax I have to pay the less fre…

That seems like it would very quickly turn into tribute to the local warlord.

That was, at least the common narrative goes, the fundamental basis for most if not all states. Mutual defense. And it's hardly any different today. There have been many cases of non-state societies who did organize their own protections. But to try and connect the dots with such factions (many of which are still functioning today) and the modern man is an error. We're talking societies with scribal and priestly classes which in no ways exist in the modern era, when the global average literacy sits at 83% and the mindblowing advancements we've seen in the last two decades alone is a force multiplier for autonomous organization that is totally unprecedented, like most of all of the advancements seen since the seminal moments of the industrial revolution.

But ultimately your negative outlook on the human condition is your own, 99% of daily life proceeds under conditions of total anarchy, authority and security are entirely illusory and we pay incredible costs to maintain those illusions, not in terms of liberty alone, but in toil and life itself. It leaves little left to live for, read the Death of Ivan Illyich if you want a better understanding of what I mean.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#477

Post by enraged_camel » Fri, May 06, 2022, 7:47 AM UTC

halotrope wrote: post #450

Everyone seems to agree that speculation in housing is a global problem with adverse effects on communities and societies. Toronto seems to be a good example of how the end-game will look like. People are priced out of owning a home for good and/or have to leave places where they might have been living for their whole life. Rent controls don't seem to work, and just cancelling (by whatever means) the market for real…

>> - Invest in infrastructure so that living apart from big cities is more worthwhile. Especially broadband internet and schools.

The rest of your list is good, but I don't agree with this at all. American cities need less sprawl, not more. Denser cities need less infrastructure, which means less stuff to maintain and have to rebuild as it ages.

IMO we should strive to make it so that living far from cities is what is expensive, not in them. I know not everyone prefers that, but it's by far more sustainable, economically.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#478

Post by bjourne » Fri, May 06, 2022, 7:48 AM UTC

nivenkos wrote: post #397

turtledove wrote: post #345

The sooner we collectively decide that housing shouldn't be a market, the better. We all need it, and we should figure out mechanisms to make it available to all. Practically that means paying to build and maintain housing stocks, changing tax incentives so developers are incentivized to build more housing and less luxury housing, charging a premium for unused land in desirable areas (parking lots don't house people)…

A more practical solution is housing coops like the BRF system in Sweden. Individual landlordism is mostly banned (there are some company rentals though) - you buy the place you live in, and there are restrictions on renting it out (no more than 2 years in a row, etc.). It's helped a lot here. I don't think that social housing is a good solution. It's a complete disaster here in Sweden, with 12+ year waiting times, a…

Sweden doesn't have social housing. What you are discussing is called rent control and means that landlords can't decide rents for their properties by themselves. Without rent control you'd get even more segregated cities as many areas would become too expensive for most to live. Landlords and their lobby organizations want rent control abolished though because doubled rents would greatly increase their profits.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#479

Post by unwind » Fri, May 06, 2022, 7:48 AM UTC

thow-58d4e8b wrote: post #443

nivenkos wrote: post #397

Earlier quoted context omitted.

A more practical solution is housing coops like the BRF system in Sweden. Individual landlordism is mostly banned (there are some company rentals though) - you buy the place you live in, and there are restrictions on renting it out (no more than 2 years in a row, etc.). It's helped a lot here. I don't think that social housing is a good solution. It's a complete disaster here in Sweden, with 12+ year waiting times, a…

> BRF system in Sweden To expand on this point, and a similar system in Finland called asumisoikeus: Municipalities have a pool of housing units. The tenants do not buy the house itself, they buy a right to live in that house, which usually costs about 10% of the price of the house, reimbursed when they move out. They also pay a rent that takes care of the energies and depreciation of the house. Socio-economic status…

The grandparent is a bit unclear in my opinion.

In the BRF system, you literally do not "buy the place you live in", you instead buy the right to live there. The actual ownership of the property is with the BRF.

The word is "bostadsrättsförening" [1] which roughly translates to "living rights association" or something (Wikipedia uses "housing cooperative" so I guess that's the best).

The word "förening" is hard to translate, the closest seems to be "voluntary association" [1], it is a formal collection of people with some common purpose (like managing a house). There are legally various types with varying requirements, and so on.

Edit: spelling, more linkage.

[1] https://en.wikipedia.org/wiki/Housing_cooperative

[2] https://en.wikipedia.org/wiki/Voluntary_association

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#480

Post by t_mann » Fri, May 06, 2022, 7:48 AM UTC

nivenkos wrote: post #471

t_mann wrote: post #449

Earlier quoted context omitted.

Has it really helped? I remember talking to a young Swede a while ago, just a few years out of college. He said he bought a flat in Stockholm pretty much as soon as he had a job, and that the price appreciation since has almost outstripped his salary.

Yeah, but my brother lives in Barcelona - and there it's even worse, on lower salaries. We ended up paying the same price for relatively similar flats, but in BCN that's much harder to achieve, and they are older and need renovation - and there are thousands of AirBnB slumlords buying up everything. So yeah, the price increases have been a problem (and hit me badly combined with the interest rate increases) but it's…

Not trying to be too skeptical, but that doesn't exactly sound like it's working too well. I remember charts by the ECB as showing Sweden with the most overpriced real estate in the EU. It might look ok in comparison to Barcelona, but that one's probably only second to Venice as the world's tourism hot spot and has an extreme concentration of AirBnBs, not exactly representative of Western Europe in general.