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

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

#491

Post by carom »

turtledove wrote: post #419
merrywhether wrote: post #402

Earlier quoted context omitted.

Isn’t there tension between what I’m assuming is land-value tax to push developers to create more housing and keeping people in the home they’ve lived in for 20 years? That home has probably become inefficient from a public value standpoint and would better contribute if it was a multi-unit dwelling. I’m with you that people should be able to continue to afford to live in the same neighborhood even (with a shift in t…

Yes! And thank you for approaching this with a thoughtful question. One solution to this would be to guarantee a unit in any multi family or apartment building to the current resident, and pay for their relocation while the new unit is being built. Alternatively, buy units from people who are leaving or who have passed away. We do need to knock down some houses to build more housing, but we can do it in a way that is…

>One solution to this would be to guarantee a unit in any multi family or apartment building to the current resident, and pay for their relocation while the new unit is being built.

You are just increasing the cost of the building's rent with this stuff. You'll have a few birthright units and everything else will be luxury to cover costs. This is the same problem we currently have with affordable units, huge missing middle.

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

#492

Post by cloutchaser »

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 problem in almost every country with out of control house prices is low interest rates since the dot com crash.

That's where everything went wrong. At 0-1% interest you can get insane mortgages for 90-95% of the value of the property, pushing the price up to where people spend every last cent they can on mortgages, but at $xxxx per month you can easily afford hundreds of thousands of dollars in mortgages.

Raise interest rates (happening), go into recession, crash the market, stop people getting mortgages, house prices will drop insanely fast and hard.

Of course no government wants to do this because it will panic the home owning class. Well - you have to chose at this point. Make it impossible for young people to buy a home, or piss off homeowners.

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

#493

Post by trasz »

jjav wrote: post #455
turtledove wrote: post #359

Earlier quoted context omitted.

Not a birthright, I don't think it should move across generations, but I do think that it's needlessly cruel to force someone out of their home because wealthier people want to live there. As for tenants v landlords, I believe it should be difficult to evict tenants except in cases where the tenant is clearly a danger to others or to the home itself. If they are vandalizing the property, that should be an eviction. L…

> But I think tenants should be protected if, eg, their income drops due to a layoff or unforseen medical expense. They should stay if they can't pay? Who takes the loss? It would be sensible to have a government program to help people in such circumstances. But if you'd be asking for the landlord to just take the loss, that's not sensible. The owner is probably barely breaking even on rent vs. costs, so they can't a…

Given the house for rent is an investment, it’s obvious who should be taking the loss: the investor.

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

#494

Post by gameman144 »

vertis wrote: post #483
kriops wrote: post #424

Earlier quoted context omitted.

Wikipedia: "A commodity is an economic good (...) that has full or substantial fungibility. (...)" On the basis of geography alone, housing can not be a commodity.

You're confusing want and need though. You might not like to live in any house, and you might need to be roughly geographically located to do work, but for the most part any house that fits your family is interchangable. When you take the other things, like job and where you want to send your kids to school it becomes a hell of a lot more fungible. Given that commoditization is a scale, I would say it could be toward…

> Given that commoditization is a scale, I would say it could be toward that end of the spectrum if we wanted it to be.

Commoditization is only a scale inasmuch as the underlying goods are fungible. Corn is a commodity because nobody cares about differences between individual kernels, but if some process came around that only worked with super-specific kernels, then you'd be reducing the commoditization of corn.

I can, however, think of nothing that would make housing even close to fungible. Views, neighborhoods, neighbors, noise, history, location -- the list of things which are entirely unique per property is higher than basically any other market I can think of.

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

#495

Post by headmelted »

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…

This really is a fixable problem.

Heavy taxation on NPD (non-primary domicile) housing solves this by itself. It's just that convincing people this is in their best interest will take a lot of effort - not to mention that there's a fairly ubiquitous problem of local politicians being in the pockets of property developers in the areas where these problems are at their worst.

People still believe that their home is a good investment, without any thought given to who's going to buy it from them later or where that person will be getting the financing.

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

#496

Post by nikanj »

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…

If you have n units of housing and 5n people looking for homes, no amount of rent control is going to help. There is no fixing the market without a substantial increase in construction.

My suggestion is somewhat simple: return to the early 20th century model where if you own the land, you're free to build homes on it. Even if it means the neighbourhood now has reduced parking, you block someone's view of the mountains (Vancouver I'm looking at you), the building casts a shadow in the local playground, etc.

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

#497

Post by philderbeast »

5ersi wrote: post #371
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)…

Nobody "decided" that housing is a market. If something can be bought and sold, then this is inherently a market. Yes, we can and should regulate markets, and we probably all agree that the purpose of the housing is for people to have a roof over their head, as opposed to use housing as an (speculative) investment market. This can easily be regulated via taxes (on ownership and transactions), but it comes with a cave…

"then there is less incentive for investor/landlord to build housing, which makes housing scarcer and drives prices up."

This doesn't ring true, it just moves the incentive to people to build housing to live in them selves, and with less competition in the market it would drive prices down.

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

#498

Post by glerk »

maccard wrote: post #489
glerk wrote: post #481

Earlier quoted context omitted.

Housing shouldn't be a market? Then how would housing be allocated? The state builds and gives housing to everyone? Maybe you should take a trip to Eastern Europe one of these days to see the final result of what you're advocating. Pros: everyone is given an apartment to live in. Cons: your city's skyline looks like this: https://i.imgur.com/5X1sIeP.jpg "We collectively decide" just means you decide for me. You think…

Eastern European cities aren't the only examples. Nordic cities (e.g. Stockholm and Copenhagen) are great examples - they have different problems but people are housed. Cities like Berlin don't have a speculative housing market due to excellent renters rights meaning the majority of people rent long term. Finally, Vienna is the poster child for "how to do social housing".

All these cities still have a housing market albeit a more regulated one than your average American city. Housing is still developed and owned by private interest and responds to supply and demand. We could debate the policies of these specific cities (for example, the trade-offs of Berlin's rent control: https://archive.ph/l3i2w) but that's beyond the point.

The parent's position is "housing shouldn't be a market", and I am showing an example of what soviet-style state control over housing looks like in practice.

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

#499

Post by throwaway48375 »

jjcon wrote: post #44
adamomada wrote: post #23

I picture that vertical M2 supply graph from March 2020 whenever I hear ‘overvalued’ when it comes to real assets. The money has changed, not the property. I’m now curious how undervalued it really is and what a huge accounting trick it was to play on everyone over the past two years.

Its because they changed the definition of m2 in may 2020 not because anything fundamentally changed - not sure why people keep thinking this. >Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less IRA and Keogh balances at depository institutions; and (2) balances in retail MMFs less IRA and Keogh balances at MMFs. Seasonally adjusted M2…

We have a fractional reserve banking system. What was the reserve rate set at in 2020?
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