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

#631

Post by UncleMeat » Fri, May 06, 2022, 2:14 PM UTC

carom wrote: post #619

UncleMeat wrote: post #594

Earlier quoted context omitted.

Why? If we pass a law dictating that chemical companies have to pay for cancer patients that developed the disease because of their use of those company's products, does the state cover the losses of the people who hold stock in those companies? No. Landlords always say that they should be compensated for the risk of homeownership. If that's true, then some landlords need to lose money .

We do that for pharma companies. [1] The system you purpose is not a loss some times, it is a system that can be abused all the time. Who says landlords aren't losing money? I am currently taking a loss. Two units are rent control at 600 per month, the third at 2300 hasn't paid in ten months with an eviction trial next week, I am in the last unit. I will be shutting down the property and using it as a single family h…

Landlords are losing money in regions with strong tenant rights. That's good. Some landlords should lose money.

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

#632

Post by cycrutchfield » Fri, May 06, 2022, 2:24 PM UTC

turtledove wrote: post #615

MisterBastahrd wrote: post #529

Earlier quoted context omitted.

Well then, feel free to buy a house and sell it at cost. Don't worry about all that money you put into the home over the years to improve or maintain it, either. Oh, and to add to the utter inanity of what you're proposing, make sure that you sell it at your purchase cost and not the 200%ish extra that they tack on to a 30 year loan at 4% interest. Go ahead. Chalk it up to a personal experiment and let us know how it…

Improving and maintaining a house is "at cost". And I've done what you describe. I was a landlord for a decade. I paid back each of my tenants all the profit I made from them, thousands and thousands of dollars per tenant. Adjusted upwards by the amount the property had appreciated. I now rent in a sliding scale, capped at the cost of the unit. Granted, it's only been ten years, not the thirty you suggest, but it's w…

You could also just donate to charity, the effect might be similar (or even stronger, since it would go to needier people). By the way, this is all very nice of you but it is off-putting how you seem to want to impose forced charity on every other landlord.

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

#633

Post by jillesvangurp » Fri, May 06, 2022, 2:26 PM UTC

mschuster91 wrote: post #552

jillesvangurp wrote: post #464

Earlier quoted context omitted.

The inevitable outcome of housing inflation and elimination of the middle class is slums: illegal housing. People will have to live somewhere. And when that becomes unaffordable they'll just improvise. This is not a technical problem but a policy problem. The solution is changing the policy. The current policy is to drive up housing prices by creating completely artificial scarcity. All the land is owned and earmarke…

> The current policy is to drive up housing prices by creating completely artificial scarcity. All the land is owned and earmarked. Just not for housing. That's not the problem either, the scarcity is (with the exception of foreign - i.e. Chinese and Russian - money laundering) natural and not artificial. The true problem is that following mechanization in agriculture many people emigrated from rural areas, resulting…

There's nothing natural about zoning restrictions. Those are designed to keep people out. Especially working class people. They get to live very far away from where their services are needed in some extreme cases.

Fix the policy and house prices will drop. That creates a new problem of course for those who then end up with a Mortage that is under water. That's the real reason the policy does not get fixed.

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

#634

Post by pjmorris » Fri, May 06, 2022, 2:27 PM UTC

georgeburdell wrote: post #193

pjmorris wrote: post #91

Earlier quoted context omitted.

I think there's a more concrete measure of value: house prices related to income. Historically (Robert Shiller has a chart for the US going back to 1890) house prices (and mortgages and rents) have maintained a stable relationship with income. Occasionally that relationship is strained but it has usually fallen back in line. One exception to this was the extraordinary, ongoing, support to the financial system post-20…

One criticism I have of Shiller is his index looks at comparable houses across time. This under estimates appreciation due to the housing stock itself becoming more luxurious. In my area, houses are about 500 sqft larger than a generation ago and have amenities like AC and often a granny unit.

> This under estimates appreciation due to the housing stock itself becoming more luxurious.

How so? Large, luxurious, houses get counted just the same way as small houses. If you mean that new houses that have not been resold aren't a factor in the index and that this biases it against the latest housing, OK. But even new houses tend to be priced in line with comparable sales, linking them to history in a way compatible with how the index is calculated.

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

#635

Post by snowAbstraction » Fri, May 06, 2022, 2:33 PM UTC

geoduck14 wrote: post #568

unwind wrote: post #479

Earlier quoted context omitted.

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 tr…

It sounds like you are describing a condominium. Is that it?

Basically.

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

#636

Post by mschuster91 » Fri, May 06, 2022, 2:35 PM UTC

jillesvangurp wrote: post #633

mschuster91 wrote: post #552

Earlier quoted context omitted.

> The current policy is to drive up housing prices by creating completely artificial scarcity. All the land is owned and earmarked. Just not for housing. That's not the problem either, the scarcity is (with the exception of foreign - i.e. Chinese and Russian - money laundering) natural and not artificial. The true problem is that following mechanization in agriculture many people emigrated from rural areas, resulting…

There's nothing natural about zoning restrictions. Those are designed to keep people out. Especially working class people. They get to live very far away from where their services are needed in some extreme cases. Fix the policy and house prices will drop. That creates a new problem of course for those who then end up with a Mortage that is under water. That's the real reason the policy does not get fixed.

Zoning restrictions make sense - without them, rabid capitalism takes over, and the only thing that matters is extracting the maximum profit out of any given piece of land. That in turn means no green anymore, ugly AF buildings (especially high-rises), a severe issue with traffic because public transport usually isn't even in the picture and the existing roads can't take up the traffic resulting from the newer density, and as a result of that a whole ugly neighborhood with no quality of life for the inmates. If you want an example just how ugly a city can turn out, just visit Frankfurt.

Thanks but no thanks. I'd rather like if people can move towards rural areas where possible.

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

#637

Post by pj_mukh » Fri, May 06, 2022, 2:41 PM UTC

mschuster91 wrote: post #554

pj_mukh wrote: post #361

Earlier quoted context omitted.

I really think most of the solution is in the first part of your plan. There’s no need to micromanage tenant-landlord relationships or setup governmental panels on who historically deserves to live where, if the government can just make sure there is an oversupply of decent housing at all affordability levels. The rest really takes care of itself at that point.

> There’s no need to micromanage tenant-landlord relationships or setup governmental panels on who historically deserves to live where, if the government can just make sure there is an oversupply of decent housing at all affordability levels. The problem is, that is outright impossible in urban areas where almost all space is already built out, not to mention it is immensely wasteful (8% of all CO2 emissions is cause…

Having had lived in urban areas all my life, American urban cities are criminally under built. There is sooo much room for growth (note room doesn’t mean land, it means airspace).

If you have a pastoralist dream, feel free to build rural housing units. But for the government to spread out the country and then try to connect it using extractive transportation technologies (gas, batteries etc) just seems like roundabout / inefficient way to achieve the same goal.

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

#638

Post by pj_mukh » Fri, May 06, 2022, 2:44 PM UTC

sokoloff wrote: post #553

aqme28 wrote: post #551

Earlier quoted context omitted.

I agree of course, but I'm not sure what your point is, other than to be a little bit distracting. It seems pretty reasonable for a government to subsidize modest multi-family homes without subsidizing mansions.

GP was explicitly arguing for government-assured “oversupply of decent housing at all affordability levels.” I do not support government assurance nor ownership for the high-end or luxury levels of affordability.

Right, the government should make sure housing is available at all levels. Presumably it’ll have to do very little to make sure luxury housing is available.

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

#639

Post by turtledove » Fri, May 06, 2022, 2:46 PM UTC

andsoitis wrote: post #628

turtledove wrote: post #617

Earlier quoted context omitted.

Let me be the first then. I've been a landlord for a decade. I've paid back each and every one of my tenants the rent I collected in surplus to costs. Adjusted upwards to reflect the appreciation of the unit. I now rent at cost, choosing to believe that it's better to help the people who live with me establish themselves and build financial safety.

> help the people who live with me are you saying you and them live under the same roof? i.e. they're your roommates?

In some cases we have rented a mother in law unit. Are different apartments in the same building under the same roof?

I tend to be broader about community then many folks in the States. Imo, you live with the people in your local area, whether that's house, apartment building, or block.

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

#640

Post by turtledove » Fri, May 06, 2022, 2:47 PM UTC

UncleMeat wrote: post #629

turtledove wrote: post #617

Earlier quoted context omitted.

Let me be the first then. I've been a landlord for a decade. I've paid back each and every one of my tenants the rent I collected in surplus to costs. Adjusted upwards to reflect the appreciation of the unit. I now rent at cost, choosing to believe that it's better to help the people who live with me establish themselves and build financial safety.

That's certainly remarkable. You are indeed the first person I've ever heard to do this.

I was inspired by someone else who did it and posted about it on Reddit somewhere a long time ago. So there are at least two, but likely many more than two of us out there.