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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

#641

Earlier quoted context omitted.

I think it is clear that the parent is using home-ownership to include land-ownership.

Don’t know how it is in most of Europe, but I think that, in the UK, you don’t actually own the land your house sits on; Lord Such-and-Such owns it, and collects rent from you. In the US, we own the land, and that is usually the real value. I’m the proud owner of a 0.125-acre New York postage stamp. It’s in a fairly affluent area, so is fairly valuable. In Wyoming, they’d laugh at it. I think Japan is similar.

> I think that, in the UK, you don’t actually own the land your house sits on; Lord Such-and-Such owns it, and collects rent from you.

This isn't quite right.

There's something kinda like that called leasehold, where you basically own an extremely long lease on a property (typically 70+ years, often up to 999 years), with the freehold (outright ownership) sitting beneath it. Generally it's used on apartment blocks and certain new-builds in specific areas (e.g. they're more common in London, but outright banned in Scotland outside of some pre-existing edge cases). There's a good chance the whole thing will be functionally reformed out of existence in the near future (see here https://commonslibrary.parliament.uk/leasehold-reform-in-eng...).

But in any case, the vast majority of UK property is sold freehold, or as you put it "we own the land, and that is usually the real value".

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

#642

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)…

If it isn't a market, then how to determine who lives where? Leaving it up to bureaucracy would bring corruption.

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

#643
post #514

Earlier quoted context omitted.

Called a leasehold. Not all property is like this though.

Like, 85% in London though.

About 34% of London is leasehold: https://www.gov.uk/government/statistics/leasehold-dwellings...

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

#644

Earlier quoted context omitted.

US immigration is cratering, it's a national crisis nobody cares about. The supply constraint is old but its not why housing is high - housing prices are high even in places where there is a lot of construction. Monetary policy explains it a lot better, and it predicts that at some point the trend will reverse.

Housing prices are high in places with construction because the places without construction are larger and are forcibly exporting demand. It’s all about supply.

SF prices are high so Buenos Aires property prices go up? I doubt it.

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

#645
post #599

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 saying used to be that many think they are Temporarily Embarrassed Millionaires, but I think at this point it's fair to say that many people think they are middle class when in fact, the middle class has been swept from underneath them and they are now more or less comfortably-poor. Public services, housing affordability, food availability, product quality, fair pay and benefits. Previously middle class people ar…

You should read about inflation. Efforts to fatten up the middle class with free giveaways to certain voting blocks has and will continue to spur inflation and make those same voters ever less wealthy. But voters are myopic, so they’ll vote for free money every time. Eventually you get Venezuela.

A better way would be to protect people by not making policy decisions that reward bad behavior and punish those who avoid debt and save. Rewarding terrible behavior may get you elected but it’s bad for society. Like giving candy to pacify a cranky baby.

But such opinions have become verboten now, and actually censored.

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

#646
post #579

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)…

Or, we could allow the housing market to respond to high demand by increasing supply instead of artificially restricting it via regulatory capture.

At the limits of this, we will have people living in 5^2 meter boxes on the Pacific coast complaining that it's not affordable and that they should just build more supply.

The problem isn't supply. We have (practically) unlimited supply. People just don't want to live in Pennsyltucky.

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

#647

Earlier quoted context omitted.

Don’t know how it is in most of Europe, but I think that, in the UK, you don’t actually own the land your house sits on; Lord Such-and-Such owns it, and collects rent from you. In the US, we own the land, and that is usually the real value. I’m the proud owner of a 0.125-acre New York postage stamp. It’s in a fairly affluent area, so is fairly valuable. In Wyoming, they’d laugh at it. I think Japan is similar.

> I think that, in the UK, you don’t actually own the land your house sits on; Lord Such-and-Such owns it, and collects rent from you. This isn't quite right. There's something kinda like that called leasehold, where you basically own an extremely long lease on a property (typically 70+ years, often up to 999 years), with the freehold (outright ownership) sitting beneath it. Generally it's used on apartment blocks an…

Thanks for the correction.

The only reference I had, was my grandparents’ “named” house, in Liverpool (It was actually a pretty nice place, near the beach, for what that’s worth, in Liverpool).

I remember my grandmother, explaining it to me, and that was what I got from it.

I was too young to have a decent frame of reference, though.

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

#648

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)…

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…

More generally, there’s tension between people who prefer nothing to change and those who want to allow change.

If you like your house and your neighborhood, you probably don’t want demolitions and construction, even if it’s not your house. It’s noisy, it brings uncertainty, and maybe when your neighborhood won’t be the same after buildings get replaced. Maybe the new buildings are too ugly or the residents undesirable or the infrastructure unable to keep up. Or maybe none of those are true but you personally are anxious from the thought of change so you don’t want to risk it.

In any case, the no-change crowd holds all the power except when those pursuing change have a lot of money. This further reinforces negative impressions of what it means to allow change in your neighborhood.

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

#649

Earlier quoted context omitted.

High construction in Idaho does nothing for housing in New York. National construction rate averages are pointless. Gotta break it down by geography and locations of (in-person) jobs.

Housing is fungible in a remote work world. So construction in cheaper locales can help reduce costs in HCOL areas. E.g. people migrate from CA to FL, reduces number of households in CA. Not for local jobs of course But anyway, beyond fungibility, demographic trend is towards population decline. Spread between population growth and rate of new home construction is at an all time high. And even CA recently passed a la…

As long as going to the same bar as your boss during happy hour leads to a promotion, career progression + economic opportunity will be tied to geography. Barely any companies operate like Gitlab does.

Demographic decline is a much bigger problem to solve, not something that should stop us from taking action.

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

#650

Earlier quoted context omitted.

Housing prices are high in places with construction because the places without construction are larger and are forcibly exporting demand. It’s all about supply.

SF prices are high so Buenos Aires property prices go up? I doubt it.

By export, I mean export inter-state.

Boise property prices are definitely going up due to SF’s housing dysfunction.

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