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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

#711

Post by Ekaros »

carapace wrote: post #654
kapuasuite wrote: post #571

Earlier quoted context omitted.

The problem is, one, that those vacant homes are not necessarily in places people live or want to live (unless we’re shipping homeless people off to empty homes), and two, that homeless people aren’t the only ones in need of housing - there are far more people living in overcrowded housing, or who are unable to move out of their parents’ house, or can’t afford to live without roommates, than there are vacant homes. T…

Anecdote: I live in Park Merced: > Parkmerced is a neighborhood in San Francisco, California, designed by architects Leonard Schultze and Thomas Dolliver Church in the early 1940s. Parkmerced is the second-largest single-owner neighborhood of apartment blocks west of the Mississippi River after Park La Brea in Los Angeles. It was a planned neighborhood of high-rise apartment towers and low-rise garden apartments in s…

Seems like rent controls are the issues. Causing markets to be inefficient. No surprises there. Get rid of them and maybe supply increases as it can better match demand and capability of renters to pay.

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

#712

Post by carom »

turtledove wrote: post #447
paisawalla wrote: post #375

Earlier quoted context omitted.

So the landlord what, eats all of the downside in that scenario? But I'm sure you'd also restrict their ability to raise rents on other tenants (if they have multiple units) to compensate, so why would the landlord even do this to begin with? It's potentially 100% downside and restricted upside.

Yep. You got it in one. Private landlords are a part of the problem. They have every incentive to prevent new housing from being built. It should be challenging to be better at providing housing than the municipality government.

I have every incentive to build. Single family home owners are who restrict building.

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

#713

Post by mogadsheu »

DoubleDerper wrote: post #31
mogadsheu wrote: post #9

Earlier quoted context omitted.

No because houses as an asset class could still be overvalued relative to other assets.

Relative to which assets? Stocks? Cars? Forex? IP? Crypto? Genuinely curious because everything is more expensive than it was before. If everything is overvalued, then nothing is overvalued [relatively]

According to the article, they’re mostly comparing it to income.

I agree with the sentiment though, in which case maybe the currency in which the assets are denominated is overvalued.

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

#714

Post by jacobr1 »

carapace wrote: post #654
kapuasuite wrote: post #571

Earlier quoted context omitted.

The problem is, one, that those vacant homes are not necessarily in places people live or want to live (unless we’re shipping homeless people off to empty homes), and two, that homeless people aren’t the only ones in need of housing - there are far more people living in overcrowded housing, or who are unable to move out of their parents’ house, or can’t afford to live without roommates, than there are vacant homes. T…

Anecdote: I live in Park Merced: > Parkmerced is a neighborhood in San Francisco, California, designed by architects Leonard Schultze and Thomas Dolliver Church in the early 1940s. Parkmerced is the second-largest single-owner neighborhood of apartment blocks west of the Mississippi River after Park La Brea in Los Angeles. It was a planned neighborhood of high-rise apartment towers and low-rise garden apartments in s…

This is one of the reasons rent-control is a bad idea. It is foolish to leave an unrented apartment empty, provided you can maximize your revenue when market conditions change. Only when locked into a low-rent does it make sense to keep it off the market. Not to mention it disincentives investment and improvements.

We need to make it easy to use the the housing we have, build more housing (of any kind) and subsidize those who need assistance.

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

#715

Post by jacobr1 »

nradov wrote: post #677
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…

In the SF Bay Area there is a lot of vacant land set aside as parks and open space. Should we develop that land for housing?

No need, the problem in the bay area is density.

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

#716

Post by paisawalla »

fundad wrote: post #630
turtledove wrote: post #447

Earlier quoted context omitted.

Yep. You got it in one. Private landlords are a part of the problem. They have every incentive to prevent new housing from being built. It should be challenging to be better at providing housing than the municipality government.

Exactly. Landlords aren’t entitled to a good business. If you diligently maintain the home you rent out AND pay income tax, it’s not a great business now. The profits are in neglect and appreciation.

If you agree with this, you're saying they're not entitled to any business, plus are on the hook for all of their tenants. Why would anyone do this?

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

#717

Post by [deleted] »

turtledove wrote: post #447
paisawalla wrote: post #375

Earlier quoted context omitted.

So the landlord what, eats all of the downside in that scenario? But I'm sure you'd also restrict their ability to raise rents on other tenants (if they have multiple units) to compensate, so why would the landlord even do this to begin with? It's potentially 100% downside and restricted upside.

Yep. You got it in one. Private landlords are a part of the problem. They have every incentive to prevent new housing from being built. It should be challenging to be better at providing housing than the municipality government.

[deleted]

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

#718

Post by jacobr1 »

v-erne wrote: post #432
notch656a wrote: post #409

Earlier quoted context omitted.

>Also, government operated facilities do not have a profit motive, Great, so the shit-show we have now, except without any incentive to efficiently spend. Sure that will go over swimmingly. Everyone knows that government construction projects are known for coming on-time and on-budget, and for the best value.

Its not like private sector is free from overspending and funds misallocation - most of money that flows in there is still controller by the jerks on top that are stroking their ego by investing in buzzwords. The invisible hand of market is myth as much as santa is.

The invisible hand is just the profit motive. Most people are indeed incentivized by (not solely) by money and profit.

The advantage of a market in this context is two-fold 1) Private-losses, mispent investments should have the investors bear the cost of losses. Granted, we often bail out investors or banks, but that isn't a market phenomena, it is a political one. 2) Where there is more profit to be had (high prices) there is more incentive for more investment.

Now, one could argue that a market system is more likely to be corrupted such that the connected get bailed out or other advantages. But if you don't trust the political system to regulate the market, why would you expect it to better regulate a bureaucracy that more directly controls the relevant resources?

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

#719

Post by kderbyma »

melissalobos wrote: post #4

Isn't this one of those "If everyone is crazy, you're crazy" situations? If every house is overvalued by some metric, then maybe the metric is wrong. People's perceptions of value are a large part of the actual value(meaning what someone would really pay) for things like housing that should depreciate over time.

every bubble in history would suggest yes ... then no.

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

#720

Post by carapace »

Ekaros wrote: post #711
carapace wrote: post #654

Earlier quoted context omitted.

Anecdote: I live in Park Merced: > Parkmerced is a neighborhood in San Francisco, California, designed by architects Leonard Schultze and Thomas Dolliver Church in the early 1940s. Parkmerced is the second-largest single-owner neighborhood of apartment blocks west of the Mississippi River after Park La Brea in Los Angeles. It was a planned neighborhood of high-rise apartment towers and low-rise garden apartments in s…

Seems like rent controls are the issues. Causing markets to be inefficient. No surprises there. Get rid of them and maybe supply increases as it can better match demand and capability of renters to pay.

In a world w/o rent control, how do you imagine things playing out here? If the landlord lowered rates now and got tenants (without rent control), then demand rebounds, does the landlord then increase the rent again? Wouldn't that put a lot of the new lower-rent renters back out on the street?

Anyway, the OP's point stands: there are perfectly good homes going empty. They aren't out in the woods. They are right here in SF.

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