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Why the government took home prices out of its main inflation index

fullstackeconomics.com

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Re: Why the government took home prices out of its main inflation index

#211

Post by coding123 »

bombcar wrote: post #181
hattmall wrote: post #74

Earlier quoted context omitted.

Is this actually happening in Europe? The US is the exact opposite. It's rather trivial to improve rural areas and housing costs are outpacing urban areas at least in percentage increases. Most rural areas still have access to all the basics that urban areas provide and are only a couple hours drive from major urban centers. There's no public transport but no one cares about that in the US. Even in the largest cities…

People define "rural" vastly differently - most "rural" areas in the USA are actually peppered with small towns (between 10 and 10k residents) which can be covered by high speed internet and even effective public transportation if desired - in a small enough town that can just be a guy with a van hired by the township. All you're really missing then is the connection to the nearest urban center - if it takes an hour…

Rural for me is 10 acre plots - can't see your neighbor too much.

Rural for others is 40 acre plots. For some it's 400-1000.

Re: Why the government took home prices out of its main inflation index

#212

Post by dont__panic »

jimmydorry wrote: post #199
dont__panic wrote: post #160

Earlier quoted context omitted.

Different people have different preferences, for sure. I used to feel that way when I lived in a small town with no amenities. But now I'd hate to move back to a major US city, for the reasons I list above. I'm not interested in raising kids, but if I was, it wouldn't be in SF, Seattle, Austin, Denver, or NYC. I'd raise kids someplace where I could let them walk around and explore in a safe way -- the situation on th…

What job prospects would your kids have, and would it even have been possible for you to start your career if you lived in the area you are planning to move to for the critical years (high school, university, first few years entering your field, etc.)? If the answer to any of these questions is no, then you have your answer to why property prices near the cities aren't ever going to match the level of rural propertie…

Depends a lot on comfort with remote work, especially when onboarding college grads. I'd say time will tell how society deals with that.

I grew up in a crappy rural area with next to no opportunity, and went to college in a crappy rust belt city with very little opportunity. Moved to NYC the day after graduation to start my career. As far as I can tell, if my life was playing out today, I'd probably pick up a remote gig and move someplace cheaper than NYC where I already know some people -- I simply wouldn't bother with the expensive giant cities because they've never been a good fit for my hobbies and interests. A lack of opportunities definitely shaped my high school experience, but where I live now has a lot more going on than where I grew up, even if they're similar densities. Not all small towns are the same!

And depending on what your kids are interested in, SF, NYC, etc. might lack opportunities for your kids, too -- it's not like they can explore nature, or mountain biking, or sailing, or a million other things easily in your average US city. I guess I'm just trying to say that there are tradeoffs no matter where you live, and we probably shouldn't generalize about "rural" and "urban". There's crappy unwalkable non-kid-friendly rural towns aplenty in the US. But there's also crappy unwalkable non-kid-friendly cities aplenty. The right corner of SF, or the right lively small town can both be good places to raise kids.

Re: Why the government took home prices out of its main inflation index

#213

Post by dont__panic »

lupire wrote: post #200
dont__panic wrote: post #43

Earlier quoted context omitted.

High housing prices == high rental prices == people living in smaller spaces == people deciding to have fewer or no kids because they don't have the space (or money). Of course, plenty of people start families without solid economic footing. But it's a bit harder to invent space out of thin air than it is to take on debt.

How big was the house your grandmother lived in with 5 siblings? Less than 1500sqft Houses are something like more than double the size they were just 40 years ago, and families are smaller.

Oh, it's definitely possible to raise a large family with small square footage. My grandparents raised my father in a 3 bedroom house that can't be more than 1500 square feet. And my dad has 6 siblings!

It does depend on what families are willing to put up with, though. I'm not sure many of my millenial peers want to raise 7 kids in a 1500 square foot house. It's important not to ask what's physically possible, but instead what's probable given societal expectations.

Re: Why the government took home prices out of its main inflation index

#214

Post by throw0101a »

binarybits wrote: post #27
hammock wrote: post #15

Earlier quoted context omitted.

Shadowstats.com has been tracking inflation with old methods for a long time

OP author here. I wrote a shadowstats debunker back in November: https://fullstackeconomics.com/no-the-real-inflation-rate-is... tldr: they don't actually reconstruct the old methodology. They add a fudge factor based on how much they think the new methodology increases the inflation rate. And that estimate is based on a basic math error.

Further, their newsletter has been at the same annual price for >10 years. If everything costs more they must be running a charity, or finding "efficiencies" every year, in order to keep the price the same.

Re: Why the government took home prices out of its main inflation index

#215

Post by coding123 »

jimmydorry wrote: post #199
dont__panic wrote: post #160

Earlier quoted context omitted.

Different people have different preferences, for sure. I used to feel that way when I lived in a small town with no amenities. But now I'd hate to move back to a major US city, for the reasons I list above. I'm not interested in raising kids, but if I was, it wouldn't be in SF, Seattle, Austin, Denver, or NYC. I'd raise kids someplace where I could let them walk around and explore in a safe way -- the situation on th…

What job prospects would your kids have, and would it even have been possible for you to start your career if you lived in the area you are planning to move to for the critical years (high school, university, first few years entering your field, etc.)? If the answer to any of these questions is no, then you have your answer to why property prices near the cities aren't ever going to match the level of rural propertie…

Programming jobs that are remote. I personally predict building homes will become a thing - as we reach 600k typical home sales level. We will find people building homes for 200k and selling them for 400k profit. The math is starting to make programming jobs not attractive to me at least. Do 1 per year.

Re: Why the government took home prices out of its main inflation index

#216

Post by tayne »

Jasper_ wrote: post #203
908B64B197 wrote: post #198

Earlier quoted context omitted.

> towns can't find employees all because housing is out of reach for the working and lower-middle class. Why not simply increase the supply?

The supply was fine before multi-home owners and property management companies took up most of it and jacked up the prices. Increasing the supply would only increase the wealth of the homeowners, it won't lower prices. Increasing the supply means building new buildings, and that often means building huge lots of five-over-ones, priced as luxury apartments in a growing market. The people building the new supply expect…

I do real estate for a living and this opinion is like a zombie that never dies no matter how many times it is proven wrong.

You are putting forward that landlords acted collectively to increase the price of realestate. This is obviously wrong. The price of homes is determined by the market. It doesn’t matter who owns those homes, they are worth what the market says they are. Landlords do not control the market and even if they banded together in a conspiracy to increase the price of homes, they couldn’t because the vast majority of homes are owned by regular people.

The high price of housing is caused by a shortage. If you don’t believe me then watch the 60 minutes segment about it. There’s no conspiracy. If there weren’t landlords building new stock it would be even worse. It’s so ironic that the hive mind spits in the face of the only people building new housing; the only people making the problem better.

Re: Why the government took home prices out of its main inflation index

#217

Post by wonderwonder »

jimmydorry wrote: post #199
dont__panic wrote: post #160

Earlier quoted context omitted.

Different people have different preferences, for sure. I used to feel that way when I lived in a small town with no amenities. But now I'd hate to move back to a major US city, for the reasons I list above. I'm not interested in raising kids, but if I was, it wouldn't be in SF, Seattle, Austin, Denver, or NYC. I'd raise kids someplace where I could let them walk around and explore in a safe way -- the situation on th…

What job prospects would your kids have, and would it even have been possible for you to start your career if you lived in the area you are planning to move to for the critical years (high school, university, first few years entering your field, etc.)? If the answer to any of these questions is no, then you have your answer to why property prices near the cities aren't ever going to match the level of rural propertie…

A huge number of tech focused jobs are remote first currently. Plus just because you grow up in the middle of no where what is preventing you from going to college somewhere else and even settling there? I see no reason why being a child in a rural area would limit you from college onwards provided you graduated highschool with a decent gpa.

Re: Why the government took home prices out of its main inflation index

#218

Post by jjoonathan »

lupire wrote: post #196
marcosdumay wrote: post #113

Earlier quoted context omitted.

People that had money 3 or 4 decades ago tend to own a few houses and get some income from renting. Also, older people think more about downsizing than about upsizing their homes.

Do they also hate their children?

They want their children to rule in hell rather than serve in heaven. Not the wisest deal ever struck.

Re: Why the government took home prices out of its main inflation index

#219

Post by yossarian1408 »

hattmall wrote: post #100
book_mike wrote: post #60

Ignoring what the value of a currency may be I wish buyers would reject bad prices. I really care about what the actual cost of a thing is from dirt to package. The companies that market, make and deliver products should make a profit but I'm not buying their Ferrari. Capitalism start with "No deal, not at that price."

Capitalism begins to break down when the primary driver of purchasing power is availability of debt. Long term debt is particularly antithetical to the efficiencies promoted by a free market. Add on the fact that a quasi-government body is the primary provider of that debt and not just through the central banking system but in many cases direct to consumers.

Sounds less like capitalism breaking down and more like a regulatory issue.. could fractional reserve banking exist in a competitive banking sector w/o a central bank?

Re: Why the government took home prices out of its main inflation index

#220

Post by nradov »

ClumsyPilot wrote: post #70
nradov wrote: post #28

Earlier quoted context omitted.

The CPI includes rent (and owner's imputed rent). No one needs to purchase real estate. That's an investment, not a living expense. Millions of people have started families in rented homes.

Millions of people have started families in slavery too. And during the plague. What wisdom does this argument lead us to - basic hygene and human right are superfluous?

Renting a home is in no way comparable to slavery. Your comment is offensive, inflammatory, and off topic.
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