31–40 of 194 posts
I can’t take an article seriously when it purposefully ignores what’s happened in the last three years because it negates the point it’s trying to make.
Is real estate in the US one of those industries where corner cutters think, “oh that’s an easy career” ? My Instagram timeline has become filled, for some reason, with local (not to me) agents insisting that there is no bubble and now is the time to buy. And they’re all really unprofessional looking and sounding and seem to be worried about one thing: their business.
A lot of people in America is looking for a quick buck. Real estate flipping was very successful in the last decade with cheap money. There are entire TV channels ( yes, channels, not shows) showing flipping and renovation in various ways. Many Americans are so tired of the rat race that they are lured by the glory of being able to get off the treadmill and riding off to the sunset. Bubble economies help fuel that dr…
Earlier quoted context omitted.
Because taxpayers subsidize it by accepting looser underwriting standards.
It’s subsidized regardless. There are countless tax incentives for homeowners.
What are the tax incentives (in the US)?
On a federal level, all I can think of is mortgage interest tax deduction, but that was greatly neutered in 2017 TCJA, and less than 10% of Americans can benefit from it. And that is a tax incentive to borrow money to buy a home, not a tax incentive for home owners.
Only other one is 1031 exchange, but that is rarely needed for typical homeowners and is available to all real estate owners.
On a state/local level, I guess there are some locales with property tax adjustments, but other than that, I cannot come up with any.
If you can buy a house (to live in) without a mortgage, or with a very low rate, you not only reap the capital gain, but save on paying someone else rent.
It is an amazing contrast with the situation when I was younger. House prices were bounded by wages and were understood to be depreciating assets. That is, without constant investment they lost their value and became unusable and difficult to trade. Even in the best of times it takes time, preparation, and fees to sell real estate. Landlording was a rich person's game because of the risk involved and if you really wa…
These are the mechanisms by which the housing market has been driven to absurdity. But that reason why were here is that politicians and by extension the electorate on whose behalf they govern, decided to turn housing into a retirement plan. We then created enormous government programs to encourage people to partake in this scheme, which only robbed the future to pay the present. And now that many families have substantial wealth tied up in housing, it will be nearly impossible to voluntarily undo this mess.
Easy way to save money when selling a home is to just sell it yourself. Real estate agents are, imho, one of the most useless professions. All you need is a real estate attorney, which you’d need one anyway.
Like many things you can do everything yourself, or contract to others to do the things you are not good at, or don't have time for. Arguing realtors are useless is like saying accountants are useless, or lawyers are useless. I also did not re-roof my house. But of course you could get terrible accountants, lawyers or roofers, and you could possibly be terrible at stuff yourself. Some people think programmers are useless and some are, but that's not sufficient to try writing it yourself if you aren't one.
Is real estate in the US one of those industries where corner cutters think, “oh that’s an easy career” ? My Instagram timeline has become filled, for some reason, with local (not to me) agents insisting that there is no bubble and now is the time to buy. And they’re all really unprofessional looking and sounding and seem to be worried about one thing: their business.
To a real estate agent, it's always the perfect time to buy. Market is up? "Buy before prices rise!" Market is down? "Buy while prices are low!" There are training classes you can take to get your agent's license, so entering the field is pretty straightforward. There are usually a lot of part-time agents who make enough off each sale to justify staying in the field. And a very few who have worked their way up to sel…
Yes and no.
This was a chapter in Freakonomics which showed how since their fee is a small fraction of the value, changes in prices would not affect them so much (within limits), i.e. the 3% fee on - say - 1,000,000 is 30,000, if the house price gets to 900,000 the 3% fee is still 27,000, but in order to be able to sell at the full price, they would need more time and have more expenses, so the real incentive for the agent is to sell quickly and find a new house to sell.
If you prefer, selling 5 houses at 850,000 is still better than selling 4 at 1,000,000 for the agent.
If number of sales go down then the agents will suffer.
Earlier quoted context omitted.
Yes if everybody should live in their own real estate. There are superbly working economies where this is not true for many decades for various reasons (ie Switzerland) and they do just fine and people are happy, just focus on more important matters in life. There are many arguments against urban sprawl which is direct consequence of such approach.
Not a fan of comparisons of other countries to one of the most wealthy per capita, homogenous one. Switzerland is an exception and not a rule
I'm tired of the snide dismissals that we Americans make to any comparison between our country and others. Oh, well, our country is special and exceptional, heterogeneous and large, so we have nothing to learn and cannot possibly change things here. Even if you arrogantly assume America is the best at everything and leads the world in so many ways, much can still be learned from the way others live their lives and structure their homes, businesses, and societies. You can compare apples to oranges. They're both fruit! Biologists compare species all the time to learn more about the species and to better ourselves with that knowledge. We can learn about and from other countries and peoples while disclaiming some of the differences. At the very least we can acknowledge that it works elsewhere and that what they do could be done here in at least a limited fashion or successful manner. Even if we're red apple fruits and they're bloody oranges, they're both fruit and both countries.
It is an amazing contrast with the situation when I was younger. House prices were bounded by wages and were understood to be depreciating assets. That is, without constant investment they lost their value and became unusable and difficult to trade. Even in the best of times it takes time, preparation, and fees to sell real estate. Landlording was a rich person's game because of the risk involved and if you really wa…
> The current attitude toward housing is based on the recent explosion of house prices which is driven by financialization, extremely low interest rates, and demand outpacing supply where there are jobs. These are the mechanisms by which the housing market has been driven to absurdity. But that reason why were here is that politicians and by extension the electorate on whose behalf they govern, decided to turn housin…
This isn’t 2008, at this point I think people are underestimating the speculative home buyer. The people who are buying houses now are more likely people looking to build rental income cash cows. In a world where productivity is somewhat slowing after massive growth, people are taking to rent seeking activity and the disincentives aren’t there to encourage productive behavior. Why buy and sell when you can buy, charg…
This is exactly what happened in Israel. Everyone who bought houses have doubled or tripled their investment in three decades.
4% inflation per year (the most common estimate I see in the US) means 3x over 30 years doesn't even break even (1.04**30 ≈ 3.24).
I often wonder how much people obsessed with home prices rising (in the US at least) take this into account. How much housing mania is fueled by people getting excited about gains that aren't as real as they think?