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Investors bought a quarter of US homes sold last year

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Re: Investors bought a quarter of US homes sold last year

#671

Earlier quoted context omitted.

Imagine if housing was cheap enough that paying the mortgage was around the same as what it now costs to rent. There definitely needs to be some rentals, but I believe that there needs to be controls over how many and the rental price.

My mortgage + insurance + taxes is a lower monthly payment than what my rent was at the time I bought my house. Compared to that same unit renting today, its several hundred dollars a month cheaper. It has over twice the square footage and a private garage. This is in a pretty big metro area, not the middle of nowhere. One of the biggest benefit of owning is a hedge against housing inflation. Its not a perfect hedge,…

Did you account for the opportunity cost of your down payment? If you chose to continue to rent, you could have invested your $100k or whatever down payment in the stock market for ~7% a year.

On the other hand, you have to count the mortgage interest as a cost but not the mortgage principal repayment.

Re: Investors bought a quarter of US homes sold last year

#672
post #601

Earlier quoted context omitted.

Same, By this definition you shouldn't invest anywhere where the supply is low and demand is high, which by very consequence rules out all investments.

All forms of investment are either predatory or rent-seeking?

Unfortunately yes. Even the pie fallacy argument is subject to certain conditions which are often false. For economy to work beyond pie fallacy you need situations where most of the economy is driven by people who make wealth by creating things out of nothing. That is purely knowledge work jobs. Almost any where, where you need a raw material as an input to make a thing, the supply of that is limited, and therefore subject to these demand-supply issues(predatory behaviour/rent seeking). This extends to things like buying a plumber's service. If the number of plumbers are limited, and their time is limited(which it is), and there more people who need their services than plumbers going around. Plumbers are going to charge a premium for putting you up their priority queue. That is what you are ready to pay to buy their services before others could get a chance. This doesn't mean its predatory. Its what you are willing to pay to buy their time. Any other way of settling this is bonkers, If the price is fixed and the queue if FIFO, why should you be given a special exception and moved up the queue. And more importantly why should the plumber settle for lower pay when clearly there is a demand for his services.

But on the short run, everything even in knowledge economy work, money is made literally by moving it from person A to person B. Hence A wins at the expense of B.

Even on the longer run most people lack the resources, patience and overall life situations to make decision over such long periods of time.

Re: Investors bought a quarter of US homes sold last year

#673
post #601

Earlier quoted context omitted.

Same, By this definition you shouldn't invest anywhere where the supply is low and demand is high, which by very consequence rules out all investments.

I'm sure OP would be OK investing in a company who focused on building equitable housing solutions. That is way different than what they are talking about and I feel like you're just being obtuse.

>>equitable housing solutions

What is equitable? and to whom? This argument is moot.

Why do you think you should get to decide how much profit somebody should make. Would you agree with the same if somebody decided to cap your salary, to make some end service/product affordable?

Re: Investors bought a quarter of US homes sold last year

#674

"but many Republican lawmakers oppose such controls." — I'm not American and not in in the US, so I'm wondering, why in many articles I read, "Doing Good Things For People™" tend to be opposed by Republicans? 1. Are there a scheme to vilify them? Bcoz it's not even mentioned why they oppose (maybe they see Bad Things™ far ahead). 2. Are they not elected by the people?

On the topic of housing (the subject of this HN thread), the most NIMBY and unequal housing locations are in urban California where there hasn't been a Republican elected in 40 years. So maybe a bias by the writer, I'm not sure the full context or what was intended.

Re: Investors bought a quarter of US homes sold last year

#675

Earlier quoted context omitted.

Because republican lawmakers come from states where this is not a problem. Perhaps many houses in red states are owned by corporate landlords but housing is way more affordable in those states. So this is a case of lawmakers simply not seeing the problem amongst the people they represent and thus being unwilling to pass what they view as unnecessary regulation. Ultimately housing affordability is a blue state problem…

Homeowners are >75% of the US voting populace. You will never pass a policy that decreases home values. "88% of U.S. Republican voters own homes, 78% of U.S. Democratic voters own homes, and 73% of U.S. independent voters own homes" https://centerforpolitics.org/downloads/pub_housing_2.pdf

Home prices are already set to decrease (although arguably not by enough to make a difference)

Here is the home price futures market on the Chicago Mercantile Exchange. It's a thinly traded market, but it's in clear backwardation. Expected to hit -12.7% from current levels if you wait 2 years. Will take a while to get back to where it is now. https://www.cmegroup.com/markets/real-estate/residential/San...

They have more specific futures markets by metro

Re: Investors bought a quarter of US homes sold last year

#676
post #672

Earlier quoted context omitted.

All forms of investment are either predatory or rent-seeking?

Unfortunately yes. Even the pie fallacy argument is subject to certain conditions which are often false. For economy to work beyond pie fallacy you need situations where most of the economy is driven by people who make wealth by creating things out of nothing. That is purely knowledge work jobs. Almost any where, where you need a raw material as an input to make a thing, the supply of that is limited, and therefore s…

I had trouble parsing this argument. You lost me way at the beginning:

> For economy to work beyond pie fallacy you need situations where most of the economy is driven by people who make wealth by creating things out of nothing.

It's unclear whether you're trying to propose an alternative model here ("beyond?") or are expanding upon something you call a fallacy but still use as the basis of your argument.

> Almost any where, where you need a raw material as an input to make a thing, the supply of that is limited, and therefore subject to these demand-supply issues(predatory behaviour/rent seeking).

I don't see how rent-seeking fits into that, so I'm going to assume you're talking about predatory investments here. Why we are fixating on goods and specifically on acquiring them for some process I don't know either.

> But on the short run, everything even in knowledge economy work, money is made literally by moving it from person A to person B. Hence A wins at the expense of B.

The other way around maybe? Does either make sense? If I invest in your company, I am giving you money: Am I winning or am I losing? Am I behaving predatory? Are you?

To most people the answer can be found by looking at the transaction in a broader context, you don't seem to even care.

I get that predatory is ill-defined in economics, but your interpretation of it seems to be useless at best. If "predatory investment" means the same as "investment" to you, then predatory is not a useful qualifier in this context. You'll have to come up with a new word to describe what others simply call predatory.

The only way for your construction to make any sense would have been to show that all investments must be made with the goal of rent-seeking and/or be predatory, while both terms each would describe only a subset of investments.

There is no point to having this conversation if we don't even share the same useful terminology.

But even if we sorted that out, the argument likely would still be incomprehensible to me. I wouldn't know where to add the words "Therefore all forms of investment are either predatory or rent-seeking." if you held a gun to my head.

Re: Investors bought a quarter of US homes sold last year

#677

Earlier quoted context omitted.

You have a very odd definition of rights and their defense. Rights are something every person is born with. They don't originate from government instituions, resources, or labor. Rather these things, protect or enhance them. There is a right to speech because I have the ability to speak, not because government has the ability to defend it or to take it away. There is a right to vote because people are freely able to…

You're just arbitrarily defining some things as rights, and others not. These things aren't etched into sacred tablets--they are decided collectively by a society and its government and are always evolving. There was no right to vote until enough people decided there should be one and made it so. Housing is no different.

No sacred tablets here. A right is an ability or activity one is able to purse without the intervention or interference of others. There were rights before government and society existed and if government and society collapsed tomorrow, you wouldn't lose your rights. It's a contradiction to says that society and government decide rights.

A right to vote is predicated on freedom of association among a nation's individual citizens. A person determines for himself whether he will or will not vote. It's not for society's sake that a vote is cast.

Re: Investors bought a quarter of US homes sold last year

#678

Earlier quoted context omitted.

You’re missing the forest for the trees.

No, he isn't. Being able to live in any one particular city is not an inherent right of humanity. It's perfectly reasonable to be priced out of some areas of the world, there is nothing at all wrong with that as a general concept.

You’re also missing the forest for the trees because you’re not seeing the real issue. What you’re describing is really just the core concept of any market.

The issue is that we’re seriously restricting growth and innovation in favor of using housing as a financial investment. Yes, it’s necessary to have some degree of inequality and nobody is entitled to to live in any exact spot, but it’s gotten out of hand at this point, it’s hurting our societies, and it’s unsustainable.

Re: Investors bought a quarter of US homes sold last year

#679

Earlier quoted context omitted.

You're just arbitrarily defining some things as rights, and others not. These things aren't etched into sacred tablets--they are decided collectively by a society and its government and are always evolving. There was no right to vote until enough people decided there should be one and made it so. Housing is no different.

No sacred tablets here. A right is an ability or activity one is able to purse without the intervention or interference of others. There were rights before government and society existed and if government and society collapsed tomorrow, you wouldn't lose your rights. It's a contradiction to says that society and government decide rights. A right to vote is predicated on freedom of association among a nation's individ…

This is getting to only be about semantics. That’s your definition of ‘rights’ based on your specific set of political beliefs, but it doesn’t reflect common usage or what people are referring to when they call housing or healthcare a right. They mean that society, via the state, should provide those things to everyone.

And you absolutely would lose your right to safety without police or some other form of protection. The ‘right’ might exist in your own mind, but it won’t do anything to prevent someone else who doesn’t share that belief from killing you and taking all your stuff. Rights are only meaningful with power behind then.

Re: Investors bought a quarter of US homes sold last year

#680
post #672

Earlier quoted context omitted.

Unfortunately yes. Even the pie fallacy argument is subject to certain conditions which are often false. For economy to work beyond pie fallacy you need situations where most of the economy is driven by people who make wealth by creating things out of nothing. That is purely knowledge work jobs. Almost any where, where you need a raw material as an input to make a thing, the supply of that is limited, and therefore s…

I had trouble parsing this argument. You lost me way at the beginning: > For economy to work beyond pie fallacy you need situations where most of the economy is driven by people who make wealth by creating things out of nothing. It's unclear whether you're trying to propose an alternative model here ("beyond?") or are expanding upon something you call a fallacy but still use as the basis of your argument. > Almost an…

>>To most people the answer can be found by looking at the transaction in a broader context, you don't seem to even care.

Except that the same argument needs to be applied to housing. Look at it in the broader context. Everything will make sense.

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