Maybe treating housing as an investment was a mistake • Hacker News Board

Re: Maybe treating housing as an investment was a mistake

#21

Post by ep103 » Mon, Mar 06, 2023, 5:19 PM UTC

photon12 wrote: post #6

> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…

My rent for my cockroach invested, 150 sq ft apartment is larger than my parent's mortgage for their suburban McMansion about 45m-1h away, and my rent is absolutely on the cheap side for a 1bd room in the area.

Re: Maybe treating housing as an investment was a mistake

#22

Post by ec109685 » Mon, Mar 06, 2023, 5:19 PM UTC

Nice thing about housing is you can continually lock in the lowest interest rate and keep it locked for 30 years. So the example in the article of 7% interest may drop to 3.5% if the fed needs to get the economy going again, allowing you to refinance.

Re: Maybe treating housing as an investment was a mistake

#23

Post by credit_guy » Mon, Mar 06, 2023, 5:20 PM UTC

beebmam wrote: post #8

VHRanger wrote: post #7

Earlier quoted context omitted.

Japan has plenty of societal ills, but at least Tokyo has been doing amazing on this front.

China has an enormous amount of housing. Their prices are still sky high

Housing in ghost cities doesn't count. Housing needs to be available where the jobs are.

Re: Maybe treating housing as an investment was a mistake

#24

Post by svachalek » Mon, Mar 06, 2023, 5:20 PM UTC

beebmam wrote: post #8

VHRanger wrote: post #7

Earlier quoted context omitted.

Japan has plenty of societal ills, but at least Tokyo has been doing amazing on this front.

China has an enormous amount of housing. Their prices are still sky high

There's a huge cultural difference there though -- people don't trust stocks, bonds, or bank accounts. Housing is the only investment most people will consider.

Re: Maybe treating housing as an investment was a mistake

#25

Post by pradn » Mon, Mar 06, 2023, 5:20 PM UTC

It's practically impossible for US society to get out of treating housing as an investment. Americans believe in home ownership as evidence of prudence (hard work + savings), acumen (housing always goes up so it's smart to buy a house!), and sense of security and achievement. These ideas aren't going to change any time soon. That's the ideological component. Home-owners also protect their investments because they're a very large group (including practically every politician) and constitute the donor class.

It's currently hard to take small steps toward stabilizing housing prices and reducing homelessness. Housing is easy to talk about, just like inequality. But it's hard to see evidence of much political will to solve these problems.

It will take a lot more housing inaccessibility, especially if it hits the currently affluent class.

Re: Maybe treating housing as an investment was a mistake

#26

Post by seunosewa » Mon, Mar 06, 2023, 5:20 PM UTC

beebmam wrote: post #8

VHRanger wrote: post #7

Earlier quoted context omitted.

Japan has plenty of societal ills, but at least Tokyo has been doing amazing on this front.

China has an enormous amount of housing. Their prices are still sky high

Why do you think that is?

Re: Maybe treating housing as an investment was a mistake

#27

Post by mdgrech23 » Mon, Mar 06, 2023, 5:20 PM UTC

photon12 wrote: post #6

> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…

I majored in economics and it still boggles my mind what we make as software engineers versus the guy who unclogged my sewer drain allowing me to use the toilet.

Re: Maybe treating housing as an investment was a mistake

#28

Post by oldstrangers » Mon, Mar 06, 2023, 5:20 PM UTC

koolba wrote: post #4

The biggest real world advantage for the average person for buying a house is forced savings. If a mortgage is $3K and rent is $2K per month, Joe Sixpack is not going to save $1K in a sinking fund. He’s going to spend some extra non-zero portion of that money. So in the long run, for average real consumers, not a theoretical economically minded consumer, a mortgage forces frugality.

Rental payments are higher than mortgages in most large cities. And those renters usually can't even qualify for a mortgage, despite paying more in rent.

Re: Maybe treating housing as an investment was a mistake

#29

Post by hiergiltdiestfu » Mon, Mar 06, 2023, 5:20 PM UTC

well, duh

Re: Maybe treating housing as an investment was a mistake

#30

Post by last_responder » Mon, Mar 06, 2023, 5:20 PM UTC

mjr00 wrote: post #10

> While the rich are more likely to own homes, tons of middle class and poor people also bought homes and planned their lives under the assumption that housing prices would go up. Tanking housing prices would destroy their trust in the system that they bet everything on. This is pretty much the crux of it. High housing prices could be "fixed" almost overnight, but for almost every citizen of the first world, their ho…

>You'd be destroying everyone's retirement plans

Everyone?