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Maybe treating housing as an investment was a mistake

goodreason.substack.com

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Re: Maybe treating housing as an investment was a mistake

#91

Post by eloisant »

andrewmutz wrote: post #62
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 and there'd be major economic repercussions I think that exaggerates it. Most retirees aren't profiting from the home they own if they live in it. The "income" from it is just imputed rent. So if the housing supply increases dramatically, that imputed rent drops, but it doesn't matter since the cost of housing drops as well.

The problem isn't retirees who paid out their house already, it's the households who still have a big mortgage on their house.

Re: Maybe treating housing as an investment was a mistake

#92

Post by kurthr »

VHRanger wrote: post #7
arcticbull wrote: post #3

My refrain remains: housing cannot be both affordable in perpetuity and a good investment. These are mutually exclusive goals. Let people build.

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

Every time I see this I have to laugh. If you live in Tokyo, I'd love to hear your anecdotal experience.

I have stayed and visited japan for the last 35 years, and find all of the "Tokyo is so affordable and buildable" is hilarious. The breathless articles I read about it leave out fundamental aspects (the incredible density, the absolute destruction 70 years ago, the corruption [especially in Shinjuku], the size of the "livable apartments", the need to rebuild anything from before 1980 for earthquake safety, that youth population falling by half, the stagnation of wages), and the fact that most people who can leave Tokyo to raise children do (even if it means commuting 2hrs each way every day on a train).

This just doesn't match anywhere in the US or frankly almost anywhere else in the world. I know 2 people who actually still live in Tokyo. One is a 28 year old single foreigner, and the other is stuck in a 100 year mortgage with their extended family. All the rest moved.

Re: Maybe treating housing as an investment was a mistake

#93

Post by yvdriess »

rcme wrote: post #12

Buying a house is an investment. You're making a bet that worker productivity will improve near you. After all, what is the value of land? Some land can be farmed or house a factory. But usually, when we talk about residential real estate, we're talking about land that houses workers. So, the value of that land is directly proportional to the economic value those workers can provide. We refer to "economic value provi…

That makes the slowdown of productivity growth only more worrisome. The EU area is sitting at -0.2% and the UK is having a full blown crisis.

https://data.oecd.org/lprdty/labour-productivity-and-utilisa...

Re: Maybe treating housing as an investment was a mistake

#94

Post by steveBK123 »

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…

To be fair, being a chef has never been a well paying role. Read Bourdain's writing on the NYC restaurant scene in the 90s. Hard work, hard drugs and hard life.

Re: Maybe treating housing as an investment was a mistake

#95

Post by bedhead »

I've been screaming about the OpenDoor's and RedfinNow's of the world for several years. These are in effect payday lenders for homes, dangling low all-cash offers to entice desperate sellers to hit the bid quickly. Ironically, these companies manage to lose money anyway, perhaps yet another sign that SFH's weren't meant for this. Incredible that even after 2008, we have yet to really learn that the financialization of people's homes should be pretty darn close to a non-starter.

Re: Maybe treating housing as an investment was a mistake

#96

Post by giraffe_lady »

czbond wrote: post #57
photon12 wrote: post #38

Earlier quoted context omitted.

Yes, there is an inconsistency in the amount of effort expended to survive versus the outcomes of that effort. I can't reconcile them in my head. I'm watching my friend trying not to physically deteriorate and have some modicum of comfort while I sit here on my couch living off savings from the job I recently quit. Nothing I do can be so much more valuable than what he does.

I mean... that's life. What schools should teach is not just "here is a career that matches you're skills" - but more so, "if you choose this career, these are the most probable outcomes and life paths you'll end up in" If AI takes engineering, medical, and law work away from those professionals - they too could have spent many hours to learn, to then earn little. Every human has worth, but we all value the type of w…

"that's life" like this is an inevitable fact of the universe we must live with? No, this is the world we have made. To some extent you have to come to terms with it and find a place to live within it, yes. But those terms can be "this sucks, this is wrong, it should change" which it seems that's where the other commenter is headed.

Re: Maybe treating housing as an investment was a mistake

#98

Post by czbond »

zachthewf wrote: post #69

Lately I've been thinking that perhaps the solution to the housing shortage is a technology that makes it easy, cheap, and extremely fast to build housing that is both attractive and illegal. Uber and Airbnb were both pretty much illegal from the get go, but ultimately worked because they were incredibly popular. They forced the laws to change to accommodate what people actually wanted. Similarly, living in tents and…

Interesting thought - you expanded my thinking here....

Re: Maybe treating housing as an investment was a mistake

#99

Post by ominous_prime »

codegeek wrote: post #48
mdgrech23 wrote: post #27

Earlier quoted context omitted.

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.

You will be surprised how much good plumbers make in the USA. You probably used a bad example. Source: I know my trusted plumber makes well over six figures a year and he cannot take all calls. I asked him once if he has problems generating leads and he smiled saying "I have too much business that I turn people away". He is a "master plumber" which these days is not easy to get certified for in many states. He told m…

You will be surprised how much good software engineers make in the USA -- still many multiples of most successful plumbers, and without the long-term physical consequences of that type of labor. Yes, there's still going to be better examples to highlight the disparity.

Re: Maybe treating housing as an investment was a mistake

#100

Post by lbotos »

joshocar wrote: post #79
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…

In general, chefs, and anyone who works in the kitchen, are severally underpaid for the skill and amount of work the job takes. It's long hours in a hot, cramped, very high stress environment for peanuts. Not to mention the terrible hours. I have a very brief stint in the food industry when I was a kid and it was enough for me to say I would never do it as a career.

Is them being underpaid not a function of buyers not willing to pay more for the goods?

I'm not under the impression that most restaurateurs are "raking it in" staff be damned. Sure, at the ultra high end, yes, but for most restaurants a chef pay is function of the market, right?

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