181–190 of 1001 posts
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…
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That’s normal. I bought my first house in the early 1990s. Saving the down payment was tough. I lived in a real shithole apartment, anything nice and the rent ate up too much of my cash flow. And I I had to pay PMI, but the monthly payment was still cheaper than rent.
Normative statements don't hold much weight for justifying why things are the way they are.
It's all so tiresome. Watching boomers pop champagne corks as their homes went astronomically high and their children were priced out of ever living in the middle class neighborhoods they grew up in in CA, and now watching them eat that equity down with reverse mortgages, has made me permanently disgusted with the US housing market. The only solution I can see is absolute carnage in the housing market, and probably t…
Housing has most under performed the general market (SP500 for generalities). Thus if your home appreciates at ~3%/yr, market at ~5-9%/yr.... boomers could have increased their wealth 3-5% more yr without homes.
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Who exactly is being “shafted” by occupying $100,000 worth of house/land, that has not otherwise been paid for, for $216 a month? That’s a great rate.
No, that's not a great rate. It's only "$100K worth" because some other rich bums have collectively occupied and bought multiple houses that they don't live in and increased the price of land, AND lobbied for no more housing to be built to artifically keep the market price high. They treat housing as an investment, rather than a dwelling, which is exactly what's being discussed here. It's ridiculous that 99%+ of peop…
But opportunity costs are real. The time value of money is a thing. If you distort the price of capital, then capital is misallocated, and society ends up with overbuilt nonsense like McMansions in Stockton that it didn’t ever need, as in 2007, and other damaging bubbles.
2.6% is dirt cheap for money. If anything it’s way too cheap, and encourages excess demand, raising prices all around.
> 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…
> 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 house is the single biggest investment they will ever make in their life. You'd be destroying everyone's retirement plans and there'd be major economic repercussions. I wonder if one way out would be to 1) build government rental-housing projects again, to fill the immedi…
It’s not really the crime that matters, at the core, but rather the perception of “other”. The single-issue anti-housing people don’t want police in their neighborhoods, they want police in other people’s neighborhoods keeping those people out of the “nice” neighborhoods.
Sadly, most people do in fact want more housing for people who are less well off than them, even if it means they have to run shoulders with strangers. But these are the people who work and don’t have time to show up to community meetings about a new apartment going up, and don’t usually decide who to vote for based on neighborhood aesthetics.
Because the problem is mostly political, most of the solution is political as well: identify, train and support local politicians who will vote to build more housing, and help them write new laws that do so. And convince them (by consistently winning at the ballot box) that the anti-housing crowd is loud but not actually large, so there’s little danger in losing their votes.
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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.
There is nothing bizarre about house appreciating despite being used when you realize that it's not the house that appreciate, it's the land. The land your house is build on doesn't get wear-and-tear, 100 years ago or 100 years from now it's still the same number of m2 of land. And it's getting rare because the population is still increasing and everyone want to live in the same big cities. If you find it ridiculous…
It is 100% reasonable to assume land prices will increase over time. No one is making any more of it, and the wealth and population of the country (also planet) continues to increase. An increasing amount of resources are bidding on a static amount of product. To put this in another way, if the value of land in the US was the same as it was 250 years ago then we would be giving it away by the square mile.
Easily fixed with a tax system: 1) first home tax-free - the address you submit your yearly taxes on. Incentivize people to own at least one home. 2) second property you pay taxes for both homes now - no more tax free benefit since you are able to afford more than one place. 3) more than 2 properties you pay taxes for all of them times some factor 0.05*N houses. Fudge around with the factor to allow more supply for a…
I buy one house, my wife buys one house, we set up one trust each for two of our kids to own one house, we get four houses tax free