291–300 of 1001 posts
1) it’s a market that is exceedingly difficult to exit. If you still at the top of the market, you generally have to also buy your next home at the top of the market as well
2) because of the disproportionate amount of peoples wealth is tied up in their home, it makes their overall wealth poorly diversified. This leads them to protect this one asset more than anything else
One thing this doesn't cover is that while we've gotten much better at making cars and TVs, but haven't really gotten all that much better at building houses. In fact, we seem to have only gotten better at using with cheaper, worse materials to build houses in ways that the average housing consumer doesn't really understand and thus can't properly price.
> 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…
Yeah, my mortgage is $800 for a 2,000 sq ft house and my son's rent for 1/2 of a 1 bdrm apt is $1700. The situation is completely out of control. (We're both in CA.)
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…
All the reasons you listed are valid and true, but I don't think that changes anything.
Yes, individuals see housing as a sign of success, and security and happiness. That's great. Companies should not be allowed to invest in housing, only individuals. Everything after the 1st home should be heavily, heavily taxed to seriously impact owning multiple homes to the point it makes no sense.
If a person wants to invest in real estate, there is plenty of commercial real estate for that purpose. Leave houses for people that need a place to live.
Earlier quoted context omitted.
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…
> 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). Is that why the population is 14M - 34M in the metro? Bigger than every American city and about the size of all of Canada combined? They just can't get out to where it should by all accounts be cheaper? Is there a fence or something?
> 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…
Why is renting in a world where we build a lot more housing somehow more expensive than buying in a world where we don't?
I think this writeup also doesn't meaningfully touch on the _end_ of the scenario, when it's assumed that Alice sells the home, and is again faced with the choice of where to live next, and whether to buy or rent. In the case where housing prices have increased substantially, she's realized a considerable gain, but all the other houses are also substantially more expensive, and that gain is all directed at paying for her own future cost of housing. I.e. even if you're a homeowner and you've gotten your home value to increase, you don't really get to realize that gain if you still need to live somewhere.
For that reason, I think the downside to building a lot more is less dramatic than this writeup suggests. If your particular home value drops because you're in an uninsurable flood zone, that's a problem. If _all_ home values drop, then your house can still be sold and used to buy another similar house. Yes, when you die your family will inherit a less valuable house -- but they will also be richer in the sense of having smaller housing costs.
> 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…
People aren't paid by how hard they work, they're paid by how much money they generate and how hard they are to replace. A head chef might be hard to replace but popular bars and restaurants are not, as we saw during Covid. They have often been replaced by people deciding to save money and eat at home. Your cognitive dissonance isn't unusual but I think it does a disservice to our ability to have productive discussio…
No, it starts and ends with peoples' lives and how much of it they must expend to keep it going. There are no such thing as "raw numbers".
Earlier quoted context omitted.
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?
A chef's pay is a function of the market, and that's why everybody is exiting the industry right now. Head chefs and restaurant owners are used to decades of low wages and think it's quite insulting that anybody would dare ask for a better wage. Then they wonder why "nobody wants to work anymore". At the same time, chances of advancing your career are very limited. If you manage to stick around for a few years as a chef, you will already be able to manage your own restaurant, but the salary for that will be just marginally higher. Unless you want to strike it out on your own, and take on massive debt for a business with low margins.
Working in a kitchen is the worst career choice a young person can make. If you have that skill, ambition, passion and drive, you will be much better rewarded in any other sector.
> 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…
> ...their house is the single biggest investment Is it really anyone's fault but their own? I don't recall housing being offered as a low/no-risk investment with guaranteed profits. Financial blogs, podcasts, and Reddit commenters might have shared that view. Are there any examples of mortgage issuers or home builders advertising housing as an investment?