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Maybe treating housing as an investment was a mistake

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Re: Maybe treating housing as an investment was a mistake

#351

Post by thfuran »

falcolas wrote: post #217
kitsunesoba wrote: post #59

Earlier quoted context omitted.

This is actually why as a homeowner, I'm not particularly bothered by the value of my house dropping. Don't get me wrong, it's not exactly fun to watch its price tag drop, but the supposed dollar value of the house isn't "real" unless I'm looking to sell, which I'm not going to be doing unless I'm changing living arrangements, whether that be buying a different house or renting. Its value to me is that it's 1) a home…

One problem with the value dropping (assuming you're still paying off the mortgage): lenders can freak out and call the entire mortgage due and foreclose on your home. They did this extensively after the subprime mortgage issue.

And even if they don't, if it happens early in the mortgage, it can pretty easily make it impossible for someone to be able to move.

Re: Maybe treating housing as an investment was a mistake

#353

Post by lotsofpulp »

nemo44x wrote: post #339
Miraste wrote: post #319

Earlier quoted context omitted.

This is completely ignoring the increase in house prices, unless by "not the most desirable location" you mean "move to the middle of Kansas." The fact is, in many areas, buying any house at all is not feasible for the vast majority of young adults.

> This is completely ignoring the increase in house prices Guess what, the small and lower cost place you bought 10 years ago went up in price too. So you have equity and you've been in the rising market. > The fact is, in many areas, buying any house at all is not feasible for the vast majority of young adults. 100% untrue. Buying a house in the place they feel they deserve to live is. You can buy a home that is a 3…

While I agree with the sentiment of your comment, I would need proof of this:

> You can buy a home that is a 30m commute by train or bus to NYC for Even a door to door commute from Secaucus, NJ station, one stop from Midtown is 20min+. I would say 60min is at least the commute you would need for housing at $400k.

Re: Maybe treating housing as an investment was a mistake

#355

Post by waynesonfire »

dfxm12 wrote: post #58
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…

What sucks is a lot of young renters with steady jobs can afford to pay off a mortgage month to month, but they just can't afford that down payment (especially the 20% needed so as to not need to get mortgage insurance)! I was in that position for a while. Every time it seemed like I could afford to put that money down, the housing prices went up! It took a handful of years of renting cheap places (with roommates), l…

do you know why they can't afford a down payment? dave ramsey has some ideas, maybe related to the boom in the luxury industry?

https://finance.yahoo.com/news/momma-cant-protect-dave-ramse...

Re: Maybe treating housing as an investment was a mistake

#356

Post by leaving »

The author misses the big picture: housing is embedded in an economic system based upon perpetual growth.

The scarcity of housing, as the author correctly points out, is related to location, location, location. The old saw is "buy land; they're not making any more of it". As the population continues to grow, there may be more houses, but there certainly will not be more houses in desirable locations that are already built up.

The madness here is the perpetual growth. The author's entire analysis is irrelevant because perpetual growth cannot continue in a finite environment.

Whether or not housing prices rise to beat inflation, and whether we vote for Bernie and AOC or not, our houses will soon be worth nothing because we will all be dead. This is the inevitable outcome of the perpetual growth paradigm.

The only sane way to stabilize housing prices and to prevent the inevitable post-apocalyptic collapse, therefore, is by achieving sustainable numbers.

The insects are gone. The animals and the oceans are going. We are immediately next. If you doubt this, and if you continue your consumer lifestyle, you are insane.

Re: Maybe treating housing as an investment was a mistake

#357

Post by nineplay »

gurumeditations wrote: post #329
nineplay wrote: post #268

Earlier quoted context omitted.

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…

They’re talking about how it is ridiculous that nothing but pure luck and circumstance of a screwed up housing market/system means they ended up with a sweet deal with affordable quality housing while their friend is forced to deal with living in a closet for much higher prices despite working hard.

I get that but

> despite working hard

that's a non-sequitur. Migrant laborers on farms work absurdly hard. "Work hard and get more" is practically a boomerism at this point. There are many reasons to work hard, but none of them have to do with guaranteed home ownership

Re: Maybe treating housing as an investment was a mistake

#358

Post by kilgnad »

xapata wrote: post #173
highwaylights wrote: post #140

Earlier quoted context omitted.

This astonishes me about the US real estate market and is something I was only educated to on HN in the last week or so. I had absolutely no idea that 30 year fixed mortgages were not only widely available but the common standard there.

I'm an economist, yet I only recently realized that adjustable-rate mortgages are economists' consensus best choice for consumers. Based on the expectation that personal economics are well-correlated with broad market economics, and that interest rates will decline when the economy struggles.

Why don't you get fixed rate so that the rate never goes up. When the background rate goes down you refinance for another lower fixed rate.

Re: Maybe treating housing as an investment was a mistake

#359

Post by anonymouskimmer »

carlosjobim wrote: post #299
lbotos wrote: post #100

Earlier quoted context omitted.

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?

The restaurateurs might be raking it if they own the real estate. If you pay rent for your location you are probably scraping by, and whipping your staff to bring in the money for your landlord. 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 as…

I thought a new means of breaking out on your own are food trucks. A quick search shows that they often net 6 figures, though I don't know if that includes the salaries of the help.

Re: Maybe treating housing as an investment was a mistake

#360

Post by tekkk »

Well say what you want but imo there's just a huge wealth transfer going on with companies hitting record profits and US, and other countries, suffering from homelessness, poor education and overall worse financial outlook than it was generations ago.

The system is rigged on a higher level than talking head politicians can manage or even comprehend. Leaving the normal people just facing a bleak reality of either being slaved as minimum wage renter or having to come up with resources to find a way out through say education.

We are basically the same as we were in Middle-Ages so it's no surprise though. With the peasants being basically property (and lets not talk about US). And the situation is better, no doubt. But accumulating wealth is a rich person's hobby.

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