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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

#641

Post by hd95489 »

rs999gti wrote: post #309
nemo44x wrote: post #262

Earlier quoted context omitted.

Buy a "starter house" and begin to build equity. It's how people have always done it. You buy a really small house that isn't in the most desirable location and start making payments into it. Down the road you have built equity and you can sell your starter home and buy a nicer, larger house. You maybe have some family to support then and need more room. But you see young people renting for 15 years in expensive plac…

I don't know why you are being downvoted. Buying small, building equity, and trading up has always been a thing in home ownership.

The new play may be buying big and buying the building not the land. Inflation on goods and services is having trouble keeping up with rates

Re: Maybe treating housing as an investment was a mistake

#642

Post by eddsh1994 »

angarg12 wrote: post #610
eddsh1994 wrote: post #575

Earlier quoted context omitted.

Are you in the Bay Area? If so I saw an ad in SF for condos/1 bed flats starting at high $300k on the weekend. With recent zoning changes it might get easier for you soon.

Nope, Greater Seattle Area. Still, we are a couple nearing our 40s, it seems insane to me that we need to "settle down" for a 1 bedroom flat while making ~3x the median local income.

Oh I agree! But better to avoid renting in general imo, if it’s a possibility.

Re: Maybe treating housing as an investment was a mistake

#643

Post by vore »

korroziya wrote: post #620
angarg12 wrote: post #551

Earlier quoted context omitted.

I'm a new immigrant to the US, and housing is my single biggest worry together with my work visa. Our household income is north of 300k, but housing still seems unaffordable. It might sound like whining, but we only achieve this level of income recently, so our lifelong savings are in the low 6 figures. We got no assets or property abroad, and no family that can help us to get in the property ladder. Even old, basic…

Most working class people die with savings below five figures. You should re-evaluate how good you're doing. Of course, if you live in California or New York, you're basically broke, since the cost of living in those states is designed to keep people poor. But that's why people left those two states in droves over the last few years.

I don't think the parent post was punching down on working class people, but rather making the point that if housing is unaffordable for even someone with a 300k household income, it is truly catastrophic for people on the average wage.

Re: Maybe treating housing as an investment was a mistake

#644

Post by vjk800 »

bityard wrote: post #625
angarg12 wrote: post #551

Earlier quoted context omitted.

I'm a new immigrant to the US, and housing is my single biggest worry together with my work visa. Our household income is north of 300k, but housing still seems unaffordable. It might sound like whining, but we only achieve this level of income recently, so our lifelong savings are in the low 6 figures. We got no assets or property abroad, and no family that can help us to get in the property ladder. Even old, basic…

I don't mean to be blunt, but if modest homes in your area are $1m, then you are in a VERY high-cost-of-living area and what you see here is not at all typical of the rest of the country. Where I live, a charming 1200sqft starter home in a blue collar neighborhood goes for $150-$200k.

Indeed. If your complaint is that you need to be a millionaire to get basic housing, it's because you live with other rich people. Since the overwhelming majority of humanity lives in houses with value far below 1M$, we can conclude that no-one really has to live in a place with only 1M$ houses, but you, for some reason, want to do so.

Living in a posh neighbourhood is a luxury, like Ferrari (which, by the way, costs much less) or a golden watch. If you want rich people lifestyle, then you should be prepared to pay rich people money for it.

Re: Maybe treating housing as an investment was a mistake

#645

Post by MrMan »

Analemma_ wrote: post #481
gknapp wrote: post #435

Earlier quoted context omitted.

I know this is anecdotal, but whenever I hear these stories, I'm curious about the details. A quick search leads me to believe that head chef pay in Seattle typically ranges from about 90k-110k per year. Finding apartments off Broadway in Cap Hill, I can see that studios, though relatively expensive, range around $1.5-2k a month. An income tax calculator estimates about a 22% total tax bracket and a monthly adjusted…

> A quick search leads me to believe that head chef pay in Seattle typically ranges from about 90k-110k per year. This doesn't sound right to me. Maybe it's true for the very fancy quasi-Michelin places like Canlis or Shiro's, but for a nice-but-average gastropub in Cap Hill it's probably much less.

if its Coastal Kitchen I could see and would hope the chef is making a grownup amount of money

Re: Maybe treating housing as an investment was a mistake

#646

Post by layer8 »

anonymouskimmer wrote: post #88
voisin wrote: post #68

Earlier quoted context omitted.

The fruits of your labour can be sold continuously at low marginal cost. His cannot.

I don't know. An unclogged pipe is used multiple times per day.

Plumbers should get into the PaaS business (pipes as a service).

Re: Maybe treating housing as an investment was a mistake

#647

Post by wil421 »

angarg12 wrote: post #551
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'm a new immigrant to the US, and housing is my single biggest worry together with my work visa. Our household income is north of 300k, but housing still seems unaffordable. It might sound like whining, but we only achieve this level of income recently, so our lifelong savings are in the low 6 figures. We got no assets or property abroad, and no family that can help us to get in the property ladder. Even old, basic…

$300k is a very very good family income and is in the top 90% if not more. Even if you just got the job you should be able to afford a house. $1m for an old suburban house is very high for most places in the US.

Re: Maybe treating housing as an investment was a mistake

#648

Post by djent »

acabal wrote: post #460

Indeed, and the article is right in saying there isn't really a way out. Humanity paints itself into these kinds of corners fairly frequently over the course of history: entrenched systems where many suffer, but where too many powerful people benefit for it to be able to change. Traditionally, the solution has been violent revolution. That's really the only way to (for example) tell 66% of Americans that their bigges…

Suggesting that the conclusion is telling homeowners that their asset is now "worthless" is extreme hyperbole. Homeowners live in their house. You need only apply the same metaphor from the article. Nobody might be willing to pay money for my couch, but I still keep it in my living room and use it.

Re: Maybe treating housing as an investment was a mistake

#649

Post by zajio1am »

There is no need to look for heterodox explanations. There are clear economic and political factors explaining why there is a housing shortage and why such shortage causes raise of prices.

Vetocracy and NIMBYism is something that is deeply embedded to modern western society. For larger housing developments, getting permits can take several times longer than actually building it, can be attacked at courts by almost anybody and significant improvement would be blocked by zoning anyways. That essentially caps housing supply in popular places, which means the price is determined just by demand (i.e. wages and mortgage rate), which grows fast in booming areas.

Re: Maybe treating housing as an investment was a mistake

#650

Post by hd95489 »

HarryHirsch wrote: post #393
nemo44x wrote: post #262

Earlier quoted context omitted.

Buy a "starter house" and begin to build equity. It's how people have always done it. You buy a really small house that isn't in the most desirable location and start making payments into it. Down the road you have built equity and you can sell your starter home and buy a nicer, larger house. You maybe have some family to support then and need more room. But you see young people renting for 15 years in expensive plac…

Have you tried buying a "starter house" around Western MA recently? Builder specials start around 200 kUSD, something that is actually move-in ready is at least 50 kUSD more. (Yes, you can try gentrifying McKnight or Upper Hill in Springfield, MA if you want to pay less, lovely Victorians, free bullet holes from the regular shootings included. You go first!) The advice is completely out of touch because there is a ge…

A lot of this work you can diy it just seems intimidating. You can absolutely rent a digger and do your own pipe. You can also to your own roof. It’s not really worth it if you make 200k a year but if you make 50 it is.
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