Maybe treating housing as an investment was a mistake • Hacker News Board

Re: Maybe treating housing as an investment was a mistake

#681

Post by nojvek » Mon, Mar 06, 2023, 7:46 PM UTC

crisdux wrote: post #374

In my metro, the median listing price for a home just peaked. Driven by low supply, high demand - stemming from a variety of factors. I've made competitive offers on many homes, only to be beaten by all cash offers or people putting more cash down for an appraisal gap. I get angry when I think about neighboring properties that sold for 50% less only 3 years ago, financed at 2.5% interest rates - while I must make a d…

Even on a software eng salary in Seattle area, housing 40m away from city took many many years of saving to afford downpayment. As we were saving, the price went up faster than we could meet 20%. The rents also went up. It feel like the bar kept on moving faster than we could catch up.

This was 5 years ago. At current >1M prices, that would not be possible. 2 bedroom rents in Bellevue are > $2500/month. Kind of nuts.

Re: Maybe treating housing as an investment was a mistake

#682

Post by pdonis » Mon, Mar 06, 2023, 7:46 PM UTC

cornholio wrote: post #326

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…

But the problem of your friend is not that you treat your house as an investment. By definition, if people "invest" in goods that can be produced at a certain price, then production should kick in and restore balance. In a functional housing market you shouldn't be able to get a better appreciation of housing than the inflation rate, except for perhaps some very limited and irreplaceble houses in the Hamptons or desi…

> This problem can only be solved politically, with the state taking a major role in the supply of housing

The state already takes a major role in the supply of housing, as you yourself acknowledge. That's the problem, not the solution.

Re: Maybe treating housing as an investment was a mistake

#683

Post by pb7 » Mon, Mar 06, 2023, 7:47 PM UTC

distrill wrote: post #672

pb7 wrote: post #654

Earlier quoted context omitted.

>they work harder jobs than me What makes it harder? Could they do your job? Or do they miss the bar for doing the level of knowledge work that you do? This "they work harder" cliche is really tired. They might work hard but they're easily replaced. You are likely not, and even more likely, they wouldn't be able to do your job. If you really feel so bad, donate some of your money to them, otherwise it's just empty vi…

idk why this position is so offensive. yes i think most of the population can sub into most tech work. honestly a bootcamp will make most people ready to perform at an acceptable level for your average FAANG swe role. admittedly the interview process is a tougher experience and keeps many people out but does not reflect the actual work. your being tired of this "cliche" does not make it untrue and this response is as…

I don't know if I would call it offensive, maybe misguided? Naive?

Most of the population could not sub into most tech work. I know this because a large portion of the population can hardly even use tech, beyond the lowest hanging fruit like social media and other ultra-refined experiences. You have a high opinion of the average person and that's fine but it will stick out in conversations like this.

Your attempts to get them into tech are great! That'll test whether they're capable of doing the work, get them out of the "harder" work if they are, and is an actionable effort rather than signaling your distaste for some alleged injustice.

Re: Maybe treating housing as an investment was a mistake

#684

Post by riku_iki » Mon, Mar 06, 2023, 7:47 PM UTC

rcme wrote: post #606

riku_iki wrote: post #600

Earlier quoted context omitted.

high enough property tax.

Wouldn't that make homes less affordable and increase rents?

it will make houses less attractive investment vehicle: people will start selling rental houses and downsize to smaller units, which will create additional supply on the market.

Also, in case of California for example, if prop13 got eliminated, it will hit mostly existing house owners, and not new ones.

Re: Maybe treating housing as an investment was a mistake

#685

Post by Drunk_Engineer » Mon, Mar 06, 2023, 7:48 PM UTC

zachthewf wrote: post #200

Drunk_Engineer wrote: post #141

Earlier quoted context omitted.

In San Francisco (and other big metros) landlords build illegal/unpermitted units all the time.

That is a good point that I hadn't thought of. I lived in an illegal unit in San Francisco—a buddy and I got permission from our landlord to put up a wall subdividing our bedroom in Bernal Heights into two smaller bedrooms. Some of my favorite years ever... What about illegal additions or illegal buildings? This seems less common to me.

Unpermitted additions are extremely common, as are "illegal" backyard cottages.

Re: Maybe treating housing as an investment was a mistake

#686

Post by Firmwarrior » Mon, Mar 06, 2023, 7:49 PM UTC

goosedragons wrote: post #177

kurthr wrote: post #92

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…

So why is the population of Tokyo steadily increasing while the population of Japan overall is decreasing? Is it all just foreigners explaining 2+% growth rate in recent years despite them making up less than 3% of the cities total population? Or are the people stuck in 100 year mortgages just having lots more kids than everybody else?

I don't want to be too combative here, but Kurthr's comments are completely unrelated to the sentiment of most people in Japan. I don't know where they came from. I lived in Tokyo for years and still have an apartment there. You can work part time for minimum wage and still afford an apartment you can live in comfortably.

It's not going to be a US-style giant house with a green lawn, but it isn't some dystopian hole in the wall or giant share-house like non-wealthy San Francisco residents are stuck in.

You can fire up Netflix and watch some of "The Full-Time Wife Escapist" on there to see a normal small apartment in action. It's tiny by US standards, but people can live there comfortably.

Re: Maybe treating housing as an investment was a mistake

#687

Post by donkey-hotei » Mon, Mar 06, 2023, 7:49 PM UTC

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…

Totally relate with this feeling.

Re: Maybe treating housing as an investment was a mistake

#688

Post by BurningFrog » Mon, Mar 06, 2023, 7:50 PM UTC

fnordpiglet wrote: post #275

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…

I don’t understand this. There are a lot of places in the US, and certainly globally, where housing prices decrease. There are also plenty of folks who got soaked in 2008 and lost everything, and no one helped them. How precisely does “the government” do this house price propping up? Via loan guarantees to ensure liquidity in the mortgage market? These make houses affordable and accessible to most people. Without loa…

> How precisely does “the government” do this house price propping up?

Primarily by not allowing construction of new housing supply.

Re: Maybe treating housing as an investment was a mistake

#689

Post by tempsy » Mon, Mar 06, 2023, 7:53 PM UTC

photon12 wrote: post #125

tempsy wrote: post #107

Earlier quoted context omitted.

This is an absurd statement. Median rent in Seattle for a 1 bedroom is $2k. Using the 40x rule someone who makes $80k could easily afford this, which is a low bar for someone with a moderately decent job. Locking in a low rate alone has nothing to do with whether owning is more affordable than renting. The rate could be 0% but with a sales price high ala 2021-2022 buying mania and then adding property taxes, insuranc…

> $80k could easily afford this, which is a low bar for someone with a moderately decent job. $80k is not a low bar, and this is insulting to really talented people I know stuck in below $40k jobs.

so rent is now considered a massive burden on everyone because someone making the minimum wage cannot easily afford the median rent in the city they live in?

that’s not how it works at all

Re: Maybe treating housing as an investment was a mistake

#690

Post by lolinder » Mon, Mar 06, 2023, 7:54 PM UTC

hd95489 wrote: post #590

lolinder wrote: post #508

Earlier quoted context omitted.

Yes, this can be a real problem. The mortgage company that we chose had a program where they did all of the underwriting before we even started making offers, and part of our offer was a certificate entitling the seller to $5000 at the mortgage company's expense if we couldn't get financing. Kind of like extra earnest money from the mortgage company offered as a guarantee that there wouldn't be any problems in closin…

Luck or you just offered enough more that the seller bit. 5k is nothing on a 1m deal.

It's not the money that's the point, it's that the mortgage company is putting skin in the game. The value of a cash offer, aside from going above the appraisal value, is that there is no risk of it falling through due to financing problems. The $5k is nothing except that it shows that our offer may as well have been cash as far as that concern goes.