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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

#751

Post by mulmen »

spaniard89277 wrote: post #130
pradn wrote: post #25

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…

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Calls to violence are unacceptable. This is irresponsible and dangerous rhetoric. Society is not so broken as to justify violent revolution. This will not make any living person's life better. Participate in your local government. If you must, move somewhere with laws that better align with your values, or where you have a better chance of driving the change you want to see. Violence is not the answer.

Re: Maybe treating housing as an investment was a mistake

#752

Post by zoomablemind »

> "...Moreover, houses are pretty much the only physical good that are expected to 1) appreciate in value, and 2) be used all the time."

That sounds more like a perpetuum mobile. I wish the author cosidered the third choice that is "an empty lot with a vision to build that exact house from ground up".

Something tells me that the current building costs contribute a lot to the home prices in general and project the "recapture" into the future.

Whether ammortization of the real estate is fairly factored in the price remains unknown.

Also, what is indeed maintaining the scarcity is the land itself, well, that's the part of the "location".

Re: Maybe treating housing as an investment was a mistake

#753

Post by P_I_Staker »

spaniard89277 wrote: post #130
pradn wrote: post #25

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…

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Re: Maybe treating housing as an investment was a mistake

#754

Post by glonq »

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…

My daughter recently moved from Vancouver BC (which sucks for housing) to Seattle, which sucks for housing.

Despite having a good university degree and a decent-paying white-collar job, she gets by in Seattle thanks to couch surfing and pet-sitting. It beats the alternative -- sharing with numerous flaky/crazy roommates.

Re: Maybe treating housing as an investment was a mistake

#755

Post by Nifty3929 »

I think an important point is that people might mean a couple of different things by “investment:”

One is a more traditional idea of investment, which isn’t so much about money, or cashing in later - it’s about having this particular dirt here for myself after some period of time. I may never get a financial reward, but this plot of land is MINE.

Another way “investment” is used is indeed about a financial reward and being able to sell for more later. Basically speculation.

Regarding the former, this is a natural way to think about it and while it might be expensive, the rational makes sense even if I don’t agree with it.

Regarding the latter, I think this came about more recently as people empirically observed housing prices going up, often faster than inflation. Without really understanding WHY it’s doing that, you might think of it like stock.

But the real reason housing had been going up over the last decades is that the government (US, and many others) have poured a lot of money into that market in various ways: tax incentives, loans, etc.

Supply restrictions come into play as well, but that’s a very local thing and not generally applicable.

So it’s not connected to real outputs like an investment. It will only keep going up as long as the government keeps pouring in more money. And when they don’t, or can’t, it won’t. And that’s when the “investment” will start to look a lot more like a speculation gone wrong.

Re: Maybe treating housing as an investment was a mistake

#756

Post by [deleted] »

93po wrote: post #747
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…

> You'd be destroying everyone's retirement plans and there'd be major economic repercussions. Investments have risks. If you invested most of your net worth into something that's a necessity for decent life without any thought into how shifting societal priorities may impact that investment, then you made a poor investment choice.

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Re: Maybe treating housing as an investment was a mistake

#757

Post by majani »

HDThoreaun wrote: post #507
majani wrote: post #406

Earlier quoted context omitted.

Also, aesthetically, you have to admit, most YIMBY cities are ugly AF compared to NIMBY cities. Aesthetics are very important to human beings; people love pretty things.

I don't admit. I think high density cities look much nicer than suburbia.

Maybe some look good in high density cities in select areas of Europe which are helped by well preserved ancient architecture, but that's not replicable elsewhere. Go to more modern, large, genuine YIMBY cities where anything goes like Tokyo and Lagos and they are quite an eyesore

Re: Maybe treating housing as an investment was a mistake

#758

Post by MarcoZavala »

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…

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Re: Maybe treating housing as an investment was a mistake

#759

Post by mordae »

jb12 wrote: post #158
lalos wrote: post #116

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

Who cares? The problem is with people or companies that own 3+ houses and a whole high-rise building.

Re: Maybe treating housing as an investment was a mistake

#760

Post by gwright »

cool_dude85 wrote: post #423
gwright wrote: post #266

Earlier quoted context omitted.

> It took a handful of years of renting cheap places (with roommates) Is this now considered unusual? I didn't purchase my own home for almost 12 years after graduation from college. I lived at home, then with roommates, which was a completely normal thing to do at the time (1987 college graduation).

It's more usual than ever, but living at home or with roommates still makes it very difficult to ever afford a home. Let's take a look: 1999 median home cost: $165,000; 1999 median household annual income: $42,000; 1999 home cost / annual income: 3.9 2022 median home cost: $468,000; 2022 median household annual income: $71,000; 2022 home cost / annual income: 6.6

I wonder what the square footage of those median homes were in 1999 vs 2022.
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