Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Maybe treating housing as an investment was a mistake

goodreason.substack.com

Post reply on HN
Print view View original

951–960 of 1001 posts

Re: Maybe treating housing as an investment was a mistake

#951

Post by danuker »

nojvek wrote: post #681
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.

With so much of the tech sector going remote, how do prices still keep going up? Why is there still so muh demand?

Is there anyone living in those expensive places? Or is it just speculation/investment?

Re: Maybe treating housing as an investment was a mistake

#952

Post by [deleted] »

humanrebar wrote: post #866
mulmen wrote: post #813

Earlier quoted context omitted.

Yep. Even if I bought a house at the peak and the market tanks I can still sell it (at a loss) and buy a comparable house because those are cheaper too. The people who get screwed are the multiple-home-owning rent seekers and I'm ok with that. Treating your primary residence as an investment has been bad financial philosophy for all of time.

> The people who get screwed are the multiple-home-owning rent seekers and I'm ok with that. Well, also people who were planning on retiring to a lower cost of living area (i.e., NY to Florida) and using the difference difference in housing costs as part of their retirement income.

[deleted]

Re: Maybe treating housing as an investment was a mistake

#953

Post by [deleted] »

panopticon wrote: post #888
mulmen wrote: post #813

Earlier quoted context omitted.

Yep. Even if I bought a house at the peak and the market tanks I can still sell it (at a loss) and buy a comparable house because those are cheaper too. The people who get screwed are the multiple-home-owning rent seekers and I'm ok with that. Treating your primary residence as an investment has been bad financial philosophy for all of time.

> The people who get screwed are the multiple-home-owning rent seekers and I'm ok with that. And people who suddenly find themselves underwater on their mortgage. Assuming they face no economic shocks they might be able to ride it out, but that sounds like a very stressful situation to be in.

[deleted]

Re: Maybe treating housing as an investment was a mistake

#954

Post by majani »

mulmen wrote: post #751
spaniard89277 wrote: post #130

Earlier quoted context omitted.

[flagged]

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.

Technically he's right. Land conflicts between large groups of people have typically been solved by violence throughout history. But good luck getting a population with strong passports and $50k GDP per capita to revolt. If this was any time before WW2 the drums of war would definitely have been beating though

Re: Maybe treating housing as an investment was a mistake

#955

Post by mulmen »

majani wrote: post #954
mulmen wrote: post #751

Earlier quoted context omitted.

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.

Technically he's right. Land conflicts between large groups of people have typically been solved by violence throughout history. But good luck getting a population with strong passports and $50k GDP per capita to revolt. If this was any time before WW2 the drums of war would definitely have been beating though

The comment is rightfully flagged now but there was nothing correct about it. It was a clear call to violence, not a warning. That’s unacceptable.

Your interpretation is a distortion of history. Nations go to war for land, not the populace of functional societies. The danger in this rhetoric is that it assumes our system of government has failed, which it hasn’t. The only threat is exactly this type of apathy.

Re: Maybe treating housing as an investment was a mistake

#956

Post by rcme »

missingrib wrote: post #859
rcme wrote: post #157

Earlier quoted context omitted.

> This is pretty much the crux of it. High housing prices could be "fixed" almost overnight This is a crazy thing to state with almost no justification. How could housing prices be fixed overnight? Please don't say "zoning changes." Plenty of places without zoning issues have really expensive real estate.

What's an example of a place without "zoning issues" with really expensive real estate?

NYC

Re: Maybe treating housing as an investment was a mistake

#957

Post by Godel_unicode »

xapata wrote: post #950
Godel_unicode wrote: post #548

Earlier quoted context omitted.

That math is my favorite example of economists not living in the real world. It doesn’t account for the ability to refinance.

It does, in fact. The bank prices that into the loan.

Huh? First, the bank can’t possibly price future interest rates into the price of a fixed loan as they’re by definition unknown. Second, we’re talking about the economic model of which is better for consumers. It assumes no refinancing to lower your interest rate down the road, which is a pretty big caveat.

Re: Maybe treating housing as an investment was a mistake

#958

Post by stewx »

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…

This fact cannot be ignored, but we must also grapple with the question of whether betting your retirement on rising home prices is a decision that should be underwritten by the public at large.

My answer is no. I want to live in a world where goods and services are abundant and cheap, including housing. I own a house and benefit from the rise in prices but I'm under no illusion that this is beneficial to society. On the contrary, the rising prices are a calamity.

If we care about the wellbeing of our fellow people, we should desire that homes become cheap.

Re: Maybe treating housing as an investment was a mistake

#959

Post by newsclues »

t-writescode wrote: post #465
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…

* They're a head-chef, that seems like a high-ranking position. * That used to feed and house a whole family, easily. * They can now **only afford a studio**

Parents generation:

* father worked in a factory, mom stayed at home * owned a house, 4 kids * 2 cars, annual vacation

The family life of a single factory worker after the war.

Re: Maybe treating housing as an investment was a mistake

#960

Post by nickelcitymario »

vannevar wrote: post #825
Fernicia wrote: post #637

Earlier quoted context omitted.

> even if builders sold their houses at cost, in places with sufficient economic activity to support employment, the real estate cost would still put those houses out of reach of most low-income buyers This makes no sense. Even if the low income families can't buy the new units, the people who do vacate their old units and there is less demand for the unit those low income families currently occupy. > Renters simply…

>Even if the low income families can't buy the new units, the people who do vacate their old units and there is less demand for the unit those low income families currently occupy. You're making the mistake I mentioned, confusing demand for actual housing with demand for real estate. It will indeed marginally depress demand for housing, but capital can step in and absorb the marginal supply, for rental or other purpo…

I ask this not to argue, but in the hopes that I might learn something:

> As long as there is more demand from capital than supply, real estate prices will stay high even if actual demand for low-income housing remains stable or even declines.

Wouldn't this be true of just about any good? I agree that an unregulated increase in supply is likely to result in increase of properties purchased for use as a rental property, but:

(1) The more property there is available for sale, the less I'm willing to pay for any given property. I'm not sure why real estate would be different.

(2) If your argument is that such property will be purchased predominantly by landlords, I don't see how that counteracts the economics of supply and demand. Why wouldn't this still drive down rent? Unless you're suggesting collusion by landlords?

> and as the old saying goes, they aren't making more of it.

I feel like I must be misunderstanding you, because this seems to contradict your argument? I'm suggesting the solution is more supply -- literally making more of it. What am I missing?

Again, not trying to be argumentative. I feel like you're seeing or understanding something that I don't, and I'd appreciate being able to understand your perspective here.

Post reply on HN