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The average age of U.S. homebuyers jumps to 56

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Re: The average age of U.S. homebuyers jumps to 56

#61

Post by cen4 »

surfpel wrote: post #7

Well that’s what happens when you frame housing as an investment. If it didn’t outpace the market and the consumer inflation rate, it wouldn’t be a good investment. So by definition it must become unaffordable for the masses. No great way out of this mess.

Unlike many other sectors where prices drop thanks to constant advances in Tech, what is weird is how Tech hasn't made a dent in Housing.

Health I can understand cause it takes a long time to produce a Doc, and there is a high demand and low supply dynamic.

But we can easily build housing cheap. Even if the real estate/investment lobby is busy buying up all the "prime" land, its not like the US is a small country to work around them somewhere.

Re: The average age of U.S. homebuyers jumps to 56

#62

Post by torginus »

hatthew wrote: post #38
gkanai wrote: post #8

Earlier quoted context omitted.

Not Japan, fwiw. Japan has been very reasonable for real estate for decades. We're now seeing inflation in major metro areas but outside of that, it's very reasonable.

My understanding is that japanese houses are fundamentally different in that they are designed to be expendable in the long term, similar to cars. You don't buy a high quality house that you maintain, you buy or build a new house and then tear it down a few decades later.

Aren't US houses the same effectively? - Not necessarily in that they aren't built to last, but that they'll be rebuilt regardless in a couple decades.

Re: The average age of U.S. homebuyers jumps to 56

#63

Post by torginus »

phyzix5761 wrote: post #35

I do financial coaching as a side business and I can tell you the main two reason why most people in their 30s can't afford a home is because they have no idea how to budget and they carry too much debt spent on things they don't need. On average people spend about 30% of their income paying off non mortgage debts like credit cards, car loans, and student loans. I teach my clients how to budget, cut back on unnecessa…

Honestly that sounds like not the whole picture. I think your perception might be because your clientele comes from the top whatever% of US society, where people make a ton of money.

Accoring to stats, the top 15% of households in the US has an income in excess of $200k - saving half of it and living like a king on the rest should be easy enough, while the median around $75k - even living frugally won't allow you to save a significant chunk of income.

Re: The average age of U.S. homebuyers jumps to 56

#64

Post by carom »

grigri907 wrote: post #50
missedthecue wrote: post #33

Earlier quoted context omitted.

Jeff Bezos owning 10% of Amazon really has nothing to do with the massive issue of entrenched institutional NIMBYism. San Francisco built 74 new units of housing last year. Not 74,000. Seventy four. We could kill all billionaires and housing would not get cheaper in a world like that.

Fortunately there is only one San Francisco and countless other Not San Fanciscos. That is a highly unique, cherry-picked case.

>From 2014 to 2018, for example, Santa Monica issued permits to build just 12 multifamily units. [1]

1. https://www.rand.org/pubs/commentary/2022/11/santa-monicas-b...

Re: The average age of U.S. homebuyers jumps to 56

#65

Post by happymellon »

torginus wrote: post #62
hatthew wrote: post #38

Earlier quoted context omitted.

My understanding is that japanese houses are fundamentally different in that they are designed to be expendable in the long term, similar to cars. You don't buy a high quality house that you maintain, you buy or build a new house and then tear it down a few decades later.

Aren't US houses the same effectively? - Not necessarily in that they aren't built to last, but that they'll be rebuilt regardless in a couple decades.

I would suggest that the UK is also similar.

It's just that we don't do it because of housing shortages, or the ever popular terraced housing, and people live in some of the worst states.

Re: The average age of U.S. homebuyers jumps to 56

#66

Post by therealrootuser »

torginus wrote: post #62
hatthew wrote: post #38

Earlier quoted context omitted.

My understanding is that japanese houses are fundamentally different in that they are designed to be expendable in the long term, similar to cars. You don't buy a high quality house that you maintain, you buy or build a new house and then tear it down a few decades later.

Aren't US houses the same effectively? - Not necessarily in that they aren't built to last, but that they'll be rebuilt regardless in a couple decades.

Literally a couple decades like 20 years? I just don't think that could be true, at least not where I live.

Looking at the listings in a broad radius around me, there is still a lot of housing built in the 1960s and 1970s being bought and sold quite regularly, and some stuff even older. A house built in 2004 ("a couple decades") would absolutely not be worth the cost to rebuild.

Re: The average age of U.S. homebuyers jumps to 56

#67

Post by mikhailfranco »

surfpel wrote: post #7

Well that’s what happens when you frame housing as an investment. If it didn’t outpace the market and the consumer inflation rate, it wouldn’t be a good investment. So by definition it must become unaffordable for the masses. No great way out of this mess.

There are a few things that could be done to remove the artificial advantage of (primary) residential property:

- remove the exemption (or reduction) for Capital Gains Tax

- remove Income Tax relief for mortgage interest

- remove any exemption (or reduction) for Inheritance Tax

Not all these advantages exist in all jurisdictions.

Then there are other changes that could mitigate distortions, inequality and volatility:

- separate interest rates for residential mortgages, commercial property, consumption and productive investments (industry, infrastructure, education)

- separate institutions for these different credit markets, with different reserve ratios and other regulations

- promote sound(er) money, to reduce inflation, and reduce the necessity to protect wealth by asset investment

- break cartels of real estate agents and aggregators to reduce transaction costs

- streamline the planning process to enable more houses to be built, without delay and costs of excessive eco/nimby appeals

- level the playing field between landlords and renters (means different things in different local jurisdictions)

Finally, there are more radical combinations of these things, such as removing the claim of mortgage interest as a business cost for landlords, which would raise their corporate taxes and deter high leverage.

Re: The average age of U.S. homebuyers jumps to 56

#68

Post by Slartie »

cen4 wrote: post #61
surfpel wrote: post #7

Well that’s what happens when you frame housing as an investment. If it didn’t outpace the market and the consumer inflation rate, it wouldn’t be a good investment. So by definition it must become unaffordable for the masses. No great way out of this mess.

Unlike many other sectors where prices drop thanks to constant advances in Tech, what is weird is how Tech hasn't made a dent in Housing. Health I can understand cause it takes a long time to produce a Doc, and there is a high demand and low supply dynamic. But we can easily build housing cheap. Even if the real estate/investment lobby is busy buying up all the "prime" land, its not like the US is a small country to…

> Even if the real estate/investment lobby is busy buying up all the "prime" land, its not like the US is a small country to work around them somewhere.

Even the US being a big country doesn't help much. The value of land for the purpose of living on it is largely defined by the infrastructure around a particular piece of land: are there schools, shops, doctors, ... nearby, or do you have to drive through an empty desert for hours to reach them? And unless faster forms of individual travel are invented, this will limit the amount of "usable" land even in an imaginary country with unlimited boundaries.

Re: The average age of U.S. homebuyers jumps to 56

#69

Post by ilikerashers »

whatever1 wrote: post #6

This is not a U.S only or even a western issue. UK, EU, China, India etc all suffer from crazy real estate prices. I think the whole world is due for a big societal revamp. The old generation has concentrated too much asset wealth for the productive generation to stay productive.

We need very big changes to capitalism at its core.

There are warning signs flashing across all economies without any coherent solutions.

Re: The average age of U.S. homebuyers jumps to 56

#70

Post by dns_snek »

shiroiushi wrote: post #49
missedthecue wrote: post #33

Earlier quoted context omitted.

Jeff Bezos owning 10% of Amazon really has nothing to do with the massive issue of entrenched institutional NIMBYism. San Francisco built 74 new units of housing last year. Not 74,000. Seventy four. We could kill all billionaires and housing would not get cheaper in a world like that.

Exactly: the billionaires aren't the problem here, it's the middle-class NIMBY homeowners who refuse to allow any new construction near them.

At what point do you just call that illegal cartel behavior?
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