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Houses are for living, not for speculation

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Re: Houses are for living, not for speculation

#81

Post by cestith »

sidewndr46 wrote: post #56
cestith wrote: post #45

Earlier quoted context omitted.

In the US economy and much of the rest of the world, money is decreasingly tied to the time or resources of people. It is increasingly tied to the money, market capture, and regulatory capture of corporations that specialize in finance rather than producing goods.

Isn't that the point of economics? If you're just going to tie money to something obvious, you don't need economics.

Yes, you need economics even when most of the money is used to pay for something productive rather than extractive.

Re: Houses are for living, not for speculation

#82

Post by ch4s3 »

jackb4040 wrote: post #51
ch4s3 wrote: post #30

Earlier quoted context omitted.

So the Chinese government making retirement unaffordable, making it impossible to invest in equities, under funding pensions, and then attacking the last thing people can invest in for retirement savings is what won Gen Z?

You're so conditioned against socialism that the only life plans you will consider are gambling your life's savings on a speculative asset, or working until you die. Not every country is constrained to these 2 options. Many of them would love for you to visit.

You'll note that I specified that China has no real broad pension system that can fund people in retirement and instead leans on the cultural norm of children taking care of their parents in old age. The (socialist) one child policy made this mathematically infeasible as 2 working adults now need to care for a child and 4 parents. The solution that Chinese people cleverly devised was to invest often at the behest of local party officials in property development, which aided in rural Chinese moving to cities, another CCP socialist policy. Then XI does a giant rug pull and attacks peoples' property/retirement savings.

Maybe look at the actual facts before trying to tun this into some dumb socialism vs not socialism argument.

Re: Houses are for living, not for speculation

#83

Post by reactordev »

cestith wrote: post #38
reactordev wrote: post #10

Earlier quoted context omitted.

Possibly but it would also create more private equity reits that would build and operate these multi-family units. There isn’t a clean solution without making it illegal for companies to own single-family homes.

You’d have to have exceptions to that. Many new homes are built as whole subdivisions, then sold to initial residential owners. Banks won’t lend on homes they can’t foreclose on as collateral, and banks are companies. Mortgage companies are for this purpose the same as banks. Some companies buy and update homes then resell them. They don’t all do a cheap flip with a massive markup. Neither do all of them hold them lo…

Incorrect about the builders. It would force builders to hold capital instead of borrowing. It would make banks able to have an asset in collateral for the loan to the person, that they can then sell. Builders already cut corners to pocket money from loan differences, we should probably put a stop to that.

I think there’s a difference between a bank company “owning” a deed vs a PE company holding it for speculation and rent squeezing. You are right though that there has to be a system to hold inventory and we made Fannie Mae and Freddy Mac macro-economic instruments instead of those inventory stewards.

Re: Houses are for living, not for speculation

#84

Post by Esophagus4 »

sidewndr46 wrote: post #46
Esophagus4 wrote: post #40

Earlier quoted context omitted.

From people I know: they aren’t aware of / comfortable with traditional financial instruments, so they just buy houses and have the rest in a savings account. Their houses aren’t even “investments” to them, they’re lifestyle properties that also may increase in value.

This, 100x over. You invest 1 million USD in a house. The house loses 90% of it's value. You still own the house. You can live in it, hopefully you get some benefit from the investment, even if it has no market value. You invest 1 million USD in the stock market. It loses 90% of it's value. You basically have nothing but a tax write off on future gains.

But at least with owning stocks, I can vote in a bunch of proxy things every so often… which will keep me busy so I don’t have to think about all the money I lost :)

I guess the housing equivalent would be an HOA, but honestly I would rather lose 90% of my money than sit through an HOA meeting…

Re: Houses are for living, not for speculation

#85

Post by OptionOfT »

boringg wrote: post #35
xtracto wrote: post #3

I wholeheartedly agree with this. My opinion is that governments should tax 2nd, 3rd and further housing so as to prevent people from accumulating residential buildings. If you want to live of your rents, buy a commercial or industrial building, speculate with that. But residential construction should be protected to ensure each household is able to buy one with the average country salary.

How do we feel about cottages or summer homes for people who live in poor weather climates? Is that a luxury that should be universally condemned? I woulnd't think those qualify as speculative but more like lifestyle money pits from what I have heard.

Allow me to flip that around. Should people in places like Phoenix be priced out of the market because a significant amount of people have a winter home there?

Re: Houses are for living, not for speculation

#86

Post by sidewndr46 »

cestith wrote: post #81
sidewndr46 wrote: post #56

Earlier quoted context omitted.

Isn't that the point of economics? If you're just going to tie money to something obvious, you don't need economics.

Yes, you need economics even when most of the money is used to pay for something productive rather than extractive.

but what's the difference between 'productive' and 'extractive'? Clearing huge swaths of land for agriculture is highly productive, in terms of making crops. Likewise irrigating huge swaths of arid land for agriculture is also highly productive. Are those 'extractive' or not?

Re: Houses are for living, not for speculation

#87

Post by sidewndr46 »

Esophagus4 wrote: post #84
sidewndr46 wrote: post #46

Earlier quoted context omitted.

This, 100x over. You invest 1 million USD in a house. The house loses 90% of it's value. You still own the house. You can live in it, hopefully you get some benefit from the investment, even if it has no market value. You invest 1 million USD in the stock market. It loses 90% of it's value. You basically have nothing but a tax write off on future gains.

But at least with owning stocks, I can vote in a bunch of proxy things every so often… which will keep me busy so I don’t have to think about all the money I lost :) I guess the housing equivalent would be an HOA, but honestly I would rather lose 90% of my money than sit through an HOA meeting…

I'm guessing this is a joke, but my advice would be not to purchase property subject to the tyranny of an HOA

Re: Houses are for living, not for speculation

#88

Post by [deleted] »

xtracto wrote: post #3

I wholeheartedly agree with this. My opinion is that governments should tax 2nd, 3rd and further housing so as to prevent people from accumulating residential buildings. If you want to live of your rents, buy a commercial or industrial building, speculate with that. But residential construction should be protected to ensure each household is able to buy one with the average country salary.

[deleted]

Re: Houses are for living, not for speculation

#89

Post by mothballed »

Esophagus4 wrote: post #33
cassianoleal wrote: post #22

Earlier quoted context omitted.

> store all their net worth into their main tax free house If you take speculation out of the housing market, storing net worth in your main house becomes a lot less attractive.

Which was the way housing was for many years. A house used to be viewed as a consumable good a hundred years ago, not an appreciating asset. (Before the New Deal commoditized mortgages)

At least in USA, since pretty much the absolute beginning, anyone with any wealth tried to gobble up the absolute most amount of land they could. Both as a form of wealth and a productive input. This has been less so in the past century though as agriculture has become smaller part of the economy.

Re: Houses are for living, not for speculation

#90

Post by simonsarris »

So that was 2016. Why doesn't it link to "Chinese property sector crisis (2020–present)"

https://en.wikipedia.org/wiki/Chinese_property_sector_crisis...

Never mind, I added a link to it, and the prior Chinese bubble (https://en.wikipedia.org/wiki/Chinese_property_bubble_(2005%...

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