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Making housing more affordable means your home's value will have to come down

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Re: Making housing more affordable means your home's value will have to come down

#101

Post by seanmcdirmid »

bee_rider wrote: post #59

I can’t really imagine wanting to own a house nowadays, given how unstable everything is. I’d rather buy an RV or something like that. Using home equity as a long term store of value seems nuts, what if your town turns into the next Florida (uninsurable hurricane and flood zone).

RV life in urban locations has a stigma these days of freeloaders and drug addicts. It works as a hack, but it’s a quick race to the bottom. Well maintained stealth van campers are a much more socially viable way to save on housing costs (and even then they achieve that by being super discreet).

Re: Making housing more affordable means your home's value will have to come down

#102

Post by s1artibartfast »

analognoise wrote: post #95
s1artibartfast wrote: post #82

Earlier quoted context omitted.

Homes are and should always be an investment because they are. They dont have to beat the stock market, but a well maintained home should track inflation at least. They have real and huge replacement costs in materials and labor. If my house burnt down, it would cost $1M to rebuild. Im all for cheap simple houses for those with less money. However, unless they are so cheap as to be disposable, they too will be invest…

Isn’t “so cheap they are disposable” Japan’s approach to homes?

Only in an exaggerated meme sense. reality is much more complicated.

The average Tokyo apartment size is 390 sqft, while the US average is above 2,000 and climbing.

Americans could have homes 10% the price, but they would mostly refuse to live in them even if they were sold at cost.

Re: Making housing more affordable means your home's value will have to come down

#103

Post by dopylitty »

hammock wrote: post #90
s1artibartfast wrote: post #68

Earlier quoted context omitted.

I thought I did, but can give an example. If the median income increases from 50K to 100K (adjusting for inflation), and houses stay at 500k (adjusting for inflation), they have become more affordable without losing value.

Well that begs the question, how are you going to double income beyond the rate of inflation?

Rather than doubling all income one option would be to make the existing income more evenly spread out.

For instance McDonalds' CEO makes ~$20 million a year[0] and they paid out $6.6/share with 726M shares[1] to parasite shareholders[2] while the average non-CEO employee makes $25k a year[3].

Since there are 150000 employees working for McDonalds that means lowering the CEO salary to $200k and eliminating shareholder payouts would free up close to $5 billion/year.

If that $5 billion were distributed evenly to all employees they would take in an additional $33k/year, more than doubling their salaries.

Of course all these numbers are estimates and there are caveats but the overall point is there's a lot of money out there that's going to a very few people.

0: https://www.restaurantbusinessonline.com/financing/mcdonalds... 1: https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/shar... 2: https://finance.yahoo.com/news/income-investors-know-mcdonal... 3: https://www.zippia.com/mcdonald-s-careers-7238/salary/

Re: Making housing more affordable means your home's value will have to come down

#104

Post by Jensson »

s1artibartfast wrote: post #102
analognoise wrote: post #95

Earlier quoted context omitted.

Isn’t “so cheap they are disposable” Japan’s approach to homes?

Only in an exaggerated meme sense. reality is much more complicated. The average Tokyo apartment size is 390 sqft, while the US average is above 2,000 and climbing. Americans could have homes 10% the price, but they would mostly refuse to live in them even if they were sold at cost.

Why did you compare home size in a city to home size in a country? Average Japan home size is about 1000 square feet, smaller but not that much smaller.

https://www.statista.com/statistics/1289345/japan-average-si...

Re: Making housing more affordable means your home's value will have to come down

#105

Post by leereeves »

s1artibartfast wrote: post #88
leereeves wrote: post #84

Earlier quoted context omitted.

If home prices can rise 5% or more per year, why can't they also fall 5% per year?

I dont know what point you are trying to make, but housing prices fluctuate all the time. I am talking about long term averages.

So am I. The median home price rose from 221k in Q4 2011 to 442k in Q4 2022.

That's doubling in 11 years, thus rising 6.5% per year on average over the long term.

https://fred.stlouisfed.org/series/MSPUS

Over the same time period, the value of existing homes, as measured by the Case-Shiller U.S. National Home Price Index (which measures the price of repeat same home sales) more than doubled.

https://fred.stlouisfed.org/series/csushpinsa

Re: Making housing more affordable means your home's value will have to come down

#106

Post by s1artibartfast »

dopylitty wrote: post #103
hammock wrote: post #90

Earlier quoted context omitted.

Well that begs the question, how are you going to double income beyond the rate of inflation?

Rather than doubling all income one option would be to make the existing income more evenly spread out. For instance McDonalds' CEO makes ~$20 million a year[0] and they paid out $6.6/share with 726M shares[1] to parasite shareholders[2] while the average non-CEO employee makes $25k a year[3]. Since there are 150000 employees working for McDonalds that means lowering the CEO salary to $200k and eliminating shareholde…

Do you realize the CEO salary is literally a rounding error in your calculation? Your answer doesnt have enough digits to express the worker impact of that $20m salary.

Re: Making housing more affordable means your home's value will have to come down

#107

Post by s1artibartfast »

Jensson wrote: post #104
s1artibartfast wrote: post #102

Earlier quoted context omitted.

Only in an exaggerated meme sense. reality is much more complicated. The average Tokyo apartment size is 390 sqft, while the US average is above 2,000 and climbing. Americans could have homes 10% the price, but they would mostly refuse to live in them even if they were sold at cost.

Why did you compare home size in a city to home size in a country? Average Japan home size is about 1000 square feet, smaller but not that much smaller. https://www.statista.com/statistics/1289345/japan-average-si...

Because the meme/myth about disposable Japanese housing comes from dense urban environments like Tokyo.

It is largely a result of tax policy and construction methods between 1960-1990 where it made sense to gut apartments after they depreciated for tax purposes.

In Japan, property tax decreases to zero over time, but resets if you upgrade it. There for people gut and remodel before selling their units so they get the benefit of a higher price, but the buyer pays the taxes.

Re: Making housing more affordable means your home's value will have to come down

#108

Post by grecy »

s1artibartfast wrote: post #61
grecy wrote: post #18

This is so fundamental to the issue. It is impossible for housing to be simultaneously a good investment and affordable. Policymakers simply have to decide if they cater to those that already own homes, or those desperately wanting to buy one. I feel strongly housing is a basic human right, and so we should stop viewing residential property as an appreciating asset.

Housing fundamentally IS and should be a good investment for the homeowner. It retains it's functionality over time, and saves the owner considerable rental expenses. Think about what conditions would need to be true for housing to be a bad investment. >I feel strongly housing is a basic human right, and so we should stop viewing residential property as an appreciating asset. Its not about "views", it is about realit…

> Think about what conditions would need to be true for housing to be a bad investment

The most simple of all - It goes down in price.

Re: Making housing more affordable means your home's value will have to come down

#109

Post by CuriouslyC »

neogodless wrote: post #5
CuriouslyC wrote: post #3

Why do new homes have to be built in competition with existing homes? With remote work and the digital elite moving wherever, why not just pop up new developments wholesale, complete with shopping and services somewhere out of the way and cheap?

I love the power of the word "just." It pairs well with armchair pundits who can simply wave a wand and solve major problems that lots of heavily motivated people who have resources and would profit nicely from solving these problems... still struggle to solve. Can you answer your own questions in reverse? Why aren't new developments built wholesale, complete with shopping and services somewhere out of the way (and c…

People do intentional communities all the time, and that's small groups of grassroots folks solving the problem. I have no doubt that a company could set up intentional communities much more efficiently, and provide more services to them so they were closer to parity with typical suburbs.

Re: Making housing more affordable means your home's value will have to come down

#110

Post by Jensson »

s1artibartfast wrote: post #107
Jensson wrote: post #104

Earlier quoted context omitted.

Why did you compare home size in a city to home size in a country? Average Japan home size is about 1000 square feet, smaller but not that much smaller. https://www.statista.com/statistics/1289345/japan-average-si...

Because the meme/myth about disposable Japanese housing comes from dense urban environments like Tokyo. It is largely a result of tax policy and construction methods between 1960-1990 where it made sense to gut apartments after they depreciated for tax purposes. In Japan, property tax decreases to zero over time, but resets if you upgrade it. There for people gut and remodel before selling their units so they get the…

> Because the meme/myth about disposable Japanese housing comes from dense urban environments like Tokyo.

But then you should compare home size to something comparable, like Tokyo to New York city, not Tokyo to USA.

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