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The Rate of Return on Everything, 1870–2015 (2019)

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Re: The Rate of Return on Everything, 1870–2015 (2019)

#121

Post by lotsofpulp »

charlie0 wrote: post #109
lotsofpulp wrote: post #105

Earlier quoted context omitted.

Newer homes have been trending smaller and smaller for a long time. Especially in the western US. https://www.washingtonpost.com/business/2024/03/10/smaller-n... > Median new-home sizes are at a 13-year low.

I must not be looking at the right place then. All the new homes I've seen recently are 2000+ sq. ft. The only ones that are smaller are usually townhomes and are even less affordable than the bigger homes I just mentioned they are located near downtowns or other heavily populated areas.

Here are some at not much more than 1k sq ft:

https://www.mihomes.com/new-homes/texas/greater-san-antonio/...

https://ginngrp.com/for-sale/parkhouse-vista/

https://www.zillow.com/homedetails/812-24th-Avenue-S-Seattle...

> The only ones that are smaller are usually townhomes and are even less affordable than the bigger homes I just mentioned they are located near downtowns or other heavily populated areas.

That will not change because the market of people looking to buy a 1k sq ft home on a quarter acre lot in a less populated area either cannot afford the construction costs or the set of buyers interested in that is too small to bet on for a developer.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#122

Post by thfuran »

adammarples wrote: post #116
thfuran wrote: post #66

Earlier quoted context omitted.

The surface area of the planet is pretty much entirely unrelated to the cost of housing.

Its variance is though. It is all owned, and controlled. If there was a new land rush then new housing would be almost free until the land was all claimed.

Building a second Australia in the middle of the Pacific would have very little effect on the price of housing in London.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#123

Post by Etheryte »

neilwilson wrote: post #114
Etheryte wrote: post #51

Earlier quoted context omitted.

Money doesn't affect the size of your economy, in general money is not even relevant to the discussion, save for the fact that it gives us a unit of measurement. Money is a relative resource, in a simplified manner, money dictates who gets what fraction of the pie. By printing more money you're not making more pie, just dividing the existing pie into thinner slices. Economies grow because of improvements in technolog…

"By printing more money you're not making more pie, just dividing the existing pie into thinner slices." So if you need a haircut but can't afford one, and I give you a new £10 note to get a haircut, and the barber works the extra 10 minutes to do that haircut and earn that £10 there's no new pie there. Looks like 10 minutes more output to me. "Printing more money" does make more pie. That's exactly what happens ever…

This mixes up where the value creation takes place. Shitcoins are a good example of this fallacy, I can mint ten billion neilwilson-coins right now and hand them out, it doesn't mean any new value has been created. Perhaps an easier way to understand this conceptually is to think of money as a loan, because that's what it essentially is, a pair of credit and debit. Taking out a loan in and of itself it doesn't create any new value, the value is created if you do something useful with it. Money isn't even a requirement, you can also barter or trade. Money is only a means for mediating trade and do relative distribution, it isn't wealth.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#124

Post by greenie_beans »

JackYoustra wrote: post #94
smarm52 wrote: post #73

> In fact, the long decline observed in the past few decades is reminiscent of the secular decline that took place from 1870 to World War I. > The fact that returns to wealth have remained fairly high and stable while aggregate wealth increased rapidly since the 1970s suggests that capital accumulation may have contributed to the decline in the labor share of income over the recent decades (Karabarbounis and Neiman 2…

It's actually one of the big problems with Capital in the 21st century: if you strip out housing, r < g! Turns out it's all zoning and rent control all the way down! Fix zoning and you end up incidentally fixing inequality too because it's such a large part of economic rents.

if it's all because of zoning, then how come we built more housing in the period leading up to the great recession (with the strict zoning laws that already existed)?

Re: The Rate of Return on Everything, 1870–2015 (2019)

#125

Post by DontchaKnowit »

Retric wrote: post #82
PostOnce wrote: post #56

Earlier quoted context omitted.

Around here, they're building bigger houses, but also on much smaller plots without gardens or dogs or tree-houses or places for kids to play outdoors. I suspect it's the same in a lot of places. Maybe these square-foot-per-person calculations should also include square feet of land.

Most people today don’t want a large back yard. It’s like an outdoor pool, there’s definitely a market but adding a pool can lower your property’s value. Land doesn’t decrease the value of a property, but it can dramatically lower the number of buyers.

If this is true, it is so insanely contrary to the opinion of literally every single person I have ever met. Everyone wants a yard. Most people want a sizeable yard for their dogs or kids, or to drink beer and have campfires.

I grew up in rural midwest USA. maybe opinions are different elsewhere, but your comment is a bit baffling. Ive never in my life heard someone say "that house would be perfect if it just came with less land"

Re: The Rate of Return on Everything, 1870–2015 (2019)

#126

Post by Retric »

DontchaKnowit wrote: post #125
Retric wrote: post #82

Earlier quoted context omitted.

Most people today don’t want a large back yard. It’s like an outdoor pool, there’s definitely a market but adding a pool can lower your property’s value. Land doesn’t decrease the value of a property, but it can dramatically lower the number of buyers.

If this is true, it is so insanely contrary to the opinion of literally every single person I have ever met. Everyone wants a yard. Most people want a sizeable yard for their dogs or kids, or to drink beer and have campfires. I grew up in rural midwest USA. maybe opinions are different elsewhere, but your comment is a bit baffling. Ive never in my life heard someone say "that house would be perfect if it just came wi…

I know several people who decided to get smaller yards or were happy to move into apartment complexes without them.

We both are dealing with biased samples. A childhood friend who is very into the outdoors moved to a rural area and got 14 acres, everyone else moved to an apartment or a house with under an acre. This stuff shows up on migration patterns, and well there’s a reason the Rural Midwest USA is a small percentage of the US population.

So, I agree many people do want a large yard, but revealed preferences suggest it’s a minority opinion.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#127

Post by rybosworld »

betaby wrote: post #21
rybosworld wrote: post #12

Earlier quoted context omitted.

The population growth rate has consistently declined for 50+ years. It's around 0.8% from a peak of 2.2% in the 60's. There's no reason to think this trend will reverse.

Why should we use peak as a benchmark? Even 0.8% is insanely high, at such rate population will double in ~150 years.

> Why should we use peak as a benchmark?

I'm not sure what you mean by the peak being a benchmark. There's a very clear trend of population growth declining every year since the 60's.

> Even 0.8% is insanely high, at such rate population will double in ~150 years

I think you are missing the part where the rate has been declining every year.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#128

Post by betaby »

rybosworld wrote: post #127
betaby wrote: post #21

Earlier quoted context omitted.

Why should we use peak as a benchmark? Even 0.8% is insanely high, at such rate population will double in ~150 years.

> Why should we use peak as a benchmark? I'm not sure what you mean by the peak being a benchmark. There's a very clear trend of population growth declining every year since the 60's. > Even 0.8% is insanely high, at such rate population will double in ~150 years I think you are missing the part where the rate has been declining every year.

I think you are missing 'in our lifetime', even though you are quoting 'will double in ~150 years'. Also 'declining every year' doesn't mean it won't start growing again.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#129

Post by qazxcvbnm »

Retric wrote: post #126
DontchaKnowit wrote: post #125

Earlier quoted context omitted.

If this is true, it is so insanely contrary to the opinion of literally every single person I have ever met. Everyone wants a yard. Most people want a sizeable yard for their dogs or kids, or to drink beer and have campfires. I grew up in rural midwest USA. maybe opinions are different elsewhere, but your comment is a bit baffling. Ive never in my life heard someone say "that house would be perfect if it just came wi…

I know several people who decided to get smaller yards or were happy to move into apartment complexes without them. We both are dealing with biased samples. A childhood friend who is very into the outdoors moved to a rural area and got 14 acres, everyone else moved to an apartment or a house with under an acre. This stuff shows up on migration patterns, and well there’s a reason the Rural Midwest USA is a small perce…

Revealed preferences are only as revealing as the market is competitive. In monopolies, is it not revealed that the populace prefers to be price-gouged? In a market as regulated as housing and with deep ties to policy (and industrial structures that I have heard about which I do not understand), it's difficult to not be sceptical of revealed preferences as a sole convincing explanation.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#130

Post by inglor_cz »

_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

Is the housing price adjusted to sqms / sqft and equipment / amenities?

Because my grandparents with their two kids and great-grandma literally lived in a one-room studio in the 1950s, even though they weren't poor. (Grandpa was an engineer for state railways, a good job in 1950s Czechoslovakia.) The toilet was common for 3 households. That was just the standard of living back then. You wanted to be warm, you had to drag coal upstairs from the basement and feed the home furnace. Daily.

In 1964, all five moved to a 3-room apartment, which increased their living space a lot, but it would still feel incredibly cramped by today's standards. It had a separate toilet just for them, though, and centralized heating. No more hauling coal upstairs. Progress!

Of course that those smaller, more primitive apartments were much cheaper than the house built in 2022 that I am now living in, and that is stuffed full with various sophisticated devices.

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