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Home Price to Income Ratio

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Re: Home Price to Income Ratio

#141

Post by nradov »

cestith wrote: post #126
nradov wrote: post #82

Earlier quoted context omitted.

There is already a lot of public funding for basic biomedical research. Actual drug development is another thing entirely. If this were publicly funded then funding would be allocated based on political priorities rather than realistic scientific and economic assessments. That misallocation of resources would overwhelm any savings from reducing sales and marketing expenses. But in general the traditional drug develop…

A ban on marketing prescription-only drugs directly to the public existed in the US until recent decades. The amount spent on marketing skyrocketed when that ban was removed.

Since there's no way to reinstate the marketing ban short of a Constitutional amendment (basically impossible) that point is moot.

Re: Home Price to Income Ratio

#142

Post by fatnoah »

jandrese wrote: post #124

How much of this is a result of our "don't tax the rich" policies that created a staggering amount of wealth at the top that has nowhere else to go? So many ultra rich investors are looking for something, anything, to invest in. Plus there is the feedback loop of massive growth you get as the bubble inflates. Is this a direct result of our fiscal policy? Have we destabilize the economy in order to create the richest…

I fully expect that as we tax investment income more and more, we'll see this trend in real estate worsening as it becomes an even more attractive investment vehicle.

Re: Home Price to Income Ratio

#143

Post by the_gastropod »

willcipriano wrote: post #132
the_gastropod wrote: post #120

Earlier quoted context omitted.

I know this is a common belief in the hilarious world of crypto enthusiasts. But, y'know, we measure inflation, and what you're suggesting is just flat out not true. https://tradingeconomics.com/united-states/inflation-cpi

That's CPI, not inflation. CPI has a number of ways that a thumb may be put on the scale, for example hedonic quality adjustments seem to me to be highly subjective.

Right, vs REAL inflation, which is measured by whatever I think happens to be too expensive right now.

Re: Home Price to Income Ratio

#144

Post by corpdronejuly »

tomkat0789 wrote: post #119
tharne wrote: post #108

Earlier quoted context omitted.

It consistently shocks me how rarely this is brought up as a solution. Price of something too high? Increase the supply.

Me too! I think the average American thinks "increase supply" means skyscrapers with apartments, rather than lower impact multiunit, mixed-use apartments/street shops that are more common in Europe. Another issue with increasing supply/density: where is every household going to park its 2-3 cars?! (Disclaimer: I've been watching tons of City Beautiful and Not Just Bikes on Youtube)

The issue is that those kinds of mixed use neighborhoods are literally illegal in most American Suburbs. Strong Towns goes over this, but our zoning laws are basically designed to create and exacerbate this problem long run

Re: Home Price to Income Ratio

#145

Post by larksimian »

the_gastropod wrote: post #130
markus_zhang wrote: post #125

Earlier quoted context omitted.

It's more like inflation of asset prices.

I take much less issue with that assertion. That high housing prices are because the dollar is worth less is what I find rather absurd. Inflation is measurable. And you have to embrace some real quacky conspiratorial thinking to go down the rabbit hole that dpweb seems to have gone down.

Inflation is not just about measuring prices. It is a really complicated number synthesized from both price signals(arguably the most objective data), surveys and ... educated opinions. For instance, economists just kinda have to put a number on what new technologies are worth. Modern car maybe costs more dollars, but you're also getting a better product type issues.

Inflation is based both on measurements and on judgement calls by economists responsible for calculating it. It's more objective than LIBOR or some crap, but (way way) less objective than the price of something on the stock market, or some other pure price signal.

'Asset' inflation isn't even part of CPI(like stock, cost of owning a house, tho rental is), is it? It's not even a claim to say that the dollar is devaluing against assets, it's just like tautologically what it means that asset prices are booming.

Re: Home Price to Income Ratio

#147

Post by ashtonkem »

giantg2 wrote: post #123
tharne wrote: post #108

Earlier quoted context omitted.

It consistently shocks me how rarely this is brought up as a solution. Price of something too high? Increase the supply.

Increasing supply can help some. But when you do that, you increase demand for material and labor, which can negate some of the benefit depending on what markets we're looking at. The real problem isn't supply at all, it's the distribution of supply and the choices of people to live there.

> The real problem isn't supply at all, it's the distribution of supply and the choices of people to live there.

I’ve said this plenty of times; America has plenty of homes, it just doesn’t have enough homes where people actually want to live.

You can get a home in my parents home town (which they left) for $60-100k right now. The issue is that there are no jobs and even fewer services. It was probably a great place to live 80 years ago when small towns were the norm, but now it’s shrinking, aging, and a long distance from any of the amenities that most Americans now demand.

Re: Home Price to Income Ratio

#148

Post by flyinglizard »

jandrese wrote: post #124

How much of this is a result of our "don't tax the rich" policies that created a staggering amount of wealth at the top that has nowhere else to go? So many ultra rich investors are looking for something, anything, to invest in. Plus there is the feedback loop of massive growth you get as the bubble inflates. Is this a direct result of our fiscal policy? Have we destabilize the economy in order to create the richest…

This is happening outside of the USA, in countries with more progressive taxation too. Canada, UK, Israel - all with much worse house price to income ratio compared to the USA.

These homes are not owned by billionaires either. It’s an asset class that’s very broadly distributed by its definition; most people own their homes.

I think it’s mostly driven by macroeconomics. Near zero interest, population growth (organic or through immigration) and historical real estate appreciation all fuel this trend.

Re: Home Price to Income Ratio

#149

Post by p4l4g4 »

My eye was drawn to the graphs. Especially the house price / income graphs. There seems to be a trend in the US graph: if you zoom in far enough, you can see a consistent drop in Januari (every year). The UK graph does not show this trend..

Does someone know the origin of this trend? And why the two countries don't show the same trend?

Re: Home Price to Income Ratio

#150

Post by corpdronejuly »

m_ke wrote: post #28
standardUser wrote: post #5

Some very clever and influential people better start finding and implementing real solutions to housing prices right now. If they don't, expect overwhelming support from Millennials for massive expansions to public housing and rent control, if not even more draconian measures.

Simple solution would be to put a property and sales tax ramp on additional homes. Make landlords who own N homes pay 1.5^N the normal rate.

The issue then becomes silly games with shell corporations hiding how many homes people own, which pushes homes into the hands of larger landlords who can afford to pay someone to play those silly games.
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