My worry as a potential buyer is that rates might remain low and home prices will roll over. While I don't have a super high conviction that will happen, the potential risk of losing more of the value of something then my net worth greatly offsets the probable benefits of getting in now.
Home Price to Income Ratio
151–160 of 704 posts
Re: Home Price to Income Ratio
#152Earlier quoted context omitted.
That's still way lower then older generations.
I don't know if this is a problem? I am perfectly happy focusing on my career and my hobbies and not worrying about home repairs, insurance, taxes, natural disasters, etc. It is more financially and emotionally rewarding for me to prep leetcode, solve software problems, etc. than it is to deal with home renovations, plumbing repair, etc. on a home. Plus the flexibility of location is huge. I can follow the job market…
Not everyone has the same goals or mobility as you. What you described is especially tough for families with kids.
Re: Home Price to Income Ratio
#153How 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…
It doesn't matter so much if a country is taxing their own rich if they allow rich people from other countries to buy real estate.
Re: Home Price to Income Ratio
#154Earlier quoted context omitted.
"better start finding and implementing real solutions to housing prices right now" They can't. Providing supply will suffer the wrath of BANANA/CAVE/NIMBY anywhere you dream of living. Constraining demand will either get you voted out of office or devastate your political network or both, depending on which policy you attempt. You're competing with a whole planet full of people that want to live here and have more me…
> For 99% of you that means living far away from your preferred locale among people you probably loath. Parent comment is vitriolic but not actually wrong. Myself, I take great comfort in the idea of huge swaths of liberal, well-educated millennials and xennials migrating out of coastal cities and into small towns across the South and Midwest. Can you work remotely? Want to own your own home on a multi-acre lot for $…
I was ready to buy an estate in the Georgia mountains earlier this year - then I saw the internet connection options. Then I looked up how much it would cost me to get a decent wired connection out there.
Totally unviable for tech workers to live in most of the solid red areas of the country strictly due internet capabilities, or lack thereof.
Re: Home Price to Income Ratio
#155Earlier quoted context omitted.
Millenial homeownership is almost at 50% this year. The people priced out are the loudest, but it's not overwhelmingly common in most parts of the US.
That's still way lower then older generations.
Older generations consumed resources at far higher than sustainable rates. I don't think older generations is an acceptable benchmark.
Re: Home Price to Income Ratio
#156Earlier quoted context omitted.
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 jud…
> 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.
Yep. This is true. The issue is that the OP seemed to suggest that the price of assets (e.g., housing) was wholly explained by the devaluation of the dollar.
Re: Home Price to Income Ratio
#157How 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…
The amount of private equity in housing is really underreported I think - still the vast majority of people owning second homes or additional property are doing it for investments, but there is nothing stopping an “uber for housing” where they use VC money to buy up massive amounts of properties and influence pricing. I believe this is one of Zillow’s primary models.
My take is that we need to treat housing as an actual human need, and there should be penalties for buying houses to rent or for investment purposes outside of ones primary residence. That sort of exists in the mortgage interest tax deduction but with rates near 0 that’s become far far less effective.
Re: Home Price to Income Ratio
#158Are we close to another housing bubble like in 2008?
We're in an everything bubble that's about to pop. Evergrande is about to take it all down.
How long will you and your Reddit pals keep saying this before you realize how untrue it is?
Last prediction I heard was that everything was going to crash today. Now it's next week. Next week will it be November? 2022? 2024? 2030?
Over and over again, I see newly minted retail investors discover the only hard part about investing; actually knowing when things will happen. If you can't say when the MOASS (or whatever the "bad thing" is this time) will actually happen, it's useless to keep doomsaying about it in the meantime.
Re: Home Price to Income Ratio
#159Earlier 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.
No, vacancy rates are at near all time lows. Any reputable study will show we have a housing shortage. Even in rural America, house prices are skyrocketing. We need to build more, ideally near transit hubs as to minimize the effect on infrastructure, and reduce our environmental impact.
Re: Home Price to Income Ratio
#160Earlier quoted context omitted.
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.
I mostly just look at the money supply. Print 10% more money, that's 10% inflation. It may not be uniform throughout the economy, or take effect immediately but that's 10% more money chasing the same assets. It's all has to go somewhere.