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There is more to high house prices than constrained supply

economist.com

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Re: There is more to high house prices than constrained supply

#211

Post by paulddraper »

snidane wrote: post #186
paulddraper wrote: post #98

Earlier quoted context omitted.

It's insane what schools can get away with for price discrimination. Remember the uproar over Orbitz (and others) price discrimination based on Mac/iOS usage? [1] Schools have been doing the same thing in broad daylight for years and years with far greater consequence, basing their price on your parent's income levels.* And near zero public blowback. It's confusing. * This is all done through school scholarships, but…

Why isn't there any public blowback regarding unequal pricing for public goods and services? They are mostly funded from income taxes which are not proportional to the amount of service thr payer gets at all. Property taxes would actually be different. The more you own, the bigger the effort the state has to gear towards you to guarantee you your ownership. Laws, law enforcement, judges, fire department in case it ca…

IDK about "any public blowback"...income tax was and is very unpopular.

It took an entire constitutional amendment before it was adopted in the U.S.

Re: There is more to high house prices than constrained supply

#212

Post by acd »

Banks create money out of thin air, fractional reserve banking. When the banks go bust the Central banks save the debts. People speculate in house prices, people loan more for their new home than their old one, new debts are created. It goes on until there is a bust in the market, either financial shock, or price discovery that the loans are not sustainable.

Re: There is more to high house prices than constrained supply

#213

Post by conanbatt »

s4vi0r wrote: post #196
conanbatt wrote: post #192

Earlier quoted context omitted.

There can't be "no landlords". Someone owns the land, even if its the State. Beware of that solution: you have a chance to fight a landlord, you have no chance to fight the state-landlord.

Yes, but the state isn't leeching off of the people. My point is wrt landlords in the sense of people who do nothing, provide no value, and make money solely by virtue of "I/my ancestor was here first I/they bought this when there was less people so gimme money". I don't see where you get your conclusion from. For many (most?) people, they really don't have a chance to fight their landlord. Legal expenses, time, ener…

> Yes, but the state isn't leeching off of the people

Are you sure about that. US government spending is 1/3 of GDP, while rents are around 1/10.

> Not sure why you can't fight a "state-landlord"

Because the state has the power to make it illegal to sue the state. You need to win a supreme court case to beat the state into something, and you will be paying taxes to fund your opposition all the way up to the supreme court.

Re: There is more to high house prices than constrained supply

#214

Post by nzealand »

pjmorris wrote: post #170
nzealand wrote: post #126

Earlier quoted context omitted.

Historically, it is more about construction costs and comparable rent prices. http://www.econ.yale.edu/~shiller/data/Fig3-1.xls

Can you describe how you reached your conclusion from the data in the spreadsheet? I don't see any of the three series correlating particularly strongly with house prices. My own pet theory is that adding the Fed's QE purchases to the graph would show stronger correlation than the series that are present.

Population and construction costs are a loose correlation with housing prices, but I dont see any correlation with interest rates.

http://lenkiefer.com/2017/12/20/state-population-growth-and-...

Here is the graph showing QE vs housing prices.

https://fred.stlouisfed.org/graph/?g=mbAe

Re: There is more to high house prices than constrained supply

#215

Post by gammateam »

joejerryronnie wrote: post #190
gammateam wrote: post #144

Earlier quoted context omitted.

Almooooooost The fed printing more dollars is done in a way designed to push people into riskier products. The literal point is so that people put their money into the economy instead of parking it in a savings account. So even though your favorite personal finance guru is having you celebrate 1.75% in an Allied Savings account in exchange for referral commissions, the point is for that to be an unattractive use of y…

I was with you until you mentioned crypto in the same sentence as market forces, as if the price of bitcoin or any other crypto currency is due to any factor other than rampant speculation (or blatant price manipulation). At this point, I look at die-hard crypto converts the same as evangelical Christians. Not that either are bad, they just believe in made up things.

my whole post described how cryptocurrencies are the tail end of rampant speculation as it is further out on the risk curve and that there is an irony as this isn't what the monetary policy distortions were intended to do, check yourself.

Re: There is more to high house prices than constrained supply

#216

Post by CalRobert »

masonic wrote: post #203
CalRobert wrote: post #202

Earlier quoted context omitted.

Indeed. The descendants of people who occupied central park ca. 1600 might have thoughts on that.

Central Park didn't exist until 1857.

The land which became central park did.

Re: There is more to high house prices than constrained supply

#217

Post by pjmorris »

nzealand wrote: post #214
pjmorris wrote: post #170

Earlier quoted context omitted.

Can you describe how you reached your conclusion from the data in the spreadsheet? I don't see any of the three series correlating particularly strongly with house prices. My own pet theory is that adding the Fed's QE purchases to the graph would show stronger correlation than the series that are present.

Population and construction costs are a loose correlation with housing prices, but I dont see any correlation with interest rates. http://lenkiefer.com/2017/12/20/state-population-growth-and-... Here is the graph showing QE vs housing prices. https://fred.stlouisfed.org/graph/?g=mbAe

Thanks... I look at the QE vs. housing prices graph and see plausible correlation. My bias, supported by the graph: "With house prices dropping, the Fed steps in to bail mortgage lenders out, keeping prices at their elevated levels"

Re: There is more to high house prices than constrained supply

#218

Post by [deleted] »

gammateam wrote: post #215
joejerryronnie wrote: post #190

Earlier quoted context omitted.

I was with you until you mentioned crypto in the same sentence as market forces, as if the price of bitcoin or any other crypto currency is due to any factor other than rampant speculation (or blatant price manipulation). At this point, I look at die-hard crypto converts the same as evangelical Christians. Not that either are bad, they just believe in made up things.

my whole post described how cryptocurrencies are the tail end of rampant speculation as it is further out on the risk curve and that there is an irony as this isn't what the monetary policy distortions were intended to do, check yourself.

[deleted]

Re: There is more to high house prices than constrained supply

#220

Post by wpdev_63 »

conanbatt wrote: post #194
vanbytheriver wrote: post #141

I purchased a van that I am going to rebuild into an RV and live in San Fransico at a fraction of what I would throwaway on rent and interest to the bank. Some googlers got the same idea and slept in the google parking lot! It does not make sense to purchase expensive properties with the record low interest rates. As soon as they rise again, your property will lose in 10s of thousands of dollars in value and you will…

I think its a fine way to save money, but that is basically choosing to be homeless and live like a pauper. When you have 200k+ salaries and you find it appealing to live like a minimum-wage worker with no family, it should raise a red flag.

Many people live alot more comfortably within a van than they do in their stationary home. They can go to the beaches during the summer weekends and go out to colorado during the ski season and bring their home with them. This is one of the many couples that are doing it these days:https://faroutride.com

If you get 90% of your home comfort in a finished conversion van and you save 50% if your wealth, it's a no brainer.

You'll also be avoiding the inevitable housing crash.

Why on god's green earth would an employer care about where you live?

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