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An average family in Tokyo can own a new house for $850/month

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Re: An average family in Tokyo can own a new house for $850/month

#31

Zoning is important, but let’s also remember that single-family housing isn’t really a speculative investment vehicle in Japan like it is here. You can either have private equity buying up foreclosed homes and house flipping tv shows or housing being used as housing that most people can afford. America chooses the former, Japan, the latter.

Does america have progressive or flat land taxes? Progressive land taxes (higher % tax of land value if you own more of it) make intuitive sense for housing affordability, but I read the Wikipedia[1] and only understood that 'it depends'. https://en.wikipedia.org/wiki/Property_tax_in_the_United_Sta...

My understanding is that most jurisdictions, but certainly California and Washington state have two types of property tax levies. 'Ad valorem' aka by value, which is a percentage of assessed value (one flat rate for all parcels, not progrssive), and per parcel taxes which is just a specific dollar amount added to each separate parcel.

There's some state by state adjustments to try to benefit owner occupied properties, but the degree to which it helps varies greatly; the California owner occupied exemption saves abou $70/year in taxes (woo?). I'm not aware of progressive property taxes, but there's a lot of different jurisdictions.

Re: An average family in Tokyo can own a new house for $850/month

#32
post #9

I think this headline is misleading in 2 ways. 1. yes you might get a house at this price but it's either 1-2 hours out of the city center (which is fine, just saying Tokyo is large.) Or alternatively it's in bad neighborhoods. (bad is relative if you are from the US) 2. your house will most likely look like this: https://www.ii-ie2.net/dat/5ba1164d.jpg Sayonara sunlight, hello neighbor. here are listings: https://ww…

It’s not so much the exact number as the approximate order of magnitude.

For anyone living in one of the equivalent world cities (say, NyC, London, Shanghai, Paris, San Fran- you may quibble with me in the exact list but you know what I mean) these prices aren’t even remotely plausible.

(The one possible exception might be Berlin but that info could be dated)

Re: An average family in Tokyo can own a new house for $850/month

#33

Earlier quoted context omitted.

Houses in the U.S. are largely built by profit maximizing developers who know that the typical American homebuyer cares more about total square footage than essentially anything else about the house. Is it big? Does it have a nice facade? I'll take it! Houses are typically built exactly "to code", rarely above it.

Isn't that kinda the point of a uniform code of building? At least here the county code requires larger studs and windload due to the weather we get.

There's an argument to be made that if nearly all building just barely meet the legal requirements, then the legal requirements are too steep because we haven't found the bottom.

Compare with NHTSA car safety ratings. Many cars get 4 or 5 stars, but you can still build/buy a car that would be less safe.

Re: An average family in Tokyo can own a new house for $850/month

#34

Zoning is important, but let’s also remember that single-family housing isn’t really a speculative investment vehicle in Japan like it is here. You can either have private equity buying up foreclosed homes and house flipping tv shows or housing being used as housing that most people can afford. America chooses the former, Japan, the latter.

> You can either have private equity buying up foreclosed homes and house flipping tv shows or housing being used as housing that most people can afford. America chooses the former, Japan, the latter.

Even in very expensive markets like Silicon Valley, foreclosures are typically less than 1% of total home sales.

Homes are not a speculative investment either. Recent studies have shown investing in housing to be safer than investing in stocks, but with similar returns, over a time period stretching back to 1870: https://marginalrevolution.com/marginalrevolution/2019/03/th...

Re: An average family in Tokyo can own a new house for $850/month

#35

Earlier quoted context omitted.

that house looks great for $850/mo, and a bmw out front to boot. where do i sign up (in LA)?

You can get a large house that gets a lot of sun and is somewhat walkable / bikeable in Compton for $350k. With 20% down and all taxes & fees & insurance included, that's close to $1700/mo. In San Bernardino, you can get stuff for $250k, which about $1200/mo. You can get trailers in Riverside for $150k, which is about $730/mo.

Is that new construction like in TFA?

$300k for new construction is ludicrously cheap for most coastal California cities. I was told to budget $150-250k for permits when I considered buying land and building my own house in Santa Barbara.

Both my current and my previous house would be illegal to build today because they are too large (even though both houses comfortably fit the frontage requirements, there is an additional X square feet of livable space per Y square feet of lot; in all R-1 zones, the calculation is such that a single-story house can usually hit the dwelling-space limit, so most 2 story houses in town would be illegal to build today).

Re: An average family in Tokyo can own a new house for $850/month

#36
Japan may not be the ideal economic model.

In the 1980s, Japan had an enormous economic bubble. (This was the period when MITI, the Ministry of International Trade and Industry, was the ultimate Platonic ideal of how to run a country's economy and the Japanese Fifth Generation computing project was going to eliminate "programming" as a job category.) This bubble burst in 1990-1991. It was bad.

"GDP fell from $5.33 trillion to $4.36 trillion in nominal terms, real wages fell around 5%,... Many Japanese companies replaced a large part of their workforce with temporary workers, who had little job security and fewer benefits. As of 2009, these non-traditional employees made up more than a third of the labor force. For the wider Japanese workforce, wages have stagnated. From their peak in 1997, real wages have since fallen around 13%..[as of 2013]."

https://en.wikipedia.org/wiki/Lost_Decade_(Japan)

"Japan's annual land prices averaged nationwide have finally risen since the asset bubble collapse, though only mildly at 0.1%, a process that has taken 26 years to show up statistically. [undated]

"By 2004, prime "A" property in Tokyo's financial districts had slumped to less than 1 percent of its peak, and Tokyo's residential homes were less than a tenth of their peak,...

"The Nikkei 225 at the Tokyo Stock Exchange plunged from a height of 38,915 at the end of December 1989 to 14,309 at the end of August 1992. By 11 March 2003, it plunged to the post-bubble low of 7,862."

https://en.wikipedia.org/wiki/Japanese_asset_price_bubble

"After a long climb during the decades of Japan’s economic miracle, prices exploded in the late eighties in the frenzy of the bubble economy. Over the following decade, prices collapsed by over 80%, hitting a low in 2002. Since then however, prices have increased and we are not in the middle of a stable period of growth with a positive outlook for the future."

https://housingjapan.com/buy/history/ [I note: "Housing Japan is the leading real estate agent for international clients looking to rent, buy or invest in the Tokyo property market."]

"Tokyo’s property market has had its ups and downs. At the peak of the bubble in 1989, some condos were selling for more than 1 billion yen, and buildings with more than 30 floors started springing up.

"After the bubble, prices plummeted. In 2002, the price per tsubo was about half that of the bubble era. But easier housing loans and low interest rates helped spur demand for new condos."

https://asia.nikkei.com/Business/Markets/Property/Tokyo-prop... [Has a nice graph of Tokyo condo prices, per-tsubo (3.3 sq. meters).]

Re: An average family in Tokyo can own a new house for $850/month

#37
> The first thing to note is that in Japan, housing isn’t an investment. It’s a place to live.

Fixing this can be a major obstacle in countries with inadequate pension systems. In countries where dependency on rising property values is the chief or sole form of retirement planing for vast numbers of people, fixing a broken housing market becomes dependent on fixing the retirement system.

And when land values are consistently propped up by government to a greater degree than other investments, it moves people even more into land speculation as their retirement investment because of its artificial safety.

Re: An average family in Tokyo can own a new house for $850/month

#38

Earlier quoted context omitted.

Sayonara sunlight, hello neighbor. This is the sort of thing that markets solve really well. If you want a dwelling unit with those properties, pay for it. If they're less important to you than cost, don't. If one is $300,000 and the other $600,000, it's very reasonable to choose affordability and go to a park.

The problem comes when you cannot afford to pay for it.

That really isn't a problem. So long as you can afford something where your basic needs are met: four walls, clean, safe, sturdy, etc, nobody's entitled to waterfront views. The idea is you create value through your work and utilize the proceeds to upgrade your residence, if that's what you value.

Re: An average family in Tokyo can own a new house for $850/month

#39

Earlier quoted context omitted.

Sayonara sunlight, hello neighbor. This is the sort of thing that markets solve really well. If you want a dwelling unit with those properties, pay for it. If they're less important to you than cost, don't. If one is $300,000 and the other $600,000, it's very reasonable to choose affordability and go to a park.

The problem comes when you cannot afford to pay for it.

And? Go somewhere cheaper?

Re: An average family in Tokyo can own a new house for $850/month

#40
post #9

I think this headline is misleading in 2 ways. 1. yes you might get a house at this price but it's either 1-2 hours out of the city center (which is fine, just saying Tokyo is large.) Or alternatively it's in bad neighborhoods. (bad is relative if you are from the US) 2. your house will most likely look like this: https://www.ii-ie2.net/dat/5ba1164d.jpg Sayonara sunlight, hello neighbor. here are listings: https://ww…

Yeah I don't care about sunlight. I'd prefer to have less honestly.
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