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Job vacancies surge past one million in new record

bbc.co.uk

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Re: Job vacancies surge past one million in new record

#341

Post by Auracle »

outside1234 wrote: post #242
Factorium wrote: post #193

Earlier quoted context omitted.

If you permanently reduce immigration, including deporting unauthorised migrants, you can achieve both of those things. Given the cost of land and building, we should consider Western nations 'full' and only allow immigration 'swaps' from other highly developed countries.

You'll also have nobody to work in the hospitals or pick food for you :)

Until they raise their wages, which is the entire point. Wages have been kept artificially low in the west because of migration for decades and it’s coming to a head.

Re: Job vacancies surge past one million in new record

#342

Post by onlyrealcuzzo »

conductr wrote: post #315
onlyrealcuzzo wrote: post #297

Earlier quoted context omitted.

How is that the flipper's fault? Ultimately, a regular home owner is buying the finished product. If they are willing to pay more for better housing, what's the problem? Of course, they're not willing to "pay more". Interest rates get lowered, and they can keep the same payment and buy more house. The reason flipping is attractive is because Central Banks push up house prices - which flippers capture on leverage. If…

I don’t think it’s anyone’s “fault” but it does contribute to the affordability issue. It’s basically introducing a middle man into the industry that needs his own markup. It’s capitalism in it’s purest form. But also a form that has detrimental consequences to average people wanting to purchase a home. And, that’s where I start to believe it’s a form of malicious compliance to accept it as status quo. However, the q…

How is this different from the middle man at the grocery store who makes pre-made salads and sandwiches and soups, so that you don't have to?

People want to buy "nice" houses. But too many houses for sale need a lot of work done for them still. Enter flippers to make the market.

The average person does not want to buy a house and renovate it for a year while living in it so that they can save $30k. Most people don't have the skills, time, risk appetite, or desire. Let alone all 4. With 2.75% 30-year fixed rates, it's only a savings of $120/m.

Re: Job vacancies surge past one million in new record

#343

Post by onlyrealcuzzo »

jjav wrote: post #337
conductr wrote: post #291

Earlier quoted context omitted.

I've come to believe flipping is a major problem, at least in my locale. A $300K house gets $50K of "improvements", then the investors needs $100K profit after commissions are covered and so we're in the $500K range for the next buyer and very little value was added. It's often the proverbial "lipstick on a pig" house after the renovations. There's little to no regulations on flippers. They can be DIY people that hav…

> I've come to believe flipping is a major problem, at least in my locale. A $300K house gets $50K of "improvements", then the investors needs $100K profit after commissions are covered and so we're in the $500K range for the next buyer and very little value was added. That's not quite how it works though. How much the investor spent in changes is not relevant. What matters is how much the next buyer values those cha…

> What matters is how much the next buyer values those changes.

Flipping doesn't really exist when appreciation is low. Remember how no one was flipping houses in 2010? And then in 2012, suddenly everyone in their mom started flipping houses again?

It only makes sense when asset appreciation is high. You'll find that most of the "value added" is simply them holding the house for 6 months and capturing appreciation (on leverage).

Re: Job vacancies surge past one million in new record

#344

Post by onlyrealcuzzo »

lesuorac wrote: post #328
carom wrote: post #314

Earlier quoted context omitted.

I don't think the 3.5% down payment market is very big. >Between July 2019 and June 2020, the average down payment for a home amounted to 12% of the home value. In the first three months of 2021, 48% of home buyers made a down payment of at least 20% of the home value. 21% of home buyers in that same period made an all-cash purchase. [1] It sounds like 69% are >= 20% down or all cash. I don't think enabling lower inc…

A 3% increase in vacancy rate caused a ~10% decrease in apartment pricing in NYC [1]. Housing is very much at the margin and a small increase/decrease of demand will have an outsized effect on price. However, I'm not going to argue that everybody poorer than me shouldn't have access to a house just so I can get one at a cheaper price ... [1]: https://inhabit.corcoran.com/new-york-city-residential-renta...

> However, I'm not going to argue that everybody poorer than me shouldn't have access to a house just so I can get one at a cheaper price ...

What's wrong with renting? Why are poor people entitled to home ownership when most of the young middle class isn't? Why can't they rent?

There would be no problem with rent if home-ownership wasn't a massive handout from the government by guaranteeing that home prices appreciate more than interest rates. This is extremely unfair to poor people as it is currently - because they can't get in line to get massive amounts of free money. Best they can get is SNAP.

Meanwhile, your local millionaire is getting >$20k per year in asset subsidization.

I don't think that even more manipulation is the solution to the problem. If the government could get out of the business of pumping up house prices while keeping benefits like SNAP, that would go a long way toward fixing inequality.

Re: Job vacancies surge past one million in new record

#345

Post by conductr »

jjav wrote: post #337
conductr wrote: post #291

Earlier quoted context omitted.

I've come to believe flipping is a major problem, at least in my locale. A $300K house gets $50K of "improvements", then the investors needs $100K profit after commissions are covered and so we're in the $500K range for the next buyer and very little value was added. It's often the proverbial "lipstick on a pig" house after the renovations. There's little to no regulations on flippers. They can be DIY people that hav…

> I've come to believe flipping is a major problem, at least in my locale. A $300K house gets $50K of "improvements", then the investors needs $100K profit after commissions are covered and so we're in the $500K range for the next buyer and very little value was added. That's not quite how it works though. How much the investor spent in changes is not relevant. What matters is how much the next buyer values those cha…

> What matters is how much the next buyer values those changes.

The next buyer usually feels like the home is over priced. Because it is. They know it is, but they lack optionality because a majority of the active MLS listings are flipped homes. Think of it as they are forcing the next buyer to pay as much as they can possibly afford. Sure, low interest helps the "afford more" but it doesn't mean they are comfortable or happy spending that amount. It doesn't mean they necessarily value it either. They may have been happy with the original condition at $300K but they never saw that option. It was an off market transaction.

> Only if they spent 50K on improvements that the next buyer feels are worth it an increase the value, then they'll offer more. But in that case, value actually was added.

Sure they feel $50K was added. But not another $100K of profit for the flipper who only held the property for 8 weeks before re-listing it. The $100K, 20% of the new "value", is completely intangible and not real. This is supposed to be real estate after all.

Re: Job vacancies surge past one million in new record

#346

Post by 908B64B197 »

nivenkos wrote: post #74
pibechorro wrote: post #56

Earlier quoted context omitted.

Inflation will make any increase in wages meaningless. It will also further drive investment into housing to escape the free falling cash. The answer is no lockdowns, no bailouts, and no quantitative money printing to oblivion. Let the everything bubble pop and start over with sound first principles. We will get there, but not before politicians make it worse and delay the inevitable defaults.

The answer is to control the housing market and stop it being used an investment against inflation. Force people to invest in industry against inflation - not rent-seeking in housing, or cryptocurrency pyramid schemes. Only allow resident citizens to own the one property they live in, and have the government handle rentals like the old council housing / Folkhemmet homes.

> The answer is to control the housing market and stop it being used an investment against inflation. Force people to invest in industry against inflation - not rent-seeking in housing

This.

Every boomer thinks he's a genius investor for simply blocking all residential development and looking at the price of his house go up. The government knows it and wants to keep the votes coming in so they prop up real estate as much as they can. Notice the same parties will simultaneously try to push some sort of virtue signaling (pro-diversity or whatever) to the younger demographics at the same time. They can't afford to pander to them via housing policy so they have to find something else...

This isn't creating any kind of value, nor innovation. Apple, Google and Facebook, like it or not, created a tremendous amount of wealth for the country. Housing didn't.

Re: Job vacancies surge past one million in new record

#347

Post by conductr »

onlyrealcuzzo wrote: post #342
conductr wrote: post #315

Earlier quoted context omitted.

I don’t think it’s anyone’s “fault” but it does contribute to the affordability issue. It’s basically introducing a middle man into the industry that needs his own markup. It’s capitalism in it’s purest form. But also a form that has detrimental consequences to average people wanting to purchase a home. And, that’s where I start to believe it’s a form of malicious compliance to accept it as status quo. However, the q…

How is this different from the middle man at the grocery store who makes pre-made salads and sandwiches and soups, so that you don't have to? People want to buy "nice" houses. But too many houses for sale need a lot of work done for them still. Enter flippers to make the market. The average person does not want to buy a house and renovate it for a year while living in it so that they can save $30k. Most people don't…

I feel like your stance is coming from a place of theory, like you're pointing out econ 101 and theory of supply and demand. From that perspective, you're correct. Flippers are filling a need/void in the market. I get all of that. What's out of whack is the flippers profit and how much market penetration they have and how they are not actually improving properties. Sure they look nice, but behind the walls they actually screwed a lot up in the process of making it "nice." Things that will cause major issues down the road. If this was known, the "value" calculation turns into a risk calculation very quick. (Home inspections are mostly a joke by the way).

If capital is so cheap, why is there no convenient vehicle that allows the buyer to buy an ugly home and hire a contractor to fix it up before moving in? (Construction loans are a joke). The $300K house with $50K fixes now cost $350K which is the value that was added. The flipper added $100K of fake value. I don't see that as real value just because some sucker came and paid it. People overpay for houses even in hot markets, all, the, time. People are motivated by all kinds of things. They have time constraints, moving for a job, kids starting school, etc, etc and sometimes they just pay what they have to to get what they want. It doesn't mean it's right and having so much of people's income going towards a mortgage isn't good for anyone except the flipper. So while I understand they play a part of today's real estate industry construct, I feel like we'd collectively be better off without them.

When flipping reaches a high level of market penetration (eg. a majority of listings are flipped homes) it gets more perverse. The pricing is completely made up, borderline or outright collusion is taking place, and the prices do not reflect value. Housing is a need, so somebody is paying the price and thus meeting your definition of "value add" but it's not real.

> How is this different from the middle man at the grocery store who makes pre-made salads and sandwiches and soups, so that you don't have to?

It's not. But his prices likely reflect something reasonable. And if not, I have infinite optionality. Without optionality, it turns into the ballpark where a hotdog cost $15

Re: Job vacancies surge past one million in new record

#348

Post by effingwewt »

GordonS wrote: post #276
s0rce wrote: post #252

Earlier quoted context omitted.

Many companies don't have sufficient margins to raise wages. Hopefully this isn't confused as me endorsing subpar wages, simply that those business can't be sustained or will just endlessly be looking for someone willing to work for cheap because hiring someone for more will actually cost them money. They may be better of turning away some customers vs. hiring someone for a higher wage to support more demand.

Many of the businesses pleading poverty have execs making millions a year - funny how there is never any issue awarding huge bonuses for the top brass, but the cupboard is always bare for employees.

Seriously if we stopped letting a dew parasites at the top leech all the money out of businesses we wouldn't have this problem. We have entire C Suites getting overpaid while the people who do the actual work can't even afford to live where they work.

Something's gotta give.

Re: Job vacancies surge past one million in new record

#349

Post by effingwewt »

luckylion wrote: post #231
tonyedgecombe wrote: post #212

Earlier quoted context omitted.

He must be particularly frugal then as the government doesn't pay you much to sit on your backside. https://www.gov.uk/jobseekers-allowance

I'm in Germany, but it's a similar amount (+ rent, internet, utilities, health insurance etc). He has the basics like a cell phone, flat screen and playstation and seems to be content with it.

There will always be people willing to accept the bare minimum. That doesn't have anything to do with the fact that those who do work are still in poverty, with no way out.

Also many have never had a single vacation in their lives. Some just needed the break.

e-spells

Re: Job vacancies surge past one million in new record

#350

Post by [deleted] »

WhompingWindows wrote: post #187

How does the global job vacancy market look? Here in the US, a lot of local restaurants and retail stores are hiring; practically every place you enter has a NOW HIRING sign out front. I'd say immigration would be a huge boon to many of these small businesses, but when I spoke to one restaurant owner, he bemoaned the labor shortage and a $15 minimum wage. It'd kill his prices, he'd lose customers. Then, in other rant…

[deleted]
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