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The Economist house-price indices

economist.com

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Re: The Economist house-price indices

#41

Post by fallingfrog »

onlyrealcuzzo wrote: post #20
api wrote: post #16

Earlier quoted context omitted.

I do not expect the pension to last. It seems like a failed socioeconomic experiment. Corruption and mismanagement play a role for sure but the big killer is increasing life spans coupled with declining fertility. With 1.5-2 kids per couple and an extra 20 years of retirement the math does not work. The only thing that could save it is crazy economic growth but that is unlikely.

Exactly. It might not sound like a big deal if life expectancy increases from 70-75. That's only a 7% increase! But, when the retirement age is 65, you're retired for TWICE as long. That's a huge difference. Either pension contributions need to increase AT LEAST two-fold, benefits cut in half, or retirement age is always set at life-expectancy - 5 years. Not to mention, somehow now 62 is the new 65. Making the proble…

But those numbers are averages. You can't form your retirement plan to live to the age of exactly 75 no matter what the life expectancy is- the real value could be anywhere from 70 to 105..

Re: The Economist house-price indices

#42

Post by mercutio2 »

tacomonstrous wrote: post #40
mercutio2 wrote: post #37

Earlier quoted context omitted.

Yes, the Illinois fiscal situation is dramatically, vastly worse than California or New York’s situation.

I was referring only to the property taxes. I'm of course aware of the severity of the pension situation both in IL and in Chicago Public Schools.

The contention among some folks is that since real estate is the only captive taxation target (people, and businesses, can leave) for Chicago, the only realistic future scenario for resolving Chicago and Illinois’s pension insolvency is to dramatically raise property taxes. That, in turn, suppresses demand for assumed in-future-more-expensive real estate.

Very Georgist!

Re: The Economist house-price indices

#43

Post by Eridrus »

aphextron wrote: post #26

I have a theory that real estate remains the only undervalued asset class left in the US. All of the attention has been in the stock market over this economic cycle, and people are likely still scarred from '07. Sure the housing market has gotten insane in the Bay Area and a few other large metros. But outside of that there are crazy deals to be had right now.

There are a lot of fixed costs that add significant friction to the housing market.

Re: The Economist house-price indices

#44

Post by tacomonstrous »

mercutio2 wrote: post #42
tacomonstrous wrote: post #40

Earlier quoted context omitted.

I was referring only to the property taxes. I'm of course aware of the severity of the pension situation both in IL and in Chicago Public Schools.

The contention among some folks is that since real estate is the only captive taxation target (people, and businesses, can leave) for Chicago, the only realistic future scenario for resolving Chicago and Illinois’s pension insolvency is to dramatically raise property taxes. That, in turn, suppresses demand for assumed in-future-more-expensive real estate. Very Georgist!

I understand that. I'm just asking for actual evidence of this a) happening, b) dampening current property values.

Re: The Economist house-price indices

#45

Post by mercutio2 »

tacomonstrous wrote: post #44
mercutio2 wrote: post #42

Earlier quoted context omitted.

The contention among some folks is that since real estate is the only captive taxation target (people, and businesses, can leave) for Chicago, the only realistic future scenario for resolving Chicago and Illinois’s pension insolvency is to dramatically raise property taxes. That, in turn, suppresses demand for assumed in-future-more-expensive real estate. Very Georgist!

I understand that. I'm just asking for actual evidence of this a) happening, b) dampening current property values.

Well I, for one, grew up in Chicago, great city, but wouldn’t consider buying real estate there specifically because of the fiscal situation, so you’ve got one data point for reduced demand.

Re: The Economist house-price indices

#46

Post by tacomonstrous »

mercutio2 wrote: post #45
tacomonstrous wrote: post #44

Earlier quoted context omitted.

I understand that. I'm just asking for actual evidence of this a) happening, b) dampening current property values.

Well I, for one, grew up in Chicago, great city, but wouldn’t consider buying real estate there specifically because of the fiscal situation, so you’ve got one data point for reduced demand.

Okay, but I know 50 other people who have bought real estate there. We would as well, if we weren't on the East coast for my job. I don't see any indication that Chicago is cooling as a property market.
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