Priced out of home ownership • Hacker News Board

Re: Priced out of home ownership

#431

Post by Plasmoid » Mon, May 27, 2024, 10:02 PM UTC

grumple wrote: post #282

lwansbrough wrote: post #178

Earlier quoted context omitted.

That's not really how it works as far as I understand. Their are economic epicentres, and building near them means greater productivity and economic growth. The further out you get, the lower the ROI. The problem is, many cities in the west, controlled by an aging population of "haves" who bought when houses were the price of a sack of beans, feel that they are entitled to live in the same neighbourhood they purchase…

> feel that they are entitled to live in the same neighbourhood they purchased in. It's not a feeling, it's how purchasing things works.

>> feel that they are entitled to live in the same neighbourhood they purchased in.

> It's not a feeling, it's how purchasing things works.

He means that people feel they get to control the neighbourhood. Exercising control over property they don't actually own.

Re: Priced out of home ownership

#432

Post by nemomarx » Mon, May 27, 2024, 10:03 PM UTC

ivan_gammel wrote: post #421

toasterlovin wrote: post #389

Earlier quoted context omitted.

Just to conceptualize this, it's like every 5 bedroom house having 1 unused bedroom, perhaps being used as an office. Of course, most houses don't have 5 bedrooms, so in reality this is an extra bedroom for every 2 houses. Again, possibly being well used for another purpose. That doesn't seem like a lot of underutilization to me.

Rooms used for another purpose are not called bedrooms. See yourself: https://www.ons.gov.uk/peoplepopulationandcommunity/housing/...

How does a guest bedroom get counted, out of curiosity?

Re: Priced out of home ownership

#433

Post by postalrat » Mon, May 27, 2024, 10:04 PM UTC

djbusby wrote: post #350

postalrat wrote: post #194

Earlier quoted context omitted.

Land is cheap but building a house is expensive. If you want more supply then you are going to need to make building more economical.

In King County WA the assessment would have two line items. Land: 500,000 Improvement: 300,000 They tax that at $800,000

I seen plenty of land around that area for $150k or less. No doubt some land is worth $500k plenty is not anywhere near that.

Re: Priced out of home ownership

#434

Post by tmnvix » Mon, May 27, 2024, 10:04 PM UTC

ubj wrote: post #427

> The growing outcry has raised pressure on the US central bank to cut interest rates to bring relief, a move Federal Reserve chairman Jerome Powell has said is likely at some point. I don't think the solution is as simple as just "cutting rates". Low rates lead to incredibly fierce bidding wars that can drive up the price by tens of thousands of dollars. An acquaintance of mine and his wife bid $50,000 over the aski…

Low rates got us into this mess. It is not a solution.

Re: Priced out of home ownership

#435

Post by sydd » Mon, May 27, 2024, 10:04 PM UTC

tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

IMO the main issue are zoning laws and urbanization. You can find lots of articles about rural areas, small villages elsentially dieing out, while large cities just (try) to grow larger.

Also there is a shift from people living in families to living single or just with one person which is more inefficient and requires more space.

Re: Priced out of home ownership

#436

Post by JumpCrisscross » Mon, May 27, 2024, 10:06 PM UTC

tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

> do Canada, Australia, New Zealand, the US, Britain, Ireland

You picked culturally-similar countries with common law systems and a history of local zoning.

Re: Priced out of home ownership

#437

Post by vladms » Mon, May 27, 2024, 10:07 PM UTC

I find it a bit strange that the article (and also a lot of the discussion here) does not discuss the size of these houses (in square meters per person), or alternatively the distribution of the sizes/areas.

I grew up in a 20 square meter per person apartment (with multiple person living there, for a total size of 60 square meters) - and it was definitely not pleasant. But I feel that nowadays people also expect a lot - for example in The Netherlands the reported average of 65 square meter per person https://longreads.cbs.nl/trends19-eng/economy/figures/constr....

Not discussing what it should be ideal, but if (some) people now want 2x or 3x what they wanted 40 years ago for example (without actually needing it due to a larger family), it's no wonder that there are issues (with prices/availability etc.).

Re: Priced out of home ownership

#438

Post by amelius » Mon, May 27, 2024, 10:08 PM UTC

WalterBright wrote: post #361

tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

Two more causes: 1. People have mortgages with very low interest rates. If they sell the home, they give up that cheap mortgage for a much higher mortgage interest rate with the next home. So, they stay. 2. The capital gains tax exemption of $500,000 has not risen with inflation. Selling your appreciated home will result in a large tax bill. It makes sense to sit in the home until you die, then it gets a basis boost…

Another cause: people live until an older age.

Re: Priced out of home ownership

#439

Post by pfdietz » Mon, May 27, 2024, 10:09 PM UTC

killjoywashere wrote: post #386

neilwilson wrote: post #336

Earlier quoted context omitted.

The issue is always lack of building. Higher interest rates just mask the problem and hand more money to rich people for no effort. The problem is that the private housing production system responds to increased credit availability only at the margins and does not over produce. That’s largely because houses are still hand built and not really substitutable like a vehicle. You don’t generally have a choice of two hous…

> The fix is public policy producing housing in order to force a situation of excess supply. So... we should have paid builders to build more houses during the pandemic?

Eliminate regulations and laws limiting supply.

Re: Priced out of home ownership

#440

Post by mkl95 » Mon, May 27, 2024, 10:09 PM UTC

If you leave in some mid EU country, chances are a lot of your current government's policies are based on "sticking it to the man".

The man used to be an upper-ish class dude (p96+), but due to how horribly slow and uneducated governments are at making data-driven decisions, the man is now a working or middle class dude.

As a result, you will see property prices skyrocket in your area while the government takes 50%+ of your 5% pay raise, leaving you only some pocket change richer than before. But the property owners in your area will be richer every year because their great grandad hunted a bunch of whales or some shit, and so called progressive policy makers are clueless about wealth distribution.