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Priced out of home ownership

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Re: Priced out of home ownership

#461

Post by Cheer2171 »

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…

Seattle is building far more than many other cities and rents are lowering as a result. Rents are up nationally, but down over 7% in Seattle. If you've visited recently, the amount of new construction and cranes is immense.

https://www.forbes.com/sites/hyunsoorim/2024/05/20/here-are-...

Re: Priced out of home ownership

#462

Post by api »

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…

I agree that there's more than one factor, but not building enough is absolutely a major one. There's tons of data to back this up.

Another one is the hyper-concentration of high paying jobs and other opportunities in a small number of cities.

There's always been a power law distribution for cities and opportunity with larger cities tending to win out, but since roughly 2000 it seems like it's greatly intensified. I've asked this question to many older people and have looked up some stats and both back up the sense that this has gotten significantly worse in the last 2-3 decades.

In the USA if you are not in one of maybe six cities you are second-tier, and it's much harder to find high paying and upwardly mobile jobs. The very top tier cities of SF Bay, NYC, Seattle, and LA are of course fantastically expensive.

Telework helps a bit but generally you still have to do time in one of those cities to establish yourself enough to get good high-paying telework jobs. Telework is often a senior-level thing or something you need a strong network to land.

Re: Priced out of home ownership

#463

Post by anon291 »

ZoomerCretin wrote: post #454
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…

This is akin to denying the existence of climate change or evolution, or that the Earth revolves around the Sun. Yes, housing prices are determined by supply and demand. This was found to be true by a California Circuit of Appeals: https://x.com/CSElmendorf/status/1774115015551074434 This is found to be true by Blackstone, who frequently notes that shortages and low increases in new supply are fundamental to their st…

It's especially dumb because while as a whole rents are increasing in America, there are many desirable parts where it's not. Texas has decreasing rents despite an increasing population

Re: Priced out of home ownership

#464

Post by anon291 »

FactKnower69 wrote: post #310
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…

1000%. I will never get tired of teaching people (it's news to every single one of them!) that at any given time, there are more than 20 empty housing units in the United States for every single homeless person on the street ( https://www.self.inc/info/empty-homes/ ). There is not , nor has there ever been , anything resembling a "housing shortage". We live in a post-scarcity world as far as housing is concerned, and…

[flagged]

Re: Priced out of home ownership

#465

Post by itake »

Tactician_mark wrote: post #456
itake wrote: post #382

Earlier quoted context omitted.

While I agree building housing is a symptom, and not the core problem. But I'm skeptical that increasing building or density would actually lower housing costs. If that were true, high dense cities like Beijing, Tokyo, Singapore, or Hong Kong would have much lower cost housing. Housing more people in a concentrated area creates more demand for services, which creates more demand for housing which jacks up prices. Pac…

Your argument about increasing demand for services isn't convincing. Since there are more people in the area, should supply be higher as well, balancing prices? It seems more likely that costs are higher in cities because there are valuable opportunities for skilled people who demand high salaries, simultaneously encouraging dense living to maximize access and increasing cost of living through the Baumol effect. High…

> Since there are more people in the area, should supply be higher as well, balancing prices?

I think we are starting a conversation about gentrification: Rich white-collar/coat workers move into an area creating demand for service work. There is some price competition for their service work labor, raising wages, but typically housing costs are too high for these workers, so they leave (lowering supply, pushing up wages).

Re: Priced out of home ownership

#466

Post by cyberax »

ajsnigrutin wrote: post #370
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…

Yes, it's lack of building. Half of my city and many other cities around my country were built during the communist 70s and 80s... and then we stopped building and maybe built 5, 6 apartment buildings in the last 30 years. Then urbanization came, centralization, everyone wants to live in a city.. but we're not building more housing. We can look around europe.. how many apartment projects were done in the 70s and 80s,…

On the other hand, Moscow got densified to hell and back during 2000-s. Guess how it affected the housing prices?

Re: Priced out of home ownership

#467

Post by anon291 »

jachee wrote: post #309
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…

> This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence. I've believed for a long time that heavily taxing income from second+ properties, similar to capital gains, would help reduce rent-seeker hoarding, to help free up and reduce the cost of properties for primary-residence owners.

People don't buy vacation homes in generic suburb #5 which is where most people statistically want to buy homes.

Vacation homes are in beautiful tourist areas. That can be a problem for local workers but I doubt this is much of a problem for most markets.

Re: Priced out of home ownership

#468

Post by anon291 »

jachee wrote: post #449
WalterBright wrote: post #405

Earlier quoted context omitted.

Taxes on rental income are already more than capital gains tax rates.

Then they need to be at least doubled, and funneled into individual owner-occupied housing subsidies.

We tried subsidizing individual housing and caused the 2008 recession. It's better to let the homes be owned by those who will pay up whether their renter does or does not. A landlord provides a valuable insurance service in some ways.

Re: Priced out of home ownership

#469

Post by rascul »

jayski wrote: post #339
FactKnower69 wrote: post #310

Earlier quoted context omitted.

1000%. I will never get tired of teaching people (it's news to every single one of them!) that at any given time, there are more than 20 empty housing units in the United States for every single homeless person on the street ( https://www.self.inc/info/empty-homes/ ). There is not , nor has there ever been , anything resembling a "housing shortage". We live in a post-scarcity world as far as housing is concerned, and…

so could this be resolved by having a high tax (~50%) on second/rental/investment homes?

Rents would go up to cover the tax increase.

Re: Priced out of home ownership

#470

Post by Cheer2171 »

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…

Sounds like the asking price was too low.
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