51–60 of 86 posts
If the nominal prices stagnate or even go down, but mortgage interest rates go significantly up, there is no positive change in affordability for the average buyer. The monthly mortgage installment will stay high, only the principal/interest balance within it will change. The sellers are the ones who will get less money, but the buyers, unless they have huge savings, won't benefit much.
Contrary to the wording of the title, this is a good thing for people that treat housing as a place to live instead of an ever appreciating asset.
Housing downturn in an environment of rising interest rates doesn’t help affordability
Obvious question since corp debt uses the same financial black magic as housing loans, will corp debt crash the same way? In the USA there was a law passed past 2008 to deal with CDOs, but banks have found a loop-hole to go around it.
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Is SF obstinate or are the employers that insist on building their businesses there and attracting employees from other areas despite a lack of housing for them the obstinate ones?
Yes obviously it is the people who want to live there who are wrong. How dare they? It's funny, especially considering all the 800K people who already live in San Francisco are the beneficiaries of previous liberal zoning rules - who are now pulling up the ladder behind them. The city was like 300K people in 1900. If they'd stopped building houses then, that would be the population now. I wouldn't be here, and assumi…
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Well, Japan hasn't seen population growth. I have a lot of sympathy for deregulation and think it should be the primary tool, though many cities also have a character and you can't replace every construction with a high rise building without destroying the city. Think of Paris or London.
> Well, Japan hasn't seen population growth. I don't know why this is everyone's immediate reaction. I'm saying housing is governed by supply and demand. If you want to drop prices you can either increase supply or decrease demand. They allowed supply to meet demand by increasing supply into flat... ish demand. ([edit] SF and Tokyo both grew ~10% from the mid 90s). So the system works :) > I have a lot of sympathy fo…
What we need to continue to strive for is medium density, where you have a mix of housing types and transit options, and also work options.
In this mode you have a good density level that is in harmony with the surrounding environment, but you can also do things like fix your own house or make changes or improvements. These types of neighborhoods also offer multi-generational living and better social interactions.
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Housing downturn in an environment of rising interest rates doesn’t help affordability
It does for those with savings in things that the government can't print.
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Housing downturn in an environment of rising interest rates doesn’t help affordability
It does for those with savings in things that the government can't print.
Real estate is a thing the government can’t print. When its value goes down, it becomes more affordable to people with savings in fiat.
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Yes obviously it is the people who want to live there who are wrong. How dare they? It's funny, especially considering all the 800K people who already live in San Francisco are the beneficiaries of previous liberal zoning rules - who are now pulling up the ladder behind them. The city was like 300K people in 1900. If they'd stopped building houses then, that would be the population now. I wouldn't be here, and assumi…
So, you are arguing that the existing population should want to have their lives upended, real estate taxes raised, schools over-crowded, family and friends priced out of their homes, quaint neighborhoods turned into skyscraper projects, and endless highway and infrastructure projects to accommodate the employees of new industry when they are happy with the status quo?
I've been waiting for a downturn since I missed the one in 08 and it seems to never come. I've resigned to the fact that I'll probably never own property and eventually move into a camper van.
I think one of the issues is this, there are so, so many people waiting to buy in the downturn with money saved that it will create its own boom. I do wonder though, if all this cash in the bank people are hoarding for the downturn will have other effects on the economy, recession ? I'm in the same boat though, I've saved and invested a shirtload of cash waiting for a downturn.
I think this is basically what happened in mid/late 2020. There was a short-lived crash across all asset classes, from stocks to Manhattan condos, and people piled in with the Fed and other central banks willingly feeding stimulus money to the frenzy.