501–510 of 550 posts
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Because demand outran the supply. Prices drop when demand falls below supply. Not when new supply is added.
Diiid you read what they said about Australia? > the number of dwellings increased by 19% while the population increased by a smaller 16% That is the opposite of demand outrunning supply.
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I think there is another element, private equity (PE) has got involved in the housing market, and like anything that PE gets involved with it burns it to the ground and then exits with it's profit leaving behind a wasteland. PE equity will do anything to get their profit no matter who it hurts
Private equity owns about 500,000 homes nationwide, so like less than a half of a percent. Anyway they got into the housing market because the margins are so good because everybody refuses to allow new housing to be built. Congratulations, you played yourselves.
There's plausible argument as to network effects (e.g. my neighbor is charging that much, so why can't I?), as well as changing unit types to rentals, limiting owner-occupied supply and hence driving up prices.
I mean, I imagine it can be kind of similar in the stock market, where that you don't actually need to buy all a company's shares in existence to bid up a stock's price... you only need to buy enough of the available float to raise prices (sometimes which can be <0.5% of shares in existence).
I think this is all demand/supply problem. There were way more rental listings May/June 2024 than this year.
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I think Vienna somewhat functions like this, and it seems to be fine. Not that individuals can’t literally own property and rent it out, but that most housing options are government owned.
actually a lot is privately owned, but by law 2/3rd of every rental property must be offered as subsidized by the city. so in practice you own the building, but the city decides who gets to rent 2/3rds of it since the subsidized units are only given to people who have a low enough income.
The problem is absolutley that housing is too expensive, which of course a bunch of realtors are not going to point out. Increasing wages will not fix the housing crisis, and will just drive prices higher. How convenient for a bunch of realtors...
In my neck of the woods (New England), home prices have doubled since March of 2020. I have yet to read a comprehensive overview of how this happened and how we get out of it. Of course, people went nuts offering over the asking price when interest rates were super low so I understand, to some degree, that baselines were reset. But the current housing market doesn't feel sustainable. I don't understand how a proper m…
Now that the rates have gone up, that money is chasing lower downside risk investments. Assets and commodities are the safest place to park cash when you can’t trust monetary policy to protect savings.
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and your evidence that property prices are almost entirely set by wages is?
Want to make a bet on what happens to rents in South Padre Island, TX (near SpaceX's Starbase) in the next 6 months? Want to make a bet on what happens to rents in San Francisco after Anthropic's or OpenAI's rents after they IPO? There's no reason either event should decrease supply or increase demand, correct? So prices should be stable?
Separately - are you against minimum wage increases as a way to make things more affordable?
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"Basketball players are extremely tall." "Go tell that to the middle school travel team in my neighborhood." Why are you even making this comment? The comment you responded to was obviously talking about median wages of the entire US population. Real Wages are near all-time highs - it's just a fact, you can look up the data yourself.
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> But the vast majority of such people's financial outcome is actually from being a landlord, that is doing literally nothing except holding a piece of paper granting them monopoly on a plot of land This is how I know that you've never tried to run houses. If you hire out a property manager and all of your maintenance you are not making money. I have to be an electrician, a plumber, a painter, a drywaller, an enginee…
No I do "run houses." I bought a house, rented it out, paid a bit for maintenance throughout, covered the entire mortgage the entire time, then sold it for 50% highly levered capital gain in ~4 years. It's not because I'm an awesome landlord or property manager. I did the bare minimum. It's because the location appreciated thanks to the community surrounding the house, which is the driving force of the vast majority…
One tenant losing their job, getting some sort of medical issue, or even a poorly trained pet can reverse 2 years of profit. These happen all the time.
Personally, the keyboard jockeys talking about how easy contractors have it is hilarious, so I guess we both get a laugh today
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> And even now, banks really hate lending to people not already "on the ladder" to use a British term. TBF, would you give some randomer a few hundred grand without a strong guarantee you'd get it all back?
> without a strong guarantee you'd get it all back? Mortgages are backed by the asset you are buying. $400k for a house is backed by the house. On top of that, almost every bank can sell off those mortgages and get the cash back immediately. So, you are correct, I would not lend hundreds of thousands unsecured to a random person, but if I had the disposable capital, though, I WOULD buy a house with that money, and pr…
And the deposit. A bad faith actor could immediately default on their brand new mortgage and the bank would need to spend money going through the courts reclaiming then selling the house.... That simply costs money . The deposit covers that risk.
This is not to mention people burning a house down. Bank can hardly recoup the sale price from a burnt out husk.
If houses were such low risk assets, banks would be buying them. They wouldn't be selling you a shovel in a goldrush and letting you take all the risk
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Want to make a bet on what happens to rents in South Padre Island, TX (near SpaceX's Starbase) in the next 6 months? Want to make a bet on what happens to rents in San Francisco after Anthropic's or OpenAI's rents after they IPO? There's no reason either event should decrease supply or increase demand, correct? So prices should be stable?
so you don't have any evidence? you are just hoping there will be evidence in the future? Separately - are you against minimum wage increases as a way to make things more affordable?
Surely if I'm wrong, you're willing to bet on it, correct? Easy money for you? Of course you won't because you obviously know this dynamic is real lmao
https://www.nber.org/papers/w33576
Yes, minimum wage as a way to make things more affordable is mostly a bad idea. https://www.sciencedirect.com/science/article/abs/pii/S00941...
> Increases in state minimum wages significantly reduce the incidence of renters defaulting on their lease contracts by 1.7 percentage points over three months, relative to similar renters who did not experience an increase in the minimum wage. This represents 10.6% fewer monthly defaults. However, this effect slowly decreases over time as landlords react to wage increases by increasing rents.