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Homes in 97% of U.S. cities are overvalued, Moody's says

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Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#521

Post by vletal »

turtledove wrote: post #345

The sooner we collectively decide that housing shouldn't be a market, the better. We all need it, and we should figure out mechanisms to make it available to all. Practically that means paying to build and maintain housing stocks, changing tax incentives so developers are incentivized to build more housing and less luxury housing, charging a premium for unused land in desirable areas (parking lots don't house people)…

Are you American? I feel like you are assuming taking extreme measures to solve US problems. Have you considered how similar measures already affect markets in other countries?

ad. "not a market" - When you do that are you going to also forgive my crazy large mortgage?

ad. "protect tenants" - In Czechia we protect the tenants more than landlords. If you mean that this should scare people from renting that works quite well. People do not have much leverage here to kick out tenants who are problematic or skip payments.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#522

Post by halotrope »

digisign wrote: post #458
halotrope wrote: post #450

Everyone seems to agree that speculation in housing is a global problem with adverse effects on communities and societies. Toronto seems to be a good example of how the end-game will look like. People are priced out of owning a home for good and/or have to leave places where they might have been living for their whole life. Rent controls don't seem to work, and just cancelling (by whatever means) the market for real…

A good list. Odd that, build enough homes for the population, is not mentioned however.

Yes I forgot that. But just building seems to be not as straightforward either as construction cost and regulation make building non-luxury housing difficult to justify economically. At least in denser urban areas.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#523

Post by ChrisMarshallNY »

radicalbyte wrote: post #344
ChrisMarshallNY wrote: post #307

Earlier quoted context omitted.

Don’t know how it is in most of Europe, but I think that, in the UK, you don’t actually own the land your house sits on; Lord Such-and-Such owns it, and collects rent from you. In the US, we own the land, and that is usually the real value. I’m the proud owner of a 0.125-acre New York postage stamp. It’s in a fairly affluent area, so is fairly valuable. In Wyoming, they’d laugh at it. I think Japan is similar.

That is not correct. In the UK, there is a concept of Freehold and Leasehold. In the former case you own the land under and everything built on it. In most of the country you buy the Freehold. The Leasehold gives you ownership of the building but not the land under it. You lease the land from the owner. I've personally considered this form of "ownership" a trap. It has become more common in recent years as a way for…

It’s not incorrect, either. I phrased it carefully, to indicate that I don’t know for sure. It describes my grandparents’ house, in Liverpool (I assume it was a “leasehold.” I never knew the official name). I know that my mother did not inherit their house, but there may have been other factors, involved.

Technically, I guess I don’t “own” my own land, either, but I pay (significant) taxes on it (because I “own” it, according to the taxing authorities. They don’t tax the bank; they tax me). The taxes are assessed on the total value of the land and the building, and location^3 is a fairly significant coefficient.

Land is a weird (but frequently lucrative) investment. You can’t lock it in a safe, and, if your neighbors start a hog farm, you can’t just pick it up and move away.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#524

Post by nivenkos »

bjourne wrote: post #478
nivenkos wrote: post #397

Earlier quoted context omitted.

A more practical solution is housing coops like the BRF system in Sweden. Individual landlordism is mostly banned (there are some company rentals though) - you buy the place you live in, and there are restrictions on renting it out (no more than 2 years in a row, etc.). It's helped a lot here. I don't think that social housing is a good solution. It's a complete disaster here in Sweden, with 12+ year waiting times, a…

Sweden doesn't have social housing. What you are discussing is called rent control and means that landlords can't decide rents for their properties by themselves. Without rent control you'd get even more segregated cities as many areas would become too expensive for most to live. Landlords and their lobby organizations want rent control abolished though because doubled rents would greatly increase their profits.

The First hand contract inequality is terrible though. Just ban landlordism directly and let people buy their residences.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#525

Post by closedloop129 »

nxm wrote: post #509
cloutchaser wrote: post #492

Earlier quoted context omitted.

The problem in almost every country with out of control house prices is low interest rates since the dot com crash. That's where everything went wrong. At 0-1% interest you can get insane mortgages for 90-95% of the value of the property, pushing the price up to where people spend every last cent they can on mortgages, but at $xxxx per month you can easily afford hundreds of thousands of dollars in mortgages. Raise i…

If there is a recession, young people will not be in a position to buy homes

They will, as long as they have a job.

All the forfeited houses from the people who cannot serve their mortgages will flood the market and drive down prices.

Additionally, all the surplus construction infrastructure will be there, fighting for every project, which will make new houses cheap.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#526

Post by sofixa »

cycrutchfield wrote: post #389
turtledove wrote: post #367

Earlier quoted context omitted.

The government would pay to do it. Or there would be taxes or rents paid to developers in accordance to the number of people housed x the quality of the housing. Or people like me would rent units because housing is important, and rent their space at cost. We can choose to pay for housing for everyone, we just have to adjust the formulas we use to decide who benefits.

So basically everybody should live in a Khrushchyovka. Real central planning communist slum type housing.

I grew up in a "commie block" as everyone aaround me. There was nothing wrong with them (decently sized, balconies, etc.) besides the comparatively poor insulation. It was certainly much better than the quality of your average Parisian housing in a century old building.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#527

Post by Kiro »

maccard wrote: post #489
glerk wrote: post #481

Earlier quoted context omitted.

Housing shouldn't be a market? Then how would housing be allocated? The state builds and gives housing to everyone? Maybe you should take a trip to Eastern Europe one of these days to see the final result of what you're advocating. Pros: everyone is given an apartment to live in. Cons: your city's skyline looks like this: https://i.imgur.com/5X1sIeP.jpg "We collectively decide" just means you decide for me. You think…

Eastern European cities aren't the only examples. Nordic cities (e.g. Stockholm and Copenhagen) are great examples - they have different problems but people are housed. Cities like Berlin don't have a speculative housing market due to excellent renters rights meaning the majority of people rent long term. Finally, Vienna is the poster child for "how to do social housing".

What is Stockholm a great example of? There's still a housing market with absurd prices and all signs of a bubble.

It's impossible to get an apartment in Stockholm unless you have a 20-year waiting time, buy an illegal third-hand contract or have the wealth to buy an apartment. The housing crisis in Sweden is extreme.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#528

Post by southerntofu »

jillesvangurp wrote: post #464
turtledove wrote: post #345

The sooner we collectively decide that housing shouldn't be a market, the better. We all need it, and we should figure out mechanisms to make it available to all. Practically that means paying to build and maintain housing stocks, changing tax incentives so developers are incentivized to build more housing and less luxury housing, charging a premium for unused land in desirable areas (parking lots don't house people)…

The inevitable outcome of housing inflation and elimination of the middle class is slums: illegal housing. People will have to live somewhere. And when that becomes unaffordable they'll just improvise. This is not a technical problem but a policy problem. The solution is changing the policy. The current policy is to drive up housing prices by creating completely artificial scarcity. All the land is owned and earmarke…

> The current policy is to drive up housing prices by creating completely artificial scarcity.

This is true but not in the way that you mean. As you said there is no shortage of space. But it's important to point out that on a global scale there is no housing shortage either. Vacant dwellings outnumber homeless people by far in most industrialized countries where homelessness is rampant (for example: 3 million empty dwellings here in France).

You seem to imply the problem is housing regulations and NIMBY preventing new constructions, but who cares when the houses are already there. I agree with you the problem is that of policy, but i would say the policy responsible for that immense suffering is "private property", the religious belief that land should be owned and that a piece of paper should dictate whether you can sleep under a roof or not and/or have access to food/healthcare/education.

We can eradicate homelessness in under 48h: it's just that no politician cares at all about poverty from their ivory tower! Just give the police instruction not to intervene for "breaking and entering" in *vacant* housing (or even better, abolish police entirely) and we can rehouse every homeless person in the next two days. Of course it would take a few weeks to rehabilitate some of the housing unit and make them real decent, but even in the meantime old housing would be much better than no housing.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#529

Post by MisterBastahrd »

turtledove wrote: post #454
cycrutchfield wrote: post #433

Earlier quoted context omitted.

No, profit is icky and illegal apparently.

Profiting from housing , yes, is not something I personally consider moral. But also, I believe that we don't need to meet my fairly radical moral stance to make housing more affordable and attainable for all. We can make incremental progress here by just tweaking incentives. We can go further by reducing profits. It's not some binary all or nothing affair.

Well then, feel free to buy a house and sell it at cost. Don't worry about all that money you put into the home over the years to improve or maintain it, either.

Oh, and to add to the utter inanity of what you're proposing, make sure that you sell it at your purchase cost and not the 200%ish extra that they tack on to a 30 year loan at 4% interest.

Go ahead. Chalk it up to a personal experiment and let us know how it turns out in 30 years.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#530

Post by yourusername »

turtledove wrote: post #408
cycrutchfield wrote: post #389

Earlier quoted context omitted.

So basically everybody should live in a Khrushchyovka. Real central planning communist slum type housing.

There's a meme that shows "leftist housing", and it depicts concrete tenements. It shows "capitalist housing", and it depicts tents under a bridge. Haha. But memes aside, no, there are many, many examples of public and social housing that are not concrete slums. Look at Singapore, Paris, the Marxhof in Vienna. Quayside Village in Vancouver. If you'd like, I can provide links to many examples from many countries aroun…

Social housing here in the Netherlands isn't quite soviet block but it's poorly built and maintained to the lowest acceptable standard. In streets where one side of the street has been sold to private owners you can see the difference. The privately owned houses are well maintained and have received upgrades where the social housing is merely 'acceptable'. I'm also familiar with how the assignment process for social housing works. I'm not sure how acceptable you think it is to wait 10 years to be able to move to a different city. Social housing must look nice from a distance but i wouldn't want all housing to be social housing.
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