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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

#571

Post by kapuasuite »

southerntofu wrote: post #528
jillesvangurp wrote: post #464

Earlier quoted context omitted.

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…

The problem is, one, that those vacant homes are not necessarily in places people live or want to live (unless we’re shipping homeless people off to empty homes), and two, that homeless people aren’t the only ones in need of housing - there are far more people living in overcrowded housing, or who are unable to move out of their parents’ house, or can’t afford to live without roommates, than there are vacant homes. That’s to say nothing of the people who are overpaying for housing today, whether in rent or mortgage, reducing their overall standard of living.

There’s a massive housing shortage in the United States and it’s acting like a vacuum, sucking up wealth and diverting it to landowners.

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

#572

Post by southerntofu »

kapuasuite wrote: post #571
southerntofu wrote: post #528

Earlier quoted context omitted.

> 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…

The problem is, one, that those vacant homes are not necessarily in places people live or want to live (unless we’re shipping homeless people off to empty homes), and two, that homeless people aren’t the only ones in need of housing - there are far more people living in overcrowded housing, or who are unable to move out of their parents’ house, or can’t afford to live without roommates, than there are vacant homes. T…

> those vacant homes are not necessarily in places people live or want to live

Good point, although i would like data to back that claim. For example in France, 200k empty dwellings are in Paris alone: this does not account for vacant industrial/office space which could also be converted to housing. In all cases, *proposing* (without coercion) homeless people a house somewhere does not sound inhumane at all.

> there are far more people living in overcrowded housing

Good point, too. Although as i said i would like to see data suggesting that the current real estate market (accounting for all vacant units) can't house everyone decently.

> There’s a massive housing shortage in the United States and it’s acting like a vacuum, sucking up wealth and diverting it to landowners.

To be clear, i'm not saying we should stop building houses entirely. But as long as you allow housing to remain vacant, prices are driven by speculation not by actual supply. I believe we should both rehouse homeless people immediately and keep investing in eco-friendly collective, affordable housing.

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

#573

Post by c7DJTLrn »

sakopov wrote: post #511

Average household income vs Average home price in US over the past 70 years. Looks like an average American is going to be a happy renter in about 10-15 years as home ownership prices reach the moon. 1950 - $3,300 - $7,354 1960 - $5,600 - $11,900 1970 - $9,870 - $17,000 1980 - $17,709 - $47,200 1990 - $29,943 - $79,100 2000 - $41,989 - $119,600 2010 - $49,276 - $221,800 2020 - $67,521 - $336,900

"You will own nothing and you will be happy"

God it's depressing. I'm jealous of the generation who bought homes for the equivalent of one year's salary, sat on them while their value multiplied 20x, and then had the economy shut down for two years for their safety. And of course, they received healthy pension increases while the minimum wage remains stagnant.

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

#574

Post by jbverschoor »

jmyeet wrote: post #173

Moody's who quite famously engaged in what should be criminal conspiracy regarding the rating of MBS [1] leading up to 2008 that cost pension funds, mutual funds and investors billions of dollars makes further statements about the housing market. Sorry but I don't put a lot of stock in what Moody's says about anything. There's pretty strong evidence that the rise in house values is structural not speculative. This is…

Housing, stockmarket, any asset or commodity.

Maybe it has something to do with all the money that has been printed, and the insane low interest rates

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

#575

Post by dunk010 »

bkjelden wrote: post #136
pjmorris wrote: post #91

Earlier quoted context omitted.

I think there's a more concrete measure of value: house prices related to income. Historically (Robert Shiller has a chart for the US going back to 1890) house prices (and mortgages and rents) have maintained a stable relationship with income. Occasionally that relationship is strained but it has usually fallen back in line. One exception to this was the extraordinary, ongoing, support to the financial system post-20…

One major problem I see with comparing housing prices to income is that most homebuyers in the US are using leverage (a mortgage) to buy their home, and the last 15 years or so have seen comparatively low mortgage rates compared to the several decades beforehand. Housing prices have been able to balloon because debt has been very, very cheap. Whether or not that will continue remains to be seen.

Yup, buried half way down the page this is the simple answer. Cheap money means people can and do borrow more.

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

#576

Post by gruez »

southerntofu wrote: post #572
kapuasuite wrote: post #571

Earlier quoted context omitted.

The problem is, one, that those vacant homes are not necessarily in places people live or want to live (unless we’re shipping homeless people off to empty homes), and two, that homeless people aren’t the only ones in need of housing - there are far more people living in overcrowded housing, or who are unable to move out of their parents’ house, or can’t afford to live without roommates, than there are vacant homes. T…

> those vacant homes are not necessarily in places people live or want to live Good point, although i would like data to back that claim. For example in France, 200k empty dwellings are in Paris alone: this does not account for vacant industrial/office space which could also be converted to housing. In all cases, *proposing* (without coercion) homeless people a house somewhere does not sound inhumane at all. > there…

>For example in France, 200k empty dwellings are in Paris alone

Source? A quick search only turns a figure half of that: https://www.statista.com/statistics/1290578/number-homes-par...

Also, just because it's "vacant" doesn't mean it can actually be used to house homeless people. It could be undergoing renovations, or on the rental market.

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

#577

Post by nivenkos »

bjourne wrote: post #562
nivenkos wrote: post #524

Earlier quoted context omitted.

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

The probability of an average person being able to afford to live in a home in a "nice area" is much higher in Sweden and other countries with rent control than in countries without. There is no shortage of homes, there is a shortage of homes that people can afford.

Hardly anyone can get rent control apartments though. The system has failed.

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

#578

Post by qeternity »

southerntofu wrote: post #566
qeternity wrote: post #537

Earlier quoted context omitted.

> There is no reason we have to pay for anything. Money is not a natural construct and is a leaky abstraction. Our ancestors built housing long before currency was even invented. As you note, there are other ways to pay for things than money. Whether it's "paid in blood" or other barter system, there is always a cost to pay. > We could very easily make housing free for all, or just affordable (see also HLM program in…

> Whether it's "paid in blood" or other barter system, there is always a cost to pay. I meant the social rights/protections had to be paid in blood. But nothing in itself requires payment. We just happen to live in a society which commoditizes everything. If everyone worked some field they're passionate about (and people are passionate about many things) and we evenly shared the work for undesirable jobs (eg. cleanin…

> If everyone worked ... we could have everything for free.

Nothing is free. As you say yourself, everything requires work. This is just physics.

> This is highly uninformed.

Ok sure, I'll bite. Your understanding of supply and demand is extremely naive. An empty dwelling does not mean excess supply. If I own two houses, it's because I want two houses. It's not because we have too many houses. In fact, hoarding is a classic sign that we don't have enough of something.

I think you ought to step back and understand why the things you mention exist. You will find out more by doing that than you will shouting into the void on HN. If it were as easy as you proclaim, we would be doing it. The world is not stupid.

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

#579

Post by unmole »

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)…

Or, we could allow the housing market to respond to high demand by increasing supply instead of artificially restricting it via regulatory capture.

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

#580

Post by b112 »

turtledove wrote: post #438
b112 wrote: post #422

Earlier quoted context omitted.

So many of these ideas are some other vision in disguise. Cars are bad, you see, and therefore, let's pick some irrelevant problem (parking lots), and conflate it with housing issues. First, most places have zero housing issues. Mostly, certain tiny areas(with large populations) of California do, but the rest of North America has no shortage of land to build on. And unlike California, most of the world doesn't seem t…

Surface parking lots take a huge volume of space that could be used to house tens or hundreds of families. It has nothing to do with "cars bad", and everything to do with "why are we letting all this precious resource go so poorly utilized?"

This is the problem. You have an agenda (cars are unimportant / should be banned), therefore, you cite parking lots as "poorly utilized".

You also act as if there is a land shortage. There is not, with exceptions stated above.

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