Priced out of home ownership • Hacker News Board

Re: Priced out of home ownership

#591

Post by slothtrop » Tue, May 28, 2024, 2:14 AM UTC

cgh wrote: post #441

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, at one time it was estimated that roughly 1/3 of Vancouver’s condo supply was vacant. So the city implemented an empty homes tax [0] and promptly raised $115,000,000 in tax revenue [1]. However, the tax is still far too low and it contains various loopholes that allows developers to hold condos empty for years until deep-pocketed buyers show up [2]. Vancouver isn’t unique. Housing is being traded like poker chip…

The vacancy rate in Vancouver is now minimal.

Re: Priced out of home ownership

#592

Post by Auracle » Tue, May 28, 2024, 2:16 AM UTC

WheatMillington wrote: post #231

Auracle wrote: post #204

Earlier quoted context omitted.

I’ll keep shouting this from the rooftops: while it may contribute in some areas, zoning laws are not the primary cause of home prices increasing like they have. For proof, look at any rural (and I mean actual rural) area and how their home prices have also been skyrocketing. It’s supply and demand, with other things being small factors. We either need to vastly increase supply across the entire country somehow, or c…

Supply and Demand is a function of zoning, because more supply cannot happen without the correct zoning happening.

I wish you could go outside my house right now and look around.

Guess what - there’s basically no zoning here. There’s land. If I wanted to put up a 30 story apartment building I could, though I suppose what few neighbors I have might make a stink about it, and it probably wouldn’t make sense when everyone here lives on at least 5 acres.

Yet - somehow, amazingly, prices are still going up. We have a severe supply/demand mismatch in the country that drives prices up across the board.

Re: Priced out of home ownership

#593

Post by nytesky » Tue, May 28, 2024, 2:18 AM UTC

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…

It does seem like we run the risk that if we expand building, especially low cost, nearly turn key rentals, that all the excess supply will be mopped up by corporate landlords like Blackerock etc. it’s a twofold advantage to prop up value of existing property portfolio, and rents have been high for so long with so much demand they may be a good return on capital over a very long term.

To counter this may be impossible; there are limits to how small you can build a SFH, and there is only so much land commuting distance from job centers.

Condos and apartments are generally a very bad investment, have huge disadvantages of high fees and lack of green space, so are a poor substitute. It’s sometimes better than renting, but it can swing wildly based on build quality of building, the maintenance, and competence of the board — very hard to evaluate or hedge against versus a SFH where you have autonomy. And in the US we rarely build family focused condos — so few have playrooms or playgrounds or 3 bed room units (outside NYC)

Re: Priced out of home ownership

#594

Post by zdragnar » Tue, May 28, 2024, 2:19 AM UTC

AnthonyMouse wrote: post #583

the_gipsy wrote: post #512

Earlier quoted context omitted.

Lack of building is not the problem - on the contrary. You cannot realistically build enough so that the rents decrease. And when you build you just fuel the vicious cycle of people -> opportunities -> people.

> You cannot realistically build enough so that the rents decrease. I'm curious what makes you think this. Suppose you built twice as many housing units as you had residents. Rents wouldn't decrease? Why not? Or do you think that a sufficient amount of housing wouldn't fit? For reference, the San Francisco metro area has ~7.5M people in an area of ~3500 square miles. With housing at the population density of Manhatta…

I think they answered in a curt but succinct way:

> when you build you just fuel the vicious cycle of people -> opportunities -> people

So long as a place is desirable to live, people will keep moving there. Obviously there's a logical limit to the argument- things get weird when you build more housing than there are people- but then so too do the logistical issues of sewer, water, electricity, and geology (some locations simply aren't economical to build high rise buildings on).

Re: Priced out of home ownership

#595

Post by Auracle » Tue, May 28, 2024, 2:21 AM UTC

lwansbrough wrote: post #579

Auracle wrote: post #204

Earlier quoted context omitted.

I’ll keep shouting this from the rooftops: while it may contribute in some areas, zoning laws are not the primary cause of home prices increasing like they have. For proof, look at any rural (and I mean actual rural) area and how their home prices have also been skyrocketing. It’s supply and demand, with other things being small factors. We either need to vastly increase supply across the entire country somehow, or c…

> For proof, look at any rural area and how their home prices have also been skyrocketing. Yes, it is supply and demand. And zoning is the largest component of the supply function. If you fix zoning, you fix supply, approximately. Outdated fire code, etc. are also important factors. > or cut down on demand This is called degrowth and it's how you destroy an economy. > Japan literally has homes they’re trying to give…

Zoning is only the largest component of the supply function in major cities. My point is that I could build as much freaking housing as I wanted where I live, of whatever type I wanted. Our local population numbers are relatively stable. Yet prices have still been surging. Why?

I said cut down in demand, not go into full depopulation. That said, at some point we’re going to need to deal with that. We can’t just keep on importing people from the third world forever to offset people making less babies. Just aim for, say - an increase of population of 1% a year. Right now it’s completely uncontrolled and people are somehow shocked that housing prices are out of control.

Even in Tokyo home prices aren’t bad, and that’s with their culture of tearing down and rebuilding every 30 years. My real point though was that the same is true here - most economic opportunities are in cities. Yet our rural housing isn’t getting cheaper, and it’s increasing in cost almost as much as (most) urban centers.

Re: Priced out of home ownership

#596

Post by karma_pharmer » Tue, May 28, 2024, 2:28 AM UTC

lazyasciiart wrote: post #521

Cheer2171 wrote: post #461

Earlier quoted context omitted.

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-...

Ten years ago people talked about how much Seattle was building and how many cranes were everywhere as well - then as now, it’s because all that building is in the same ten square yards of “urban villages” across the city where you are allowed to build densely.

... which are also the same ten square yards where all the butt-in-the-air folded-in-half fent zombies hang out.

Sorry but it's true.

Re: Priced out of home ownership

#597

Post by dzhiurgis » Tue, May 28, 2024, 2:31 AM UTC

estebank wrote: post #499

dzhiurgis wrote: post #451

Earlier quoted context omitted.

> is there maybe some other common cause? Immigration. It's not that immigrants buy up the houses (opposites, we tend to live cramped up in flat shares). It's that they support landlords profits (with cream on top of not knowing your rights) and have overall pressure on market. Building should at least match immigration/population growth. Also not building dense enough. Kiwis always tout "I wouldn't wanna live in a h…

I reject the idea that not having a backyard means that that property is shitty.

It's not my sentiment, but I do see it why it's a big part of culture and life here.

Flats tend to be horrible here. Townhouses are ok and are growing, albeit too slow and too far from public transport.

There was some news yesterday about new row of townhouses around Auckland being classified as rural and unable to receive mail (rural mailboxes must be grouped in one spot, not on each house).

Re: Priced out of home ownership

#598

Post by ImJamal » Tue, May 28, 2024, 2:33 AM UTC

AlexandrB wrote: post #559

FuckButtons wrote: post #545

Earlier quoted context omitted.

The worlds population has doubled since 1974. In every country listed the rate of new building construction has stayed roughly constant or declined since then. You can explain this phenomenon with an Econ 101 supply and demand curve without need for any further elaboration.

That's contradicted by the provided OECD link that shows that in many countries the housing stock per capita has stayed the same or slightly increased since 2011. Yet prices continue to increase.

Are the houses equal though? If houses 20 years ago averaged 1500 square feet and 10 years ago averaged 2000 square feet it would increase the price even if they stock increased.

Re: Priced out of home ownership

#599

Post by dalyons » Tue, May 28, 2024, 2:50 AM UTC

patall wrote: post #321

sneed_chucker wrote: post #287

Earlier quoted context omitted.

The majority of mortgages in the US are fixed rate with a 30 year term. Mortgages originating now will have a rate in the 7% ballpark. In 2021 you could get mortgages with a 2.5% fixed rate. However, it's common for people to refinance down to a lower rate when they come available, so lots of American homeowners have rates in the 2-3% range.

Makes sense, thank you! Actually that would go in line with my suspicion that 'the market' predicts/trends towards a 2 USD = 1 EUR rate within one or two decades.

How are fixed mortgages related to exchange rate forecasts?

Re: Priced out of home ownership

#600

Post by nradov » Tue, May 28, 2024, 2:51 AM UTC

aegypti wrote: post #337

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…

A surplus of housing in Madison, WI is irrelevant to someone living and working in NYC, which has a severe housing shortage. We are still subject to space time.

I don't understand what you mean. Nothing prevents people from moving to Madison. And let's not have any spurious claims that there are no good jobs in Madison: the unemployment rate is significantly lower in WI than in NY.