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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

#721

Post by Ekaros »

carapace wrote: post #720
Ekaros wrote: post #711

Earlier quoted context omitted.

Seems like rent controls are the issues. Causing markets to be inefficient. No surprises there. Get rid of them and maybe supply increases as it can better match demand and capability of renters to pay.

In a world w/o rent control, how do you imagine things playing out here? If the landlord lowered rates now and got tenants (without rent control), then demand rebounds, does the landlord then increase the rent again? Wouldn't that put a lot of the new lower-rent renters back out on the street? Anyway, the OP's point stands: there are perfectly good homes going empty. They aren't out in the woods. They are right here…

Yes, terminate the contract according to local regulations. Rent again for higher price. Then those who can't afford would need to either move out to cheaper regions or find ways to pay the correct market rate.

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

#722

Post by s1artibartfast »

throw123123123 wrote: post #467
usrn wrote: post #355

Earlier quoted context omitted.

Perhaps legal immigration is but immigration overall is very high. I've hit my quota, here's my reply: illegal immigrants still have to live somewhere So they're going to take housing off the market. They manage to rent houses in various ways (employers, government programs, ngos etc.)

An illegal immigrant cant have a bank account, credit check or buy a home. Is that what you perceive as competition in the housing market?

I'm places like California, illegal immigrants can get state issued drivers license and open bank accounts, and that ignores the simplicity of renting or owning a house in another's name

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

#723

Post by carapace »

Ekaros wrote: post #721
carapace wrote: post #720

Earlier quoted context omitted.

In a world w/o rent control, how do you imagine things playing out here? If the landlord lowered rates now and got tenants (without rent control), then demand rebounds, does the landlord then increase the rent again? Wouldn't that put a lot of the new lower-rent renters back out on the street? Anyway, the OP's point stands: there are perfectly good homes going empty. They aren't out in the woods. They are right here…

Yes, terminate the contract according to local regulations. Rent again for higher price. Then those who can't afford would need to either move out to cheaper regions or find ways to pay the correct market rate.

That seems like it would make for a pretty precarious living situation for people who can't find ways to pay the correct market rate, eh?

The bottom line (no pun intended) is that the corporation that owns Park Merced has (presumably) done the math and they expect to make more money by keeping the apartments empty and eating the losses now (and paying the overhead of evicting gangs of squatters) so they can rent them later at the "correct" market rate (a pretty likely speculation, I'll grant them) than by renting them at a market rate that fills them up again now and getting locked in to rent control at the new, lower rates later on.

So, in other words, the poor people can't live there because someday soon the rich people will almost certainly want to live there again.

What you suggest would instead let the poor people stay in the apartments until the rich people wanted back in, so I guess that's an improvement?

But I don't follow how getting rid of rent control would incentivize supply increases?

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

#724

Post by dodobirdlord »

somenameforme wrote: post #423
dodobirdlord wrote: post #302

Earlier quoted context omitted.

The crux of MMT is the idea that spending creates money and taxing destroys money, so deficits are made up and only inflation matters. Doesn’t seem like a “so much for” moment for MMT, which also predicts this if there’s too much money in the economy. The real question is whether there’s political appetite for the MMT-prescribed treatment here, which is to significantly raise taxes. I’m guessing no.

Why would taxation "destroy money" in times of endless deficits? All that taxed money, and much more on top, is spent before it's even received.

The government has a money source and a money sink, and the idea that input and output must balance is an anachronism dating to days of physical currency. Under MMT, the government spends the amount it needs to spend to fulfill its obligations, and taxes the amount it needs to tax to prevent inflation. Under this model the purpose of taxation is not to collect money so that it can be spent (since government spending comes from the money source), but rather to collect money so that it can be destroyed by feeding it into the government's money sink. In a growing economy with a growing population it's implausible that balancing inflow and outflow would be ideal, since over long time scales that would result in the number of dollars per person and per unit of economic activity to decrease, leading to deflation.

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

#725

Post by pcmoney »

AftHurrahWinch wrote: post #686
chrisseaton wrote: post #430

Earlier quoted context omitted.

In Europe they don’t even normally have physicals! The NHS has never just checked up on me like that - they just couldn’t afford to do it.

NHS Health Check is the equivalent of the Medicare Annual Wellness Visit. It's recommended every five years, starting at age 40, for people without pre-existing conditions. For people with pre-existing conditions it begins at a younger age and is recommended more frequently, based on the determination of your GP Surgery. You should get your first invitation to an NHS Health Check around the time of your 40th birthday…

Physicals are annual in the US and done pretty much every year and covered 100% by every insurance I have ever had.

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

#726

Post by imapeopleperson »

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)…

> I'm also of the much more radical opinion that we should protect tenants over landlords in nearly every case,

At least you understand this is radical. Developers/landlords are the ones providing and maintaining housing, not tenants. The government is incapable of doing this themselves which is why it’s left to the free markets.

The only real issue is that the ‘free markets’ are anything but. Governments overly try to dictate policy which continues to hurt us (a well known feature is state run economies)

Examples of this are zoning restrictions (NIMBY) and rent control.

Broad, idealistic government policies are a disease; they will never be as efficient as entrepreneurs.

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

#727

Post by refurb »

KptMarchewa wrote: post #660
refurb wrote: post #620

Earlier quoted context omitted.

No doubt you'll need more "fixes" before you're done. It's like rent control in SF or public housing in Singapore. Design a new system and you'll create loopholes to be exploited. Fix those and new loopholes are created. And on and on. Easier to just remove government restrictions to supply and build until prices come down.

>public housing in Singapore Which is a huge success.

Success how?

If you're talking about providing housing in a country that had little quality housing 70 years ago, then yes, it's successful.

If it's providing affordable housing for young people, then I'd challenge that. You can't even apply for public housing unless you are married (otherwise wait until after you are 35). The government overbuilt before, so now it's a 4-5 year wait after you win a lottery to get a house. People are still pumping real estate like crazy and the average home in the resale market is >$1M now (which is a 3 bedroom, 100 sq m apartment with a 99 year lease).

Singapore is stuck in the exact same situation as every other developed country - housing is an asset that the middle class expects a healthy return on, yet increasing costs are a barrier to new owners.

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

#728

Post by digisign »

halotrope wrote: post #522
digisign wrote: post #458

Earlier quoted context omitted.

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.

Agreed those restrictions should be... restricted. But, even luxury housing gets old. The primary driver remains a shortage in supply, everything else is approaching long tail.

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

#729

Post by joshspankit »

trgn wrote: post #271
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…

The US is rotating from housing as commodity investment to housing as intergenerational asset, something which has happened in a lot of other countries already (see e.g. Western Europe, mentioned in other comments here). House prices will remain up because any gain from sale will be plowed into the next home. It's a ratchet upward. Higher mortgage rates are somewhat irrelevant in this dynamic, because the home itself…

I’ve seen the houses being built and “intergenerational asset” is an almost laughable assumption (not by you, but by the American public). Yes the land is worth $$, but I would be surprised if a currently-priced $300k home lasts more than 20 years without needing a $50-100k injection and who knows what labour and materials will actually cost by then.

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

#730

Post by cplusplusfellow »

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)…

I’m sorry but respectfully, literally none of this will effect the outcomes you desire. You will assuredly constrain supply and decrease vendors to produce new supply.
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