If you sell a house these days, the buyer might be a pension fund • Hacker News Board

Re: If you sell a house these days, the buyer might be a pension fund

#761

Post by [deleted] » Wed, Jun 09, 2021, 8:28 PM UTC

spoonjim wrote: post #547

davidw wrote: post #125

Here's why investors buy up houses: they know your neighbors will do the dirty work of artificially constraining the housing supply, which makes it a good investment. Here's one who comes right out and explains this: > Meanwhile, local opposition to building is so commonplace and the approval process so cumbersome, time consuming, and expensive, even when a proposed project complies entirely with requirements, approv…

After I spent my entire net worth plus a good chunk of my future net worth on this house you can be damn right I’m going to vote to protect its value.

[deleted]

Re: If you sell a house these days, the buyer might be a pension fund

#762

Post by patrickthebold » Wed, Jun 09, 2021, 8:30 PM UTC

c7DJTLrn wrote: post #716

cosmojg wrote: post #32

If only so many people didn't treat land and houses like investments, there wouldn't be such a disastrous hoarding problem. Henry George's Land Value Tax [1][2] seems like an obvious economic fix that would require a large fraction of the population to change how they think about land and natural resources, but most of them are invested in such a way (i.e. owning multiple houses on multiple parcels of land, often wit…

My theory is that bank loans are to blame. When we say someone has "bought" a home, it's rare that they've actually bought it, rather they've just signed a contract promising that they'll pay back a huge sum of money they don't have over a long period of time. This creates a market of buying and selling of -- in the words of Mark in The Wolf of Wall Street -- fairy dust. Big numbers like £500k, £600k are thrown aroun…

Strong disagree. If that were the case only the wealthy would own homes. Available financing certainly pushes the prices up a bit as more people can buy homes, but homes really are often worth 500-600k, if you simply do a comparison to renting, and probably even more so if you factor in inflation risk, interest rate risk, and the equity gained in the house.

Re: If you sell a house these days, the buyer might be a pension fund

#763

Post by legulere » Wed, Jun 09, 2021, 8:30 PM UTC

davidw wrote: post #125

Here's why investors buy up houses: they know your neighbors will do the dirty work of artificially constraining the housing supply, which makes it a good investment. Here's one who comes right out and explains this: > Meanwhile, local opposition to building is so commonplace and the approval process so cumbersome, time consuming, and expensive, even when a proposed project complies entirely with requirements, approv…

I would not call it artificially constrained supply. New construction in the vicinity has an effect on the quality of life in the existing houses/flats. In the end space is indeed physically constrained, especially where people want to live. Even from that scarcity perspective a lot of low density construction just seems like waste.

I guess you could get both perspectives behind a Georgism type land value tax.

Re: If you sell a house these days, the buyer might be a pension fund

#764

Post by Aunche » Wed, Jun 09, 2021, 8:32 PM UTC

cosmojg wrote: post #32

If only so many people didn't treat land and houses like investments, there wouldn't be such a disastrous hoarding problem. Henry George's Land Value Tax [1][2] seems like an obvious economic fix that would require a large fraction of the population to change how they think about land and natural resources, but most of them are invested in such a way (i.e. owning multiple houses on multiple parcels of land, often wit…

I'm pro-LVT, but I wish that people would stop conflating it with Georgism. The controversial part about Georgism is that only land should be taxed. This might have been a reasonable position 100 years ago, but not in the digital age.

Re: If you sell a house these days, the buyer might be a pension fund

#765

Post by ViViDboarder » Wed, Jun 09, 2021, 8:32 PM UTC

ta1234567890 wrote: post #540

davidw wrote: post #125

Here's why investors buy up houses: they know your neighbors will do the dirty work of artificially constraining the housing supply, which makes it a good investment. Here's one who comes right out and explains this: > Meanwhile, local opposition to building is so commonplace and the approval process so cumbersome, time consuming, and expensive, even when a proposed project complies entirely with requirements, approv…

And, at least in California, realtors will always push prices up. It’s pretty much never in their best interest to lower the price. Even the buyer’s agent gets paid a percentage of the sale price, so if they try to lower it they’d be essentially working against themselves. And this is without even accounting for all the schemes realtors create (like listing below market to get a lot of offers and create artificially…

Interesting theory. My CA realtor told me to bid below asking price and we got the house.

Repeat business is a good motivator. We were happy with the realtor after our first purchase, used them to sell that property and again, in our second search and then recommended them to friends who made purchases. The marginal income they could have gotten by pushing us to a higher price are dwarfed by their combined earnings.

Re: If you sell a house these days, the buyer might be a pension fund

#766

Post by [deleted] » Wed, Jun 09, 2021, 8:33 PM UTC

p_l wrote: post #642

bennysomething wrote: post #612

Earlier quoted context omitted.

They know that the current government planning regulations mean that getting anything built is extremely difficult. They know that due to supply and demand that this makes property a wise investment. Blame planning regulations. I read recently that Japan and new Zealand scrapped various regulations and this led to stabilization / lower of property prices. Near me, someone is sticking up protest letters at bus stops c…

Japan not so much scrapped various regulations as their regulations are just different - and nationwide. One of the effects of how their zoning classes work is that you don't have "residential-only" zones with no shops or other amenities - instead you have zones defined along the lines of maximum nuisance and with overlapping uses. You have a total of 12 zones, which start from "exclusively low rise residential" that…

[deleted]

Re: If you sell a house these days, the buyer might be a pension fund

#767

Post by rabuse » Wed, Jun 09, 2021, 8:33 PM UTC

JAlexoid wrote: post #594

granshaw wrote: post #579

Earlier quoted context omitted.

It's a vicious cycle – OP and others are forced to commit most of their wealth to own a home because of all the NIMBYs that came before them, and on and on.

Nah... That's just ignorance. It's like the American opposition to pedestrianization of blocks. Pedestrianized blocks increase local business footfall and increase high margin economic activity. New developments in your community increase value of your home, far better than restricting development.

How's that? Genuinely curious.

Re: If you sell a house these days, the buyer might be a pension fund

#768

Post by ritikgeeks » Wed, Jun 09, 2021, 8:35 PM UTC

The implementation of a land value tax is the most significant barrier to widespread adoption. There is no objectively fair way to separate the value of the land from the value of the improvements, thus someone has to decide what the land is worth. Alternatively, without an objective mechanism to oppose them, many of the same strategies can be used to distort/contest appraisals,.https://apkwind.com/showbox-apk/ "dark stores," and deed restrictions that preclude other uses

https://apkwind.com, https://apkwind.com/spotify-premium-apk/, https://apkwind.com/blackmart-alpha-apk/

Re: If you sell a house these days, the buyer might be a pension fund

#769

Post by maxsilver » Wed, Jun 09, 2021, 8:35 PM UTC

michaelmrose wrote: post #725

maxsilver wrote: post #593

Earlier quoted context omitted.

> It's like they are throwing hundreds of thousands of dollars in bags full of hundred dollar bills over your fence and you are complaining about income tax. They aren't throwing dollars over the fence, they're throwing debt over the fence. Sure, my property is on-paper worth more. If I cash that out, I just have to spend it all (every other house got more expensive by an equal amount, and I have to live somewhere).…

The utility of your argument relies on it being something burdensome like a 200% increase but in fact if your property went up by 200% for building a complex it would in fact be extraordinary not only for the nation but for your area as well. If your 200k house for example went up to 600k you could in fact sell it and have a money fight with hundreds of thousands of dollars of real profit in your new living room even…

> but in fact if your property went up by 200% for building a complex it would in fact be extraordinary

It's not, at least in the us. In the past nine years, my house went from a real-world value of ~$90k (2012), to now being worth ~$240k (2021), despite wages being mostly flat. This is not uncommon, most homes in this or any nearby city have posted somewhat similar gains (plus or minus 10%). This property specifically, recorded it's highest jump ($40k over a single year) in the year after they built luxury apartments in the lot directly behind it.

And that's not a NYC / SF / Chicago / Seattle / Austin type hip place. It's just generic small-city Midwest nowheresville. A place with no restrictions on housing construction whatsoever, and has entire neighborhoods of new development in the past decade to prove it.

> If your 200k house for example went up to 600k you could in fact sell it and have a money fight with hundreds of thousands of dollars of real profit in your new living room

You are not getting it. No, I literally can not do that. If my house went from 200k to 600k, then every other house has also gone up a similar amount. If I sell my house to cash out, my family is homeless, I don't have a "new living room". And if I want a "new living room" to live in, I have to give every single dollar of that 600k back, for some new property at similar high prices. It's not real money, it's debt that I happen to be holding in my hands in paper form, and the future occupant of my house is now on the hook for.

Californians simply can not seem to wrap their head around this. They just assume the money is real, because "move to the south or the midwest" is always an option for them, so they can cash out and keep a bunch of it. Some of us already live in these places, and don't have a magic "high quality housing at cheaper-than-my-home-market rate" place to escape to.

> justify constraining housing supply

Literally no one is arguing to constrain housing supply. Blocking a shitty luxury development never constrains housing, it frees it to be used for real housing.

Fighting against Poisoned Milk sales is not "justifying constraining milk supplies". Fighting against cost-raising developments for private equity firms is not in any way "justifying less housing". You can want more housing and not want everyone's rent to spike, these are not in conflict in any way.

Re: If you sell a house these days, the buyer might be a pension fund

#770

Post by reverend_gonzo » Wed, Jun 09, 2021, 8:35 PM UTC

nostrademons wrote: post #755

reverend_gonzo wrote: post #710

Earlier quoted context omitted.

See, I used to think that maybe with the different compensation structure, Redfin agents' interested might end up being more in line with the buyers. I ended up working with one, and realized that is absolutely not the case. First, yes, Redfin agents don't get commissions the way traditional real estates agents get commissions. However, Redfin agents do still want to close as many deals as possible. Also, while real…

It works for a certain type of buyer, one who basically wants to drive the process themselves and just needs an agent for guidance. This described us pretty well, and many other Millennials. We basically just wanted an agent because we were househunting during COVID and needed one to literally get in the door, and to help guide us through the paperwork and process since we were FTHBs. Redfin was great for this; our a…

So, I wasn’t a first time home buyer and didn’t hand holding. What I did need was an argent which was actually working for me, not just trying to close at all costs.

I think in situations where the property doesn’t have any issues, where you’re just going in to buy a place, they can work out fine. Unfortunately you have no idea what kind of place you’re looking at until you’re trying to buy it.

Every worthwhile agent will have a ton of useful information before and after you purchase.