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Priced out of home ownership

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Re: Priced out of home ownership

#841

Post by cced »

xenadu02 wrote: post #822
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…

People really want there to be "one reason" for skyrocketing housing prices. Real life is not so accommodating. The problem is multi-faceted. Is there asset price inflation due to cheap money? Yes. Have foreign nationals been parking their cash in real estate in certain western countries? Yes. Has restrictive zoning and NIMBY-ism reduced the incoming supply of new homes? Yes. Multiple things can be true at the same t…

Right, but when you’re driving 100km/h down the road, hitting a moose will slow you down a whole lot more than a bird.

Is there any discussion in the scaling/proportion of a given facet when these get brought up?

Re: Priced out of home ownership

#842

Post by __MatrixMan__ »

lazide wrote: post #677
__MatrixMan__ wrote: post #673

Earlier quoted context omitted.

The solution is to make the property-as-an-investment a less lucrative perspective by occasionally sabotaging the property value of (but not the ability to safely live in) houses that are not being used to house people. A few high profile jury nullifications would probably be sufficient, but we gotta be the rational economic agents that the theories think we are and work together on this.

The issue is it takes significant pressure over time for any real effect to occur here. Think San Francisco or New York in the 70’s type of ‘urban decay’. [ https://amp.theguardian.com/cities/2015/may/18/welcome-to-fe... A one-off broken window, or never cutting your grass isn’t going to do anything. Realistically? High central bank rates for awhile does the same thing. 1974 had a fed rate of 10.74%, 1975 5.82%, etc.…

But we don't control the fed. The degree to which these investments are risky is our only lever.

Re: Priced out of home ownership

#843

Post by B56c »

starbird3000 wrote: post #649
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…

Where I am there’s been a huge increase in houses being bought for cash by equity hedge funds, like 25% of houses going on the market. Nearby Kushner bought hundreds of houses in Baltimore. The impact of this is that house prices soared because no one can compete against a multi-billion-dollar company to buy a house, which artificially pushes up prices. Secondly, I’ve done a lot of engagement with policy makers and b…

It's true that the current large developers will never meet the need for affordable housing, but that's where small local developers can fill in assuming zoning and regulation allows them to. All of the small projects that are profitable but too tiny to justify the time of large developers can be picked up by small, local developers who have a vested interest in incrementally improving a place.

Re: Priced out of home ownership

#844

Post by lo_zamoyski »

bane wrote: post #826
rndmize wrote: post #796

Earlier quoted context omitted.

No, lack of building _is_ the main problem. It doesn't matter if the demand for homes is "artificial" or not - the easiest solution is to build more. > 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? This is something I've wondered, and I'm of the opinion there's two reasons that are rarely discussed. One i…

> No, lack of building _is_ the main problem. This might be one of those things where the obvious bit (built more!) is both true, and reductively incomplete. We do have a sense that just building more housing in the presence of lots of liquid capital and easy credit seems to create a speculator market -- even down to retail investors. (e.g. The China real estate bubble bursting seems to be strong evidence that this c…

> developers are concentrating on building "luxury" units

And many of those "luxury" units don't cater to families, but single people. You'll find 1 or 2 bedroom units with bedrooms where you can barely fit a queen sized bed. So these are units that are not only more expensive than, say prewar or midcentury units, but more expensive per unit area than those units.

Re: Priced out of home ownership

#845

Post by joe_the_user »

xenadu02 wrote: post #822
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…

People really want there to be "one reason" for skyrocketing housing prices. Real life is not so accommodating. The problem is multi-faceted. Is there asset price inflation due to cheap money? Yes. Have foreign nationals been parking their cash in real estate in certain western countries? Yes. Has restrictive zoning and NIMBY-ism reduced the incoming supply of new homes? Yes. Multiple things can be true at the same t…

Uh, it's not strange at all to expect a single cause when a system fails. Rather, there's often a chain of failure but with one thing at the head. You can look at how a car breaks down - you go from a single belt failing to a damage spread around.

Your list can be easily sorted this way (Notably, foreign nationals with money are just an instance of asset price inflation, in no way an instance of "nuance" or something).

I see the chain of causation thus - a flood of printed money has increased the value of all capital assets (some of that money appears as the money of foreigners and some of domestic investors, some as hedge funds, etc). Housing has been a focus and areas with restricted supply are where the money has been most attracted (it's spread more and more as the scale increases - a key point of the gp).

Re: Priced out of home ownership

#846

Post by grumple »

Plasmoid wrote: post #431
grumple wrote: post #282

Earlier quoted context omitted.

> feel that they are entitled to live in the same neighbourhood they purchased in. It's not a feeling, it's how purchasing things works.

>> feel that they are entitled to live in the same neighbourhood they purchased in. > It's not a feeling, it's how purchasing things works. He means that people feel they get to control the neighbourhood. Exercising control over property they don't actually own.

We are also legally entitled to that as well, this is how voting works. Community boards and local governments are intended to give people democratic control over the areas in which they live.

Re: Priced out of home ownership

#847

Post by pizzafeelsright »

amelius wrote: post #631
pizzafeelsright wrote: post #505

Earlier quoted context omitted.

I can't say I see it the same way. We're born in a year we didn't choose to parents we didn't pick with talent we didn't earn with intelligence we don't deserve with environmental influences we can't control. The game is Texas Hold em. Play your cards. Bluff if you must. Press if you can. Go all in when you can leverage. I recently got to know a gentleman quite like myself. His parents and upbringing are quite the sa…

> You can get upset about the game or play it. You've got to think outside the box. Do we want a society that rewards gambling behavior, or do we want to reward honest hard working? Apparently we cannot have both, because we are now observing that increasingly money (and bricks) makes more money than honest work. You can keep playing the game until there are only survivors and losers but ultimately we need people who…

Generally, the game is Hard Work will equal Positive Outcome. I was speaking more about the hand we are dealt. We can whine or we can find a way to play - or work - and win.

I "slave" away 50% of my life so that my family can thrive. This sacrifice brings me much happiness.

...there is nothing better than that a man should rejoice in his work, for that is his lot....

Re: Priced out of home ownership

#848

Post by hot_gril »

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's basically this. Because there's a finite supply of land in desirable areas, home ownership is an investment, unlike renting. Same as how I got "priced out" of owning 1/10000th of Apple Inc.

Re: Priced out of home ownership

#849

Post by tossandthrow »

ben_w wrote: post #815
tossandthrow wrote: post #735

Earlier quoted context omitted.

EUR 400k for a newly build home in the greater Berlin area seems like extremely affordable in my opinion. Houses, like other goods, decrease in value over time. A new house should be significantly more expensive than a 50 year old house - just like a car.

> EUR 400k for a newly build home in the greater Berlin area seems like extremely affordable in my opinion. I was picking the absolute lowest cost for an example, so on one hand it should have. On the other hand, what's that in "years of average income", and does it seem reasonable that half of this is the land itself?

I think the rule of thumb is that you should not buy at more than 4x household income.

I know that the salaries in Berlin are in the lower end, but 100k EUR a year in household income seems like a reasonable expectation for people wanting to live in attractive areas.

Re: Priced out of home ownership

#850

Post by mrkeen »

firstplacelast wrote: post #555
whoknowsidont wrote: post #196

Earlier quoted context omitted.

That's not the problem at all. Stop allowing people to buy multiple homes. Stop allowing landlords to "collaborate" on prices.

Why is the problem always rich people? They're going to do what they're going to do. The poors need to hold themselves accountable and stop working for unsustainable wages that can't get them even a small, run-down home. They continue to drive their own wages further and further down and make it that much harder for those that come after them. It's ridiculous that they expect other people to sacrifice when they won't…

> or just opt out

They're working on it!

See 'Figure 1' https://www.nimh.nih.gov/health/statistics/suicide

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