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

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

#911

Post by toomanybeersies »

d110af5ccf wrote: post #886
sjg007 wrote: post #852

Earlier quoted context omitted.

They force you to tear it down. If you don’t they will and charge you for it. That being said there was one guy in LA who built a massive house called the enterprise I think. Edit: he lost in court and is being forced to demolish it.

I've never been able to wrap my head around why things work like this. If what you build isn't a nuisance to neighbors, houses the same number of people as before, and doesn't pose a safety or environmental hazard, what business is it of anyone else? I've met a significant number of otherwise carefully law abiding people with various non-permitted remodels and even outbuildings. (I guess the latter won't work so well…

Devil's advocate: without regulations and permits, how do we know that what you're building isn't a nuisance etc. etc.?

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

#912

Post by beiller »

refurb wrote: post #887
beiller wrote: post #842

Earlier quoted context omitted.

Same in Canada. I am in the top 3% of wage earners in the entire country and can not "afford" to buy. Average price is > 1 million. At > 1 million, a 20% down payment is required in cash. That would basically take my well balanced portfolio into pure real estate holdings not to mention a massive tax hit to sell 200k+ of my portfolio. I used quotes in afford because I could afford it, but I feel it would be a huge mis…

Sounds like you need to grow balls like your fellow Canadians and go “all in”. Most folks I know buying throw every dollar they have into a house plus a hundred thousand from the bank of mom and dad. You’ll never be able to afford unless you do it.

I'll stick with never. Rents keep dropping. It's almost like it's... pure speculation with no fundamentals. Surely that can't be the case, otherwise rents would keep dropping! Oh no!

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

#913

Post by ta1234567890 »

nopeNopeNooope wrote: post #583
ta1234567890 wrote: post #540

Earlier quoted context omitted.

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…

That sounds insightful, but there's no point in screwing a buyer for a tiny today payday. Those agents work on volume, so if you think they're pushing you to not get the lowest price, it's so they can close the deal, not because their incentives aren't aligned with yours. If they're telling you to offer more, it's because they have better knowledge of the market and the game than you. They're banking on many commissi…

> That sounds insightful, but there's no point in screwing a buyer for a tiny today payday.

Except: 1) most people will only buy a property once, so there’s very little potential downside for the agent, and 2) is not about screwing the buyer over, is about driving the whole market higher so they can keep pumping their commissions up and convincing more owners to sell. The latter is specially easy to do in smaller cities/communities served only by a small number of local realtors.

There’s plenty of people trying to game almost any valuable market in the world. You don’t think at least some realtors (of course not all of them) are trying to do the same? Specially when most of the buyers and sellers are in it for just one transaction in their whole lives, and there’s so much money involved?

Think of it as the prisoners dilemma. If you play once, the optimal is to screw over the other player. That’s what realtors are facing 90% of the time, a sequence of one-time prisoners dilemmas. Except if they do it right, they get to increase the value of the outcomes over time.

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

#914

Post by rwcarlsen »

nibles_and_bits wrote: post #895
rwcarlsen wrote: post #810

Earlier quoted context omitted.

I've been trying to build a house for myself. Going through all the hoops is not only cumbersome and expensive - but nearly impossible. I've run into legal tiff's between the county and nearby city. The city wants me to pay $40,000 for a sewer hookup for a single family dwelling when the sewer line is literally right along the road in front of where we will build the house. This is because the city has a beef to pick…

Why did you buy a lot zoned ag when you clearly wanted one zoned residential? A little due diligence before purchasing the lot and you would either know what you in for and still buy or decide it's too much of a hassle and walk.

I didn't buy it until I figured out the (very convoluted and possible) way to build on it while ag. Because rezoning is a long, expensive process that can trivially be blocked by a single neighbor that doesn't want to rezone with me. I wanted the parcel because it was in what I considered a desirable location for a reasonable price. In my region, finding property is getting very difficult - and unless you want to go super far away from civilization, you don't have so many options.

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

#916

Post by toomanybeersies »

bennysomething wrote: post #612
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…

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…

Deregulation of the construction market was a disaster for New Zealand, and cost the country billions of dollars [1].

Also, New Zealand has some of the least affordable housing in the world, and it's only getting worse.

[1] https://en.wikipedia.org/wiki/Leaky_homes_crisis

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

#917

Post by nmfisher »

mixmastamyk wrote: post #813
ClumsyPilot wrote: post #783

Earlier quoted context omitted.

"False" is a hell of an elaborate argument, very convincing when placed against 50 years of data across 5 countries, all leading to same skyrocketing housing prices.

Nothing more needed to refute an argument of said quality. If I delivered one million finished apartments to your city anywhere in the world today, the average price would go down. How about ten or a hundred million? Q.E.D. Housing scarcity is real, whether you believe it or not.

I'm really not sure that's true. I don't know exactly how many were built, but Melbourne (Australia) added a lot of CBD apartments and the price continued to shoot up.

Those were overwhelmingly tiny/cheap/low-quality/investor-bought apartments, but the fact is they were still there.

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

#918

Post by joe_the_user »

rwcarlsen wrote: post #810
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've been trying to build a house for myself. Going through all the hoops is not only cumbersome and expensive - but nearly impossible. I've run into legal tiff's between the county and nearby city. The city wants me to pay $40,000 for a sewer hookup for a single family dwelling when the sewer line is literally right along the road in front of where we will build the house. This is because the city has a beef to pick…

I've been trying to build a house for myself. Going through all the hoops is not only cumbersome and expensive - but nearly impossible. I've run into legal tiff's between the county and nearby city. The city wants me to pay $40,000 for a sewer hookup for a single family dwelling when the sewer line is literally right along the road in front of where we will build the house.

Costs like for all city services are standard everywhere in California.

The reason is proposition 13. Cities can't raise taxes to pay for services so they basically have to charge for each service "a la carte". That sewer charge is more or less for what you and others are going to get from the city over some longer time frame. It suck but the alternative is home owners paying taxes, which home owners have decided they don't want to do.

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

#919

Post by d110af5ccf »

toomanybeersies wrote: post #911
d110af5ccf wrote: post #886

Earlier quoted context omitted.

I've never been able to wrap my head around why things work like this. If what you build isn't a nuisance to neighbors, houses the same number of people as before, and doesn't pose a safety or environmental hazard, what business is it of anyone else? I've met a significant number of otherwise carefully law abiding people with various non-permitted remodels and even outbuildings. (I guess the latter won't work so well…

Devil's advocate: without regulations and permits, how do we know that what you're building isn't a nuisance etc. etc.?

That's why I never suggested the (obviously fatally flawed) idea of abolishing regulations and permits. Rather I raised an objection to the current state of their implementation.

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

#920

Post by itwy »

beiller wrote: post #912
refurb wrote: post #887

Earlier quoted context omitted.

Sounds like you need to grow balls like your fellow Canadians and go “all in”. Most folks I know buying throw every dollar they have into a house plus a hundred thousand from the bank of mom and dad. You’ll never be able to afford unless you do it.

I'll stick with never. Rents keep dropping. It's almost like it's... pure speculation with no fundamentals. Surely that can't be the case, otherwise rents would keep dropping! Oh no!

Rent is not dropping. It is going up, rapidly.
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