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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#931

Post by sunshowers »

Panzer04 wrote: post #611
sunshowers wrote: post #453

Earlier quoted context omitted.

This is a creation of the US federal government — a 30 year fixed makes no sense without government intervention, since that is an absurd level of interest rate risk the bank would need to take. I don't know of any other country with 30 year fixed mortgages — most have something similar to the 5/1 ARM as the main option. edit: Seems like Germany has fixed mortgages but makes it hard to refinance.

The fixed prepayment is what makes them insane. Fixed interest instruments are common, at least at the institutional level, but no penalty prepayment option is the crazy part, because it exposes the lender to all the downside if rates go up and none of the upside if they go down.

That makes sense. Refinancing is essentially that.

Re: Priced out of home ownership

#932

Post by ethbr1 »

int_19h wrote: post #921
ethbr1 wrote: post #836

Earlier quoted context omitted.

I'd love to see a progressive rate purchase tax on properties. Proceeds to fund transit capital expansion. Above the median, buyers (and therefore developers building) start incurring increasing transaction costs. Part of the issue is that builders can dump luxury properties into the market, then wash their hands of future responsibility as soon as it's sold.

Why not just have a progressive property tax, and use that money to fund local infrastructure as needed? Or better yet just tax land heavily.

Because property taxes are one step removed from builder incentives. Better to directly adjust builder housing price choices, at least for intents of building less luxury housing.

Re: Priced out of home ownership

#933

Post by csomar »

sib wrote: post #782
csomar wrote: post #754

Earlier quoted context omitted.

But you have to admit that no one could have guessed that increasing the money supply (ie: printing money) would have led to higher asset (including real estate) pricing.

Are you missing a /sarc tag?

Do I really need it?

Re: Priced out of home ownership

#934

Post by csomar »

B56c wrote: post #863
csomar wrote: post #746

Earlier quoted context omitted.

And you are basing this on what evidence. Cities spread disease either infectious or by pollution. If a job can be done remotely, the company should not only allow it but it should be the only way to do it. Many jobs can be done remotely today and this will move annex jobs with them. Cities will remain central hubs but this will reduce the pressure and demand.

See cagenut's comment above. Cities are economically robust because they have the economic activity to justify the infrastructure investments. You can have much more rural, spread out areas, but they can't afford to support many of the amenities that modern people would consider necessities, especially tech workers.

And what are these amenities? Because I am typing this from a rural area that has decent food, good medical options nearby and high speed internet as well as I can get a cheap bus to nearby places.

Re: Priced out of home ownership

#935

Post by mcmoor »

DenisM wrote: post #897
wodenokoto wrote: post #723

Earlier quoted context omitted.

I think it is a question about the area of central locations grows much slower than the amount of people who wants to live in a central location. Dubai is expanding like there is no tomorrow, and the price of down town and marina just keeps increasing, regardless of how many new high rise areas the emirate undertakes. China has hundreds of literally empty cities, yet people are being priced out of living in Beijing.…

The empty cities are interesting. People don’t want to live there because there are no jobs and no services. There are no jobs or services because there are no people. Sounds like an opportunity for the government to step in and create employment, e.g. move a big military contractor there to “bootstrap” the city.

Several countries in Asia are/were not only making new cities, but new Capital cities (Malaysia, Egypt, Indonesia, etc) and they have mixed results. Old city pull and inertia is so strong.

Re: Priced out of home ownership

#936

Post by closeparen »

kurthr wrote: post #763
derlvative wrote: post #707

Earlier quoted context omitted.

This is a lot of mental gymnastics to pretend people don't need places to live. More people are born, hence more housing is needed.

Actually, California population (for example) has fallen by >400k over the last several years. The first falling year was 2019, 2020 saw a small rise ( 300k, 2022 a fall of ~150k, and 2023 a fall of ~50k. https://www.macrotrends.net/global-metrics/states/california... That includes both births/deaths and in/out migration. Population growth rate has been generally falling since 1990 (except for a peak in 2000) and sig…

The price finds whatever level it needs to maintain a population that fits within the housing supply. Obviously population can’t grow that much against a fixed housing supply; once the vacants and spare bedrooms are filled up, people just get priced out. This is Malthusian NIMBY policy working exactly as intended.

Population geography also shifts from rural to urban and from declining to rising cities even as the total population size holds constant or shrinks. The fact that there is space for you on a farm or in a coal-mining town is cold comfort to someone with a STEM degree and a job offer at a corporate headquarters.

Re: Priced out of home ownership

#937

Post by sgregnt »

whoknowsidont wrote: post #196
DGAP wrote: post #180

Stop subsidizing demand at the national level. Stop restricting supply at the local level.

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

People buying multiple hones is a blessing - it makes building home cheaper (economy of scale) the problem is obly in the tweasted reality of abosolutly rampant regulation, the only problem is government and local regulation if you artificially restrict supply you don't have enough homes.

Re: Priced out of home ownership

#939

Post by closeparen »

ericmay wrote: post #758
AnthonyMouse wrote: post #572

Earlier quoted context omitted.

> Total number of dwellings per thousand inhabitants, 2022 and 2011 The issue here is that demand shifts regionally over time. Dwelling units in Detroit don't satisfy demand in San Francisco. The result is that you continually have to increase supply in the places demand currently is. To keep prices flat, the number of units per thousand inhabitants has to increase over time, because the number of empty units in area…

> Dwelling units in Detroit don't satisfy demand in San Francisco. They do help though. Individuals need to realize they can’t afford to live in a place like California and have to give up that luxury if they want more affordable housing arrangements.

Living in a productive, walkable city is only a luxury because our public policy makes it so. We can unmake it, and we should, is the point.

Re: Priced out of home ownership

#940

Post by sgregnt »

postalrat wrote: post #194
DGAP wrote: post #180

Stop subsidizing demand at the national level. Stop restricting supply at the local level.

Land is cheap but building a house is expensive. If you want more supply then you are going to need to make building more economical.

In desired areas land is about 80% of the house price, that's why if you add zoning you obly get exyremely expansive single family houses where you could get cheat multi family high rises
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