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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

#951

Post by ta1234567890 »

dragonwriter wrote: post #928
ta1234567890 wrote: post #913

Earlier quoted context omitted.

> 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 cit…

> most people will only buy a property once, so there’s very little potential downside for the agent, Agents do get repeat and referral business if they don't suck; the agent we use has been involved in several sales and a purchase for our extended family in a few years, and we've referred other people to her, too. > Specially when most of the buyers and sellers are in it for just one transaction in their whole lives…

> the agent we use has been involved in several sales and a purchase for our extended family in a few years, and we've referred other people to her, too.

Great, so you are wealthy and have wealthy friends and family. Cool. That still doesn’t mean agents are not trying to get prices up.

Your experience could mean that your agent noticed you had money and decided it would be in her best interest to treat you well.

You got me about how many times someone buys property. I looked it up and it seems like “most people can expect to own three homes during their lifetimes”. So, let’s say you buy your first home at 30 and die at 81, and own each house for the same time, then you’ll buy a new house every (81-30)/3 = 17 years. It’s very hard for me to believe that an agent will try to get someone a lower price just so they can work with them again 17 years later.

Also, given rising housing prices and the state of overall student debt/rising costs of education, I would bet that the average number of houses someone buys/owns in a lifetime is going to drastically go down in the next few decades (thus reducing even further the possibility of an agent of getting repeat business from a single client, unless maybe they are as wealthy as you and your friends and family).

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

#952

Post by screye »

nathanaldensr wrote: post #933
screye wrote: post #513

At a philosophical level, I am opposed to the idea of funds being able to hold onto property like a pure monetary asset. Past the primary residence, individual landlords have some plausible deniability for having a 2nd/3rd home. Maybe they want to return to the house one day. Maybe it is a vacation home. A lot of folks on HN are libertarian and believe in the power of the free market. When supply can be kept artifici…

I am neither brainwashed, nor blinded by greed, nor am I "objectively wrong." The vast array of opinions in this comment thread alone prove this topic is anything but objective. If I may borrow and turn another popular thought-terminating phrase: No, the science is not settled on this topic. I built a house a couple of years ago for two times annual income. I was responsible. I work in tech, yes, but I didn't buy my…

> hateful and bitter

Agreed. I am deliberate about what things I choose to be riled up by. American planning happens to make that small list.

My comment was a pure rant in a way that was unproductive.

I also agree that there is nothing objective here, which is why I tried to phrase it in the 'as objective as something subjective can be' form. But I guess it was a bit convoluted.

_____

Let me be specific: Post WW2 car-mandating endless suburbia built without any regard for financial or environmental sustainability is something I actively dislike.

> single, in a tiny apartment in a crappy, dirty apartment building

This gets to the core of the brainwashing I speak of. American cities were left to the dogs during white flight, and they haven't recovered since. There can only be one NYC in the nation. There a dozens of other ways to build sustainable & beautiful cities. NYC's subway system is pretty shabby for a city its size and the city feels haphazardly built. A lot of European capitals in comparison have wonderful examples of apartments that don't suck and subway systems that are a joy to use.

I am not anti-village or even anti-suburb. There is such as thing as well built suburbs. Plus,villages are bound to be low density by their very nature. But villages also tend to be quite sustainable. Strongtowns.org have written a ton of articles on this, and notjustbikes [1] does a great job of elaborating on this.

Urbanist communities have spent agonizingly long talking about the 'missing middle' [2] in housing. The options aren't NYC like shoulder to shoulder density or single family zoning. There are a plethora of options that lie in the middle.

> car-mandating

The car-mandating part is important too. It is one thing to want a huge house with a huge garden. It is another to protest building of non-single family homes in plots near you. Especially when asset prices continue to appreciate as wages stay flat. That's Nimbyism.

It forces a village level of density on any area that's a few miles outside the downtown mandating cars as the only possible form of transport.

> I love where I live and my neighbors do, too. We get along

Exactly, then why not let everyone have that choice?: The choice of living in an arrangement they desire in a manner that is reasonably priced. Imagine if it was illegal for you to build a house on your own land in a manner that you desired, even when it was safe and affected no one else. That's exactly what's happened to middle housing in the US.

> without any regard for financial or environmental sustainability

This is my last point. After all that, the cost of maintaining low density essential public infrastructure (electricity, water, roads, etc) is much much higher than that in denser neighborhoods. This video by not-just-bikes go into detail on this point. [3]

> brainwashed

brainwashing is rarely implied in the literal sense. In most cases, it implies a situation where a person refuses to acknowledge negatives of a system even when it's staring them in the face. America has doomed its cities and implemented laws that strongly favor suburbs. If I grew up here, I would also think that cities were terrible too. Here, people live in cities transiently and usually in rentals. They never develop a relationship with neighbors or drop roots, because they move out the second they have their first child.

> I want my kids to live in a nice neighborhood and, overall, have a good growing-up experience.

The negatives of cities are very much the negatives of American cities. The many positives of American suburbs would look less great if they had to pay the real cost of maintaining their infrastructure. NotJustBikes has an entire video [4] on how sustainable cities provide a significantly better growing-up experience for children than American suburbs. I highly recommend it.

People spend thousands on visiting Europeans cities for the summer. People fantasize about how dreamy such a place would be and retiring there. By all definitions, these ARE their cities. That's what cities in developed countries could've been like. Alas, the New World seems to lack the creativity to imagine such a place back home.

[1] https://www.youtube.com/channel/UC0intLFzLaudFG-xAvUEO-A

[2] https://missingmiddlehousing.com/

[3] https://www.youtube.com/watch?v=7IsMeKl-Sv0

[4] https://www.youtube.com/watch?v=ul_xzyCDT98&t=1s

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

#953

Post by nradov »

ta1234567890 wrote: post #907
nradov wrote: post #797

Earlier quoted context omitted.

Blaming real estate agents is just silly. They're salespeople so of course they're going to try to maximize commissions. Ultimately it's up to the buyer to agree on the price or walk away. Listing prices are almost totally meaningless. At most they're just a starting point for initial negotiations.

> Listing prices are almost totally meaningless. At most they're just a starting point for initial negotiations. Not sure if you have no experience in real state at all, or just want to play devil’s advocate. The listing price can have a huge effect. Like I described before, if the listing price is lower than the perceived value of the listing, it makes it attractive to a wider audience, because people that wouldn’t…

I have experience in real estate. Listing prices are largely irrelevant. Your concern is completely misplaced and you don't understand causality. Multiple rounds of bidding are common in high demand areas regardless of whether the listing price is aligned with the market value.

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

#954

Post by RHSeeger »

RHSeeger wrote: post #909
khrbrt wrote: post #863

Earlier quoted context omitted.

Density brings in more tax revenue to pay for expanding the sewers and can support more mass transit to reduce traffic -- no street widening needed. In many cities, it's the poorer denser neighborhoods that subsidize the more affluent less dense neighborhoods. Scroll down to red and green map here: https://www.strongtowns.org/journal/2015/5/10/lafayette

You can really add things like sewers after the fact. You either need to add them before or during the addition of more (higher density) housing. Generally, this means that the builder of the new housing is required to foot the bill for that added capacity, which can make it not worth the cost. The same tends to be true of roads, but with less catastrophic results. In a town where going 2 miles can take 20 minutes, a…

I meant to say that you can't add sewers after the fact, but now it's too late to edit. My apologies for any confusion.

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

#955

Post by digitaltrees »

bravo22 wrote: post #715
digitaltrees wrote: post #76

Earlier quoted context omitted.

REITs have been doing this for a long time. It accelerated after 2008 because of the housing collapse which was triggered by Banks creating to much money rather than the Fed.

Fannie and Freddie bought up a lot of subprime mortgages.

Red herring. Most origination of subprime started with private market actors. GSEs were a fraction of the market; very late to the game and never held anywhere near what investment banks did.

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

#956

Post by digitaltrees »

nickthemagicman wrote: post #906
digitaltrees wrote: post #54

Earlier quoted context omitted.

So you’d rather have an inefficient use of property that sits languishing just because some one owned it in the past? One of the benefits of taxing property is that it encourages productive use. Use it or lose it. The increasing velocity of property transfers helps increase economic activity.

Yes. I'm happy with inefficient use of our water supplies as well as our housing supply.

And are you happy with the concentration of wealth and power that results in fallow land being unused, Inherited and never conveyed to someone that would actually use it?

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

#957

Post by staticautomatic »

rwcarlsen wrote: post #914
nibles_and_bits wrote: post #895

Earlier quoted context omitted.

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…

It sounds like you signed up for something like the fight you’re having.

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

#958

Post by trainsplanes »

spoonjim wrote: post #880
zip1234 wrote: post #792

Earlier quoted context omitted.

Gambling your entire net worth on a single hyper-local investment is not a good idea.

It’s a great idea, it means that my kids will go to school with other kids whose parents care a lot about their education. A large amount of money shouldn’t be needed for that, but I didn’t see another way to achieve that outcome.

Schools can go downhill pretty fast, and often do.

Markets also go downhill. If you really went all out with paying for it, you also need to hope that your employment will remain stable. People who are very comfortable with their job and predict no downsides are often the ones getting bitten when the market changes, as it always does.

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

#959

Post by dragonwriter »

ta1234567890 wrote: post #951
dragonwriter wrote: post #928

Earlier quoted context omitted.

> most people will only buy a property once, so there’s very little potential downside for the agent, Agents do get repeat and referral business if they don't suck; the agent we use has been involved in several sales and a purchase for our extended family in a few years, and we've referred other people to her, too. > Specially when most of the buyers and sellers are in it for just one transaction in their whole lives…

> the agent we use has been involved in several sales and a purchase for our extended family in a few years, and we've referred other people to her, too. Great, so you are wealthy and have wealthy friends and family. Cool. That still doesn’t mean agents are not trying to get prices up. Your experience could mean that your agent noticed you had money and decided it would be in her best interest to treat you well. You…

> Great, so you are wealthy and have wealthy friends and family.

Relative to HN, probably not; globally, definitely, for California...that’s sort of a fuzzy matter of perspective (probably not for a California homeowner), but, eh, whatever. Not the point. My point is that satisfaction is not completely irrelevant for agents.

> That still doesn’t mean agents are not trying to get prices up.

Maybe, though even if they aren't hoping for repeat or referral business the incentives are more for agents to close deals as rapidly as possible; most buyers are going to be looking near the limit of what they can afford anyway, a buyer's agent trying to push them higher is just going to make the process slower. A seller's agent wanting to maximize price would actually be acting in their principal’s interest, but even on the seller side the incentive is to get a deal and close rather than drag things out for a little bump; spending twice the work for a an extra 10% on thr sale price (and thus commission) isn’t a winning move even though it may be what the seller would want.

> Also, given rising housing prices and the state of overall student debt/rising costs of education, I would bet that the average number of houses someone buys/owns in a lifetime is going to drastically go down in the next few decades

The sources I’ve seen have shown it going up recently (increasing economic inequality and buy/rent price ratio should probably have that effect by cutting some of the people that would buy the fewest houses entirely out of homeownership.)

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

#960

Post by presentation »

onlyrealcuzzo wrote: post #635
dcolkitt wrote: post #618

Earlier quoted context omitted.

Tokyo is growing faster than New York, London, or most other major Western metros.[1] (It's true Japan as a whole has slow growth, but Tokyo still has robust growth because or rural to urban migration.) Yet real housing prices have not risen in Tokyo in 25 years. [1] https://livejapan.com/en/in-tokyo/in-pref-tokyo/in-tokyo_sub...

Tokyo had THE BIGGEST property bubble in the history of the world 30 years ago: https://en.m.wikipedia.org/wiki/Japanese_asset_price_bubble It arguably has STILL not deflated. At one point, the Emperor's Palace alone was worth more than all the real estate in California: https://www.scmp.com/magazines/style/news-trends/article/309... I guess if you believe those valuations made sense, then sure.

Even so, normal people can and do buy property in close proximity to the city center all the time, and cheap rent spots are easy to come by. Minato-ku was definitely crazy overspeculated, but go 15 minutes away by train and you get an order of magnitude cheaper housing.
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