Considering how crazy expensive accommodations have become the last couple of years, concentrated in the hands of greedy corporations, landlords and how little politicians seem to care about this problem, do you think we will ever experience a real estate market crash that would bring those exorbitant prices back to Earth?
deleted by creator
You do realize that there are other ways to invest, bonds, shares, ETFs, etc.
In my opinion if you earn average or above average for the city you live in you should be able to afford a roof over your head easily which is not anymore the case for a lot of places.
Are they better than the mega-corps buying up thousands of houses, sure. Are they still taking one of the basic necessities for life and commidfying it? Also yes. You can use whataboutism all you want and maybe it helps you sleep at night but that doesn’t change what you’re doing.
I also love to hear landlords complain about how hard their “jobs” are and how tenants are so difficult. News flash: nobody is holding a gun to your head and making you rent out a house. If it’s so much work why don’t you sell the house, put the money into some structured investments and work all the hours you’d work on the property at a real job? Is it because it’s not actually all that much work? Is that why you say it’s a good retirement supplement? Or was it because your daddy was a landlord, and his daddy was a landlord and dammit being a landlord runs in your veins? Gee, I wonder if we ever came up with a term for a family landlord business? Maybe we can come up with something really regal to describe them?
deleted by creator
deleted by creator
I’m trying to get a mortgage atm. Long term disabled / self-employed with low income, got dad as a guarantor, I feel amazed we managed to get a single lender, we now have a mortgage in principle.
I’m also horribly unlucky so I can predict with near-certainty that yes house prices will crash immediately after I’m on the hook at 7.5%, at which point interest rates will also plummet.
Can’t put a price on having my own space and not being evicted on the whim of a greedy landlord though (my current situation, 13 years, £70k in rent, not so much as a thank you or goodbye, just off you fuck so I can get someone in paying more).
You can always refinance if rates plummet. But rates and prices have an inverse relationship. Prices fall when rates increase and prices rise when rates fall. So your ideal scenario is to get in with high rates and low prices, then refinance later for a lower rate. Although right now we have the worst of both worlds, high rates and high prices. Prices are starting to stagnate due to rising rates, and may eventually start trickling back down as high rates hold.
Thanks, that’s really helpful info. One of my friends told me I was insane for buying a house right now, but my response was that there’s never really a ‘good time’ to buy a house… the best time was always 10 years ago! Trying to time the market whether with houses, stocks, crypto, whatever is rarely a good idea.
If curious if “affordable housing” has an actual definition? Like is there some formula that we could use?
If the average habitant in a country can buy a house and pay the whole credit in his lifetime, I consider this as affordable housing
You probably mean median, right?
But I meant an official one.
Ideally lower than median: closer to Q1. Still, you have to start somewhere.
Depends, do you want that person to be able to have a partner, kids and something to eat? If no then yeah, probably.
At this moment in The Netherlands:
- starter: forget buying one (you need to bring loads and the student loan that wouldn’t impact your chances on a mortage, guess what, it does)
- unemployed or on benefit, social letting (waiting time for a place to live mesured in decades)
- earning more then minimum wage: free letting market, costs about half your income (you won’t get a mortage when it would cost you more then a 3rd)
Oh, and there is a huge shortage and building has dropped to less then 10% of what is needed, due to inflation. The only way hiusing is affordable is when you already live in a bought house and have been living there for about 15+ year. (Bought mine in 2000, before the prizes exploded and after that the mortage rates exploded)
Either the income needs to improve a lot (with constant prizes and rates), or the prizes need to collaps (when that happens nobody will move, to expensive)
Housing should be a right tbh
How would that work, do you think? I agree with your premise, so you don’t need to worry about that part.
I’m what they call an “idea man”, meaning I don’t know anything lol but I dream big
Housing and affordable housing should totally be a human right. Look at all the global inequality and how it keeps on growing, the Rich 🤑 / wealthy are accumulating and consolidating wealth 🤑 … Locking people out of opportunities 😕😔😔😐 n the governments do nothing to protect their citizens from the legal corruption… In fact they help the corporations out.
If people who built nations and kept them running ( the workers / ETC) were compensated properly we’d all have housing, food, clean water ETC. It’s called sharing the profits / wealth. But that’s not what monopolies and people at the top 🎩 🔝 of industries do.
I mean US still got child labor 😭 till this day.
People that keep the countries running need to go on a strike / protest all at once for a week or two and demand some kind of equality from their government or otherwise no work no running economy!!
It’s been done before and it can happen again if we can brave sharing food and water with each other for a week or more.
Tie minimum wage (aka liveable wage) to median rental prices of the area.
It’s just gonna get worse until everything crashes completely in a way that nobody will own anything they can’t carry on their back.
I think were closer to seeing people be forced to rent every comoddity they need to live than we are to seeing full home ownership.
No. As the effects of climate change become worse, people will migrate to cooler places, which will only push up prices in those places. Poor people will be left to live in uninhabitable and uninsurable areas, while the rich will get to live in comfort.
Climate change is essentially a class struggle, like everything else in life. As long as the 1% don’t have to suffer, nothing will be done. To get the rich to do something about climate change, it will have to affect them directly.
limate change is essentially a class struggle, like everything else in life. As long as the 1% don’t have to suffer, nothing will be done. To get the rich to do something about climate change, it will have to affect them directly.
Exactly this. Elysium comes to mind, altough it won’t be a space station in orbit but probably a densely populated blue zone in Western Antarctica defended by turret boats or some shit.
I also think in addition to what you mentioned people don’t want to address that the population is a problem as well. The earth more than doubled the people living on it in 70 years from all of human history, that’s not just sustainable. You can hypothetically fit 20 people in a one bedroom but just because you can doesn’t mean you should.
I’m in a hot climate and it’s far more expensive here than it is in cooler parts of the country, and it continues to be that way. Your hypothesis would be for the distant future, but that’s not what’s driving costs right now and in the immediate future.
Sure, but the premise of the question is if “we will ever have affordable housing again in our lifetime?” There is no reason to believe there will be affordable housing right now or in the immediate future, and this comment hypothesises why climate change will cause affordable housing to continue to be problematic in the distant future as well.
In Australia, they are bringing in a shared equity program that has given me hope. Roll on 2024…
The opposite. I think home ownership will gradually seep away and only corporations will own houses. We’ll all basically rent small hovels from multinationals or it’ll be a package of the company we work for, like the dystopian show Severance.
“You’ll own nothing and be happy” - World Economic Forum
They really did go mask off with that one. I don’t understand anyone could’ve checked that out and signed off on it without going “surely people are going to see right through this?”. The answer is either apathy or malice, but both are equally bad for us in the end.
That’s just decentralized feudalism where we work even more for less
They already allow children to inherit companies, why not just return us to surfdom.
I mean we are seeing the results right now of decades of exponential growth. Take a house that costs $100,000 and increase prices from 3-10% per year every year for ten twenty forty years whatever and boom, same house now costs a million bucks. It’s not surprising to me at all. Idk how to fix it but it’s not surprising.
Decades? 2008 was only 15 years ago…
Not without some real force or change, middle class has invested to much of their retirement into the housing market to allow the prices to tank. Those who have are not going to risk it for the have nots.
Imagine storing all of your nation’s wealth in real estate that is actively decaying by the minute instead of into companies that make products and provide jobs. What a stupid fucking idea.
Doesn’t matter. Houses are sold for prices as if they’re still mostly new. If you are good you can beat down the price by a cost of a new roof or a new heating system. Never both. No seller will ever acknowledge that renovation doesn’t make sense and the house should be teared down, actively lowering the land value. And they don’t have to. Someone else is around the corner to buy at any price, turning it into an overpriced rental unit.
That’s because in most cases, you’re paying for the cost of the land, not the house itself. Just look at how much unimproved land costs. The house itself is a depreciating asset, the land appreciates so much that it overwhelms the cost of the house. Even condos are subject to this, simply because they take up space (which is worth money) and their price is tied to traditional houses because they are (imperfect) substitutes.
No. Appraisals and tax assessments have a land value and a “structural improvement” values. Both of these are added together for the purchase price.
If there’s a building on the land that’s not derelict and has utilities- it’s almost always going to be worth more than the land value by itself.
There are def certain zip codes and/or a very large plot of land with a single house on it where the inverse is the case (land being worth more than improvement) but that is not the norm.
My entire city burned down a year and a half ago. The burned lots were selling for over half the price as surviving houses, right after the fire. Like they were only 20-30% off. Most of the value is in the land.
If we have affordable housing, that would lower the prices for landlords, and we can’t have the leeches hurt
As long there is no Mass Genocide and Mass Death of Owner,the only possibility would be a to high Interest Rate that forces home owners to sell.
All the Possibilities
Given that most modern construction has a mortgage with some bank, a “Mass Death of Owners (and their descendants and families)” would just make the homes pass on to be property of the bank.
But the bank will now have a glut of properties to sell or rent out, and far fewer people competing to buy them, so prices would drop.
Sadly, they will just claim bankruptcy and we will bail them out… again. Eat the rich.
Interesting fact, the Black Death in Europe gave an opportunity to peasants to get a better life. The ruling class did what the ruling class always does, and try to prevent the peasants from getting a better life. Thankfully, the peasants realized “Fuck this. We have power and we’re going to wield it.”
How the Black Death made life better
What can the Black Death tell us about the global economic consequences of a pandemic?
How would a high interest rate help? My mortgage is locked to a fixed rate.
Not unless we reduce the amount of red tape necessary for new construction. A market with super high housing prices should naturally correct itself as those profit margins attract new investment, but we clamp down really hard on new construction via nimbyism and over precise zoning laws.
deleted by creator
In a democracy, it usually requires a majority of people to feel the same. Right now, in almost every Western country, most people live in owner-occupied housing. Most people are perfectly happy for prices to keep going up. So they’re fine with high migration and slow building. Slowly, the number of owner-occupied homes is decreasing, but we are decades away from the flip. When it happens, it’s going to be extremely destructive. Generations have and will have been locked out of home ownership. There will be all kinds of punitive taxes on property.
Check Germany, only 49.5% own their houses and the situation is getting steadily worse.
It is getting ridiculously expensive and the majority of the people cannot afford getting a mortgage. In Munich the average sq.m. is between 8 and 15K while the average salary is 3K and the rent for 70sq.m. flat is 1.500€.
Just keep building, and change zoning laws to make that easier.
Yesterday I caught this little tidbit from the Denver news as I walked through my company’s break room:
Consumers are facing a double whammy as housing is both too expensive and there’s not enough of it.
As someone who grew up before macroeconomics was declared evil and apparently purged out of higher education, it’s no mystery to me that a market with inadequate supply will have high prices.
Consumers are facing a double whammy as housing is both too expensive and there’s not enough of it.
oh Denver. It’s been that way in Portland for several years now.
I’m not necessarily familiar with the exact definition of “macroeconomics” in this context, and I’m far too young to understand the cultural nuances you describe.
But I’m pretty sure it doesn’t take more that two brain cells to understand that the latter point is almost always the direct cause of the former.
It’s been 20 years since I took the class, but I think basically microeconomics is individual decision-making, and macroeconomics is market-level trends.
So an average market price over time is a macroeconomic model and a household’s maximum budget for groceries is a microeconomic model.
Supply and demand curves exist in macro.
What’s the deal with it being declared evil then? It makes a lot of sense.
