4 ms·

The money quotes: "If house prices fall, the middle aged and middle class will be in an uproar. [...] Perhaps even more critically, banks need house prices to

by tomp 11y ago

The money quotes: "If house prices fall, the middle aged and middle class will be in an uproar. [...] Perhaps even more critically, banks need house prices to rise, or at least not collapse." "More quality housing would increase its stock, and with supply rising to meet demand, prices would fall. This would be great for young renters, bad for middle-aged property owners, bad for banks. Thus it is not likely to happen. Property prices, at an all time high, are not likely to fall, and if they do, expect the government to put a floor under them." I couldn't agree more. I'm young and capital-poor, so this fact is a huge problem for me. I don't see a solution.

MaysonL 11y ago
Of course, that's only nominal house prices that shouldn't fall. If inflation-adjusted real house prices fall, not really a problem. Perhaps a little more inflation than we currently have would be a good idea (4-5%).
- tomp 11y ago
  When housing accounts for 30-50% of your income, house prices are inflation.
  - GFischer 11y ago
    Amen... in my country (Uruguay) they have a carefully managed inflation index... but it is meaninglesss.. housing went up 70%, what do I care if lottery tickets or vegetables go up or down 1%
ryandrake 11y ago
> I couldn't agree more. I'm young and capital-poor, so this fact is a huge problem for me. I don't see a solution. Vote for politicians not obsessed with propping up the business and real-estate portfolios of wealthy middle-aged people? (assuming you can find such politicians)
- tomp 11y ago
  Easier said than done. Unfortunately, these issues are so far removed from the public's mind that no politicians even bother talking about it.
  - ryandrake 11y ago
    It's not far removed from the public's mind. People know they're currently getting shafted. They have just been convinced that anything in the best interest of wealthy middle-aged people must also be in their best interest, because everyone thinks they will one day be wealthy middle-aged people. 39% of Americans think they are or will one day be among the top 1%: http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hope-over-self-interest.html http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hop...
- scott_karana 11y ago
  > Assuming you can find such politicians Some of us might become those politicians. :)
  - dougmany 11y ago
    but not before becoming wealthy middle-aged people.
    - scott_karana 11y ago
      Being wealthy and middle-aged isn't intrinsically bad.
ZeroGravitas 11y ago
I've been thinking recently that a political party that specificaly threatens to tax the old rich people in the future for all the stupid stuff they're doing right now might help to make this topic more relevant (thinking especially of climate change denial and propping up property bubbles that transfer rather than generate wealth). It seems kind of far-fetched, but in the Netherlands people sued the government for not doing enough about climate change and won, and I think there's a youth group suing the government in the states about climate change too. Not sure if the demographics work out politically though.
brc 11y ago
If you're serious about collecting capital, spend the next 5 years saving 50% or more of your income. Then, find the best investment for that, whether property or something else. That's the solution.

by tomp 11y ago

MaysonL 11y ago

Of course, that's only nominal house prices that shouldn't fall. If inflation-adjusted real house prices fall, not really a problem. Perhaps a little more inflation than we currently have would be a good idea (4-5%).

tomp 11y ago
When housing accounts for 30-50% of your income, house prices are inflation.
- GFischer 11y ago
  Amen... in my country (Uruguay) they have a carefully managed inflation index... but it is meaninglesss.. housing went up 70%, what do I care if lottery tickets or vegetables go up or down 1%

ryandrake 11y ago

> I couldn't agree more. I'm young and capital-poor, so this fact is a huge problem for me. I don't see a solution. Vote for politicians not obsessed with propping up the business and real-estate portfolios of wealthy middle-aged people? (assuming you can find such politicians)

tomp 11y ago
Easier said than done. Unfortunately, these issues are so far removed from the public's mind that no politicians even bother talking about it.
- ryandrake 11y ago
  It's not far removed from the public's mind. People know they're currently getting shafted. They have just been convinced that anything in the best interest of wealthy middle-aged people must also be in their best interest, because everyone thinks they will one day be wealthy middle-aged people. 39% of Americans think they are or will one day be among the top 1%: http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hope-over-self-interest.html http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hop...
scott_karana 11y ago
> Assuming you can find such politicians Some of us might become those politicians. :)
- dougmany 11y ago
  but not before becoming wealthy middle-aged people.
  - scott_karana 11y ago
    Being wealthy and middle-aged isn't intrinsically bad.

ZeroGravitas 11y ago

I've been thinking recently that a political party that specificaly threatens to tax the old rich people in the future for all the stupid stuff they're doing right now might help to make this topic more relevant (thinking especially of climate change denial and propping up property bubbles that transfer rather than generate wealth). It seems kind of far-fetched, but in the Netherlands people sued the government for not doing enough about climate change and won, and I think there's a youth group suing the government in the states about climate change too. Not sure if the demographics work out politically though.

brc 11y ago

If you're serious about collecting capital, spend the next 5 years saving 50% or more of your income. Then, find the best investment for that, whether property or something else. That's the solution.