4 ms·

Not to simplify it but chances are there is more gold in the ground, real estate is the one commodity that is truly finite. Granted, people can always build on

Not to simplify it but chances are there is more gold in the ground, real estate is the one commodity that is truly finite. Granted, people can always build on unbuilt land but that in turn requires infrastructure, etc to support a new community or residence. For this reason, it being finite, I wish the US government would set some restrictions on allowing business and foreign investments to purchase residential real estate. It is hard enough (San Francisco seems like a large part of the rest of the US on steroids) for working people to purchase these days...having empty homes bought by non-residents just sit waiting until the prices are forced (due to said) to rise is only going to exacerbate the situation.

qubex 11y ago
Those purchases “by business or foreigners” transfer cash to the seller and be up in the economy anyway. Homeowners who sell do so because it is in their interest to do so, the restriction you propose would be Pareto-inefficient.
- sytelus 11y ago
  Or is it? The money flowed in real estate will most likely immediately get used to buy other houses and there by inflating homes even further. I don't think anyone sells their home and uses the proceeds to buy some stock - the proceeds goes almost always immediately to buy other home. It's like you live in a village, a traveler pays you $100 for a goat which was suppose to be only $10. Then you realize goat is so valuable so you use your $100 to buy two goats from neighbor for $50 each. Now your neighbor realizes what's going on and he uses his new money plus some more buy more goats - all in anticipation that everyone needs goat and prices will keep going up. The virtuous cycle starts and sooner or later major portions of people's money keeps changing hands in form of million dollar goats. Very little of that money might actually get used for other purposes like building the hospital or school because those things don't deliver investment returns like a goat does.
vinceguidry 11y ago
> real estate is the one commodity that is truly finite This is untrue in both the literal and figurative senses. In the literal sense, real estate isn't just land, other properties of land, such as mineral or air rights, can also be created, bought, and sold. You can build up and sell condominiums. You can build down. You can dredge land out of the ocean. Eventually you'll be able to build out in space. In the figurative sense, people make this claim to assert that real estate is becoming rare, and therefore intrinsically valuable. While certain markets definitely are this way, like NYC penthouses, the asset class as a whole is much like it's brethren in this regard. Value is in the eye of the beholder, trends develop rapidly and can bolster or devalue individual properties at breathtaking rates.
- dev360 11y ago
  I wish startups could tackle actually making affordable home ownership a reality. This is a much larger problem for our generation than what people care to admit. Specifically, I'm wondering why there are no cheap modular houses (like in movie ex machina). Houses that are mass produced, cheap and relatively easy to ship and assemble but configurable.
  - vinceguidry 11y ago
    > I wish startups could tackle actually making affordable home ownership a reality. You're looking at one of the oldest, most capital-intensive markets in existence. It's practically the polar opposite of technology. Not a whole lot startups can really do. > Specifically, I'm wondering why there are no cheap modular houses (like in movie ex machina). Houses that are mass produced, cheap and relatively easy to ship and assemble but configurable. Well, that's easy to answer. In most real estate transactions, the cost of the underlying land is going to be the dominant factor, the house is just a value-add, the equivalent of buying a soda with your meal. Modular houses themselves are at a disadvantage because it's not the cheapest way to put homes on land. Modern stick-framed houses are so cheap to put up these days that once you factor in the R&D, transportation and specialized installation costs, factory-built modular homes are at a severe disadvantage. Construction workers are literally everywhere, the labor is so cheap that it's practically a non-factor. Also, it's easy to over-build. If developers create a glut, nobody's going to make money for a long time. Prices don't really come down during a glut because the developer would rather let the house sit than sell at a loss. So you get a lot of empty housing stock sitting around.
prostoalex 11y ago
> chances are there is more gold in the ground, real estate is the one commodity that is truly finite If 432 Park Ave taught us anything it's that one can always build up.

qubex 11y ago

Those purchases “by business or foreigners” transfer cash to the seller and be up in the economy anyway. Homeowners who sell do so because it is in their interest to do so, the restriction you propose would be Pareto-inefficient.

sytelus 11y ago
Or is it? The money flowed in real estate will most likely immediately get used to buy other houses and there by inflating homes even further. I don't think anyone sells their home and uses the proceeds to buy some stock - the proceeds goes almost always immediately to buy other home. It's like you live in a village, a traveler pays you $100 for a goat which was suppose to be only $10. Then you realize goat is so valuable so you use your $100 to buy two goats from neighbor for $50 each. Now your neighbor realizes what's going on and he uses his new money plus some more buy more goats - all in anticipation that everyone needs goat and prices will keep going up. The virtuous cycle starts and sooner or later major portions of people's money keeps changing hands in form of million dollar goats. Very little of that money might actually get used for other purposes like building the hospital or school because those things don't deliver investment returns like a goat does.

vinceguidry 11y ago

> real estate is the one commodity that is truly finite This is untrue in both the literal and figurative senses. In the literal sense, real estate isn't just land, other properties of land, such as mineral or air rights, can also be created, bought, and sold. You can build up and sell condominiums. You can build down. You can dredge land out of the ocean. Eventually you'll be able to build out in space. In the figurative sense, people make this claim to assert that real estate is becoming rare, and therefore intrinsically valuable. While certain markets definitely are this way, like NYC penthouses, the asset class as a whole is much like it's brethren in this regard. Value is in the eye of the beholder, trends develop rapidly and can bolster or devalue individual properties at breathtaking rates.

dev360 11y ago
I wish startups could tackle actually making affordable home ownership a reality. This is a much larger problem for our generation than what people care to admit. Specifically, I'm wondering why there are no cheap modular houses (like in movie ex machina). Houses that are mass produced, cheap and relatively easy to ship and assemble but configurable.
- vinceguidry 11y ago
  > I wish startups could tackle actually making affordable home ownership a reality. You're looking at one of the oldest, most capital-intensive markets in existence. It's practically the polar opposite of technology. Not a whole lot startups can really do. > Specifically, I'm wondering why there are no cheap modular houses (like in movie ex machina). Houses that are mass produced, cheap and relatively easy to ship and assemble but configurable. Well, that's easy to answer. In most real estate transactions, the cost of the underlying land is going to be the dominant factor, the house is just a value-add, the equivalent of buying a soda with your meal. Modular houses themselves are at a disadvantage because it's not the cheapest way to put homes on land. Modern stick-framed houses are so cheap to put up these days that once you factor in the R&D, transportation and specialized installation costs, factory-built modular homes are at a severe disadvantage. Construction workers are literally everywhere, the labor is so cheap that it's practically a non-factor. Also, it's easy to over-build. If developers create a glut, nobody's going to make money for a long time. Prices don't really come down during a glut because the developer would rather let the house sit than sell at a loss. So you get a lot of empty housing stock sitting around.

prostoalex 11y ago

> chances are there is more gold in the ground, real estate is the one commodity that is truly finite If 432 Park Ave taught us anything it's that one can always build up.