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that's a false dichotomy. you can support freeing up urban real estate and retirees downsizing without assuming a house is an investment. for instance, if the e

that's a false dichotomy. you can support freeing up urban real estate and retirees downsizing without assuming a house is an investment. for instance, if the economic system acted to stabilize home values neutrally rather than explicitly promoting increasing valuations (through interest rates, and other mechanisms), you could still have those positive dynamics without the negative externalities.

FooHentai 6y ago
You're right. Ops position was that housing should not be seen as any kind of investment. My point was that, for retirees, housing is a valid investment vehicle and that dynamic is valuable to society as a whole. But on reflection, I'm thinking in the wrong terms here. I could better view this as housing being an important store of value for retirees, rather than an investment generating financial return for them.
- clairity 6y ago
  exactly. i'm actually ok with a primary home being a modest investment (like 0-1%/year appreciation over inflation, but not 2+%), i'm unabashedly against naked wealth extraction via the corporatized investment mentality, leaving people homeless, or at the very least broadly overleveraged (a profoundly negative externality). there's also the oft-mentioned japanese view that homes are a depreciating asset, though land values remain quite high, so the asset class is still modestly investible, iirc.
simonh 6y ago
It’s not the economic system as such that drives up real estate prices, it’s us the people who want to live in a nicer house. We bid up the prices of real estate in competition with each other. It’s not some external sinister faceless policy monster, it’s the queues of people who line up to view properties for sale - us. I’m a Brit but we have this bad here at the moment. A house next to ours came on the market just last week, it wasn’t even listed inline yet but on day one the estate agent had a long list of people registered with them viewing the property all day and got four offers. It’s those people living in my area competing for property driving up house prices.
- clairity 6y ago
  there's certainly fashionability, ego, and projection in homebuying that drives up bids, which can raise home prices in a given neighborhood over time, but that's largely because supply is artificially limited by things like regulatory capture and demand is distorted by economic policy promoting price inflation. for instance, low interest rates mean that more house can be bought at a given monthly payment amount (everyone seems to assume more is better), which is the economic basis of that ratcheting you're describing.

FooHentai 6y ago

You're right. Ops position was that housing should not be seen as any kind of investment. My point was that, for retirees, housing is a valid investment vehicle and that dynamic is valuable to society as a whole. But on reflection, I'm thinking in the wrong terms here. I could better view this as housing being an important store of value for retirees, rather than an investment generating financial return for them.

clairity 6y ago
exactly. i'm actually ok with a primary home being a modest investment (like 0-1%/year appreciation over inflation, but not 2+%), i'm unabashedly against naked wealth extraction via the corporatized investment mentality, leaving people homeless, or at the very least broadly overleveraged (a profoundly negative externality). there's also the oft-mentioned japanese view that homes are a depreciating asset, though land values remain quite high, so the asset class is still modestly investible, iirc.

simonh 6y ago

It’s not the economic system as such that drives up real estate prices, it’s us the people who want to live in a nicer house. We bid up the prices of real estate in competition with each other. It’s not some external sinister faceless policy monster, it’s the queues of people who line up to view properties for sale - us. I’m a Brit but we have this bad here at the moment. A house next to ours came on the market just last week, it wasn’t even listed inline yet but on day one the estate agent had a long list of people registered with them viewing the property all day and got four offers. It’s those people living in my area competing for property driving up house prices.

clairity 6y ago
there's certainly fashionability, ego, and projection in homebuying that drives up bids, which can raise home prices in a given neighborhood over time, but that's largely because supply is artificially limited by things like regulatory capture and demand is distorted by economic policy promoting price inflation. for instance, low interest rates mean that more house can be bought at a given monthly payment amount (everyone seems to assume more is better), which is the economic basis of that ratcheting you're describing.