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In other words: the rent is too high. If it was lower you could actually pay wages at a level that people would show up for. A correction of real estate prices

In other words: the rent is too high. If it was lower you could actually pay wages at a level that people would show up for. A correction of real estate prices is long overdue, there is no need for landowners to skim off money that could be used more productively in others sectors of the economy.

jchanimal 6y ago
Is the solution to this inflation?
- Guest42 6y ago
  Can you elaborate the types and causes of inflation being mentioned?
  - DavidButter 6y ago
    Asset inflation, I assume?
- HarryHirsch 6y ago
  Inflation benefits people with debts. People with assets are quite untouched, you'd even think that real estate is viewed as a safe investment (the "concrete gold" meme). Better unemployment benefits would help, but under Delaware Biden they are a political impossibility.
  - jolux 6y ago
    Unemployment benefits are currently the best they’ve ever been by a wide margin.
    - HarryHirsch 6y ago
      The word is "currently", isn't it? They'll be rolled back soon enough, same as in 2008, to get the plebs back to work.
      - jolux 6y ago
        One assumes, though it's expected the child tax credit will be introduced in a permanent bill eventually, so I think there's a chance we'll see a more permanent UI benefit too. At least I hope.
        HarryHirsch 6y ago
        Pfft. Biden rolled back immigration restrictions in a period of record unemployment, and you expect improvement in unemployment benefits? Labour must be squeezed, and the child tax credit does that, too. Can't have a reduction in births, that would mean less workers fighting for a job twenty years down the line.
- aphextron 6y ago
  Inflation is the result of rising wages. However, we're in a place now where wages haven't even matched inflation for decades. Suddenly things start catching up and everyone loses their mind, claiming it's the fault of unemployment insurance.
honkycat 6y ago
Everybody's gotta wet their beak every step of the way down. Landowner, restaurant owner, manager. By the time it reaches ground level nothing left but crumbs
ihyfhgyfhth 6y ago
That would require interest rates to rise - which would pop the current asset prices and lead us into a decadal global recession. There is no way out. Get out of debt and hoard as much as you can. Bad times are coming.
- 6gvONxR4sf7o 6y ago
  Does it require changes in rates? Interest rates determine absolute property prices, by way of per month payment prices, but it’s the latter that should have primacy, right? What people can afford to pay each month.
  - ihyfhgyfhth 6y ago
    Right. Property values are highly correlated with incomes, because that determines what purchasers or renters can afford. Interest rates determine how much of a loan a purchaser can service. So, low rates allow purchasers to bid up the price of assets, which effectively transfers money from borrowers to current asset owners. Since property prices are highly correlated with incomes, and income changes are correlated with inflation and productivity gains, the only lever that can be pulled to change real estate prices is the interest rate. For property to become more affordable, the interest rate has to rise. Since that would cause property values to drop, many people who recently purchased property would find themselves owing more to a mortgage lender than their property is now worth, and it would likely remain that way for a decade. Many of those people were stretching to afford their purchase before, with 3% down programs and half their monthly income or more going to service a loan. We are already at a record high level of mortgages in forbearance. So, the interest rate cannot be allowed to rise. The only people that would benefit are people with a decent income, no debt, and substantial savings, who do not yet own an asset class. Almost no-one, and mostly young people. But low interest rates push money to seek higher returns, which causes investment to become speculative instead of seeking lower-risk capital improvements. This reduces future productivity gains, which lowers growth long-term. In other words, the future is Japanification. Society will gladly sacrifice its children and future for a few more years of fun bucks. A decade long recession is, I believe, inevitable, and will happen after the next asset crash.
thisisnico 6y ago
I don't think the prices are gonna correct as much as people think it would, considering my entire generation is waiting on the sidelines to buy, the demand will always be there until it's satisfied.
- deleted 6y ago
  [deleted]
- ihyfhgyfhth 6y ago
  12% of US detached housing is vacant. Property is being held by speculators who are betting that interest rates will fall and increase the value of property. No amount of supply will meet the demand of an asset class that increases in value by 6% a month.
  - slowhand09 6y ago
    Interest rates are at historic lows. The Fed rate going negative has been discussed in months gone by. Lender money to borrow is a little tougher as with rates so low they may keep it in equities, or buy GME or Bitcoin where they have higher upside potential.
    - ihyfhgyfhth 6y ago
      Buying GME to offset losses in real estate is the most 2021 thing I've heard. I don't know if I should laugh or cry. The only thing I have to say is that I would expect the government to push more federally backed mortgage loans at their preferred interest rates if they sense a slowdown in private lending. Heaven forbid markets correct themselves.
  - LMYahooTFY 6y ago
    Do you have a source for this? Trying to dig through census data but can't find this specific metric.
    - ihyfhgyfhth 6y ago
bitshiftfaced 6y ago
I think you may've missed some subtext from the parent post. It sounded to me like people are not showing up to interviews not just because of higher wages offered elsewhere. It sounded like, at least partly, those interviewees currently do not need to show up to job interviews in order to make ends meet. This has the added effect of lowering the labor supply, which to me explains the struggle parent poster is facing.

jchanimal 6y ago

Is the solution to this inflation?

Guest42 6y ago
Can you elaborate the types and causes of inflation being mentioned?
- DavidButter 6y ago
  Asset inflation, I assume?
HarryHirsch 6y ago
Inflation benefits people with debts. People with assets are quite untouched, you'd even think that real estate is viewed as a safe investment (the "concrete gold" meme). Better unemployment benefits would help, but under Delaware Biden they are a political impossibility.
- jolux 6y ago
  Unemployment benefits are currently the best they’ve ever been by a wide margin.
  - HarryHirsch 6y ago
    The word is "currently", isn't it? They'll be rolled back soon enough, same as in 2008, to get the plebs back to work.
    - jolux 6y ago
      One assumes, though it's expected the child tax credit will be introduced in a permanent bill eventually, so I think there's a chance we'll see a more permanent UI benefit too. At least I hope.
      - HarryHirsch 6y ago
        Pfft. Biden rolled back immigration restrictions in a period of record unemployment, and you expect improvement in unemployment benefits? Labour must be squeezed, and the child tax credit does that, too. Can't have a reduction in births, that would mean less workers fighting for a job twenty years down the line.
aphextron 6y ago
Inflation is the result of rising wages. However, we're in a place now where wages haven't even matched inflation for decades. Suddenly things start catching up and everyone loses their mind, claiming it's the fault of unemployment insurance.

honkycat 6y ago

Everybody's gotta wet their beak every step of the way down. Landowner, restaurant owner, manager. By the time it reaches ground level nothing left but crumbs

ihyfhgyfhth 6y ago

That would require interest rates to rise - which would pop the current asset prices and lead us into a decadal global recession. There is no way out. Get out of debt and hoard as much as you can. Bad times are coming.

6gvONxR4sf7o 6y ago
Does it require changes in rates? Interest rates determine absolute property prices, by way of per month payment prices, but it’s the latter that should have primacy, right? What people can afford to pay each month.
- ihyfhgyfhth 6y ago
  Right. Property values are highly correlated with incomes, because that determines what purchasers or renters can afford. Interest rates determine how much of a loan a purchaser can service. So, low rates allow purchasers to bid up the price of assets, which effectively transfers money from borrowers to current asset owners. Since property prices are highly correlated with incomes, and income changes are correlated with inflation and productivity gains, the only lever that can be pulled to change real estate prices is the interest rate. For property to become more affordable, the interest rate has to rise. Since that would cause property values to drop, many people who recently purchased property would find themselves owing more to a mortgage lender than their property is now worth, and it would likely remain that way for a decade. Many of those people were stretching to afford their purchase before, with 3% down programs and half their monthly income or more going to service a loan. We are already at a record high level of mortgages in forbearance. So, the interest rate cannot be allowed to rise. The only people that would benefit are people with a decent income, no debt, and substantial savings, who do not yet own an asset class. Almost no-one, and mostly young people. But low interest rates push money to seek higher returns, which causes investment to become speculative instead of seeking lower-risk capital improvements. This reduces future productivity gains, which lowers growth long-term. In other words, the future is Japanification. Society will gladly sacrifice its children and future for a few more years of fun bucks. A decade long recession is, I believe, inevitable, and will happen after the next asset crash.

thisisnico 6y ago

I don't think the prices are gonna correct as much as people think it would, considering my entire generation is waiting on the sidelines to buy, the demand will always be there until it's satisfied.

deleted 6y ago
[deleted]
ihyfhgyfhth 6y ago
12% of US detached housing is vacant. Property is being held by speculators who are betting that interest rates will fall and increase the value of property. No amount of supply will meet the demand of an asset class that increases in value by 6% a month.
- slowhand09 6y ago
  Interest rates are at historic lows. The Fed rate going negative has been discussed in months gone by. Lender money to borrow is a little tougher as with rates so low they may keep it in equities, or buy GME or Bitcoin where they have higher upside potential.
  - ihyfhgyfhth 6y ago
    Buying GME to offset losses in real estate is the most 2021 thing I've heard. I don't know if I should laugh or cry. The only thing I have to say is that I would expect the government to push more federally backed mortgage loans at their preferred interest rates if they sense a slowdown in private lending. Heaven forbid markets correct themselves.
- LMYahooTFY 6y ago
  Do you have a source for this? Trying to dig through census data but can't find this specific metric.
  - ihyfhgyfhth 6y ago

bitshiftfaced 6y ago

I think you may've missed some subtext from the parent post. It sounded to me like people are not showing up to interviews not just because of higher wages offered elsewhere. It sounded like, at least partly, those interviewees currently do not need to show up to job interviews in order to make ends meet. This has the added effect of lowering the labor supply, which to me explains the struggle parent poster is facing.