5 ms·

There are a lot of people vaguely guessing around at what the "real value" of a home is. In a world where you need shelter to produce income the value of a hou

There are a lot of people vaguely guessing around at what the "real value" of a home is. In a world where you need shelter to produce income the value of a house is essentially all your income over the entire span of your life. So really arguments that houses are "overvalued" are ridiculous to me, houses have never decreased in value historically, why would they do so now? I am fully expecting single family residential properties to reach 7 and 8 figures in my lifetime. Why wouldn't they continue the track of the last 100 years? No, increasing the supply will do nothing, speculators already own most of the available real estate so that will only drive the prices up further. Look at the number of single family home that are being bought and immediately rented out, in new construction the renters far outnumber the owners. Until speculation is banned or the government locks in reasonable prices, prices will continue to rise in perpetuity.

ghaff 5y ago
>Look at the number of single family home that are being bought and immediately rented out, in new construction the renters far outnumber the owners. I'm not sure I see the problem. People are living in the property one way or the other. It's not like there is some infinite pool of renters not living someplace who will absorb any supply. What would be (and is in some places) a problem is if speculators/people parking cash bought property and let it sit empty.
- yunohn 5y ago
  > I'm not sure I see the problem. I don’t see why only parked properties are a problem? Rentals are always more expensive than the underlying mortgage - that’s what makes it an investment opportunity. This is a big problem since most people could’ve afforded the original property if they weren’t priced out by investors.
  - leetcrew 5y ago
    there are a few ways this could not be true. the mortgage could have been locked in a long time ago at a much lower valuation. the rent would still be above the underlying mortgage, but that doesn't mean I would have bought the house when I was a child. the landlord might own the building outright, or the valuation might be increasing so fast that the rent only needs to offset the rent. either way, the rent could be pushed below the mortgage (or what the mortgage would be). there are some us cities with extremely high price-to-rent ratios. some of those properties must be renting for below the underlying mortgage.
    - yunohn 5y ago
      The higher valuation now is exactly the problem. It’s not connected materially to the property value, rather the speculative investment value the market is giving it. This doesn’t change my point that renting needs to be profitable to happen, and the proof is in the pudding/reality.
vinw 5y ago
> houses have never decreased in value historically Never?
- question000 5y ago
  Yes literally never in my lifetime, even after the 2008 recession those same houses are worth more now then ever. Any findings that show house values are "going down" are just sampling errors, or more likely people being purposefully misleading by distorting the trends.
  - anon98356 5y ago
    Firstly, never and never in your lifetime are two very different timespans. Second, just because those houses from 2008 recession are now worth more than in 2008 doesn't mean they have been steadily increasing in value since 2008. There have definitely been downturns in the property market. One in particular that springs to mind is the impact of Brexit on house prices in London. Sure, eventually the price might recover to the point that homes are worth more than pre Brexit. But if you are trying to sell in the meantime that drop can have a significant impact on your ability to move.
    - question000 5y ago
      Ok never ever have housing really prices gone down. Look at any chart of average home prices in the US if you bought a house at any time and waited 10 years you definitely made money. Even in neighborhoods where >50% people were in foreclosure their homes are worth more then ever. If you can find anywhere housing prices are less then in 2008 please say so. The Brexit thing is just guesswork on your part those properties will be sell at the same prices they were listed at probably nobody actually purchased them in the first place just for speculation.
      - lotsofpulp 5y ago
        Look anywhere in rural areas of high tax states in Great Lakes/Midwest/Northeast, such as southern Illinois or upstate NY. Even homes in CT/NJ away from the urban centers are down in real value, maybe flat or slightly higher in nominal value. Certain regions of the country are hot, certain regions are nowhere near. Even the differences in the regions of the US where house prices are rising exhibit a wide range from many areas only experiencing slight changes to others in the hundreds of thousands of dollars. It depends if your region has the amenities people with money are looking for or if it has access to large numbers of high paying jobs.

ghaff 5y ago

>Look at the number of single family home that are being bought and immediately rented out, in new construction the renters far outnumber the owners. I'm not sure I see the problem. People are living in the property one way or the other. It's not like there is some infinite pool of renters not living someplace who will absorb any supply. What would be (and is in some places) a problem is if speculators/people parking cash bought property and let it sit empty.

yunohn 5y ago
> I'm not sure I see the problem. I don’t see why only parked properties are a problem? Rentals are always more expensive than the underlying mortgage - that’s what makes it an investment opportunity. This is a big problem since most people could’ve afforded the original property if they weren’t priced out by investors.
- leetcrew 5y ago
  there are a few ways this could not be true. the mortgage could have been locked in a long time ago at a much lower valuation. the rent would still be above the underlying mortgage, but that doesn't mean I would have bought the house when I was a child. the landlord might own the building outright, or the valuation might be increasing so fast that the rent only needs to offset the rent. either way, the rent could be pushed below the mortgage (or what the mortgage would be). there are some us cities with extremely high price-to-rent ratios. some of those properties must be renting for below the underlying mortgage.
  - yunohn 5y ago
    The higher valuation now is exactly the problem. It’s not connected materially to the property value, rather the speculative investment value the market is giving it. This doesn’t change my point that renting needs to be profitable to happen, and the proof is in the pudding/reality.

vinw 5y ago

> houses have never decreased in value historically Never?

question000 5y ago
Yes literally never in my lifetime, even after the 2008 recession those same houses are worth more now then ever. Any findings that show house values are "going down" are just sampling errors, or more likely people being purposefully misleading by distorting the trends.
- anon98356 5y ago
  Firstly, never and never in your lifetime are two very different timespans. Second, just because those houses from 2008 recession are now worth more than in 2008 doesn't mean they have been steadily increasing in value since 2008. There have definitely been downturns in the property market. One in particular that springs to mind is the impact of Brexit on house prices in London. Sure, eventually the price might recover to the point that homes are worth more than pre Brexit. But if you are trying to sell in the meantime that drop can have a significant impact on your ability to move.
  - question000 5y ago
    Ok never ever have housing really prices gone down. Look at any chart of average home prices in the US if you bought a house at any time and waited 10 years you definitely made money. Even in neighborhoods where >50% people were in foreclosure their homes are worth more then ever. If you can find anywhere housing prices are less then in 2008 please say so. The Brexit thing is just guesswork on your part those properties will be sell at the same prices they were listed at probably nobody actually purchased them in the first place just for speculation.
    - lotsofpulp 5y ago
      Look anywhere in rural areas of high tax states in Great Lakes/Midwest/Northeast, such as southern Illinois or upstate NY. Even homes in CT/NJ away from the urban centers are down in real value, maybe flat or slightly higher in nominal value. Certain regions of the country are hot, certain regions are nowhere near. Even the differences in the regions of the US where house prices are rising exhibit a wide range from many areas only experiencing slight changes to others in the hundreds of thousands of dollars. It depends if your region has the amenities people with money are looking for or if it has access to large numbers of high paying jobs.