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Easy solution: either raise wages or lower prices. As it stands wages are too low to attract workers given prices, especially the price of real estate.
by api 5y ago
Easy solution: either raise wages or lower prices. As it stands wages are too low to attract workers given prices, especially the price of real estate.
- j_walter 5y agoHow will someone lower prices when the government has done nothing but print money in the last 4 years...let alone the free cash giveaways in the last 18 months. People are using that money to buy bigger or more houses...thus driving up the price of real estate.
- sanxiyn 5y agoIt's mostly not inflation. Inflation-adjusted house price is also up.
- j_walter 5y agoDepends on your definition of inflation... >In economics, inflation (or less frequently, price inflation) is a general rise in the price level of an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.
- rtpg 5y agoyes the ... one-time $3400 checks and a major economic contraction. That definitely caused 10+% price increases on $500k+ homes. Beyond everything else, this is just mathematically absurd.
- missedthecue 5y agoThere was also boosted unemployment. In some states people were taking in over $4000 per month in unemployment. That's a lot of money to not work.
- forz877 5y agoIt's still not enough to dispute the parent's comment. There isn't anyone poor getting rich off unemployment. It's not the reason for the housing boom.
- onlyrealcuzzo 5y agoYou could buy houses in cash in half the cities in Ohio for 6 months unemployment + 3 stimulus checks. There are plenty of places like this in the US - Alabama, Mississippi, etc. Sure - that is not the reason house prices in Marin are up 30%. That's probably got more to do with central banks pushing up equities >30%. And probably because when you cut mortgage interest rates by 1 percentage point (which they did), you can afford ~15% more house. In real terms - monthly payments for new housing purchases are down.
- forz877 5y agoSure, you could buy a house in the extremely small cities of Ohio with little to no jobs or economic future. I doubt many are. Almost all the population growth in the US is in major metro areas. If those cities are close to commute to Cleveland, Columbus, or Cincinnati, sure.
- onlyrealcuzzo 5y agoYou could literally buy houses in Cleveland for less than $30k. 6 months of unemployment plus stimulus in Ohio was >$25k. This is even more true for Detroit.
- forz877 5y agoI live in the rust belt. No one is buying those 30k homes. Why? They're unmaintained, falling apart, need completely rewired, completely new plumbing. The housing stock in the rust belt is OLD. This is what makes prices "so cheap" to you lot looking in from the coasts. But the reality is no one is buying the discount properties that need major work. They're in run down neighborhoods with vacancies everywhere and sit on the market for months. They're almost unsellable - many are held onto with the hope that a neighborhood will get gentrified. Cities like Detroit and Cleveland see Pittsburgh's resurgence and think that will happen there. But for every expensive Pittsburgh neighborhood there's a Clairton and McKeesport.
- wincy 5y agoI don’t know how but my sister and my brother in law bought a brand new Harley in the middle of the pandemic, while they were both unemployed and collecting benefits. Pretty discouraging to me, I feel like a sap that I kept working. Why do they get twice as much assistance when my wife doesn’t work because we decided to have her be a stay at home mom?
- rtpg 5y agoEven $20,000 is not $500,000. The obvious answer to your last question is not that your sister and BIL should not get assistance, but that your wife should also get more assistance. We don't do enough to support people across the country. 2020 showed some rare aid to people in a reasonable fashion (at least for a couple of months). We can do more of that. We have fiat currency after all, let's take advantage of it!
- j_walter 5y agoYou think that's the only money that got issued? The loans that went to companies was absurdly abused and had almost no oversight. Trillions of dollars went into the economy in a matter of months...
- api 5y agoGood point, which is why wages have to go up. Eventually everyone will make six figures and a loaf of bread will be $16 but housing will be rationally priced again with starter homes at $500k.
- ericmcer 5y agoHow do you lower the price of real estate?
- betaby 5y agoIncrease supply by building more and building up.
- sanxiyn 5y agoThis doesn't help in the short term, because building takes time. Moving people is faster than constructing buildings.
- TuringNYC 5y agoYou're right it does not help in the short term, but we've been speaking about the Bay Area problems (for example) for two decades and vigorously discussing it in the past decade -- building five years ago could have solved today's problem. Similarly, we could speak about it for another decade, or we could build now and solve part of the problem in five years. This also doesn't exclude other fixes that can happen orthogonally.
- Telemakhos 5y ago> building takes time It does not have to take nine months (the national average) to build a house or a hundred houses. Housing can be and in times of necessity has been built rapidly and well. My favorite example is Hilton Village in Newport News, VA, built to house workers at Newport News Shipyard at the tail end of and after World War I. Five hundred units were constructed within two years, and they were built cheaply yet with a randomization to the sequence of models and detailing that kept the houses from feeling like a cookie-cutter development, avoiding pitfalls into which many suburbs today fall. A hundred years later the homes remain occupied and in fact prized today for their charm. The barriers to affordable, desirable, swiftly built housing are artificial.
- prostoalex 5y ago
- rodgerd 5y ago1,800% increase in CEO pay vs 10s % for worker pay. Gee, I wonder what the problem could be?
- ptr2voidStar 5y agoNow we're getting closer to the truth - although your hyperbole doesn't help, you're definitely on the right track.