3 ms·

On one hand, yes you are right. There is consolidation bonzanza waiting to happen in housing, which honestly I am not even mad about because homeownership is a

On one hand, yes you are right. There is consolidation bonzanza waiting to happen in housing, which honestly I am not even mad about because homeownership is a disgraceful sham and national institutional investors might be less NIMBY. On the other hand, keep in mind that kneecapping demand is orthodox macroeconomics since the 1970s for very stupid reasons. Finance people are pretty good at unlearning stupid ivory tower econ, cause stuff like "flows before pros" vs "the market efficiently allocates goods" is their day job, but sometimes it's hard to let old habits die out. (And the textbook stuff is a nice salve for feeling better about the impacts of the job, too.) See https://www.employamerica.org/researchreports/inflation-expectations/ https://www.employamerica.org/researchreports/inflation-expe... for a sketch of how normal macro is bullshit. If I sound too conspiratorial, here is https://www.federalreserve.gov/econres/feds/files/2021062pap.pdf https://www.federalreserve.gov/econres/feds/files/2021062pap..., a paper from a well-credentialed macroeconomicist at the fed whose sick of the bullshit. There's been good empirical work for years, and now the theory damn is finally breaking. Now, to sound much more conspiratorial after all, you can also read a prediction of the trend until from...1943. https://delong.typepad.com/kalecki43.pdf https://delong.typepad.com/kalecki43.pdf Rock-bottom interest rates, UBI vs jobs guarantee, a breakdown of the full employment consensus (as occurred in the 1970s), it's all there.

estaseuropano 5y ago
Home ownership used to be one of the few accessible investments that directly benefit less well off people. Rather than throw rent money in a black hole they build equity. How is that a sham?
- californical 5y ago
  Housing cannot by definition be a good investment, without becoming gradually more scarce and unaffordable in the future. Keeping housing affordable means that it should grow with inflation, approximately. A good investment should outpace inflation.
  - mrsuprawsm 5y ago
    In the case when population remains constant, sure, but with a growing population, more housing is always required, thus the value should always increase, no?
    - avz 5y ago
      Prices increase when you have a shortage. Prices decrease when you have a surplus. We can maintain prices by growing housing stock in line with population. (The same applies to everything else from semiconductors to cars to human labor.) In California, people used zoning regulations to create a shortage and predictably house prices rose. Some people got richer. Other people got evicted. Ideally, we'd create a slight housing surplus to reduce prices. As an added benefit, this would reduce rent-seeking opportunities and create a buffer of empty housing stock that would make moving and searching for a new place to live less of a hassle increasing people's mobility.
  - cascom 5y ago
    I interpreted the parent post to be more as “sound financial strategy to saving” rather than “good investment” (buying for levered appreciation) Would also note that housing can be affordable nationally, and unaffordable in some markets given the local nature of housing.
    - Ericson2314 5y ago
      > Would also note that housing can be affordable nationally, and unaffordable in some markets given the local nature of housing. True, but if we don't densify (the natural result of that thinking), we'll condemn ourselves to waste inefficiency low growth and environmental destruction. > I interpreted the parent post to be more as “sound financial strategy to saving” rather than “good investment” (buying for levered appreciation). This is still a bit fraught, especially as housing has historically reason too fast. Remember there are net 0 dollars (basically), and saving is a mostly monetary phenomenon. Arguably it's because terrible cost disease in healthcare, education, housing, etc. that people want to save so much in the first place!
  - 5y ago
- knownjorbist 5y ago
  The point is it never should have been that way.
- avz 5y ago
  In a hypothetical world where humans eat something durable like wood, making wood an investment would create a group of people who cannot afford food. In the real world where shelter is durable, making it an investment creates a group of people who cannot afford shelter. Homeownership-as-investment is a mechanism to increase one's wealth at the expense of the less fortunate. It is ethically bankrupt. It is also a disgrace that even though technological progress makes more and more things people need affordable, we use political means like zoning regulations to artificially drive up home prices in order to turn them into a good investment and thus unaffordable for some.

estaseuropano 5y ago

Home ownership used to be one of the few accessible investments that directly benefit less well off people. Rather than throw rent money in a black hole they build equity. How is that a sham?

californical 5y ago
Housing cannot by definition be a good investment, without becoming gradually more scarce and unaffordable in the future. Keeping housing affordable means that it should grow with inflation, approximately. A good investment should outpace inflation.
- mrsuprawsm 5y ago
  In the case when population remains constant, sure, but with a growing population, more housing is always required, thus the value should always increase, no?
  - avz 5y ago
    Prices increase when you have a shortage. Prices decrease when you have a surplus. We can maintain prices by growing housing stock in line with population. (The same applies to everything else from semiconductors to cars to human labor.) In California, people used zoning regulations to create a shortage and predictably house prices rose. Some people got richer. Other people got evicted. Ideally, we'd create a slight housing surplus to reduce prices. As an added benefit, this would reduce rent-seeking opportunities and create a buffer of empty housing stock that would make moving and searching for a new place to live less of a hassle increasing people's mobility.
- cascom 5y ago
  I interpreted the parent post to be more as “sound financial strategy to saving” rather than “good investment” (buying for levered appreciation) Would also note that housing can be affordable nationally, and unaffordable in some markets given the local nature of housing.
  - Ericson2314 5y ago
    > Would also note that housing can be affordable nationally, and unaffordable in some markets given the local nature of housing. True, but if we don't densify (the natural result of that thinking), we'll condemn ourselves to waste inefficiency low growth and environmental destruction. > I interpreted the parent post to be more as “sound financial strategy to saving” rather than “good investment” (buying for levered appreciation). This is still a bit fraught, especially as housing has historically reason too fast. Remember there are net 0 dollars (basically), and saving is a mostly monetary phenomenon. Arguably it's because terrible cost disease in healthcare, education, housing, etc. that people want to save so much in the first place!
- 5y ago
knownjorbist 5y ago
The point is it never should have been that way.
avz 5y ago
In a hypothetical world where humans eat something durable like wood, making wood an investment would create a group of people who cannot afford food. In the real world where shelter is durable, making it an investment creates a group of people who cannot afford shelter. Homeownership-as-investment is a mechanism to increase one's wealth at the expense of the less fortunate. It is ethically bankrupt. It is also a disgrace that even though technological progress makes more and more things people need affordable, we use political means like zoning regulations to artificially drive up home prices in order to turn them into a good investment and thus unaffordable for some.