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As much as I enjoy pissing on boomers, older home owners did nothing for their houses to appreciate. It's just something that happens due to monetary policy, lo

by fleddr 5y ago

As much as I enjoy pissing on boomers, older home owners did nothing for their houses to appreciate. It's just something that happens due to monetary policy, low interest rates, local scarcity of supply and a growing population. A lesser known reason is that since the 2008 crisis, hardly any new homes got built. Whilst the underlying demand was still in place, and growing. "You can’t sell anyone a home for $485k if they can only get a $166k mortgage" You only need enough buyers that can afford a 485K mortgage to meet supply. So when supply is very low (which in my country is very much true), if only 25% of the potential buyers can afford that mortgage it's still enough to buy the supply. Which they do, and they even overbid still. So this can keep going for a long while. Not even a crash solves it. Our 2008 crash dropped prices by 20% only. Which is now the gain in a single year. So that leaves the only other option you mention: wages.

qeternity 5y ago
> As much as I enjoy pissing on boomers, older home owners did nothing for their houses to appreciate. It's just something that happens due to monetary policy, low interest rates, local scarcity of supply and a growing population. All the things you mention, boomers did that. Monetary policy was drafted by boomers, for boomers, to protect and enrich boomers (low interest rates being one outcome). We printed trillions last year to protect boomers at the expense of young people. Scarcity is a function of zoning laws, again drafted by boomers to protect the value of their nest egg. It’s 100% their fault.
- imtringued 5y ago
  >enrich boomers (low interest rates being one outcome) Why does it matter if you pay $1000 per month on interest or $1000 per month on the principal? The monthly payment is the same. The only difference is that the bank takes less of your money.
loeg 5y ago
Boomers absolutely constrained supply to raise prices.
- numair 5y ago
  Your problem is not with “boomers.” It’s with a population pyramid that has actually just fallen apart — but those effects won’t show up for another 20+ years.
  - lmm 5y ago
    Nope. The problem is zoning laws which are a boomer invention. The population shift may actually solve the problem as there will be enough homes to go around despite it being de facto illegal to build new ones anywhere anyone wants to live.
  - imtringued 5y ago
    >population pyramid that has actually just fallen apart True, but the effects do show up today. When people have less children, the economy also consumes less, meaning less work needs to be done leading to a scarcity of the holy "well paying full time job". Instead you get a rise in part time jobs and as wages go down you also get an increase in "meaningless" employment in the service industry. The lack of children that are consuming more than they produce has basically created a huge demand hole in the economy that the rise of "consumerism" is trying to fill. Meanwhile working age people try to save for (early) retirement and reduce consumption themselves.
- fleddr 5y ago
  That's not a boomer thing at all, it's a human thing. As soon as younger generations secure a home, and when they resell later, they aren't going to give discounts to the next generation. Surely you can't belief they will? Everybody that owns a home, regardless of generation, wants their home value to at least persist and ideally grow. Likewise, people want to protect their neighborhood, as it directly affects the quality of living. It's natural and normal behavior, and not an issue in itself. The real issue is the infinite growth mindset in a finite world.

by fleddr 5y ago

qeternity 5y ago

> As much as I enjoy pissing on boomers, older home owners did nothing for their houses to appreciate. It's just something that happens due to monetary policy, low interest rates, local scarcity of supply and a growing population. All the things you mention, boomers did that. Monetary policy was drafted by boomers, for boomers, to protect and enrich boomers (low interest rates being one outcome). We printed trillions last year to protect boomers at the expense of young people. Scarcity is a function of zoning laws, again drafted by boomers to protect the value of their nest egg. It’s 100% their fault.

imtringued 5y ago
>enrich boomers (low interest rates being one outcome) Why does it matter if you pay $1000 per month on interest or $1000 per month on the principal? The monthly payment is the same. The only difference is that the bank takes less of your money.

loeg 5y ago

Boomers absolutely constrained supply to raise prices.

numair 5y ago
Your problem is not with “boomers.” It’s with a population pyramid that has actually just fallen apart — but those effects won’t show up for another 20+ years.
- lmm 5y ago
  Nope. The problem is zoning laws which are a boomer invention. The population shift may actually solve the problem as there will be enough homes to go around despite it being de facto illegal to build new ones anywhere anyone wants to live.
- imtringued 5y ago
  >population pyramid that has actually just fallen apart True, but the effects do show up today. When people have less children, the economy also consumes less, meaning less work needs to be done leading to a scarcity of the holy "well paying full time job". Instead you get a rise in part time jobs and as wages go down you also get an increase in "meaningless" employment in the service industry. The lack of children that are consuming more than they produce has basically created a huge demand hole in the economy that the rise of "consumerism" is trying to fill. Meanwhile working age people try to save for (early) retirement and reduce consumption themselves.
fleddr 5y ago
That's not a boomer thing at all, it's a human thing. As soon as younger generations secure a home, and when they resell later, they aren't going to give discounts to the next generation. Surely you can't belief they will? Everybody that owns a home, regardless of generation, wants their home value to at least persist and ideally grow. Likewise, people want to protect their neighborhood, as it directly affects the quality of living. It's natural and normal behavior, and not an issue in itself. The real issue is the infinite growth mindset in a finite world.