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I don't think you understand how the value of these assets is supposed to rise. When you buy a flat in the center of town, it's supposed to increase it's value

by po1nt 5y ago

I don't think you understand how the value of these assets is supposed to rise. When you buy a flat in the center of town, it's supposed to increase it's value for being in the center while town is expanding. That means that there are always new housing units creating in the expanding periphery which drives population of town and therefor demand for living in the center. The issue is that newly created housing is already priced sky high. You can blame quantitative easing which lowers interest rates and drives comodities we usually buy with credit high. Just add another line to the graph and you'll see it. Problem is not the market, but the fact someone is tempering with it so bad it inevitably collapses.

AnthonyMouse 5y ago
> When you buy a flat in the center of town, it's supposed to increase it's value for being in the center while town is expanding. If the town is expanding then the supply of housing goes up along with the demand and prices stay the same, i.e. proportional to the cost of constructing new housing. Once you reach a certain point you have to build taller buildings which are more expensive to build and then housing prices would reflect the higher construction cost, but this only applies to urban areas and the costs only get really high when the buildings get really tall. If you converted some of the suburbs to three story buildings that filled the lots, the cost per square foot wouldn't be much higher than it is for single family homes, but there would be ten times more housing per acre. Doing this is prohibited by zoning, which is the real reason why housing is unaffordable.
- sokoloff 5y ago
  People who wish to live in areas of three story multi-family structures that fill the lot should be able to find or make places where that’s legal and the predominant style, I agree. (I’m opposed to the effective exclusion of that via pervasive 1/2 family zoning.) Equally, people who don’t want to live like that should be able to find or make places where detached 1-3 family buildings that don’t fill the lot are legal and the predominant style. (I’m opposed to zoning laws/changes that prohibit these neighborhoods as well.) Forcing everyone to live in what they consider an undesirable hellscape isn’t good policy in either direction.
forgotmyoldname 5y ago
> I don't think you understand how the value of these assets is supposed to rise. When you buy a flat in the center of town, it's supposed to increase it's value for being in the center while town is expanding. Why is it "supposed" to be this way? It doesn't work this way in a lot of Asia. People don't want old, used homes and they lose value over time. Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns. When American cities expand, they build more houses farther away but further condense business in the downtown core. But that's a problem that's politically invented and not so much a problem elsewhere.
- Izkata 5y ago
  > People don't want old, used homes I don't think that's what they were describing. They were describing new homes, not old: I think the "supposed-to-be" pattern is up for 10-30 years after first being built, as the area is still growing and becoming more desirable, then down once the growth no longer outpaces the aging.
- wiseowise 5y ago
  > Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns. That is absolutely not true. There's a reason why it is called center in the first place. Amsterdam, for example is completely flooded by tourists in the center and not so much outside of it.
  - trinovantes 5y ago
    They specifically said cities in Asia Look at the real estate market in Singapore or Tokyo where housing prices are more reasonable
    - lasc4r 5y ago
      I was trying to get an idea of what Japanese house prices are, but I couldn't find much beyond the cost of a new house. Which is less than in the US, but not by much more than 10-20%. I understand houses in Japan don't typically appreciate in value like they do in the US though. They like to buy new and don't see it as an investment. I assume a huge factor has to simply be that Japan's GDP and population growth has been basically flat for ~25 years.

by po1nt 5y ago

AnthonyMouse 5y ago

> When you buy a flat in the center of town, it's supposed to increase it's value for being in the center while town is expanding. If the town is expanding then the supply of housing goes up along with the demand and prices stay the same, i.e. proportional to the cost of constructing new housing. Once you reach a certain point you have to build taller buildings which are more expensive to build and then housing prices would reflect the higher construction cost, but this only applies to urban areas and the costs only get really high when the buildings get really tall. If you converted some of the suburbs to three story buildings that filled the lots, the cost per square foot wouldn't be much higher than it is for single family homes, but there would be ten times more housing per acre. Doing this is prohibited by zoning, which is the real reason why housing is unaffordable.

sokoloff 5y ago
People who wish to live in areas of three story multi-family structures that fill the lot should be able to find or make places where that’s legal and the predominant style, I agree. (I’m opposed to the effective exclusion of that via pervasive 1/2 family zoning.) Equally, people who don’t want to live like that should be able to find or make places where detached 1-3 family buildings that don’t fill the lot are legal and the predominant style. (I’m opposed to zoning laws/changes that prohibit these neighborhoods as well.) Forcing everyone to live in what they consider an undesirable hellscape isn’t good policy in either direction.

forgotmyoldname 5y ago

> I don't think you understand how the value of these assets is supposed to rise. When you buy a flat in the center of town, it's supposed to increase it's value for being in the center while town is expanding. Why is it "supposed" to be this way? It doesn't work this way in a lot of Asia. People don't want old, used homes and they lose value over time. Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns. When American cities expand, they build more houses farther away but further condense business in the downtown core. But that's a problem that's politically invented and not so much a problem elsewhere.

Izkata 5y ago
> People don't want old, used homes I don't think that's what they were describing. They were describing new homes, not old: I think the "supposed-to-be" pattern is up for 10-30 years after first being built, as the area is still growing and becoming more desirable, then down once the growth no longer outpaces the aging.
wiseowise 5y ago
> Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns. That is absolutely not true. There's a reason why it is called center in the first place. Amsterdam, for example is completely flooded by tourists in the center and not so much outside of it.
- trinovantes 5y ago
  They specifically said cities in Asia Look at the real estate market in Singapore or Tokyo where housing prices are more reasonable
  - lasc4r 5y ago
    I was trying to get an idea of what Japanese house prices are, but I couldn't find much beyond the cost of a new house. Which is less than in the US, but not by much more than 10-20%. I understand houses in Japan don't typically appreciate in value like they do in the US though. They like to buy new and don't see it as an investment. I assume a huge factor has to simply be that Japan's GDP and population growth has been basically flat for ~25 years.