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Turns out that mass flipping houses doesn’t work when you can’t hire contractors to do the work for a price that makes your budget assumptions hold. I am disap

Turns out that mass flipping houses doesn’t work when you can’t hire contractors to do the work for a price that makes your budget assumptions hold. I am disappointed that they’re looking to offload them to institutional investors rather than individuals. Housing should probably not be an investment vehicle, but here we are.

woah 5y ago
We're on the tail end of 50 years of policy to make single family homes into a perpetually growing investment vehicle to finance baby boomer's retirements.
- deleted 5y ago
  [deleted]
- hncurious 5y ago
  I hope you're right, but what signs do you see that it's at the tail end? Home ownership rate is at 65%. They want their home value to keep increasing and I don't see evidence of millennials being any less self interested when the rubber meets the road. https://www.statista.com/statistics/184902/homeownership-rate-in-the-us-since-2003/ https://www.statista.com/statistics/184902/homeownership-rat...
  - JohnWhigham 5y ago
    Yup, milliennials are just doing what their parents did. Just shows how egregious boomers have been in fucking up this country with their own greed.
sremani 5y ago
Projected population of US in 2050 is 458 million from the current 330 million. Given that underlying reality, housing is going to be an investment.
- jeffbee 5y ago
  Real-dollar home prices plunged continuously from 1950 to 1970 while the US population increased by one third. Home price inflation is a policy choice, not a law of physics.
  - epistasis 5y ago
    Exactly, and in that era the federal government financed massive amounts of new housing (for white people), with the intent of homeownership for nearly all white people. And once homeownership became the norm, those same people started massive downzoning projects to prevent new homes from being built. And shortly after that, funding for public housing was gutted. Which leaves us with the massive shortage we have now. We have plenty of money that is allowed to chase a smaller supply, as long as you can leverage your existing housing asset for a larger down payment. But all those people who didn't buy in the 1980s or earlier are at a massive disadvantage.
- onion2k 5y ago
  Assuming that the additional 128m people need about 50m - 70m new homes it would make sense that there's going to be a boom in supply of homes in the near future. Without the ability to control or limit that growth it could easily result in an oversupply, especially in any given geographic region, which would lead to a contraction in prices. Unless you're also able to predict where these new citizens will live I'd suggest real estate investing could be quite risky.
  - mywittyname 5y ago
    >Unless you're also able to predict where these new citizens will live Larger cities, especially those in warmer regions, is a very good bet.
    - wayoutthere 5y ago
      Climate change will drive a lot of people to the northeast and Midwest in our lifetimes. Much of the Deep South will become unlivably hot and humid, and much of the west will become dry enough that water rationing makes life in the sun not so much fun anymore. If you want to invest, put your money in places like Pittsburgh and Buffalo. Some values along the coast in Baltimore and Philly too. Plenty of cheap real estate out and I suspect we’ll see a revitalization of the rust belt as climate change makes other areas untenable.
throw123123123 5y ago
Housing is an investment in the sense that you need a certain amount of capital to create one, and in that sense you want to allocate it the best way possible: the best value at the best prices. There's no better way to do that than with markets. Housing will always be expensive in one way or the other, but you can make it cheaper and more plentiful. And that should be the goal.
- wayoutthere 5y ago
  > Housing will always be expensive in one way or the other, but you can make it cheaper and more plentiful. And that should be the goal. When housing becomes an investment, the goal is to get that sweet ROI which generally means working to restrict the supply of housing to make prices rise. Lobbying is a high-ROI activity. And housing doesn’t need to be expensive. Japan is a good example. It’s only expensive because we instituted policies that make it an effective investment vehicle when it’s a necessity in life. Many cities outside the US have policies in place making property taxes very expensive for an investor who doesn’t live in the house. In particular many countries prohibit foreign investors from purchasing real estate without a local intermediary who is legally responsible for any shenanigans. The free market works well for many things, but there are areas where the motive to create artificial scarcity create some dystopian outcomes (see also healthcare). We have to ask ourselves as a society if our belief in the free market is strong enough to accept the societal issues (crime, mental health, etc) that have been proven to come along with unstable housing.
  - throw123123123 5y ago
    > When housing becomes an investment, the goal is to get that sweet ROI which generally means working to restrict the supply of housing to make prices rise. Lobbying is a high-ROI activity. There are many ways to lobby that increase both the value of real estate and make the system better. For example, you could lobby for a visa for immigrant construction workers, which will reduce the cost to build. > And housing doesn’t need to be expensive. Definitions matter, but that's my original point. Construction companies in JApan also have a sweet ROI or they wouldn't build at all, you can achieve multiple goals. The current market structure is in good part a result of regulatory capture, but housing will remain profitable in multiple other structures. If it stopped being profitable, it would be impossible to build, and you wouldnt be able to improve or create new supply which is definitely the worst result long term. > dystopian outcomes (see also healthcare Healthcare is the **show it is precisely because it is NOT a free market by any practical or theoretical definition. I want to mention one more thing about the narrative that Nimbyism is an investment topic. It really isn't: it is in the landlords interest to get more construction going, because more people increase the value of land, it doesn't decrease it. That is why land in a city is worth more than in a rural town. A SFH owner turned into the low owner of an 8 appt complex is way richer, as in 10X. At the tokyo example, it is close to 10k per square meter of land! https://www.statista.com/statistics/875736/japan-average-land-price-tokyo/ https://www.statista.com/statistics/875736/japan-average-lan...

woah 5y ago

We're on the tail end of 50 years of policy to make single family homes into a perpetually growing investment vehicle to finance baby boomer's retirements.

deleted 5y ago
[deleted]
hncurious 5y ago
I hope you're right, but what signs do you see that it's at the tail end? Home ownership rate is at 65%. They want their home value to keep increasing and I don't see evidence of millennials being any less self interested when the rubber meets the road. https://www.statista.com/statistics/184902/homeownership-rate-in-the-us-since-2003/ https://www.statista.com/statistics/184902/homeownership-rat...
- JohnWhigham 5y ago
  Yup, milliennials are just doing what their parents did. Just shows how egregious boomers have been in fucking up this country with their own greed.

sremani 5y ago

Projected population of US in 2050 is 458 million from the current 330 million. Given that underlying reality, housing is going to be an investment.

jeffbee 5y ago
Real-dollar home prices plunged continuously from 1950 to 1970 while the US population increased by one third. Home price inflation is a policy choice, not a law of physics.
- epistasis 5y ago
  Exactly, and in that era the federal government financed massive amounts of new housing (for white people), with the intent of homeownership for nearly all white people. And once homeownership became the norm, those same people started massive downzoning projects to prevent new homes from being built. And shortly after that, funding for public housing was gutted. Which leaves us with the massive shortage we have now. We have plenty of money that is allowed to chase a smaller supply, as long as you can leverage your existing housing asset for a larger down payment. But all those people who didn't buy in the 1980s or earlier are at a massive disadvantage.
onion2k 5y ago
Assuming that the additional 128m people need about 50m - 70m new homes it would make sense that there's going to be a boom in supply of homes in the near future. Without the ability to control or limit that growth it could easily result in an oversupply, especially in any given geographic region, which would lead to a contraction in prices. Unless you're also able to predict where these new citizens will live I'd suggest real estate investing could be quite risky.
- mywittyname 5y ago
  >Unless you're also able to predict where these new citizens will live Larger cities, especially those in warmer regions, is a very good bet.
  - wayoutthere 5y ago
    Climate change will drive a lot of people to the northeast and Midwest in our lifetimes. Much of the Deep South will become unlivably hot and humid, and much of the west will become dry enough that water rationing makes life in the sun not so much fun anymore. If you want to invest, put your money in places like Pittsburgh and Buffalo. Some values along the coast in Baltimore and Philly too. Plenty of cheap real estate out and I suspect we’ll see a revitalization of the rust belt as climate change makes other areas untenable.

throw123123123 5y ago

Housing is an investment in the sense that you need a certain amount of capital to create one, and in that sense you want to allocate it the best way possible: the best value at the best prices. There's no better way to do that than with markets. Housing will always be expensive in one way or the other, but you can make it cheaper and more plentiful. And that should be the goal.

wayoutthere 5y ago
> Housing will always be expensive in one way or the other, but you can make it cheaper and more plentiful. And that should be the goal. When housing becomes an investment, the goal is to get that sweet ROI which generally means working to restrict the supply of housing to make prices rise. Lobbying is a high-ROI activity. And housing doesn’t need to be expensive. Japan is a good example. It’s only expensive because we instituted policies that make it an effective investment vehicle when it’s a necessity in life. Many cities outside the US have policies in place making property taxes very expensive for an investor who doesn’t live in the house. In particular many countries prohibit foreign investors from purchasing real estate without a local intermediary who is legally responsible for any shenanigans. The free market works well for many things, but there are areas where the motive to create artificial scarcity create some dystopian outcomes (see also healthcare). We have to ask ourselves as a society if our belief in the free market is strong enough to accept the societal issues (crime, mental health, etc) that have been proven to come along with unstable housing.
- throw123123123 5y ago
  > When housing becomes an investment, the goal is to get that sweet ROI which generally means working to restrict the supply of housing to make prices rise. Lobbying is a high-ROI activity. There are many ways to lobby that increase both the value of real estate and make the system better. For example, you could lobby for a visa for immigrant construction workers, which will reduce the cost to build. > And housing doesn’t need to be expensive. Definitions matter, but that's my original point. Construction companies in JApan also have a sweet ROI or they wouldn't build at all, you can achieve multiple goals. The current market structure is in good part a result of regulatory capture, but housing will remain profitable in multiple other structures. If it stopped being profitable, it would be impossible to build, and you wouldnt be able to improve or create new supply which is definitely the worst result long term. > dystopian outcomes (see also healthcare Healthcare is the **show it is precisely because it is NOT a free market by any practical or theoretical definition. I want to mention one more thing about the narrative that Nimbyism is an investment topic. It really isn't: it is in the landlords interest to get more construction going, because more people increase the value of land, it doesn't decrease it. That is why land in a city is worth more than in a rural town. A SFH owner turned into the low owner of an 8 appt complex is way richer, as in 10X. At the tokyo example, it is close to 10k per square meter of land! https://www.statista.com/statistics/875736/japan-average-land-price-tokyo/ https://www.statista.com/statistics/875736/japan-average-lan...