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Property is intrinsically limited. Property in desirably places is especially intrinsically limited. You’re basically lucky if you own any property at all at th

by tjr225 4y ago

Property is intrinsically limited. Property in desirably places is especially intrinsically limited. You’re basically lucky if you own any property at all at this point. Just take a gander and how much property in Hong Kong or Amsterdam costs and you’ll start to think it is cheap in the US. It’s only going to get worse. Do you think that people are going to desire living in Santa Monica or Queen Anne less over the next few hundred years? Our planet is getting smaller relative to the amount of people that live on it and relative to the habitable places that exist.

ReptileMan 4y ago
Except why is no one asking the question why so few places are desirable and doing something to alleviate it.
- tjr225 4y ago
  Most of the time it’s because you get to live in a city and then also get to drive an hour and go hiking/skiing in the mountains or go to the beach. It isn’t very complicated.
- socialismisok 4y ago
  Plenty of folks are, but if the thing you want to do about it is decommidify housing you get a whole lot of people saying, "that'll never work!" Without actually engaging with the ideas. Plenty of ideas and people trying out there, just not much interest from the every day person.
- lmm 4y ago
  Because housing policy is set up so that homeowners in desirable places are the ones who have control over whether more housing gets built there, and unsurprisingly they vote to enrich themselves at the cost of everyone else. The only way to fix it is to set planning rules strictly at the national level, but who's going to vote for that?
  - DocTomoe 4y ago
    And - in all fairness - enriching yourself only is the side-effect, the major other output being "there now is a (more) desirable place". People want to live at increasingly more desirable places, and that is true even more so for people who cannot afford to: If such desirability was no object in their quest, Detroit would be full of people, the Bay Area wouldn't have so many issues with housing, and housing prices would be a non-issue. If the alternative is "everywhere sucks equally", which is the likely outcome of a national-level central planning, I doubt you will find many takers.
    - lmm 4y ago
      I live somewhere with national-level planning rules and it's brilliant (indeed it's the most populous metropolitan area in the world, and I don't think that's coincidence).
      - DocTomoe 4y ago
        Without going too deep in Japanese real estate planning laws, iirc most I am aware of are more a "national guideline" and are frequently overridden by prefectures and cities. That's hardly on the level of actual national-planning, communist-style 5-year-plans.
  - prottog 4y ago
    > The only way to fix it is to set planning rules strictly at the national level You don't even need centralized planning. Just implement a proper land value tax [0] so that the desirability of a plot of land has to be commensurately paid for by the owner. [0]: https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
silisili 4y ago
> Property in desirably places is especially intrinsically limited. Yes...but property values are way up all over. Boise, Phoenix, Nashville...even middle of nowhere Kansas. El Paso is having it rough. They've always had super cheap houses to the point of unbelievable...what most would consider a decked out mansion for 300k or so, and a 3+ percent property tax. Guess what's happening now that everyone's regular ol 150k house is now worth 400k? Valuable property will always have value, but the vast majority of US property is not so desirable. It's already stalled, and it's going to be a bloodbath next year. The real question is what happens when all the buyers of the last 3 or so years are underwater? We either end up in 2008 again, or tons of bailouts which just pushes inflation further towards the houses being worth it again.
- DSingularity 4y ago
  Why would they sell? They live there now. Why also would builders not keep prices high buy produce less? 2008 was bad loans coming to head. I don’t think it’s going to be the same.
  - silisili 4y ago
    > Why would they sell In many cases, they don't, they just walk away. Would you stay in a 500k 2000sqft house that you have no equity in, when a 300k 2000sqft house was for sale next door? In a non-recourse state? And even for principled people, when you lose your job or fall behind on something you overpaid for, it's really easy to just walk away.
    - thebradbain 4y ago
      Even in non-recourse states, walking away from your mortgage will decimate your credit score and preclude you from getting a mortgage on a cheaper property in practice, even if theoretically it pencils out on paper.
    - yawnr 4y ago
      Because you have a 2.5% mortgage and your monthly payment is still smaller than than 300k house at current rates. This is going to be the main issue to me. People are just going to sit in all these houses with bloated prices because the rates they pay are so low, and prices are going to have a very hard time returning to anything close to what they were with inventory so low.
kortilla 4y ago
> Do you think that people are going to desire living in Santa Monica or Queen Anne less over the next few hundred years? Milwaukee and Detroit were pretty desirable not that long ago. Cuba was quite nice 80+ years ago. Hong Kong was desirable globally just 10 years ago. What is “desirable” changes from many other factors so property investments absolutely aren’t a given. Land in the middle of nowhere barely beats inflation and has varying degrees of ongoing costs depending on the jurisdiction.
- peteradio 4y ago
  I doubt arable farmland has generally gone down over the long view.
- mickdeek86 4y ago
  The campesinos may disagree about Cuba being "quite nice" 80 years ago, what with all the slavery and rape. But yes, a seemingly good real estate investment for foreigners.

by tjr225 4y ago

ReptileMan 4y ago

Except why is no one asking the question why so few places are desirable and doing something to alleviate it.

tjr225 4y ago
Most of the time it’s because you get to live in a city and then also get to drive an hour and go hiking/skiing in the mountains or go to the beach. It isn’t very complicated.
socialismisok 4y ago
Plenty of folks are, but if the thing you want to do about it is decommidify housing you get a whole lot of people saying, "that'll never work!" Without actually engaging with the ideas. Plenty of ideas and people trying out there, just not much interest from the every day person.
lmm 4y ago
Because housing policy is set up so that homeowners in desirable places are the ones who have control over whether more housing gets built there, and unsurprisingly they vote to enrich themselves at the cost of everyone else. The only way to fix it is to set planning rules strictly at the national level, but who's going to vote for that?
- DocTomoe 4y ago
  And - in all fairness - enriching yourself only is the side-effect, the major other output being "there now is a (more) desirable place". People want to live at increasingly more desirable places, and that is true even more so for people who cannot afford to: If such desirability was no object in their quest, Detroit would be full of people, the Bay Area wouldn't have so many issues with housing, and housing prices would be a non-issue. If the alternative is "everywhere sucks equally", which is the likely outcome of a national-level central planning, I doubt you will find many takers.
  - lmm 4y ago
    I live somewhere with national-level planning rules and it's brilliant (indeed it's the most populous metropolitan area in the world, and I don't think that's coincidence).
    - DocTomoe 4y ago
      Without going too deep in Japanese real estate planning laws, iirc most I am aware of are more a "national guideline" and are frequently overridden by prefectures and cities. That's hardly on the level of actual national-planning, communist-style 5-year-plans.
- prottog 4y ago
  > The only way to fix it is to set planning rules strictly at the national level You don't even need centralized planning. Just implement a proper land value tax [0] so that the desirability of a plot of land has to be commensurately paid for by the owner. [0]: https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax

silisili 4y ago

> Property in desirably places is especially intrinsically limited. Yes...but property values are way up all over. Boise, Phoenix, Nashville...even middle of nowhere Kansas. El Paso is having it rough. They've always had super cheap houses to the point of unbelievable...what most would consider a decked out mansion for 300k or so, and a 3+ percent property tax. Guess what's happening now that everyone's regular ol 150k house is now worth 400k? Valuable property will always have value, but the vast majority of US property is not so desirable. It's already stalled, and it's going to be a bloodbath next year. The real question is what happens when all the buyers of the last 3 or so years are underwater? We either end up in 2008 again, or tons of bailouts which just pushes inflation further towards the houses being worth it again.

DSingularity 4y ago
Why would they sell? They live there now. Why also would builders not keep prices high buy produce less? 2008 was bad loans coming to head. I don’t think it’s going to be the same.
- silisili 4y ago
  > Why would they sell In many cases, they don't, they just walk away. Would you stay in a 500k 2000sqft house that you have no equity in, when a 300k 2000sqft house was for sale next door? In a non-recourse state? And even for principled people, when you lose your job or fall behind on something you overpaid for, it's really easy to just walk away.
  - thebradbain 4y ago
    Even in non-recourse states, walking away from your mortgage will decimate your credit score and preclude you from getting a mortgage on a cheaper property in practice, even if theoretically it pencils out on paper.
  - yawnr 4y ago
    Because you have a 2.5% mortgage and your monthly payment is still smaller than than 300k house at current rates. This is going to be the main issue to me. People are just going to sit in all these houses with bloated prices because the rates they pay are so low, and prices are going to have a very hard time returning to anything close to what they were with inventory so low.

kortilla 4y ago

> Do you think that people are going to desire living in Santa Monica or Queen Anne less over the next few hundred years? Milwaukee and Detroit were pretty desirable not that long ago. Cuba was quite nice 80+ years ago. Hong Kong was desirable globally just 10 years ago. What is “desirable” changes from many other factors so property investments absolutely aren’t a given. Land in the middle of nowhere barely beats inflation and has varying degrees of ongoing costs depending on the jurisdiction.

peteradio 4y ago
I doubt arable farmland has generally gone down over the long view.
mickdeek86 4y ago
The campesinos may disagree about Cuba being "quite nice" 80 years ago, what with all the slavery and rape. But yes, a seemingly good real estate investment for foreigners.