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Another example of how timing the market is not a good idea, or, “time in the market beats timing the market.” But why is it considered an invariant, the fact

Another example of how timing the market is not a good idea, or, “time in the market beats timing the market.” But why is it considered an invariant, the fact that there aren’t houses where people want houses? Wouldn’t it be extremely possible for people to change where it is they’re willing to live and work as a result of the housing market?

lotsofpulp 3y ago
Maybe people feel that you either live in an economically booming place, or an economically dying place. And the former is better for income security. Or maybe people like competing, and aspiring to move up the socioeconomic ladder.
codetrotter 3y ago
One thing that makes this difficult still is, what if there are two different markets you want to be in. Time in the market for stocks beats timing the market for stocks. Time in the market for housing beats timing the market for housing. But let’s say you have $30k USD. Currently you have this money in stocks, and you are renting an apartment to live in. Time in the stock market should mean that in 15-20 years, those $30k USD you put in stocks today might grow to be worth a fair bit more. But at the same time, you are losing out on owning a house. Instead paying rent to someone else. And in this case it is not possible to know if it would be better to keep the money in stocks and keep renting, or go and get a loan so you can get some little place of your own with the $30k of yours + the $90k or so that a bank will lend you.
- pharmakom 3y ago
  The equation depends on interest rates and how liquid you want to be, so it’s a very difficult one to answer.
- WendyTheWillow 3y ago
  There are many ways to invest in real estate, but generally yes there is always an amount of uncertainty in investing.
huntertwo 3y ago
People live where they have jobs. Jobs usually exist where there are people - new jobs can be created if some company or industry’s growth demands it. Amazon warehouses and Walmarts exist where there are enough people to justify it. Coffee shops, fast food restaurants, financial services, etc all provide jobs and are located in cities, not rural areas. Water service, electricity, natural gas service do not exist by default. People can’t just choose to change where they want to live.
- WendyTheWillow 3y ago
  People absolutely can choose to change where they want to live, by educating themselves on what’s available in places they previously thought were uninhabitable to them. Much work can be done remotely, and much other work is done in many different places than it used to be done in, not to mention the possibility of commuting to/from a job in an expanded range as a result of housing scarcity. Moving is very much a growing option for people, and the data for cross state moves shows that to be the case [0]. [0] https://www.census.gov/library/stories/2023/11/state-to-state-migration.html https://www.census.gov/library/stories/2023/11/state-to-stat...
anonu 3y ago
> extremely possible for people to change American mobility tends to be pretty high relative to other people in the world - meaning Americans are more likely to uproot and move to a new community, even 100s or 1000s of miles away from what was "home". With WFH the "objective function" has shifted for part of society who can WFH - its less about job location and more about lifestyle, quality of life and cost of living. However, my anecdotal analysis tells me that WFH, while still a strong factor, is beginning to subside. Not so much due to employers demanding employees be in the office but more because theres a shift back to cities after a 3 year trend out of them. On a tangential topic - here's an interesting Pew Research report on mobility - I believe from 2012. So it's quite dated, but is still a good framework to understand how to think about mobility: https://www.pewresearch.org/wp-content/uploads/sites/3/2011/04/American-Mobility-Report-updated-12-29-08.pdf https://www.pewresearch.org/wp-content/uploads/sites/3/2011/...
anon84873628 3y ago
Sibling comments talk about living where there are jobs. But people also want to live near family, friends, and the culture they know. Maybe you need to take care of an aging parent. Or have kids in school and don't want to disrupt their life. There are a huge number of social network effects constraining where most people live.
- WendyTheWillow 3y ago
  I would argue that those social constraints ought not hold in the face of growing housing scarcity, and the predictions that all else will remain static in people’s behavior is usually an inaccurate one.

lotsofpulp 3y ago

Maybe people feel that you either live in an economically booming place, or an economically dying place. And the former is better for income security. Or maybe people like competing, and aspiring to move up the socioeconomic ladder.

codetrotter 3y ago

One thing that makes this difficult still is, what if there are two different markets you want to be in. Time in the market for stocks beats timing the market for stocks. Time in the market for housing beats timing the market for housing. But let’s say you have $30k USD. Currently you have this money in stocks, and you are renting an apartment to live in. Time in the stock market should mean that in 15-20 years, those $30k USD you put in stocks today might grow to be worth a fair bit more. But at the same time, you are losing out on owning a house. Instead paying rent to someone else. And in this case it is not possible to know if it would be better to keep the money in stocks and keep renting, or go and get a loan so you can get some little place of your own with the $30k of yours + the $90k or so that a bank will lend you.

pharmakom 3y ago
The equation depends on interest rates and how liquid you want to be, so it’s a very difficult one to answer.
WendyTheWillow 3y ago
There are many ways to invest in real estate, but generally yes there is always an amount of uncertainty in investing.

huntertwo 3y ago

People live where they have jobs. Jobs usually exist where there are people - new jobs can be created if some company or industry’s growth demands it. Amazon warehouses and Walmarts exist where there are enough people to justify it. Coffee shops, fast food restaurants, financial services, etc all provide jobs and are located in cities, not rural areas. Water service, electricity, natural gas service do not exist by default. People can’t just choose to change where they want to live.

WendyTheWillow 3y ago
People absolutely can choose to change where they want to live, by educating themselves on what’s available in places they previously thought were uninhabitable to them. Much work can be done remotely, and much other work is done in many different places than it used to be done in, not to mention the possibility of commuting to/from a job in an expanded range as a result of housing scarcity. Moving is very much a growing option for people, and the data for cross state moves shows that to be the case [0]. [0] https://www.census.gov/library/stories/2023/11/state-to-state-migration.html https://www.census.gov/library/stories/2023/11/state-to-stat...

anonu 3y ago

> extremely possible for people to change American mobility tends to be pretty high relative to other people in the world - meaning Americans are more likely to uproot and move to a new community, even 100s or 1000s of miles away from what was "home". With WFH the "objective function" has shifted for part of society who can WFH - its less about job location and more about lifestyle, quality of life and cost of living. However, my anecdotal analysis tells me that WFH, while still a strong factor, is beginning to subside. Not so much due to employers demanding employees be in the office but more because theres a shift back to cities after a 3 year trend out of them. On a tangential topic - here's an interesting Pew Research report on mobility - I believe from 2012. So it's quite dated, but is still a good framework to understand how to think about mobility: https://www.pewresearch.org/wp-content/uploads/sites/3/2011/04/American-Mobility-Report-updated-12-29-08.pdf https://www.pewresearch.org/wp-content/uploads/sites/3/2011/...

anon84873628 3y ago

Sibling comments talk about living where there are jobs. But people also want to live near family, friends, and the culture they know. Maybe you need to take care of an aging parent. Or have kids in school and don't want to disrupt their life. There are a huge number of social network effects constraining where most people live.

WendyTheWillow 3y ago
I would argue that those social constraints ought not hold in the face of growing housing scarcity, and the predictions that all else will remain static in people’s behavior is usually an inaccurate one.