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I am personally very curious to know when interest rates are not perfectly offset by increased purchase price. I believe this is a popular belief that is wrong.

I am personally very curious to know when interest rates are not perfectly offset by increased purchase price. I believe this is a popular belief that is wrong. That can’t possibly be the case, not even in the majority of mkts.

dragontamer 3y ago
This past year. Interest rates went up, and then prices went up. No offset occurred, everything just became dramatically more expensive. Bam. Theory already busted.
- quickslowdown 3y ago
  Seems like financypants lives in a beautiful world where corporations aren't greedy shitbags engaged in price gouging
  - deleted 3y ago
    [deleted]
  - dragontamer 3y ago
    Well, the real problem with regards to housing is that we just didn't build enough houses IMO. Cheap houses in particular get voted off of most city councils or other local politics. It only costs $20k per trailer in a trailerpark IIRC, and so trailer parks can build hundreds of housing units for under 10-million invested. Or various apartment buildings can be built with similar cost-efficiencies. Or Row-homes, or multiplex homes, etc. etc. The issue is convincing the public that low-cost housing is to the benefic of society and that its a good thing to build. Most people see them as ways of attracting drug-dealers, black people / minorities, or turning a neighborhood into a Ghetto. -------- So build enough low-cost housing. Build enough medium-cost housing. Etc. etc. The problem is that in most municipalities, people are only happy when high-cost housing is built. But that's just not sustainable.
    - seanmcdirmid 3y ago
      The real problem is that there isn't enough housing where everyone wants to live. There is a shortage in a few popular cities while the rest of the country can have a surplus of housing to live in. Yes, Seattle could use more trailer parks, but there is absolutely nowhere to put them. We build lots of multiplexes, row homes, town homes, apartment buildings, but we still have a net influx of a 30k/year into the area, so its a losing battle.
      - WarOnPrivacy 3y ago
        > The real problem is that there isn't enough housing Because too little has been built and little of that fits widespread need. > where everyone wants to live. Wants to live infers worthwhile choices. The reality is that people live anywhere they can survive. Worthwhile choices don't include locations that are likely to lead to homelessness.
        seanmcdirmid 3y ago
        > Because too little has been built and little of that fits widespread need. But housing has been built and is being built. We leave it to the market, so its mostly higher end housing that gets built (more money to be made), but plenty of well to do techies are moving to the city that there isn't a shortage of people who want to live in that. > Wants to live infers worthwhile choices. The reality is that people live anywhere they can survive. Worthwhile choices don't include locations that are likely to lead to homelessness. Actually, cites with nice weather but expensive weather attract the chronic homeless in droves. They don't care about the high cost of housing (they couldn't afford to live in Detroit either, so what does it matter?), and the nicer more mild weather works better for sleeping rough and not dying. I'm not really sure what is your point. If all American residents wanted to live in San Francisco, should we fit 380 million people in that small area?
        dragontamer 3y ago
        > But housing has been built and is being built. We dramatically slowed-down homebuilding after 2007, and have *NEVER* recovered. https://www.census.gov/econ/currentdata/?programCode=RESCONST&startYear=1959&endYear=2024&categories[]=APERMITS&dataType=TOTAL&geoLevel=US&adjusted=1&notAdjusted=0&errorData=0#table-results https://www.census.gov/econ/currentdata/?programCode=RESCONS... Note that our population has been growing at much faster rates than housing. So the overall trend is inevitable: fewer housing units than our population growth means that we will just have more expensive houses. There's simply not enough houses for everyone.
  - financypants 3y ago
    I’m not really addressing greedy corporation shitbags. I’m talking about the relationship between rates and prices. If you need someone to vent to about shitbag greedy corporations, go elsewhere. (I’m not disagreeing that corps are shitty greedy horrible inhuman profit machines)
    - quickslowdown 3y ago
      That's the point I'm making, though. You're ignoring Occam's Razor, that the most likely explanation, when none of the others fit quite right, is greed.
      - dragontamer 3y ago
        A greedy investor would have built more homes that better matched our population dynamics. Greed is insufficient to explain the problem. We have a market failure here for sure. (Markets work even in the presence of greed, with the proper regulatory environment. Whatever the hell has gone wrong with our society over the last 30 years to cause us to stop building houses is... well... "Greed" just is insufficient to explain the behavior)

dragontamer 3y ago

This past year. Interest rates went up, and then prices went up. No offset occurred, everything just became dramatically more expensive. Bam. Theory already busted.

quickslowdown 3y ago
Seems like financypants lives in a beautiful world where corporations aren't greedy shitbags engaged in price gouging
- deleted 3y ago
  [deleted]
- dragontamer 3y ago
  Well, the real problem with regards to housing is that we just didn't build enough houses IMO. Cheap houses in particular get voted off of most city councils or other local politics. It only costs $20k per trailer in a trailerpark IIRC, and so trailer parks can build hundreds of housing units for under 10-million invested. Or various apartment buildings can be built with similar cost-efficiencies. Or Row-homes, or multiplex homes, etc. etc. The issue is convincing the public that low-cost housing is to the benefic of society and that its a good thing to build. Most people see them as ways of attracting drug-dealers, black people / minorities, or turning a neighborhood into a Ghetto. -------- So build enough low-cost housing. Build enough medium-cost housing. Etc. etc. The problem is that in most municipalities, people are only happy when high-cost housing is built. But that's just not sustainable.
  - seanmcdirmid 3y ago
    The real problem is that there isn't enough housing where everyone wants to live. There is a shortage in a few popular cities while the rest of the country can have a surplus of housing to live in. Yes, Seattle could use more trailer parks, but there is absolutely nowhere to put them. We build lots of multiplexes, row homes, town homes, apartment buildings, but we still have a net influx of a 30k/year into the area, so its a losing battle.
    - WarOnPrivacy 3y ago
      > The real problem is that there isn't enough housing Because too little has been built and little of that fits widespread need. > where everyone wants to live. Wants to live infers worthwhile choices. The reality is that people live anywhere they can survive. Worthwhile choices don't include locations that are likely to lead to homelessness.
      - seanmcdirmid 3y ago
        > Because too little has been built and little of that fits widespread need. But housing has been built and is being built. We leave it to the market, so its mostly higher end housing that gets built (more money to be made), but plenty of well to do techies are moving to the city that there isn't a shortage of people who want to live in that. > Wants to live infers worthwhile choices. The reality is that people live anywhere they can survive. Worthwhile choices don't include locations that are likely to lead to homelessness. Actually, cites with nice weather but expensive weather attract the chronic homeless in droves. They don't care about the high cost of housing (they couldn't afford to live in Detroit either, so what does it matter?), and the nicer more mild weather works better for sleeping rough and not dying. I'm not really sure what is your point. If all American residents wanted to live in San Francisco, should we fit 380 million people in that small area?
        dragontamer 3y ago
        > But housing has been built and is being built. We dramatically slowed-down homebuilding after 2007, and have *NEVER* recovered. https://www.census.gov/econ/currentdata/?programCode=RESCONST&startYear=1959&endYear=2024&categories[]=APERMITS&dataType=TOTAL&geoLevel=US&adjusted=1&notAdjusted=0&errorData=0#table-results https://www.census.gov/econ/currentdata/?programCode=RESCONS... Note that our population has been growing at much faster rates than housing. So the overall trend is inevitable: fewer housing units than our population growth means that we will just have more expensive houses. There's simply not enough houses for everyone.
- financypants 3y ago
  I’m not really addressing greedy corporation shitbags. I’m talking about the relationship between rates and prices. If you need someone to vent to about shitbag greedy corporations, go elsewhere. (I’m not disagreeing that corps are shitty greedy horrible inhuman profit machines)
  - quickslowdown 3y ago
    That's the point I'm making, though. You're ignoring Occam's Razor, that the most likely explanation, when none of the others fit quite right, is greed.
    - dragontamer 3y ago
      A greedy investor would have built more homes that better matched our population dynamics. Greed is insufficient to explain the problem. We have a market failure here for sure. (Markets work even in the presence of greed, with the proper regulatory environment. Whatever the hell has gone wrong with our society over the last 30 years to cause us to stop building houses is... well... "Greed" just is insufficient to explain the behavior)