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Everyone are trying to find the slightest argument that their mortgage will go down a bit soon and we can continue to see extreme asset price inflation. Person

Everyone are trying to find the slightest argument that their mortgage will go down a bit soon and we can continue to see extreme asset price inflation. Personally, I believe these strong sentiments and beliefs that the market can only go up needs to be reversed before we will see any material change.

jajko 2y ago
There are more people in the world, I've been born when population was 5 billion and something, now we're at 8. City centers or good locations remain the same and don't magically expand or spawn out of blue, what is growing is mostly less interesting stuff due to distance to good stuff. You would have to battle hard, really hard, to just counter this force in economy. This ignores massive push for people moving due to work, so in better places there is exponentially more interested people than space available. Just look at SF or NY is we talk about US. Plus add strong emotions, most world population simply wants to live in their own, renting is frowned upon, despite ie Switzerland having very low home ownership, population is one of happiest globally and nobody here bats an eye, there are more important matters in our short lives to focus on than gathering as many available resources in some rat races.
- tossandthrow 2y ago
  I am talking about national median housing prices. Ie. Outliers like SF or NY won't even be visible in these statistics. (also, I personally am speaking from an EU perspective, where my expressed opinion is the same). But tell me: are you arguing that we see a general willingness to spend a larger roprtion of disposable income on housing, and that this is a permanent trend (due to the dynamics you emphasize).
  - xnx 2y ago
    Since housing has virtually no upper-limit on what you can spend, it can absorb any disposable income from other things getting cheaper (food, technology, etc.).
    - tossandthrow 2y ago
      Yes, so historically it has been a rule of thumb that this is a third of the disposable income. What a am considering is whether people are ready to move that to half? Two thirds? My own assumption is that people are willing to do this as long as they believe that the house will be a good investment. But houses can never be a long term good investment. It will always converge to inflation.
- thiago_fm 2y ago
  That's BS, go to Europe, most cities there makes the US look like a shithole and the population isn't growing. Not to mention how many people now only want to work from home, making it pointless to live in a big city with HCOL. People have trouble to understand that shit can't go up forever...
  - webdood90 2y ago
    > ... making it pointless to live in a big city with HCOL I don't think most people choose a place to live strictly based on the location of their employer. They enjoy being in a city for its food, entertainment, and accessibility. Good cities have limited space so I expect the demand will only increase over time, until the population tanks.
    - ghaff 2y ago
      Yes, but if employer isn't the deciding factor, people can live where they want and spend time in cities (of their choice) on vacation, working remotely, etc. That's the conclusion I came to.
- WheatMillington 2y ago
  City dwellers really do look down on non-city-dwellers contemptuously, huh? As if we'd all be living in a big city if we just had the opportunity.
- heavenlyblue 2y ago
  London population reached the level of 1940s again only very recently for example so it's not that obvious
- csa 2y ago
  > City centers or good locations remain the same and don't magically expand or spawn out of blue Tokyo would like to say hello. IIRC, it’s the only place in Japan with a net population growth, largely due to people moving in for work. The situation is dire elsewhere because many people are taking completely absurd and/or selfish stances on development in their locale.
  - mycologos 2y ago
    My theory for Tokyo is that its relatively low housing costs come from lax enforcement of zoning and building regulations, and lax enforcement comes from a culture of trust that doesn't exist in other comparably big cities.
thiago_fm 2y ago
Yep, after 15 years of the market beating records after records, and an incredible amount of money printed and ongoing bubbles not popping by QE, people forget that the market can go down, so the value of their overpriced property. When they paid $2M for a house in SF 2021, and their whole family is laid-off and nobody is hiring as the economy is going down the drain... good luck on believing that your house that costed maximum 300K to build will still be worth 50% than what it was...
- WWLink 2y ago
  > your house that costed maximum 300K to build When you buy real estate you're mostly paying for the value of the land. Sometimes I'd even say the land might be worth more if there wasn't already a house on it lol.
  - tossandthrow 2y ago
    This really depends. Currently in SF, yes. But the value of the land is also not given.
  - thiago_fm 2y ago
    Nope, in most of the US (so, not NY/SF and big centers), which has the most land, land is really cheap and the costs to build the house is the highest. Also in a lot of places in the world is like this.
    - WWLink 2y ago
      In most of the US, a house costs more than 300k. The average price atm is 513,000 according to https://fred.stlouisfed.org/series/ASPUS https://fred.stlouisfed.org/series/ASPUS I'll suggest neither of us are actually right anyway. A raw piece of land that was never setup for building a house on would definitely be worth less than a piece of land that was ready for a house. Especially if it had city water/sewage, power lines, fiber for internet, etc. Add in school districts and whatever else, and again the land becomes more valuable. So having a piece of land with a house on it might be worth more than an empty piece of land - but that comes back to location! A piece of land in the middle of a developed city would be worth more than a random piece of land in rural Ohio. Anyway, I still think it tracks. In my town an empty house-sized plot of land with utilities would probably cost similar to a house (maybe minus that $300k cost to build a house).

jajko 2y ago

There are more people in the world, I've been born when population was 5 billion and something, now we're at 8. City centers or good locations remain the same and don't magically expand or spawn out of blue, what is growing is mostly less interesting stuff due to distance to good stuff. You would have to battle hard, really hard, to just counter this force in economy. This ignores massive push for people moving due to work, so in better places there is exponentially more interested people than space available. Just look at SF or NY is we talk about US. Plus add strong emotions, most world population simply wants to live in their own, renting is frowned upon, despite ie Switzerland having very low home ownership, population is one of happiest globally and nobody here bats an eye, there are more important matters in our short lives to focus on than gathering as many available resources in some rat races.

tossandthrow 2y ago
I am talking about national median housing prices. Ie. Outliers like SF or NY won't even be visible in these statistics. (also, I personally am speaking from an EU perspective, where my expressed opinion is the same). But tell me: are you arguing that we see a general willingness to spend a larger roprtion of disposable income on housing, and that this is a permanent trend (due to the dynamics you emphasize).
- xnx 2y ago
  Since housing has virtually no upper-limit on what you can spend, it can absorb any disposable income from other things getting cheaper (food, technology, etc.).
  - tossandthrow 2y ago
    Yes, so historically it has been a rule of thumb that this is a third of the disposable income. What a am considering is whether people are ready to move that to half? Two thirds? My own assumption is that people are willing to do this as long as they believe that the house will be a good investment. But houses can never be a long term good investment. It will always converge to inflation.
thiago_fm 2y ago
That's BS, go to Europe, most cities there makes the US look like a shithole and the population isn't growing. Not to mention how many people now only want to work from home, making it pointless to live in a big city with HCOL. People have trouble to understand that shit can't go up forever...
- webdood90 2y ago
  > ... making it pointless to live in a big city with HCOL I don't think most people choose a place to live strictly based on the location of their employer. They enjoy being in a city for its food, entertainment, and accessibility. Good cities have limited space so I expect the demand will only increase over time, until the population tanks.
  - ghaff 2y ago
    Yes, but if employer isn't the deciding factor, people can live where they want and spend time in cities (of their choice) on vacation, working remotely, etc. That's the conclusion I came to.
WheatMillington 2y ago
City dwellers really do look down on non-city-dwellers contemptuously, huh? As if we'd all be living in a big city if we just had the opportunity.
heavenlyblue 2y ago
London population reached the level of 1940s again only very recently for example so it's not that obvious
csa 2y ago
> City centers or good locations remain the same and don't magically expand or spawn out of blue Tokyo would like to say hello. IIRC, it’s the only place in Japan with a net population growth, largely due to people moving in for work. The situation is dire elsewhere because many people are taking completely absurd and/or selfish stances on development in their locale.
- mycologos 2y ago
  My theory for Tokyo is that its relatively low housing costs come from lax enforcement of zoning and building regulations, and lax enforcement comes from a culture of trust that doesn't exist in other comparably big cities.

thiago_fm 2y ago

Yep, after 15 years of the market beating records after records, and an incredible amount of money printed and ongoing bubbles not popping by QE, people forget that the market can go down, so the value of their overpriced property. When they paid $2M for a house in SF 2021, and their whole family is laid-off and nobody is hiring as the economy is going down the drain... good luck on believing that your house that costed maximum 300K to build will still be worth 50% than what it was...

WWLink 2y ago
> your house that costed maximum 300K to build When you buy real estate you're mostly paying for the value of the land. Sometimes I'd even say the land might be worth more if there wasn't already a house on it lol.
- tossandthrow 2y ago
  This really depends. Currently in SF, yes. But the value of the land is also not given.
- thiago_fm 2y ago
  Nope, in most of the US (so, not NY/SF and big centers), which has the most land, land is really cheap and the costs to build the house is the highest. Also in a lot of places in the world is like this.
  - WWLink 2y ago
    In most of the US, a house costs more than 300k. The average price atm is 513,000 according to https://fred.stlouisfed.org/series/ASPUS https://fred.stlouisfed.org/series/ASPUS I'll suggest neither of us are actually right anyway. A raw piece of land that was never setup for building a house on would definitely be worth less than a piece of land that was ready for a house. Especially if it had city water/sewage, power lines, fiber for internet, etc. Add in school districts and whatever else, and again the land becomes more valuable. So having a piece of land with a house on it might be worth more than an empty piece of land - but that comes back to location! A piece of land in the middle of a developed city would be worth more than a random piece of land in rural Ohio. Anyway, I still think it tracks. In my town an empty house-sized plot of land with utilities would probably cost similar to a house (maybe minus that $300k cost to build a house).