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It's great that the US Economy is performing so much better than the rest of the world, but what good is that if people don't feel like it's going well? > The

• TMWNN 2y ago
  > It's great that the US Economy is performing so much better than the rest of the world, but what good is that if people don't feel like it's going well? "The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it". —[Jeff Bezos](https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-212315127.html https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-2123...)
• isk517 2y ago
  Yeah, but think about how much money you'll have when you finally sell your house and live as a woods hermit.
  • chasd00 2y ago
    I think the standard approach is you sell your house after raising a family and retiring because you don't need the additional space but a young couple starting a family does. Then you and you partner buy/rent a small condo on the beach and enjoy retirement.
    • mtalantikite 2y ago
      All the older people I know still have the same homes they had when their kids left home 20 years ago. Some of them have the retirement home near a beach, but it's in addition to the one they raised their kids in.
      • sanderjd 2y ago
        Yep, this is what you might call, the problem.
      • xnx 2y ago
        "Aging in place" is a big part of the current housing situation. Older people are occupying a lot more house than they used to. The market may solve this by having multi-generational households again.
        • mindslight 2y ago
          The problem is that most US houses are quite poor for multi-generational living, as they generally revolve around a single common area with an open design. The traditional multi-family house has been gobbled up by the rental market, and now even the in-law apartment has been gobbled up by short term rentals. It's possible to build new in-law apartments with conditional approval from the city that it will only be used by related family, but that just dovetails into the problem of needing to build. There's also the general problem that the costs of system-legible senior care have shot up to ridiculous levels. I'm currently casually caring for my aunt, who lives by herself in a bona-fide two family. She keeps ideating about "assisted living" but from what I've gathered it would be essentially selling her house to buy in with a large lump payment, and then still paying stiff monthly fees larger than her current expenses (which includes part-time in home help). Essentially the assisted livings have come under control of the same type of economic vampires that have set up shop everywhere else, making it prohibitive for her to move on and consume less housing.
    • ok_dad 2y ago
      I just bought a house at 40, so I guess I’m allowed to retire at 70? I’ll be dead before then at this rate.
• blitzar 2y ago
  > Rising home values are a zero-sum game US Home Ownership Rate: 65.6%. It may be a zero sum game (debatable) - but 65% are one side of the coin with a huge pile of cash and 35% are on the other with a lot less. As a wise man once said - the good of the many outweigh the needs of the few
  • lantry 2y ago
    Is increased home value really that good? and does 35% of the country really count as "few"?
  • darth_avocado 2y ago
    Wait till the 65% need to live elsewhere and find out they can’t afford to.
    • olliecornelia 2y ago
      [dead]
  • yetihehe 2y ago
    A joke originating from communism time in eastern europe: Politicians: Comrades, our living conditions and pay constantly increase. Citizens: Oh, that's very good for you.
    • blitzar 2y ago
      Some of you may die, but it's a sacrifice I am willing to make
  • greentxt 2y ago
    Probably worth noting that homes are owned by old people, and the old people are in control of the government, making policy that is self serving to the grest detriment of younger Americans. For example social security will end in about 10-15 years, after those old people like Mitch McConnel have gone to bed. Meanwhile the youngsters are paying huge sums into the ponzi scheme, and the cost to service US debt remains an unsolved problem. There was a good Ted talk recently by Scott Galloway highlighting just how badly the youth are getting screwed. I disagree with most all of his proferred solutions but he did a great job of describing the issue.
• segasaturn 2y ago
  People don't feel like it's going well because they've been getting sticker shock every time they go to the grocery store for the last 2 years. Regardless of GDP numbers, or Wall Street turning record profits, or medium income growing, people aren't used to and don't like seeing a carton of eggs selling for 8 or 9 dollars.
  • beej71 2y ago
    What's really strange to me is that during COVID, the prices at our Safeway spiked and stayed high. The prices at our WinCo barely budged. And they're still low. These stores are 10 minutes apart.
  • fallingsquirrel 2y ago
    The average price for a dozen eggs is $2.86. https://fred.stlouisfed.org/series/APU0000708111 https://fred.stlouisfed.org/series/APU0000708111
    • MeetingsBrowser 2y ago
      TIL eggs in my Texas suburb are 2x the national average.
      • AlotOfReading 2y ago
        The cheapest eggs at the store in my California suburb are 2x the nominal average. Looked up the online prices and averaged all the available dozens to find the "price average". It's the square of the nominal average ($8.20)
        • bryanlarsen 2y ago
          California and Hawaii are pretty much the only states that still have expensive eggs: https://pantryandlarder.com/eggspensive https://pantryandlarder.com/eggspensive
        • HDThoreaun 2y ago
• sanderjd 2y ago
  Yeah agreed, I think looking at wealth is a very poor way to understand the economy. Income vs. expenses is what matters for the vast majority of people.
• whatindaheck 2y ago
  > Rising home values are a zero-sum game. It makes people look wealthier on paper I had a thought the other day and HN seems like a good place to ask. And I understand this idea is just straight up out there but I am honestly asking. What would/might happen if we put a freeze on home prices? Assuming a magic wand could be waved.
  • moffkalast 2y ago
    People would just continue the already established practice of paying part of the sum in cash to dodge taxes, or in this case to work around the imposed limit.
  • returningfory2 2y ago
    If housing prices were capped, as in this proposal, selling a house would immediately be a bad economic decision because you would, by design, be giving up something for less than it's worth. People would rationally respond to this by selling less often. The distribution of homeowners over time would then change very little - i.e., in 20 years time, mostly the same people who own homes would still have them, and people who didn't have a home would be economically locked out of homeownership. You see this dynamic play out exactly with rent control. People are (rationally) very reluctant to leave rent controlled apartments, so rental housing basically sticks with the people who had it at the time rent control was introduced and newcomers are kind of screwed.
    • whatindaheck 2y ago
      > You see this dynamic play out exactly with rent control. People are (rationally) very reluctant to leave rent controlled apartments I’m holding onto an apartment now exactly because of this so it really hits with me. Thank you!
• lispisok 2y ago
  There are two economies. People who got on the housing ladder before the rate increases after the huge jump in home prices and everybody else. The first group is doing great, the other group is screwed. Once again we've pulled the ladder on young people.
  • causi 2y ago
    As part of the first group, we're still not doing great. Home insurance rates and property taxes have gone through the roof. My mortgage costs 25% more now than it did two years ago.
    • lispisok 2y ago
      I could have (should have) bought a house before the pandemic but I wasnt quite ready yet. Now housing affordability is so bad I have to save multiple hundreds of thousands more dollars to afford the same house in 2019. That's on top of all my other expenses like rent also skyrocketing. I make more money than ever and am probably close to my peak earnings yet I feel poorer than ever.
    • HDThoreaun 2y ago
      Homeowners are objectively doing great in the US. Yes prices are up, but real wages are up too, especially for the bottom quartile. Obviously there are exceptions, but most people are making more than they did pre pandemic adjusted for inflation.
  • peterdobs 2y ago
    [dead]
• RIMR 2y ago
  It's important to note that this only means that households that own real estate are seeing their net worth increase. Renters are seeing their bills go up. So landlords are doing great, homeowners get extra paper wealth, and most millennials see their cost of living increase. And on top of that, we're getting price gouged by grocery cartels. The real battle is convincing people that none of this has anything to do with inflation.
• skybrian 2y ago
  That goes too far. Housing can improve through new construction and remodeling, or deteriorate through neglect, so that doesn't seem zero-sum to me. Some price increases are due to demand alone, but demand also results in at least some improvements to supply. House flippers can do real work on the house. The housing market serves people with more money. This can be a problem for people who would rather have lower rent than a nicer place.
  • mywittyname 2y ago
    It's zero sum because increases in home value don't do anything for the home owner. They have to sell to liquidate that value, but then they need to buy another place to live. But since housing inflation is roughly even across regions, all of the proceeds from the sale of their current home have to be rolled back into their new one. If a family moves into a $100k house, lives there for five years and sells it for $150k, they might have made $50k. But when they move into a $300k house that was worth $200k five years ago, their situation hasn't improved. The only people who benefit are the odd ducks who buy in coastal California, then sell to move to Iowa.
    • skybrian 2y ago
      I think this is assuming the conclusion. If you assume houses didn't change at all then sure, the "value" is the same as before even though the price went up, and home owners didn't see any benefit. Sometimes that's true for a particular house, but why assume that overall, no houses changed? Contractors get paid to do things. People do work on their houses. Also, the value of a thing is often due to context rather than the thing itself. The neighborhood could really have gotten better over time, even if the house itself didn't change. That counts as a benefit. Maybe not one you wanted, though.
    • solatic 2y ago
      What you're describing is inflation, not a zero-sum game. The price of something is not the same as its value. If you have a fixed amount of somethings but their price is increasing, that's inflation in a zero-sum game. But there isn't fundamentally a fixed amount of housing; it's just that in many markets, the amount of housing isn't growing fast enough to seem like it isn't a fixed amount. But changes to laws and policies could start to increase the amount of housing.
• solatic 2y ago
  > Rising home values are a zero-sum game. It makes people look wealthier on paper, but there's nothing good that comes from gains in housing prices. This is oversimplifying. A rise in housing prices should lead the more construction of more housing, if costs stay relatively the same, and indeed the inflation in housing prices has grown far faster than the cost of labor or building materials. We have a zero-sum game because supply is restricted instead of allowing the market to respond by producing more housing. Sometimes this is due to NIMBYism, sometimes just legacy zoning practices. China has the opposite problem right now because their central planning built too much housing. But there's nothing special about housing that makes it a zero-sum game. For sure, land is basically a zero-sum game (you could blast apart mountains or build artificial islands, but that's not usually financially feasible), but most countries have large apartment towers that expand the amount of housing available despite the zero-sum game for land. And America has so much land compared to most countries. It's not even funny. It's just mostly wasted.
  • xnx 2y ago
    When things get bad enough, the market finds a way. People may decide that owning in a recently less desirable area (e.g. Detroit) outweighs renting in a more desirable one.
    • solatic 2y ago
      In a way, it already did, which is why remote work is so much more popular now. If you don't need to show up to an office, you can purchase cheaper housing in a place further away from an urban metro.
• NovemberWhiskey 2y ago
  >Rising home values are a zero-sum game. It makes people look wealthier on paper, but there's nothing good that comes from gains in housing prices. If I substitute the word "stock" for the word "housing", would you still agree with the statement? If not, what differentiates housing-as-an-asset from stocks-as-an-asset from a wealth perspective? It's not like we can't have more of either of them.
  • dgfitz 2y ago
    Liquidity.
  • deleted 2y ago
    [deleted]
  • mywittyname 2y ago
    No. I own plenty of stock and a house. My house increasing in value has done nothing for me except raise my property taxes. The increased value of my stock holdings has resulted in a very nice increase in my quarterly dividend distribution. Thus, I see an increase in stock value the same way I see any other increase in my income. I could sell my house an pocket those gains, but I'd have to buy another house that has also experienced the same, or even greater price increases. Or rent smaller apartment at 2-3x my monthly mortgage. In reality, calling housing inflation "zero sum" is being generous. It's pretty much an economic drag on society. Having the price of housing get cheaper over time would probably be better. > housing-as-an-asset from stocks-as-an-asset Of course these are both "assets." But stocks are an income producing investment while my house is more akin to my car: it costs me money but provides me with necessary functionality. If I owned rental properties, then I'd call those income producing investments, but I don't own rentals.
    • NovemberWhiskey 2y ago
      >The increased value of my stock holdings has resulted in a very nice increase in my quarterly dividend distribution. But there are masses of companies in the S&P 500 that don't even pay dividends. The dividend yield of the index is like 1.3%.
• tmaly 2y ago
  Your house did not actually increase in value, you just have more dollars and credit chasing an asset that has a limited supply.