4 ms·

> If sellers are not in a particular rush to part with a given good, for whatever reason, there is no reason for an over-supply to lead to lower prices. This j

by mlyle 2y ago

> If sellers are not in a particular rush to part with a given good, for whatever reason, there is no reason for an over-supply to lead to lower prices. This just says that supply isn't very elastic at that point. It's hardly the only market where supply or demand isn't extremely elastic. Understanding that supply and demand might not be straight lines of unit slope is an econ 101 concept. > Real estate also has the handy benefit in it's basically guaranteed to hold value, and it's unexpected if it doesn't increase in value year over year. And the unfortunate cost called property tax which puts a drag on any earnings and compounds losses. It's an asset class like any other. My house did a real 2x after California's low property taxes over the past 20 years, plus there's my owner's imputed rent which is maybe worth another 0.5x for a total return of 2.5x. It's also had tax deferral on the earnings and the values are a little less volatile than the stock market. OTOH my equities did more like 8x over this time.

mrspuratic 2y ago
In Ireland as well as property tax we also have a dereliction charge for sites/properties, it's been on the books since 1990, but recently being leveraged (clumsily) to punish land hoarding in urban areas. It's currently 7% p.a. of what somebody declares the market value of the land is, and the land can also be subject to a CPO unless remedied. The LPT local property tax is a fraction of 1% p.a. typically 0.1% (subject to regional and valuation variables).
- mlyle 2y ago
  Here in California, we tend to have total property tax rates of ~1.5%, which includes improvements like buildings. For various reasons, this is lower than the rest of the country which is more like 2-2.5%. But also, the assessed values of buildings tends to be artificially low in most places. These low assessed values discourage real estate changing hands, because the new owner would often have to pay more. There's a lot of economists who think we should have a higher tax rate, but only on the true market value of the land, to promote efficient usage of real property.

by mlyle 2y ago

mrspuratic 2y ago

In Ireland as well as property tax we also have a dereliction charge for sites/properties, it's been on the books since 1990, but recently being leveraged (clumsily) to punish land hoarding in urban areas. It's currently 7% p.a. of what somebody declares the market value of the land is, and the land can also be subject to a CPO unless remedied. The LPT local property tax is a fraction of 1% p.a. typically 0.1% (subject to regional and valuation variables).

mlyle 2y ago
Here in California, we tend to have total property tax rates of ~1.5%, which includes improvements like buildings. For various reasons, this is lower than the rest of the country which is more like 2-2.5%. But also, the assessed values of buildings tends to be artificially low in most places. These low assessed values discourage real estate changing hands, because the new owner would often have to pay more. There's a lot of economists who think we should have a higher tax rate, but only on the true market value of the land, to promote efficient usage of real property.