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Housing as an investment vehicle is ultimately the problem. Those who buy into it expect prices to keep going up, like any good investment. If rising prices fal

by jameslk 11mo ago

Housing as an investment vehicle is ultimately the problem. Those who buy into it expect prices to keep going up, like any good investment. If rising prices falter, there’s big rippling consequences, especially for those whose net worth is mostly their house value, bought with debt. On the other side is those who need shelter, who don’t have unlimited income to afford the price of something that rises faster than they earn. It doesn’t seem like a sustainable system.

socalgal2 11mo ago
> housing as an investment vehicle is ultimately the problem. No, lack of supply is the problem. If there wasn't a lack of supply then housing wouldn't be an investment vehicle. Nimbys and over regulation has made it impossible to build which creates the lack of supply which is what drives the price up and makes the incentive to invest.
- holoduke 11mo ago
  There will be always lack of supply of housing. Its such an essential thing that it never becomes unused or unwanted. The combination of bad regulations where banks can give extremely high loans is the biggest issue. I would not be surprised if mortgages of 60 years will be possible where your total down payment is 4 times the actually price of the house.
  - fc417fc802 11mo ago
    Not true. As an overly simple thought experiment consider what happens to the market if a government were to dictate the construction of two units of housing per capita. The issue is lack of supply. That is enforced by zoning, which is ultimately dictated by politicians, who know they won't get reelected if they make policy changes that gut a significant portion of their constituents' savings. It's a fairly straightforward example of systemic dysfunction with no obvious solution.
  - socalgal2 11mo ago
    Plenty of places in the world with an oversupply. Lots of examples in China China (like the USA) didn't let the market handle it. China built without letting market demand dictate supply. USA did the opposite, didn't builders meet supply. They try, they try all the time to built more, they get stopped by nimbys and over regulation.
- jameslk 11mo ago
  Lack of supply exists because housing is an investment. If you suddenly flooded the market with housing, prices would drop (see Austin) and this puts everyone from your typical homeowner to your friendly neighborhood PE firm in a difficult financial position. Ultimately this drives votes towards maintaining the status quo
- jancsika 11mo ago
  Wow, you picked the one housing-related article I've read where supply cannot be the problem! You could literally surround the PE mobile home park with new, available lots. But as the article states, it is prohibitively expensive for these current "mobile" home owners to move-- their abodes are no longer mobile in any practical sense. And, as the article also states, many have porches and other bespoke add-ons-- dismantling and rebuilding would add even more thousands. This should be obvious on the face of it-- if those homes were truly mobile, like campers, the camper owners would just scoot (as camper owners do) when PE tried to jack up the rent. I'll go further and speculate that a sizable portion of the owners are fixed income with very little savings. You could even offer free lots 500 feet down the road and some still couldn't take you up on it (at least without racking up some seriously predatory CC or other debt). No doubt these PE firms had a firm grasp on the owners income levels, home ages/prices, and all kinds of other data before they bought up the lots and jacked up the rents. Unless your grand plan to flood the market with mobile home lots includes a "let's teach the users" campaign to tell everyone in the next generation to buy campers instead of mobile homes, adding supply won't help them, either. Edit: formatting, clarification
  - twoodfin 11mo ago
    They can’t sell the home where it sits and buy a new one elsewhere?
    - bb88 11mo ago
      Typically it's the land that appreciates, faster if it has a house or other permanent structure, though that does include mobile homes. If the land is rented, the mobile home will often depreciate, much like a used car. Nobody wants to live in a mobile home with 1970's decor. So those owners are likely going to take a bath.
      - estearum 11mo ago
        Land Value Tax fixes this
    - dingnuts 11mo ago
zrn900 11mo ago
> Housing as an investment vehicle is ultimately the problem I think this was best put into words in the form of "Houses are for living in, not for speculation"...

by jameslk 11mo ago

socalgal2 11mo ago

> housing as an investment vehicle is ultimately the problem. No, lack of supply is the problem. If there wasn't a lack of supply then housing wouldn't be an investment vehicle. Nimbys and over regulation has made it impossible to build which creates the lack of supply which is what drives the price up and makes the incentive to invest.

holoduke 11mo ago
There will be always lack of supply of housing. Its such an essential thing that it never becomes unused or unwanted. The combination of bad regulations where banks can give extremely high loans is the biggest issue. I would not be surprised if mortgages of 60 years will be possible where your total down payment is 4 times the actually price of the house.
- fc417fc802 11mo ago
  Not true. As an overly simple thought experiment consider what happens to the market if a government were to dictate the construction of two units of housing per capita. The issue is lack of supply. That is enforced by zoning, which is ultimately dictated by politicians, who know they won't get reelected if they make policy changes that gut a significant portion of their constituents' savings. It's a fairly straightforward example of systemic dysfunction with no obvious solution.
- socalgal2 11mo ago
  Plenty of places in the world with an oversupply. Lots of examples in China China (like the USA) didn't let the market handle it. China built without letting market demand dictate supply. USA did the opposite, didn't builders meet supply. They try, they try all the time to built more, they get stopped by nimbys and over regulation.
jameslk 11mo ago
Lack of supply exists because housing is an investment. If you suddenly flooded the market with housing, prices would drop (see Austin) and this puts everyone from your typical homeowner to your friendly neighborhood PE firm in a difficult financial position. Ultimately this drives votes towards maintaining the status quo
jancsika 11mo ago
Wow, you picked the one housing-related article I've read where supply cannot be the problem! You could literally surround the PE mobile home park with new, available lots. But as the article states, it is prohibitively expensive for these current "mobile" home owners to move-- their abodes are no longer mobile in any practical sense. And, as the article also states, many have porches and other bespoke add-ons-- dismantling and rebuilding would add even more thousands. This should be obvious on the face of it-- if those homes were truly mobile, like campers, the camper owners would just scoot (as camper owners do) when PE tried to jack up the rent. I'll go further and speculate that a sizable portion of the owners are fixed income with very little savings. You could even offer free lots 500 feet down the road and some still couldn't take you up on it (at least without racking up some seriously predatory CC or other debt). No doubt these PE firms had a firm grasp on the owners income levels, home ages/prices, and all kinds of other data before they bought up the lots and jacked up the rents. Unless your grand plan to flood the market with mobile home lots includes a "let's teach the users" campaign to tell everyone in the next generation to buy campers instead of mobile homes, adding supply won't help them, either. Edit: formatting, clarification
- twoodfin 11mo ago
  They can’t sell the home where it sits and buy a new one elsewhere?
  - bb88 11mo ago
    Typically it's the land that appreciates, faster if it has a house or other permanent structure, though that does include mobile homes. If the land is rented, the mobile home will often depreciate, much like a used car. Nobody wants to live in a mobile home with 1970's decor. So those owners are likely going to take a bath.
    - estearum 11mo ago
      Land Value Tax fixes this
  - dingnuts 11mo ago

zrn900 11mo ago

> Housing as an investment vehicle is ultimately the problem I think this was best put into words in the form of "Houses are for living in, not for speculation"...