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Rated PG-34 posted:Except you're ignoring that houses are also a speculative asset that contains about 60% of world wealth and absorbs a buttload of surplus capital. Housing is not merely bought and sold for people to live in. Well, not so much ignoring as intentionally glossing over a bit, in order to make a reasonably clear point. It's true that housing is also speculative, but the houses that are bought for speculative purposes are almost always occupied - that is, they are either occupied by the speculators (in which case, it's completely included in the argument I made) or they're rented. And the rental market clearly has a relationship to housing prices, since most units can be either owner-occupied or rented, and can move fairly fluidly between the two. There are obviously exceptions varying based on local laws etc. but for the most part, you can buy a condo or apartment or house, or you can rent it. But the thing is: ignoring the homeless (not out of malice, but because they're a comparatively tiny percentage of Americans), everyone's gotta live somewhere. So total homes available are total homes available, whether they're owned by their occupant or not. So, rental market demand is still based on the same factors as the buyer's market demand - real wages, total population, demographics, and distribution of that demand between cities, suburbs, rural areas. It's trivial to see that the population of the united states is still growing, and that means the total units available - rental or for purchase - have to grow, and if they fail to keep up, prices and rents have to rise. If a foreign speculator buys a bunch of homes, that can be seen as adding to the demand, except that speculator is almost always going to add those units to the rental market, easing demand. If prices rise, speculators have to command higher rents to make their purchase worthwhile, and when rents are high, investing in non-owner-occupied real estate becomes more attractive. Whereas when supply is better, rents can fall, and that makes investment in rental property less attractive, reducing sale prices. The ratio of renters to buyers, the length of time in which buyers hold before selling, the degree to which speculators will accept vacant properties, these factors can be glossed over for making a point but they're not nonexistent and it's worth pointing them out. Real estate pricing is complicated, the numbers have a lot of inputs, and if you really want to understand why homes cost what they currently cost, it's good to recognize all of these factors. But by far the most important, the factor that simply dwarfs all others, is supply. If we want cheaper homes, there is nothing we can do that is anywhere close to as useful as adding a lot more units to the supply. Leperflesh fucked around with this message at 18:19 on May 16, 2017 |
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May 16, 2017 18:17
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Leperflesh posted:It's true that housing is also speculative, but the houses that are bought for speculative purposes are almost always occupied - that is, they are either occupied by the speculators (in which case, it's completely included in the argument I made) or they're rented. I don't think this is as definite an assumption as you make it sound. There are lots of reasons to not rent out a property - selling it can be more complicated if there is a current tenant and lease in place, for instance, and renting an apartment requires that you take over the duties of a landlord, which can be tedious and time consuming, and can also expose you to any number of additional hassles. Putting a unit out to rent makes sense if you are paying a mortgage, but many speculators and corporate owners aren't doing that, they're simply buying with cash in hand. The additional trouble of renting out those units isn't necessarily worth it compared to just mothballing them to resell or whatever is wanted down the line. It is also true that at the upper end of big-city markets, you get many people who buy an apartment but don't rent it, because they want it to be available to them when they happen to want it - even if that is only a matter of days or weeks a year. When you are wealthy enough, the loss from not renting your condo isn't troubling. That isn't going to be a widespread phenomena (globally speaking) but it does seem to create a pocket at the top of cities like NY or LA, SF, where there are apartments and condos being bought and effectively not used, preventing the addition of units from having the expected effect down market.
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May 16, 2017 18:33
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Rated PG-34 posted:Except you're ignoring that houses are also a speculative asset that contains about 60% of world wealth and absorbs a buttload of surplus capital. Housing is not merely bought and sold for people to live in. Yeah, this. When people talk about raising wages, they really mean increasing middle class wages relative to the rich. The pressure from the high end is awful in many places. I live in what is a semirural area, with increasing pressure from warehouses and McMansions. A not insignificant portion of the McMansion sales are driven by high income folks from New York making GBS threads up market. Either through deciding they need to drive over an hour and a half in way to work so they can live in a horrible monument to excess and poor taste, or just simply being rich enough to buy a 4,000 sf "vacation home" in a development...
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May 16, 2017 18:33
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QuarkJets posted:Boomers ate out and drank unnecessary beverages and smoked cigarettes by the carton yet homeownership was still pretty accessible for them, so maybe those aren't the real causes for plummeting youth homeownership rates yeah and a lot of people are realizing that maybe home ownership, at least in the areas they'd like to live such as "near any major city or place with fun things to do and non-horrible jobs" isn't a feasible goal and so they're enjoying life in other ways instead.
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May 16, 2017 21:51
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Ashcans posted:I don't think this is as definite an assumption as you make it sound. There are lots of reasons to not rent out a property - selling it can be more complicated if there is a current tenant and lease in place, for instance, and renting an apartment requires that you take over the duties of a landlord, which can be tedious and time consuming, and can also expose you to any number of additional hassles. Putting a unit out to rent makes sense if you are paying a mortgage, but many speculators and corporate owners aren't doing that, they're simply buying with cash in hand. The additional trouble of renting out those units isn't necessarily worth it compared to just mothballing them to resell or whatever is wanted down the line. I agree all of this stuff happens, but I disagree that it makes up a significant portion of the market. I'm not entirely sure how to research it: "vacancy rate" generally means units explicitly made available but not occupied. For example: https://www.census.gov/housing/hvs/index.html quote:The Housing Vacancies and Homeownership provides current information on the rental and homeowner vacancy rates, and characteristics of units available for occupancy. I'm very wary of assertions based on, say, news reports that give individual people's opinions about how many empty houses bought by investors are sitting around, because that's not data. And, because I simply don't believe that a lot of investors are routinely spending hundreds of thousands of dollars on properties, for which they must pay property taxes even if they paid cash, and then willingly foregoing the rental income they'd get by just hiring a property manager and having them rent out the property. Definitely must happen, but speculation on the order of mere months is pretty rare, and holding a house or even an apartment empty for years just to avoid the hassle of renting is not the behavior of someone who is in the business of making money. If you can point to some kind of data that supports your assertion, I'd be very interested though! There is a rising gap between rich and poor, and there have been huge gains in total wealth held by the very rich over the past few decades, so it's conceivable, even though my gut feeling is that it's not a significant factor. LogisticEarth posted:Yeah, this. When people talk about raising wages, they really mean increasing middle class wages relative to the rich. I don't think so. I think raising real wages means wages compared to costs, e.g, after taking into account inflation and as compared to (say) the CPI. When an economist says "real middle-class wages have been stagnant" they are adjusting the dollar wages of the middle class earners for those specific factors. We call that "purchasing power," and the cost of housing is a component of the CPI, so it's already included in the calculation. E.g., one of the major reasons that "real wages" are stagnant, is the rise in the cost of housing. http://www.cpwr.com/sites/default/files/annex_how_to_calculate_the_real_wages.pdf Rich people do buy second homes and leave them vacant most of the time. But I haven't seen any data to suggest this is a new phenomenon. Can you show that wealthy people are accumulating even more empty second+ homes than they used to, and that this unoccupied rate is large enough to be a significant factor in home prices? If it is, then I'd say that just makes it all the more needful to build more housing. Unless you think we can somehow legislate against the right of wealthy people to purchase multiple properties that they don't occupy 100% of the time.
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May 16, 2017 22:11
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Buying residences as a substitute for other investments and hypothetically leaving them empty for investment only works if you think new supply can't be added enough to move down the demand curve. If you can, the investment thesis for holding vacant units breaks down as your expected appreciation declines, reducing your expected reurn.
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May 16, 2017 22:16
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Well considering that 8 people now have the same amount of wealth as the bottom half of the world and that wealth gap is increasing day to day, I'd say it's a safe assumption that more empty homes owned by rich assholes is also increasing. And good luck legislating against wealthy people in this day and age when they want to abolish the death tax
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May 16, 2017 22:45
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Isn't the actual occupancy rate in the newer luxury highrises in NYC, Vancouver, SF etc. something below 50% because they're primarily used as vehicles to park wealth for foreigners?
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May 16, 2017 23:00
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Rated PG-34 posted:Well considering that 8 people now have the same amount of wealth as the bottom half of the world and that wealth gap is increasing day to day, I'd say it's a safe assumption that more empty homes owned by rich assholes is also increasing. What, do you think they keep their money under their mattress? They invest it in many areas, including owning property to rent out, or in banks, where they loan people money to buy houses for interest. When you have a lot of money the money becomes a force in and of itself, making you look for returns. An empty house does not produce returns.
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May 16, 2017 23:07
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sure feels good living in debt peonage to the 1%
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May 16, 2017 23:16
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This reminds me of a tone-deaf article I read titled something like "Why aren't millenials buying more diamonds?" Like expensive jewelry, homeownership is a luxury that previous generations have taken for granted. A generation reaching employment age in a slow economy after decades of wage stagnation can not afford the same things that previous generations could, and this should be surprising to no one
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May 16, 2017 23:22
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Bozart posted:What, do you think they keep their money under their mattress? He's saying the opposite, that real estate is a common speculative investment for the rich.
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May 16, 2017 23:29
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crazypeltast52 posted:Buying residences as a substitute for other investments and hypothetically leaving them empty for investment only works if you think new supply can't be added enough to move down the demand curve. If you can, the investment thesis for holding vacant units breaks down as your expected appreciation declines, reducing your expected reurn. It just occurred to me that buying an investment property and then deliberately leaving it empty could be used as a tax dodge. Create a corporation ostensibly in the business of renting property, have it buy property, fail to rent it out, lose money on paper on the lost rent while also depreciating the asset, write your business losses off against your business income elsewhere (such as the return on your other investments), and when you're happy with how much the property has appreciated in value, sell it and take a profit. I have no idea if this actually works, but it'd be a reasonable ("reasonable") justification for buying property and then not bothering to take rental income from it. "It's a hassle" is not a justification, since there are property management services you can engage to do it for you and hiring one would still produce monthly returns. In any case, Rated PG-34 posted:good luck legislating against wealthy people in this day and age when they want to abolish the death tax well, it seems to have some possibility in Canada and the UK, anyway: https://www.theguardian.com/business/2014/dec/04/property-investors-islington-london-homes-empty-jail http://www.cnbc.com/2016/07/19/vancouver-moves-to-tax-empty-homes-in-overheated-property-market.html Enacting some kind of vacancy tax probably is not a Republican priority though, as you say.
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May 17, 2017 01:32
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I bought a house in 2013 with a mortgage through Guaranteed Rate, serviced (not sold I think, but not sure) by Nationstar Mortgage. In January 2017 I paid off the mortgage, and a substitution and reconveyance was filed with the county which appeared, to me, to correctly release the mortgage lien on the property. 6 weeks after the reconveyance was filed, a request for notice was filed on the property on behalf of Nationstar Mortgage. This request will send them notice if the property is foreclosed on or short sold. Does anyone have any idea why the mortgage company would file the request 6 weeks after I paid off the loan? Is this something that is commonly done for some reason?
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May 18, 2017 20:55
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They may have changed mailing address for legal and updated every mortgage they service with an updated notice, without realizing doing yours was dumb.
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May 18, 2017 21:09
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My potential buyer, the same one who somehow had the code to my lockbox and had let himself into my house before the inspector on inspection day, is demanding a $2k lower price because his inspector found a couple loose shingles. I actually expected the inspector to find some real stuff, especially because he went over our entire house with a FLIR for any hotspots. The inspection report was cleaner than I could have possibly dreamed, but the buyer thinks that because we're about to move he can shake us down for every last cent. gently caress this guy, he's playing hardball over pocket change and sent in a buyer's termination of contract with his new, lower offer if we didn't like it. I guess I'm letting this house go vacant and I just take my time selling it. For reference, he was already getting a good price under tax assessment in a market that's not moving particularly slow. I was just ready get it sold so that I could focus on moving.
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May 19, 2017 00:45
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Twerk from Home posted:For reference, he was already getting a good price under tax assessment in a market that's not moving particularly slow. I was just ready get it sold so that I could focus on moving. I sold a house and got a list of 16 things wrong with it from the buyer that they wanted fixed. I fixed one of them because it was a legitimate broken thing, and told them no way on the other 15 stupid things they wanted. The deal closed just fine - people just ask for stupid things because they think they can get away with it.
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May 19, 2017 00:51
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Droo posted:I sold a house and got a list of 16 things wrong with it from the buyer that they wanted fixed. I fixed one of them because it was a legitimate broken thing, and told them no way on the other 15 stupid things they wanted. The deal closed just fine - people just ask for stupid things because they think they can get away with it. The realtors have done a round of back and forth since I said "No", it looks like he's actually terminating. I should have seen this coming because the guy was a gigantic pain in the rear end to deal with at every stage of the process, and submitted a series of $1k higher offers instead of talking to me during early negotiations. Good riddance, rear end in a top hat. Hope you got your moneys worth out of the option fee and inspection costs. Will he have to pay for the appraisal that has already happened too?
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May 19, 2017 01:20
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The dude spent at least half of that with inspections and the like. Who walks away because of 2k?! Sounds like a first time home buyer.
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May 19, 2017 01:25
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Kirios posted:The dude spent at least half of that with inspections and the like. Who walks away because of 2k?! Or a "Mover and Shaker" who thinks everyone will bow to his superior negotiating skill. I still need to write up my horror story of the seller from almost a year ago.
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May 19, 2017 04:39
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Kirios posted:The dude spent at least half of that with inspections and the like. Who walks away because of 2k?! OTOH he may have just gotten cold feet. Nothing wrong with that
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May 19, 2017 06:06
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Well he could have just terminated due to inspection instead.
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May 19, 2017 12:39
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Wasn't sure where to post this.. Read some article thing morning (well the first paragraph) on my phone from my google now feed about Bank of America leading talks with other mortgage lenders in an effort to get the standard minimum down payment on a mortgage, to avoid PMI etc. down to 10% from 20% sighting the difference in risk is minimal, if not non existent for the lender either way. Anyone else see this article? I've been trying to find it now that I am at work, but it's no longer on my Google feed and googling any combination of what the article was about doesn't seem to return results.
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May 19, 2017 14:44
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thebushcommander posted:Wasn't sure where to post this.. http://www.reuters.com/article/us-bank-of-america-mortgages-idUSKCN18E37J
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May 19, 2017 15:12
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Huh seems like reuters should have come up. Apparently my google skills are poor.
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May 19, 2017 18:24
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Too bad that surely won't be retroactive. I put 5% down last year, am at ~8% right now, and will be at 10% by the end of the year but it'll be a couple more years before I get to 20%.
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May 20, 2017 15:45
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Thoguh posted:Too bad that surely won't be retroactive. I put 5% down last year, am at ~8% right now, and will be at 10% by the end of the year but it'll be a couple more years before I get to 20%. You can always refi.
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May 20, 2017 20:17
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thebushcommander posted:Wasn't sure where to post this.. That's interesting. I think if the "standard" downpayment drops from 20% to 10%, it's just a further cementation of current housing prices. If you look at something like the Case Shiller Index, I don't think we're ever returning to 100, and 20% down on what housing costs these days isn't reasonable for most people. If the point of 20% is determine financial stability, it's excessive in most places. In coastal suburbs and "up and coming" areas of coastal cities, you're looking at $100k when you add closing costs.
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May 22, 2017 13:23
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How can I rate shop between some place like Quicken loans and my local credit union? Will they give me the numbers for a particular loan? Is there any disadvantage of having 2-3 places quote this out, like having them hit my credit so many times? I don't want to get hosed by some place with a high rate (like when you're at a car dealership) but I don't want to have 3 places all give me back the exact same #'s
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May 22, 2017 15:07
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Bob Morales posted:How can I rate shop between some place like Quicken loans and my local credit union? Will they give me the numbers for a particular loan? Is there any disadvantage of having 2-3 places quote this out, like having them hit my credit so many times? I don't want to get hosed by some place with a high rate (like when you're at a car dealership) but I don't want to have 3 places all give me back the exact same #'s Do exactly as you described. You want a "Loan Estimate" from each place, accept no substitutes. Compare them to each other and make them bid against each other. Stop overthinking your credit report.
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May 22, 2017 15:45
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Edit - Wrong thread - bought a house - make sure your inspectors look at where your comms wiring actually terminates.
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May 22, 2017 16:48
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Aha, this is the secret I've been hunting for http://chaser.com.au/national/millenial-buys-sydney-apartment-by-giving-up-4-coffees-for-just-547-years/
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May 24, 2017 14:34
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I just want to tell you guys I switched from burger king to home made sandwiches, and now im a millionaire
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May 24, 2017 17:55
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ElGroucho posted:I just want to tell you guys I switched from burger king to home made sandwiches, and now im a millionaire Ironically you will have to save up even more money than you saved now, because of how much longer you'll probably live.
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May 24, 2017 19:59
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Similarly, I started unplugging all the "wall warts" around my house - you know, all those appliances and stuff that drain power even when they're turned off. I'm now using the $0.94 I'm saving annually on my electricity bills to make sure that I'll have a comfortable retirement. You guys should totally look into it!
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May 24, 2017 20:06
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The most galling thing is that it was some multimillionaire-by-inheritance making the avocado on toast comment, which explains why the comment was so profoundly stupid We should raise inheritance taxes simply because it might raise the average IQ of the wealthy class
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May 24, 2017 22:25
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Leperflesh posted:Similarly, I started unplugging all the "wall warts" around my house - you know, all those appliances and stuff that drain power even when they're turned off. I'm now using the $0.94 I'm saving annually on my electricity bills to make sure that I'll have a comfortable retirement. You guys should totally look into it! After the 20 bucks for the wattage meter, I think I'm in debt for testing the crap around the house.
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May 24, 2017 22:42
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Was looking for the BOFA article (on this page :/ ) and saw that they offered 3% down without PMI loans. That stuff has got to be a racket, though, doesn't it?
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May 24, 2017 22:42
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totalnewbie posted:Was looking for the BOFA article (on this page :/ ) and saw that they offered 3% down without PMI loans. Lender paid PMI. You still pay for the PMI, just as (often) deductible mortgage interest which you must re-fi to get rid of the premium on your rate.
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May 24, 2017 22:45
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baquerd posted:After the 20 bucks for the wattage meter, I think I'm in debt for testing the crap around the house. Considering the energy used to design, manufacture, distribute, advertise, and sell those things, I'd guess they've had a net negative effect on the global average temperature.
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May 24, 2017 22:46
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