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Arglebargle III posted:Forgive this econ 101 look at things, but if you want to reduce supply of luxury apartments would a price ceiling help? The idea is that it would make luxury apartments impossible to build and push developers back to the middle class market. The problem is too much money in the market, not too many nice houses. Cutting off the supply of luxury apartments will just push that same money into another form of housing.
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Jun 9, 2014 04:37
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Badger of Basra posted:Is the tech bubble really going to pop soon? I can't wait. If Uber is worth $18 billion then my contact list must be at least a couple thousand. We may have reached peak ads, but it seems like tech's ability to eat away at the rest of the economy is only just beginning.
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Jun 9, 2014 05:19
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Shifty Pony posted:An interesting take on the state of the industry. The interesting part about the state of internet advertising starts right past the guy standing on the radioactive waste barrels, but I highly recommend reading the entire article. There is even a good chunk at the beginning which ties into housing and the present recoil against suburban sprawl, as well as some cute animal photos to keep you from getting too depressed. I somewhat agree that we are at or near "peak ads", but there are lots of businesses with solid revenue that don't rely on ads. Tech is pushing its way into physical products that will dramatically transform our way of life. Amazon has complex robotic supply chain/inventory management, Google is building self-driving cars, IBM has Watson, and so on. A lot of tech does not rely on ads to be viable.
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Jun 9, 2014 05:49
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Lead out in cuffs posted:If the price of something only tracks inflation, then its value stays constant. No, a large capital asset with attendant cash flows is pretty much the definition of an investment. An investment can be a money sink and a money sink is not necessarily an investment.
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Jun 9, 2014 07:08
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Runaktla posted:Maybe the only reason this isn't brought up a ton is the discussion will naturally evolve into anti-immigration and stop having too many babies you Catholics/Mormons/other naturally more prone to reproduction groups :/ At some point, the location where you live becomes more of a consumption choice, rather than a human right. It seems pretty absurd to keep out immigrants in order to preserve the perceived right of a native to live in a desirable neighborhood as a lifestyle choice. On the same line of thinking, it's really silly to defend living in the city center as any sort of right. Obviously it would be nice if it were possible but it's obviously not possible, and wouldn't be for many years even if we decided to make it a priority.
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Jun 9, 2014 08:31
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You are ignoring the fact that a house easily has cash income, either rental rates, or imputed rental rates for owner-occupied housing. Housing is an investment, it's just not a very good one. The high returns experienced are typically because people use leverage, hold for a long time, and have very little churn. If banks let you borrow 500k at 4% to invest in the stock market, you should absolutely do that instead, but typically the only way you'll borrow lots of money is to buy a house/car.
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Jun 9, 2014 09:58
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computer parts posted:The most sprawl-y cities in the US are typically those that boomed after WW2 though. The US was rich during the boom, and most of Europe was comparatively pretty poor. Western Europe had to really pull together to rebuild, but the US could just gently caress around and do whatever felt good.
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Jun 10, 2014 02:13
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bryn987 posted:2. Title Insurance - wtf is this? I have to pay to protect myself that some lawyer didn't gently caress up the title earlier? My house is brand new. How can a 3 month old house have a hosed up title? Why can't the person that did the title work pay the drat insurance to cover his work? The title system is a mess, with no central database of land ownership. Anybody could theoretically come up with a claim to your land from hundreds of years ago. Title insurance makes a lot of sense.
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Jun 10, 2014 02:29
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effectual posted:Haha, that's just moronic, unless they can corner the market. People are more likely to pay mortgage (so they don't get forclosed and lose all their equity...ending up with nothing to show for the home buying, kind of like a renter) but renters can just move (if there are available units somewhere) and stop paying if it costs too much. Maybe they really hope to corner the market, but will the FTC get involved? (probably not, or get bribed to do nothing) You don't understand how asset backed securities work. On a large enough scale, you can expect a certain return on rental income, due to law of averages. For attracting capital, you can divide up these cash inflows into senior (always get paid first) and junior (might get paid, but high returns) and have the underlying capital be the value of the house. They aren't expecting much in terms of rental income, but using the rental income this way will allow the financial sector to hold on to the properties until they can be flipped at the peak of the market. Depending on what they expect the houses todo capital appreciation-wise, they can design the tranches and collateralization and cash flows to appeal to the different investors they have.
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Jun 10, 2014 07:10
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VitalSigns posted:This is genius. I mean, barring some impossible black-swan world-destroying event like people being unable to continue to afford sky-high housing costs if there's an ever-so-slight economic slowdown...the law of averages proves that the senior tranche can never default, it's a safer bet than the US government! Rent seems a lot more stable than the underlying price of the house. Remember that the last time we had armageddon in the housing market, rental yields jumped. If you bought during the panic, you could still charge the same rent, but sell the house for a nice profit 5 years later. And after all, if people can't afford rent, what are they going to do, buy a house?
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Jun 10, 2014 10:40
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VitalSigns posted:Well rents are high now, so it's not like during the bubble when you could drop back from your McMansion mortgage to a cheap rental. Bloomberg put together an infographic: http://www.bloomberg.com/infographics/2013-12-20/blackstones-big-bet-on-rental-homes.html Most of the homes are 3-4 bedrooms, and the broad trend is lower home ownership and higher rents. The trend of higher rents has apparently continued through the recession with not much variation. Also, the coupons being paid are pitiful.
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Jun 10, 2014 11:06
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axeil posted:That said, a security made up of monthly rent seems really iffy from a risk perspective. How the hell do you tranche that? Cashflows from mortgages are processed monthly the same way rent would be. Also, it's not at all out of the capability of a competent real estate company to predict and model rental cashflows taking into account in vacancy. axeil posted:To clarify, what I'm saying is, a traditional MBS is able to tranche because the stuff most likely to pre-pay is in the upper tranches while the stuff most likely to default is in the lower tranches. With loans you can determine this by FICO, LTV, etc. How the gently caress do you determine that for a rental? In an MBS, the senior tranches have to be protected from prepayment by the junior tranches.
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Jun 10, 2014 12:39
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axeil posted:I believe you have it the other way around. Senior tranches are exposed to prepayment risk in exchange for being protected from default risk. Junior tranches are exposed to default risk in exchange for being protected from prepayment risk. It depends on how the security is structured actually. The example that stood out in my mind used a z-tranche to protect senior tranches from prepayment.
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Jun 10, 2014 13:01
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Berke Negri posted:High rises rule anyways. Who is like "god, I hate this city of the world and just wish I lived in a town of short buildings." The joy of being a hipster dumping ground of a city means that the people who think this way are non-rich people who simultaneously believe that people who aren't cool and authentic like them should be forcibly evicted from the city to keep prices down.
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Jun 18, 2014 02:52
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ShadowHawk posted:Seriously. We KNOW how to build earthquake proof buildings these days. But my quaint neighborhood!
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Jun 18, 2014 09:04
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effectual posted:Is Japan built on piles of trash too? A lot of pacific rim countries have a lovely foundation that is basically wet sand.
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Jun 18, 2014 14:42
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As a combination of number 1 and 4, there are a ton of savings from the boomer generation being plowed into real estate not just for themselves, but also for their children. Many people I know have been offered houses by their parents as a wedding gift or other excuse. A lot of these people aren't rich either, they just bought a house 30 years ago that's now worth a ton of money and have many options for using that money.
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Jun 20, 2014 06:53
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shrike82 posted:It'll be cool to see how this pans out long-term as a sociological phenomenon with the younger generation being bestowed property worth easily a couple million USD while they're in their 20s-30s but making peanuts in middle class jobs. If you live rent free, that's a HUGE leg up in savings, even if you have a fairly meh job. The average person has to give up a large portion of their lifetime income to buy a house. Also, if the property is in a prosperous area that stays prosperous (A good bet is DC/NYC), it's a benefit that will also help them get high income jobs with more security. I am not not Asian, and while I won't be given a house, we have decided to self-finance any real estate purchases, since we have a large enough family and many of the elderly members have a hard enough time buying decently-yielding debt as it is. on the left fucked around with this message at 11:51 on Jun 20, 2014 |
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Jun 20, 2014 11:48
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LemonDrizzle posted:That sounds like a nice idea in principle, but what happens in say five years' time when central bank zero interest rate policies are a thing of the past and your generous elderly relatives could easily be earning 5-10% on their savings rather than the (for example) 3% they've achieved by lending to fund their grandchildren's house purchases? Seems like a recipe for intrafamilial strife IMO... I honestly doubt interest rates will surge. Governments all around the world seem pretty dedicated to ZIRP. After all, we are in an economic situation where even 0% interest isn't enough to stimulate inflation and instead deflates currency.
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Jun 20, 2014 14:17
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cheese posted:Hmmmm, let me check my supply side economics note card. We need to lower interest rates...already at zero? poo poo. We need to cut taxes on the rich and corporations...already low and full of loopholes and exemptions? poo poo. Remove barriers to the flow of international capital...already non-existent? poo poo. Little help? ZIRP is not supply side economics by any stretch of the word. And yes, the challenges faced by countries in a zero interest rate scenario are new territory, which is why we have stuff like quantitative easing.
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Jun 21, 2014 02:41
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cheese posted:Can you explain to me why? My understanding of ZIRP is that in theory it makes it easier to acquire capital to invest and expand businesses. The problem is that it does not do this in actuality, which is why in 2008 in the GFC we had both implied negative interest rates AND deflation. Hence all the special programs trying to spur inflation and modify the bond yield curve.
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Jun 21, 2014 06:07
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shrike82 posted:It's one thing to forecast zero interest rates for the short/mid-term. I think it's safe to bet that the only thing that would radically change interest rates would also destroy pretty much every other assumption about money and investing.
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Jun 21, 2014 06:28
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cheese posted:"Small" living is an idea that only makes sense to you if you have lived a life of such privilege and excess that you get to idly fantasize about giving away a bunch of your easily replaced possessions so you can embrace the "simple" life. I guess the worst case is you grow weary of it, sell your 75k dollar small home and move back into that 2 bedroom 2 bath luxury apartment that you were renting for 3500 a month in Mountain View? Every microapartment approved is a vote for cities as a place for young, well-off single people with no kids. Single mothers gtfo.
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Jul 3, 2014 02:27
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One big problem is that you kind of have to trample all over the local culture of an area to make it affordable to live in. We could probably make San Francisco way more affordable if the government went in and subsidized a bunch of high density housing. The problem and greatest fears of residents is that it will end up looking like this though: 
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Jul 3, 2014 08:14
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Hedera Helix posted:It would be preferable to not being able to afford to live in the city, period, and having a commute ranging from one to three hours a day from god only knows where. You can have extremely dense housing situations AND extremely high prices though. In fact it's very common when talking about cities with high rises (building/square footage costs rise exponentially with height). At some point, you do have to say no more people can live here.
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Jul 3, 2014 08:37
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