[HN Gopher] For most Americans, owning a home is now a distant d...
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For most Americans, owning a home is now a distant dream
Author : gamechangr
Score : 28 points
Date : 2022-04-29 18:43 UTC (4 hours ago)
(HTM) web link (www.winknews.com)
(TXT) w3m dump (www.winknews.com)
| coldtea wrote:
| "You will own nothing and be happy - or else"
| [deleted]
| gamechangr wrote:
| "The U.S. now has almost 500 cities where the average cost of a
| home has hit $1 million, according to Zillow."
|
| Does that sound right? That sounds kind of high to me...
| jonas21 wrote:
| They're counting every city, town, and village in the census
| data, regardless of how small. For example, the most expensive
| city in the country has a population of 88:
|
| > _Indian Creek, Florida, an exclusive 300-acre island in
| Biscayne Bay in Miami, is the most expensive city in the
| country, with a typical home value of around $28.3 million. The
| city has a total population of 88 residents, including a
| handful of high-profile celebrity tenants, such as Tom Brady
| and Enrique Iglesias._ [1]
|
| There are over 30,000 places in the dataset, so it's not too
| surprising that ~500 of them (<2%) are very expensive. Looking
| at the median city would be much more useful.
|
| [1] https://www.zillow.com/research/million-dollar-
| cities-2021-3...
| timcavel wrote:
| la6472 wrote:
| If this https://tab.gladly.io/cats/ can raise 1 million then
| everything is possible
| bxparks wrote:
| I'll be an armchair economist and throw out my ideas for _why_
| this is happening:
|
| * Dramatic increase of inequality in the last 40 years means that
| wealthiest buyers are determining the price of the entire housing
| inventory. I know too many people with multiple houses. Related
| to this, the global slosh of foreign capital looking to launder
| their money, or park their money in tangible assets.
|
| * Perverse incentives in the US tax code. Stepped-up Cost Basis
| means that aging Baby Boomers are highly incentivized to never
| sell their homes. After their death, their beneficiaries receive
| a huge tax benefit.
|
| * Many of the economically productive areas of the country have
| zoning laws which restrict new housing development, which cause
| scarcity, which drive up the value of existing houses for the
| benefit of existing homeowners.
|
| * There has been almost no productivity increase in the
| construction industry in the last several decades. Due to their
| inefficiency, the industry is incentivized towards expensive,
| higher-profit houses, instead of producing higher volume, lower-
| cost houses.
| Sohcahtoa82 wrote:
| > Stepped-up Cost Basis means that aging Baby Boomers are
| highly incentivized to never sell their homes. After their
| death, their beneficiaries receive a huge tax benefit.
|
| How does that work? If I buy a house for $100K, then sell it 30
| years later for $1M, am I really going to get taxed on the
| $900K gain?
|
| And what tax benefit if it's inherited? Does inheriting reset
| the cost basis so there will never be taxes due on that $900K
| gain or something?
| jvanderbot wrote:
| Is it because we want to live in nice homes in nice cities? Or is
| it because literally no matter where you look, it is impossible
| to buy a home there.
|
| I suspect a lot of column A, a little of column B. You can still
| get $80k homes in nice little towns in the midwest. But can you
| work there?
| codefreeordie wrote:
| All of the above. There are tons of houses available all over
| the country [except within a 2 hour driving commute of the few
| major financial hub cities] for prices that the median
| household income would readily qualify.
|
| There's tons of new house construction going on, primarily in
| areas that are just barely outside of easy affordability
| (places like all of Texas that _isn 't_ Austin, for example).
|
| What there is not is much house construction in the super top
| most desired cities, in commute-range of the big financial and
| tech hubs. The combination of high demand and anti-housing
| policy have made housing in those locations utterly
| unobtainable.
|
| It's not even really that all the property is going to big
| investors -- most of the big investors prefer markets like
| Texas where the ratio of rents to prices is more workable. Much
| better to pay $500,000 per unit and rent out for $2,400/month
| than to pay $2,000,000 per unit and rent out for $5,500/month.
| clircle wrote:
| I was really hoping that the pandemic would basically "solve"
| US housing by normalizing work from home. But no.
| Sohcahtoa82 wrote:
| WFH has certainly increased.
|
| But it hasn't solved housing because the simple fact is,
| setting aside cost, most people _want_ to live in big cities.
| You have more options for everything from food to
| entertainment.
|
| Then there's the politics...small towns tend to lean right.
| My brother got a job that lets him WFH, and he thought about
| moving to some podunk town in Iowa since he saw tons of
| houses on Zillow for under $75K, then he took a closer look
| in Google Street View and saw more Confederate flags than he
| felt comfortable with.
| polski-g wrote:
| As a programmer? Yes.
|
| As a plumber? Only if competition is low enough.
| gamechangr wrote:
| No question desired locations have more pressure on housing,
| but all the large cities are having lower inventory.
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(page generated 2022-04-29 23:02 UTC)