quote:

America Should Become a Nation of Renters
The very features that made houses an affordable and stable investment are coming to an end.

More rental units, please.


Rising real-estate prices are stoking fears that homeownership, long considered a core component of the American dream, is slipping out of reach for low- and moderate-income Americans. That may be so — but a nation of renters is not something to fear. In fact, it’s the opposite.
...

This process is painful, but it’s not all bad. Slowly but surely, most Americans’ single biggest asset — their home — is becoming more liquid. Call it the liquefaction of the U.S. housing market.

Houses have typically traded with very little liquidity premium. That meant a relatively low purchase price compared to what it would cost to rent — the equivalent of the dividend from housing investment — and stable prices over time.

..

It may have seemed at the time like a failed experiment. But financialization had changed the housing market forever. Houses are now more prone to be priced high relative to rents, and to see their prices fluctuate with the market. The very features that made home buying an affordable and stable investment are coming to an end.

But the illiquidity that made houses a safe investment also made America less dynamic and mobile. In coastal markets with strong demand for housing, market forces would normally have led to the replacement of single-family homes with duplexes and apartments. But existing homeowners are reluctant to agree to development with unknowable effects on the value of their most precious investments. The result is less development — and sky-high rents for any residents not lucky enough to own their own home.

As institutional investors increasingly enter the housing market, however, the incentives begin to shift. Large investors can expand or redevelop their properties themselves, because they benefit from a greater number of overall tenants, even if rents themselves dip.

Meanwhile, the increased availability of rental properties could benefit homeowners in declining areas of the country. They frequently cannot move to more prosperous areas because they can’t sell their homes for nearly enough to buy a new place somewhere else. In an economy with more rentals, however, they could afford to try a new place for a few years without the commitment of a mortgage or down payment.

A nation of renters could lead to a world where location decisions are driven far more by personal preferences and life-cycle demands. Younger workers might prefer the excitement of the city. A couple just starting a family could reunite with their parents or siblings in a small town.

The U.S. is not quite there yet, and not just because too many people are chasing too few apartments. To see the U.S. as a nation of renters requires a revision of the American dream of homeownership. [b]This country was always more about new frontiers than comfortable settlements, anyway.

Derpies posted:

Man if only we all inherited a condo

Ignatius M. Meen posted:

you know it has been a while since we saw your condo, i remember when you couldn't stop posting about it. how is the old joint nowadays?

Three Olives posted:

I got married and moved, we owned too many houses.

Duck and Cover posted:

You know you can buy a condo with the money you inherited right?

Pimpcasso posted:

I look forward to the housing market collapsing again tbh

Derpies posted:

I stand corrected.

Man why dont my boomer parents die so I can buy a few investment condos too!

Pimpcasso posted:

I look forward to the housing market collapsing again tbh

Duck and Cover posted:

Uh don't you have grandparents? Sheesh wanting your parents to die is terrible!

Pimpcasso posted:

I look forward to the housing market collapsing again tbh

Duck and Cover posted:

You know you can buy a condo with the money you inherited right?

vandalism posted:

There should be a cap on rental ownership to allow families to have reasonable homes. Companies should not be allowed to hoover up homes. People should get paid enough to be able to buy a home. This is pretty simple poo poo.

EorayMel posted:

vandalism posted:

There should be a cap on rental ownership to allow families to have reasonable homes. Companies should not be allowed to hoover up homes. People should get paid enough to be able to buy a home. This is pretty simple poo poo.

Funky See Funky Do posted:

The dystopia is sooo close to completion. All that's missing is for a new designer drug called Blitz to ravage to underclass and for combat drones to be granted 2nd Amendment rights.

Ville Valo posted:

My wife and I *just* bought our first house; did we win or are we the first to lose?

Masturbasturd posted:

3 Olives remember that time when I wrecked your poo poo so bad on STP you zelle'd my senator 750k to legislate mandatory 24 hour employment under penalty of death?
Good times, girlfriend

EorayMel posted:

Three Olives posted:

https://www.bloomberg.com/opinion/a..._source=twitter

Congrats to the death of the American Dream and to the exciting future of being beholden to the whims of whatever hedge fund owns your home. No one ever wanted to be comfortable in a home anyways, this is a country of the kind of rugged independence of having your landlord jack up your rent knowing that the huge increase is barely more than the exorbitant emotional and financial cost of moving instead of paying the increased rent. When you really thing about it, you always really wanted better liquid financial investments, just like right to work gave you the freedom to find a new job whenever you wanted. Trust me, you'll love it!

Congrats America, your dream is dead to provide an even brighter future!