141
Why are there so many expensive homes?
(lemmy.world)
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 14 Aug 2023
141 points (96.7% liked)
No Stupid Questions
35868 readers
339 users here now
No such thing. Ask away!
!nostupidquestions is a community dedicated to being helpful and answering each others' questions on various topics.
The rules for posting and commenting, besides the rules defined here for lemmy.world, are as follows:
Rules (interactive)
Rule 1- All posts must be legitimate questions. All post titles must include a question.
All posts must be legitimate questions, and all post titles must include a question. Questions that are joke or trolling questions, memes, song lyrics as title, etc. are not allowed here. See Rule 6 for all exceptions.
Rule 2- Your question subject cannot be illegal or NSFW material.
Your question subject cannot be illegal or NSFW material. You will be warned first, banned second.
Rule 3- Do not seek mental, medical and professional help here.
Do not seek mental, medical and professional help here. Breaking this rule will not get you or your post removed, but it will put you at risk, and possibly in danger.
Rule 4- No self promotion or upvote-farming of any kind.
That's it.
Rule 5- No baiting or sealioning or promoting an agenda.
Questions which, instead of being of an innocuous nature, are specifically intended (based on reports and in the opinion of our crack moderation team) to bait users into ideological wars on charged political topics will be removed and the authors warned - or banned - depending on severity.
Rule 6- Regarding META posts and joke questions.
Provided it is about the community itself, you may post non-question posts using the [META] tag on your post title.
On fridays, you are allowed to post meme and troll questions, on the condition that it's in text format only, and conforms with our other rules. These posts MUST include the [NSQ Friday] tag in their title.
If you post a serious question on friday and are looking only for legitimate answers, then please include the [Serious] tag on your post. Irrelevant replies will then be removed by moderators.
Rule 7- You can't intentionally annoy, mock, or harass other members.
If you intentionally annoy, mock, harass, or discriminate against any individual member, you will be removed.
Likewise, if you are a member, sympathiser or a resemblant of a movement that is known to largely hate, mock, discriminate against, and/or want to take lives of a group of people, and you were provably vocal about your hate, then you will be banned on sight.
Rule 8- All comments should try to stay relevant to their parent content.
Rule 9- Reposts from other platforms are not allowed.
Let everyone have their own content.
Rule 10- Majority of bots aren't allowed to participate here.
Credits
Our breathtaking icon was bestowed upon us by @Cevilia!
The greatest banner of all time: by @TheOneWithTheHair!
founded 1 year ago
MODERATORS
With respect, you're missing the point.
Sellers don't determine price. Buyers do. "Investors" (big, small, whatever) are selling homes at those prices (or renting, or VRBOing) because there are customers ready to buy the next available unit. If customers aren't willing to buy at that price, then the seller will lower the price. Or never build the big house in the first place. Or never renovate. Who would spend money on an investment when nobody will buy it?
They can only sell for those prices because buyers are ready to buy.
Economists have a concept of "economic value". Regardless of price, "economic value" it what the next buyer is willing to pay for an item RIGHT NOW. People have a lot of weird ideas about what the "value" of something is, and they'll include all sorts of non-monetary factors because they think value is a feeling or concept of utility that particularly applies to them. They value "walkability" or "views" or "quaint antique design", or whatever.
But inasmuch as "value" has any objective meaning, the best one economists have managed to come up with is economic value -- the price that a unit of something will sell for at this very moment. And I humbly suggest that the economic value of housing in your area something is determined entirely by the buyer: the person or entity that is willing to buy the next available unit of housing.
If those buyers can't outbid all the other buyers, then they weren't going to get a home anyway. This has nothing to do with the seller.
You and the other guy are talking about two different things. You're trying to explain supply and demand in a very factual way, the other guy is explaining to you how this is hurting actual people who need somewhere to live.
They haven't missed the point at all but are talking about the human element here.
The "investors" are the buyers/customers, and they aren't reselling these houses--they're renting them out. It's mostly corporations increasingly doing over the last 15 years or so (I think it started around the 2008 financial crisis). They have the capital to do it and so regular people are being priced out more and more as this practice keeps driving up prices.
It didn't used to be this way. Even in my "cheap" area, when I bought my house back in 2005 all but one house on my block were owner-occupied. Now, more than half the houses are rentals because whenever one came up for sale it was bought by a rental company. This is a serious crisis that needs to be addressed.
Renting them out is still selling them, just another kind of selling. The company can only charge rent if there is a renter willing to pay. Again, the buyer determines price -- if rent is too high, there will be no renters.
Renting them out is not selling, it's an ongoing income source for the owner. The renter does not determine the price when the alternative is to move elsewhere or live out of your car. There's simply not enough housing--supply is limited. It's not a simple equation like a factory adjusting the output and price of its widgets. If things were as simple as you say, there wouldn't be such a severe housing crisis in the US. Just search for US housing crisis, there are thousands of articles explaining what's going on.
If the first time buyer cannot afford a house, it means another buyer showed up with a higher offer. It doesn't really matter who owns the house.
Part of the problem is it's still more profitable to build an expensive property and wait a couple years to find a buyer who can afford it than to build an affordable property which will sell right away.
Because the alternative is to be homeless.
Or leave the area for lower prices somewhere else.
So quit your job and pay hundreds, maybe even thousands, of dollars to move somewhere different where you no longer have a source of income and don't know anyone?
I'm not saying I like it, that's just how it is. As a consumer of housing, like anything else, when you can't afford what you want you have to get something less.
No, this is not how it is. In order to rent an apartment you have to show proof of income, and people who can't afford a studio apartment where they live also cannot afford to move. What you are suggesting is literally not possible. You might as well tell someone to grow wings and make a nest in the clouds.
You can't afford steak, you eat chicken, you can't afford that, you eat beans. You can't afford that, you're in trouble.
I didn't create the system, man. I get it, it's hell to be poor. But corporations buying and flipping homes doesn't have much to do with the plight of people who can't afford studio apartments. If somebody else is ready to pay a higher rent than you are for the same apartment, they're gonna get it. Doesn't matter whether the landlord is a friendly grandma or a faceless megacorp, nobody is gonna willingly sell something for less.