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0 pointscheriot3y ago0 comments

> And are losing value on the property, which is the point of depreciation.

The house depreciates while the land appreciates. In the US for the last 50 years has been net appreciation for most homes.

> If it were so profitable, then tons of capital currently being spent on other uses (tech, medical, finance) would instead go into buying up more housing.

Hedge funds have been buying houses at scale since the great recession.

> Historically, housing has performed quite similar to the stock market for returns

Which increases faster than incomes. Hence the way each generation has a declining rate of home ownership.

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ChrisLomont3y ago

>Hedge funds have been buying houses at scale since the great recession.

Zillow tried that and lost over a billion dollars - I'd expect lots of those purchases are not the money makers you think they are.

>Which increases faster than incomes.

Not for the same size houses - the median house now is many times the size of a median house from 1950, and a few times the size of a median house from 1970. If you buy the same house previous generations bought, you'd find prices relatively the same.

>Hence the way each generation has a declining rate of home ownership.

That's not what historical data shows [1,2], going all the way back to 1900. Each generation has had higher ownership rates at equal points in life than each previous one, except perhaps a recent one due to the 2008 crash, but they're catching back up again.

Certainly there is no way you can claim each generation declines and see the same data FRED and Census post.

For example, FRED shows that Q2, 2022, at 65.8% is higher than all of history except the decade before the crash, and it is trending up again.

[1] https://fred.stlouisfed.org/series/RHORUSQ156N

[2] https://www2.census.gov/programs-surveys/decennial/tables/ti...

cheriotOP3y ago

Zillow was flipping not buying to hold. https://www.nytimes.com/2020/03/04/magazine/wall-street-land...

> Not for the same size houses

Anecdotally, the price per square foot has also gone up in the places with the most jobs. To be clear, the whole context of the article is that we're talking about the (sub)urban areas that have seen substantial job growth. If zoning prevents large houses from being split then you're describing an increase in mansions while others can't afford a home.

Despite younger people moving to less prosperous regions where they can afford a home, yes, home ownership rates for younger generations have declined. Specifically, in the family and peak earning years from 30 to 50. https://ipropertymanagement.com/research/homeownership-rate-...

More clear example https://res.cloudinary.com/apartmentlist/image/fetch/f_auto,... from https://www.apartmentlist.com/research/homeownership-by-gene...

djbebs3y ago

Why do you believe land appreciates?

cheriotOP3y ago

A house without a major renovation will slowly depreciate yet housing prices in mid to major cities continue rising.

adgjlsfhk13y ago

read some Adam Smith. land appreciates as long as population increases because you can't make more of it.

djbebs3y ago

There's a limited number of atoms in the universe, under that argument everything appreciates.

j / k navigate · click thread line to collapse

0 pointscheriot3y ago0 comments

> And are losing value on the property, which is the point of depreciation.

The house depreciates while the land appreciates. In the US for the last 50 years has been net appreciation for most homes.

> If it were so profitable, then tons of capital currently being spent on other uses (tech, medical, finance) would instead go into buying up more housing.

Hedge funds have been buying houses at scale since the great recession.

> Historically, housing has performed quite similar to the stock market for returns

Which increases faster than incomes. Hence the way each generation has a declining rate of home ownership.

0 comments

ChrisLomont3y ago

>Hedge funds have been buying houses at scale since the great recession.

Zillow tried that and lost over a billion dollars - I'd expect lots of those purchases are not the money makers you think they are.

>Which increases faster than incomes.

>Hence the way each generation has a declining rate of home ownership.

Certainly there is no way you can claim each generation declines and see the same data FRED and Census post.

For example, FRED shows that Q2, 2022, at 65.8% is higher than all of history except the decade before the crash, and it is trending up again.

[1] https://fred.stlouisfed.org/series/RHORUSQ156N

[2] https://www2.census.gov/programs-surveys/decennial/tables/ti...

cheriotOP3y ago

Zillow was flipping not buying to hold. https://www.nytimes.com/2020/03/04/magazine/wall-street-land...

> Not for the same size houses

More clear example https://res.cloudinary.com/apartmentlist/image/fetch/f_auto,... from https://www.apartmentlist.com/research/homeownership-by-gene...

djbebs3y ago

Why do you believe land appreciates?

cheriotOP3y ago

A house without a major renovation will slowly depreciate yet housing prices in mid to major cities continue rising.

adgjlsfhk13y ago

read some Adam Smith. land appreciates as long as population increases because you can't make more of it.

djbebs3y ago

There's a limited number of atoms in the universe, under that argument everything appreciates.

j / k navigate · click thread line to collapse