Comment on Housing prices
HaiZhung@feddit.org 1 week agoI think this is way too complicated, a much simpler effect describes the housing cost:
Wealth inequality drastically worsened over the last 40 years. The uber rich got even richer: while the vast majority of people has little to no money and can’t afford a house or other assets.
Rich people have (compared to their wealth) low consumer spending, but they massively accumulate wealth.
What’s the wealth spent on? Assets.
That’s why you see all the assets go up - stock market highs, gold price up, housing prices up, everything up.
It’s as simple as that. Rich people don’t know where to put their money except buying more assets, which drives their prices up massively.
Individual rich people don’t lend the mortgages, it is large financial institutions that do that and then use the equity to do even more gambling. Individual rich people own a few expensive properties, sure, but this accounts for very little of the overall residential real estate “market”.
But when nations restrict the financialization of housing, prices flatten or even go down.
Polisheocket@lemmy.zip 1 week ago
Where I live they don’t make starter homes, everything is 800k and up, 2,000+ sqft. People can live in 1,200 sqft and are good starter homes. Have them start at 400k (CA so everything is expensive)
HaiZhung@feddit.org 1 week ago
Yes and that is the logical conclusion of what I said above.
If regular people and families have no buying power, then houses that suit their needs will not be built. Rich people have buying power, so luxury apartments and suites will be built.
Polisheocket@lemmy.zip 1 week ago
It’s unfortunate, my uncle likes smaller places and he’s really struggling to find one.
NABDad@lemmy.world 1 week ago
A guy bought the property next to my house. He was going to tear down the house that was there, but our historic district stopped him. He had to restore that house and convert it to a duplex. Then he squeezed another house in the strip of land in between.
It is hideous. When my mother-in-law visited, she asked why they were building an office building next door.
It sold for $799,000.
Polisheocket@lemmy.zip 1 week ago
We had an investor do that to us, it was 3 houses down and built 3 units with no parking. Plus the house could look down in our pool and all other homes in the neighborhood were single story. Then they painted it hot pink. It was an eye soar