If the government wants high ownership levels, it should raise the interest rates so that the prices of houses go back to 1995 levels. Better yet, tax non-primary-residency houses and condos at ten times primary-residency houses. This will free up the resources from parasitic rent-seekers.
Letting foreign speculators bid up housing prices to unaffordable levels does nothing for our economy or well-being. Speculate on diamonds, fashion, the roulette table, and other things that aren't necessities, not shelter.
Couple points you hit on, the first above is that in my opinion they cannot raise interest rates until the debt is lower or we cannot afford the payments. Yes, had I seen that earlier I might have saw the higher prices coming.
At least here in the San Fernando Valley, I was looking for a new apartment and signed up for a popular listing service here and am in my 3rd month. There are still the same condo units for rent from when I first joined ! I emailed one and got a response in less than two minutes. (No, I didn't rent it.) For the tax part I don't think I should go there right now, but it would be revenue wouldn't it ?
Speculate on diamonds, fashion, the roulette table, and other things that aren't
necessities, not shelter.
Bingo. That is what changed around the year 2000. The non separation of investment and consumer banking allowing all these 'financial vehicles' to be born, like Satan's spawn such as credit default swaps and the bundling of mortgages to be sold, as a 'speculative' investment to investors.
Better yet, tax non-primary-residency houses and condos at ten times primary-residency houses. This will free up the resources from parasitic rent-seekers.
Hey it is a free market. Investors pretty much saved the US economy from going into depression. They should be worshipped as HEROs. They used cash to buy properties hence thereby reducing the risk. If the investor want to buy property they are doing a favor. Punishing them would be criminal.
they cannot raise interest rates until the debt is lower or we cannot afford the payments
They can't make the payments now. Cut the military.
Yeah, we had to spend a lot to counter the threat of the Soviet Union. The problem was that we didn't cut back after the Soviet Union fell. Instead, we let the greedy warfare industry protect its revenue streams by inventing new bad guys and making the world a more dangerous place.
Obviously, not all are foreign. I can say very confidently that in south Florida, the vast majority are. A weak dollar makes such speculation even better. I suppose I'm lucky that the Euro is having such a hard time now.
Investors pretty much saved the US economy from going into depression. They should be worshipped as HEROs.
I would argue that the people you call "investors" are really speculators and that they caused the Second Great Depression. We should have had a moderate recession back in 2001-2003 instead. That would have been better.
It seems that Wall Street pools of money and small investors owning multiple properties are making up more and more of the ownership pie. Our correspondent in Arizona, R. Arribas is an apostle of this philosophy. I don't blame him or other small-timers for trying to get rich in real estate, but it signals a downward spiral in the general equity, or common equality, in that home ownership is becoming ever more remote.
I was looking at the below graph on Calculated Risk particularly the Composite 20 cities data (all the way to the right on the graph). The current nominal price is 49% of the year 2000's price. That means the price appreciated roughly 3% annually from 2000 to present day. From what I remember going back about 10 years listening to Market Watch on NPR, that home prices typically appreciate about 3 to 6 percent annually depending on the location.
Problem is that if you cut the entire defense budget, you still have a deficit of at least $330 billion.
Cut 95% and then cut $400 billion from other areas, say by not providing Social Security benefits to Boomers above the poverty line. Just use SS as an insurance policy, not a retirement plan, for that generation.
Just use SS as an insurance policy, not a retirement plan, for that generation.
I agree with you Dan. You mean a means test, or going back to how FDR originally proposed it as social insurance. I think he needed enough Republican votes to pass it, so he compromised and made it a pension system more than an insurance plan.
I think he needed enough Republican votes to pass it, so he compromised and made it a pension system more than an insurance plan.
Separation of Concerns is the single most important concept in the development of software or government policy. You cannot serve two masters. It would be better if there were two completely difference systems, one for insurance and one for retirement planning, than to combine the two. However, I don't agree with the forced retirement planning given how inefficient it is, and I opened my first IRA at age 20.
How can the sales of real estate rise as the same time, the rate of home ownership is falling? It can only mean that the rich is buying up the house to rent to middle class to squeeze more money from the middle class. Another example of rich squeezing more milk from the rest of the population. It is time to tax them at the equal rate as the middle class.
Oh, and Wong, let's limit the number of properties that the foreigners can purchase.