patrick.net

Robber Baron Elite Scum says

30 years later... It needs to be knocked down....

How do you figure? I'm sure houses made today, with cheap homedespot crap may need to be demolished, my house built in 1951 is solid as a rock.
Robber Baron Elite Scum says

when home prices crash 99%

Then I'll just have to line up for all of the $16.00 houses I can find.
The title companies would have to hire Robo signers just to keep up with MY demand.

CaptainShuddup says

How do you figure? I'm sure houses made today, with cheap homedespot crap may need to be demolished, my house built in 1951 is solid as a rock.

Most homes eventually get demolished including the 1951 built homes. Structural problems, termites, neglect and the age simply warrants it logical to demolish than to repair.

CaptainShuddup says

Then I'll just have to line up for all of the $16.00 houses I can find.
The title companies would have to hire Robo signers just to keep up with MY demand.

That's if your bank will be solvent enough to give you $16.00 dollars.

robertoaribas says

yes, buying homes is a scam... renting is a scam...

I never said homeownership or renting was a scam. Just the prices are a scam and a rip off along with how the deal is operated..

robertoaribas says

I guess everyone should live in their cars or tents...

That is your suggestion, not mine.

But many people do just that.

I knocked down a 37 year old house a few years ago. It took 2 years to rebuild it. The old house was OK for early 70s construction (it took the Loma Prieta 7.0 earthquake without as much as a drywall crack) but the new one is WAY WAY better! The earthquake codes here in CA mean new houses are probably as tight as the Flintstone rock abode but with better lighting and take less energy to heat and cool.

Still damned expensive though!

A house can be built in one year, but not by one person. The question is how many person-years it takes to build a house.

And then there's the land under the house. Depending on your choice of religion, that took anywhere from seven days to 13 billion years to be made.

Robber Baron Elite Scum says

Most homes eventually get demolished including the 1951 built homes. Structural problems, termites, neglect and the age simply warrants it logical to demolish than to repair.

(Sarcasm alert)
Oh yeah old Europe is practically all new homes right?
Rome wasn't built in a day, but it wasn't built yesterday.

Or yesteryear for that matter. There's houses 500+ years old all over the world.
Quit talking out of your butt, that is crap that insurance companies use to justify their insurance rates. And people just buy it.

robertoaribas says

yes, buying homes is a scam... renting is a scam...

I guess everyone should live in their cars or tents...

excluded middle fallacy.

http://en.wikipedia.org/wiki/Land_value_tax

(LVT)Delurking says

http://en.wikipedia.org/wiki/Land_value_tax

My City taxes LVT

Robber Baron Elite Scum says

I can't wait to see the expression on the faces of you cockroaches when home prices crash 99% and shit hits the fan into cannibal anarchy.

How dare you call us cockroaches! Cockroaches is a complex multi-cell organism, too sophisticated for what we are. Call us amoebas, paramecia, even fungi, but never a cockroach!

CaptainShuddup says

Sarcasm alert)
Oh yeah old Europe is practically all new homes right?
Rome wasn't built in a day, but it wasn't built yesterday.

Or yesteryear for that matter. There's houses 500 years old.
Quit talking out of your butt, that is crap that insurance companies use to justify their insurance rates. And people just buy it.

Termites Cause Mansion to Be Demolished

http://content.usatoday.com/communities/gameon/post/2012/01/termites-drove-tigers-ex-to-demolish-12-million-mansion-elin-nordegren-tiger-woods-people/1

There was another historic mansion that was bought by a bankrupt internet millionaire that had to be demolished because the age and neglect that made it structurally unsafe.

Insurance companies will always justify their rates regardless because they need to give out less money than they take in.

PS. Stay on topic. This is not about insurance companies.

Michinaga says

And then there's the land under the house.

the cost of that is basically what it takes to outbid the #2 bidder for it.

That value is not relative to any cost of production at all.

Even crappy land up in the wilds of Hokkaido is still valued at ¥6000/m2, or $300,000 an acre at current FX.

In the good parts of Tokyo, land is going for a lot more than that:

http://housingjapan.com/2011/05/07/land-for-sale-in-omotesando-for-residential-housing/

$50M per acre. Same dirt that was a cabbage patch 400 years ago.

Real estate is weird, very weird.

Michinaga says

A house can be built in one year, but not by one person.

What the original poster forgot to mention is this person building this house is an illegal alien with an 8th grade education. A PhD in Computer Science, working for the High Tech industry has to work 30 years, together with his wife, to pay for 2 illegal mexicans working for 3 month to build a house. That makes a lot of sense, sure!

CaptainShuddup says

Rome wasn't built in a day, but it wasn't built yesterday.

Ha..but it wasn't built in America either. We squeeze every once of profit out of our goods, making them crap by the time we're done.

robertoaribas says

I'm buying a home tomorrow for $85K. I make that in six months...

Sorry to hear, Robertoaribas! Things will look up.

Michinaga says

And then there's the land under the house. Depending on your choice of religion, that took anywhere from seven days to 13 billion years to be made.

No man ever built land (minus artificial land that is not sustainable).

Therefore no man deserves 30 years of your hard labor for him doing nothing except claiming the land first before the competition.

Funny thing is I'm starting looking at what it's going to take to ship home construction materials to Japan later this decade, how many 20'ers, import tariffs, construction regulations, etc.

There is a lot of actual hard wealth incorporated in the housing good. All the cement, lumber, plumbing, hardware, appliances, roofing, furnishings.

Plus all the skilled labor to put this stuff together correctly.

Had a friend construct his own home on Maui. Bought the land for $200,000 in 2000, built the 2000' house over several years and sold the property for $1M at the peak.

Real estate will suck up every dollar we have if we let it.

Delurking says

All the cement, lumber, plumbing, hardware, appliances, roofing, furnishings.

Haven't all of those generally become more affordable over the last 60 decades? And in the age of Globalization, low tariffs and offshore labor it's all moot!

Great thing about Japan is that they're losing ~1M people aged 25-65 a year now.

That simply HAS to put a boot up the ass of land values.

Plus the upcoming 5% tax rise isn't going to do land value any favors.

Between 2000 and 2020 Japan is going to lose 14M working-age people -- 2010 and 2030, same thing, 14M decline. 2020-2040, another 13M+.

I'm hopeful that this won't be the demographic armageddon everyone is expecting, rather than housing will collapse (due to the vacancy factor) and labor rates will rise (due to labor shortage).

But this is tricky, since less people means less demand, too. Deflation is in the cards. ISTM they should just print $1000/mo and give it to everyone to spend on stuff.

CL says

Haven't all of those generally become more affordable over the last 60 decades? And in the age of Globalization, low tariffs and offshore labor it's all moot!

Yup. A lot can be manufactured off-site. Japan still runs a closed economy but if you don't have a lender paying for the stuff I suspect you can bypass a lot of the non-tariff trade barrier BS.

Robber Baron Elite Scum says

The level of American stupidity is astounding... You sheep are brainless idiots. It's really comedy to me on how stupid you all are.

At least with rent for 30 years... You have the ability to save. But now you fucking debt slaves are starting to dump your mortgage liabilities on to renters.

90% of all millionaires became so by buying real estate. I am a landlord, land owner, investor, flipper, capitalist, scumbag, call me what you like, but people like me need people like you, who like to rent. Thanks for making us rich. :)

lets not forget the home builders did not build the land.

in coastal cali - maybe 50 to 80% of 'home value' is the land value.

Robber Baron Elite Scum says

A brand new home is not worth 30 years of labor since it can be made within a matter of months

How true. I paid something like 6 months income (after taxes) for my house.

Delurking says

Great thing about Japan is that they're losing ~1M people aged 25-65 a year now.

That simply HAS to put a boot up the ass of land values.

Not necessarily. I have seen places in the US where the population declines AND more housing is built without negatively affecting housing prices (stayed pretty much flat). This was on a peninsula in the Chesapeake Bay where this happened. Just so happened that the average number of people per household dropped at the same time. That's what I would expect to happen in parts of Japan where a population drop will result in more house per person but necessarily less housing.

Robber Baron Elite Scum says

A brand new home is not worth 30 years of labor since it can be made within a matter of months or within 1 year depending on the features

True, but it might take 30 people to build it in 1 year. That's 30 person-years per house. For one person buying one house, that works out to 30 years of labor.

Robber Baron Elite Scum says

The level of American stupidity is astounding... You sheep are brainless idiots. It's really comedy to me on how stupid you all are.

At least with rent for 30 years... You have the ability to save. But now you fucking debt slaves are starting to dump your mortgage liabilities on to renters.

90% of all millionaires became so by buying real estate. I am a landlord, land owner, investor, flipper, capitalist, scumbag, call me what you like, but people like me need people like you, who like to rent. Thanks for making us rich. :)

wthrfrk80 says

Robber Baron Elite Scum says

A brand new home is not worth 30 years of labor since it can be made within a matter of months or within 1 year depending on the features

True, but it might take 30 people to build it in 1 year. That's 30 person-years per house. For one person buying one house, that works out to 30 years of labor.

But most of those are laborers and are thus paid less than (hopefully)you are.

This kind of reminds me of my "Moore's Law" discussion. A fairly well-paid person in America should be able to buy a house with a couple years' labor, not permanent debt.

It's a lot like Healthcare. Insurance is because you can't afford healthcare, but now you can't afford insurance. I need insurance to pay for my insurance!

Robber Baron Elite Scum says

Therefore no man deserves 30 years of your hard labor for him doing nothing except claiming the land first before the competition.

That's why I don't (and won't) live in CA, NYC, DC, or Boston.

wthrfrk80 says

Robber Baron Elite Scum says

Therefore no man deserves 30 years of your hard labor for him doing nothing except claiming the land first before the competition.

That's why I don't (and won't) live in CA, NYC, DC, or Boston.

Well here in LA there is no shortage of people fresh from the rural areas who are dying to live here for any number of reasons. (want to work in entertainment, like the weather, are gay, etc, on and on).

Me I like the weather. Its nice to have choices - flyover is totally affordable now - but I guess its BYO job for many.

CL says

It's a lot like Healthcare. Insurance is because you can't afford healthcare, but now you can't afford insurance. I need insurance to pay for my insurance!

The market demand-side price for something you can't live without is every penny you have & ever make.

This is why free-marketeerism in real estate and health care is ideology-driven hogwash that does not survive contact with the real world.

PockyClipsNow says

lets not forget the home builders did not build the land.

in coastal cali - maybe 50 to 80% of 'home value' is the land value.

That's not unique to calif. 'Coastal' land is scarce relative to aggregate land supply. And who doesn't like going to the beach? Ocnj 1/10th acre beachfront lot goes for about 1M,,,and for some strange reason, people pay those price tags! I guess when you can lever other people money with no risk, and use preferential tax treatments, parlayed with prohibiting everyone else access to the beach, who wouldn't pay those exorbitantly fleecing price tags?

Oddly enough, those nutters in nj think "their" beaches are so darned special, they require that you pay just to access the "public" beach!

Simplest solution sounds like a heavy lvt on all coastal (within 1/2 mile) and use the proceeds to fund the navy. that and do away with the silly preferential tax treatment the gov gives RE 'owners'

PockyClipsNow says

Well here in LA there is no shortage of people fresh from the rural areas who are dying to live here for any number of reasons. (want to work in entertainment, like the weather, are gay, etc, on and on).

I consider them suckers. I hope they have fun making money for their landlord or bank.

Our ancestors fought/died/immigrated to escape serfdom/aristocracy. We modern Americans are signing up for it voluntarily!

Delurking says

This is why free-marketeerism in real estate and health care is ideology-driven hogwash that does not survive contact with the real world.

It works GREAT in the real world. IF you're the top 0.1% that reaps the profits from it.

Dunnross,
I like your previous comment. It is true that it takes a couple of illegal immigrants 3 months to build a property. I live in LA and see it all over the place. And then they are sold at a 500k or more profit to phd's who will work all of their life to pay it off-or 30 years at least. So true!

Raw comment says

90% of all millionaires became so by buying real estate.

Do you have a source for that information? I've found none, except that it is a quote attributed to Dale Carnegie commonly found on get-rich-quick websites.

Mathematics are not in agreement with the idea that buying houses or land leads to wealth. There is a long period, relative a life span, of debt usuallly associated with the purchase which means the period of compound interest will necessarily be short.

So, perhaps, if real estate is passed on through generations and sold there can be wealth building. It's wealth not realized by the original buyer though. This is probably why descendents of families who immigrated to North America and settled in the colonies are sometimes members of very wealthy families. It seems clear that the most wealth has been built through business, though.

Forgot to share some information I found. Page 50 of this summary seems to disagree with the 90% of millionaires assertion above, but without more detail is not definitive.

http://www.northerntrust.com/pws/jsp/display2.jsp?TYPE=interior&XML=pages/nt/0605/1147987494825_694.xml

http://www.ustrust.com/ust/Pages/Insights-on-Wealth-and-Worth.aspx

FunTime says

Mathematics are not in agreement with the idea that buying houses or land leads to wealth. There is a long period, relative a life span, of debt usuallly associated with the purchase which means the period of compound interest will necessarily be short.

And property taxes are working against you. If there's a structure on the property, there are insurance costs too.

FunTime says

It seems clear that the most wealth has been built through business, though.

Most wealth comes from Crony Capitalism and outright legal theft.

Jean says

Dunnross,

I like your previous comment. It is true that it takes a couple of illegal immigrants 3 months to build a property. I live in LA and see it all over the place. And then they are sold at a 500k or more profit to phd's who will work all of their life to pay it off-or 30 years at least. So true!

Yes, but pundits will always tell you that the land is worth more than the house. Now, you tell me, what's the value of a postage stamp lot, if you can't grow food on it or mine for gold? In fact, these land regulations in Cali metropolitan areas should render most of these tiny lots almost worthless. You can't even kill a rat in your own back yard, without the green peace declaring you Public Enemy #1.