[WealthVsSurvive]

The short answer is that a house is no longer a place to live, but an abstract financial asset. The problem with divorcing occupation and use from finance and ownership concerns remediation of grievances. The benefit of such a system concerns maximizing the building's utility. I'm personally in favor of a more boring housing market, in addition to automatic tenant enrollment in equity-sharing programs (ie, due to living in a building and paying rent, the person who experiences hardship and loses tenancy still has some small, depreciating ownership based upon what they paid as rent). This helps solve the problem of financial engagement for the less financially literate, in addition to enabling higher-density housing to be built.

[mcdeltat]

Bingo. People love to go into some deep analysis of housing and "agh it's a really hard problem", but it's simple at the end of the day: we have constructed, and continue to construct, a society where housing is not considering a right, but instead a way to inflate your bank account. It smells like this from the prospective house buyer at the bottom all the way to the government propping up the system at the top. Time to change the system. I refuse to believe that out of all the great things humanity has achieved, effective housing (shelter, of all things!!) is unsolveable.

[toomuchtodo]

The system will not change because the folks in charge profit and maintain power from a system of accelerated financialization. They then wring their hands and clutch their pearls as young people take rational actions by not having children (rapid fertility rate decline), worried what happens to the pyramid scheme as it runs out of steam. Their crisis is the young cohort's survival mechanism.

Young people have to do their best to survive in an unfavorable macro for the life they have left, and old folks age out eventually (which is the only way they give up power, the power which is needed to make change to improve the macro).

https://news.ycombinator.com/item?id=40338619

https://www.ted.com/talks/scott_galloway_how_the_us_is_destr...

https://www.youtube.com/watch?v=u-PinTQcuik

https://www.axios.com/2024/07/25/adults-no-children-why-pew-...

[boogieknite]

Im a rube but it my knee jerk reading tfa is there has to be some correction or young people are financially and domestically doomed. The solutions you listed here seem great. Is there momentum behind establishing these in the US?

Is it more likely the trend continues and young people will simply become priced out, or is a correction more likely? If the latter, what are smart people expecting?

[frmersdog]

You are correct.

>Is it more likely the trend continues and young people will simply become priced out, or is a correction more likely?

As a layman, take this with a huge grain of salt: it depends. By established rules, a major correction should be imminent. In fact, it should have happened one of several times already.

Examples of catalysts include a bond liquidity crisis in late 2019, the flash crash at the start of the COVID pandemic, the Gamestop debacle in early 2021, the collapse of the Chinese real estate market later in 2021, and the US bank collapses of early 2023. There are also others, though several venture into conspiracy theory territory.

In every example I mentioned, unprecedented action was undertaken to prevent a catastrophic event that might have lead to financial contagion across global markets. There will be probably be more. It remains to be seen whether authorities will continue undertaking steps to shore things up when the bubble threatens to pop. (Trump's return to office is an interesting wrinkle; grab another grain of salt, but it's my opinion that the Gamestop thing only got as bad as it did because the regulatory regime under his tenure was asleep at the wheel.)

It should be noted that a correction doesn't necessarily lead to affordability if purchasing power simply continues falling or remains stagnant, as a result of a weaker job market. There are people who believe that sellers will simply refuse to drop residential real estates prices, as they have with commercial properties. Consolidation of ownership under large entities - as we've already seen to some extent - would allow owners to simply squat on properties, perhaps renting then out. Who knows what happens to the algorithmic rent fixing lawsuits, that might have brought those costs back to Earth a bit, after this year's electoral red wave.

[DrillShopper]

Every time there is the potential for a correction (2008 being close to mind) the government just hands the banks a ton of taxpayer money because they're "too big to fail".

So I wouldn't expect a correction until the US is unable to borrow more money or defaults on its debt.

Much like climate change it will already be too late by the time young people have the power to change it. So I'm not surprised many of them have sort of checked out from the "spouse/house/kids" grift/grind

[ipython]

This is all well and good but as someone who just went through a renovation, the cost of labor and materials is astronomical. Yes the land is expensive too but it’s not like it was free to get construction crews out either.

So while it is a financial asset, the cost is still tied to the cost of physically constructing the thing.

[masto]

The part I found strangest about the house-buying process (in 2015) was that the real estate agents, mortgage brokers, etc., had a fundamentally different conceptual framework than we did. I thought we were looking for a place to put our stuff, where we would stay basically permanently. They were assuming we'd sell it in 5-10 years. I didn't understand this unstated premise at first and it led to some confusing moments.

[Eddy_Viscosity2]

Another short answer is that actual inflation could be much larger than the "official" inflation numbers use for these calculations.

[xienze]

> The short answer is that a house is no longer a place to live, but an abstract financial asset.

This line of thinking is commonly repeated, but it fails to take into account the old “location, location, location” thing. If you bought a house that was once in the middle of farmland 30+ years ago but now that house is on (let’s say) two acres of land in the middle of a coveted suburb of a large city where the average house sits on .2 acres, why _wouldn’t_ that house (or more accurately, the land) have appreciated greatly in value?

A LOT of these houses that “boomers” bought were once out in the boonies, and now those places are desirable, developed areas.

[bigtex88]

Henry George is screaming from his grave. We know how to fix these sorts of problems but we will never take the steps to actually fix them.

[blindriver]

There should be no tax on selling a primary residence if and only if you buy another primary residence. Otherwise tax it like capital gains or higher. Make it economically unfeasible for people to own more than one house. I’m generally a capitalist but i’m okay with this because the housing situation is ridiculous.

Hedge funds and other corporations should be disallowed from purchasing single family homes. Period.

[tmountain]

This sounds interesting. Where is it typically put into practice?

[deadbabe]

People don’t have the right to simply live in highly desirable areas for very cheap.

It is time for people to accept that if they want affordable housing they should look at some lesser developed areas in the country. Otherwise it’s pay to play.

[angmarsbane]

People don’t have the right to simply live in highly desirable areas for very cheap - I find that it's less people can't afford to live in their dream locations as people can't afford to live where their jobs are, or within reasonable commuting distance.

[frmersdog]

And the jobs? The amenities that make areas highly desirable require workers who can actually commute to them.

It's a game of chicken. The people who live in these areas and expect to be served without complaint either acquiesce to density and lower property values, or risk (occasionally fiery) demonstrations against the unfair and unworkable situation. Their goal is to keep the game running, so that everyone else doesn't decide on one or the other end state. Essentially, "Highly desirable areas that are too expensive for low/middle-income workers," is a transition state.

[cheema33]

In my city, the homeless are offered free housing that is away from the downtown area. They do not want it. Preferring instead to camp in downtown where they want to be.

Cheaper housing is available if people are willing to move to less densely populated areas.

At the end of the day, housing is all about supply and demand. Like most other things in life. There is not enough supply in the areas where people want to live. And no country has been able to figure out a solution for that problem.

[mcdeltat]

What about when housing is equally unaffordable in the less desirable areas? Keeping in mind that wages are probably less in those areas.

Also, less desirable areas are not necessarily constructed to be any more functional or sustainable, so why should we promote that? Areas that are "less desirable" in my city are swathes of oversized, copy-pasted houses massively spaced apart with near zero amenities. 100% car dependent. Near-dystopian land use, really. We don't need more of that. Instead, I'd much rather take amore sustainable approach to housing across the board.

[tantivy]

What happens in society when every city is filled with the retired rich and zero actual workers?

[saulpw]

There is nowhere someone can live for $200/mo, as they could in some lesser developed countries. The floor has been established by speculation, building codes, and minimum services. It sounds like a good idea to make sure all dwellings have electricity and running water, but when the alternative is a tent under the freeway, it's actually much worse.

[boogieknite]

been noticing this for years.

solar and starlink keep on improving. i continue to be surprised remote work communities arent commonly developing in scenic, non-traditional locations. it seems idealistic, but makes a lot of sense on paper

[mattnewton]

We're past that and to the point of neighborhoods voting against any development and supply increase.