American Real Estate

Since there are quite a few Asian Americans here, there needs to be a thread of this type.

Thomas Piketty’s famous r > g (rent > growth) means that the returns to capital (rent) are greater than the overall growth rate of the economy, and certainly greater than growth in returns to labor, the wage (w). Since this compounds over time, it’s natural for market economies to see more and more inequality. Piketty found evidence from 7 (?) developed countries to back up his claim.

Piketty’s thesis was easily defeated. The most salient argument, IMO, came from Matthew Brognlie at MIT. Brognlie said that Piketty didn’t account for depreciation. After accounting for depreciation, the widening divide is almost all in housing. Since home ownership in the U.S. is widespread, this isn’t really that much of a problem.

For our purposes though, this means that the wealth divide in the U.S. will be between those who own housing and those who don’t.

Well I can tell you from experience that it appears in the US home ownership is definitely a good long term solution. Your mortgages are known and more or less fixed, and if you keep paying you eventually pay it off. But rent increases year after year. As soon as your employer gives you that raise you have been hoping, your landlord will raise rent to match the raise. Almost like they somehow knows you got a raise. So if you own a house eventually you won’t ever need to pay rent and all you have to pay is property taxes and repairs. I don’t know if that’s higher than rent.

So that means those who don’t make enough to qualify for a loan is always going to be paying money to those who do.

How does your employer know you got a raise? I wouldn’t know if any of my tenants got one.

I don’t know. But back in America when I got a raise rent seems to go up in sync with it. So there must be some cross talking going on.

But you know many properties in the US especially apartment complexes are owned by faceless corporations, so obviously their job is to extract the most money from people while delivering the least service.

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:ponder:

From my experience, I would not even try and argue against that statement. Home ownership puts you on the map in the US. Great tax breaks, a reason to work a job, even a shit job that pays the mortgage…and a sense of pride. I lurve my lawn. Funny to think I keep teaching so I can mow the lawn. One can’t force homeownership on people though, as a way to make things equitable. It’s a commitment not everyone is up to and losing a house can ruin you. :idunno:

We rented our first house in NY for a year. I was OK, but glad we sold it and got out of that…especially b4 covid. Try and evict someone in NY. It’s very difficult and time consuming. Now try it during covid. I would do it again, but never in a place I had lived in. Too many emotions when people fuck up where you used to live. I wish there were more condos in the US. I’d buy a flat to rent out easy peasy.

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Yup, local laws matter a lot. Nowhere is this contrast seen between Virginia and Maryland. In Virginia you don’t need a reason to evict someone. Unfortunately, there are very few listings in VA right now.

“Yeah, I need you out.” That would be nice. End of contract though. Just kicking people out for not doing nothing is wrong and should be illegal. If they are breaking the lease though in any way gtfo.

In NY, life long or generational renters KNOW THE LAW inside and out. I imagine this is true in other States. Lucky for us, we know a real estate lawyer whose wife is Taiwanese. It was a good experience. All MY costs were tax deductible. ha!

There are companies that will rent out your property for you too. I like that. There’s even one I was in contact with a while back that will find the house FOR you, in a desirable local, sometimes with good long term tenants already in the place.

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Homeowners with mortgages gained an average of $17,000 in equity in the third quarter of 2020 over the year before, the biggest equity gain since 2014, according to CoreLogic.

The stock market continues to soar, enriching wealthy investors,

What’s wealthy? What’s the cutoff?

The good news about the lack of houses for 1st timers is that they are building new ones with very low interest loans. Millennials are solidly into their prime earning years.

Yep… typical slanted crap from the Crappy News Network.

Even us poor folk have to start somewhere. What a novel idea… planting acorns so years later maybe ya get an oak tree and join the “wealthy” or near wealthy. Either way the stock market gives us a chance to rise-up economically and not be as dependent on government handouts. But too many politicians are like crack dealers getting their constituents addicted to government handouts while scapegoating and demonizing other groups.

So tired of hearing the lying media go on and on about the “wealthy” or the “one percent,”
as if the one percent were a static, unchanging group of individuals.

I bet most folks don’t realize that by age 60 (it should be common sense, really):

11 percent of Americans will have experienced at least one year within the top 1st percentile.
Almost 70 percent of the population will have experienced at least one year within the top 20th percentile, 53 percent will have experienced at least one year within the top 10th percentile, and 36 percent will have encountered one year within the top 5th percentile. https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0116370

If you’re tired of hearing the media talk about the 1%, perhaps endorse economic policies and strategies that make home ownership in the U.S. a realistic goal for the working and middle class. The current system is prohibitive.

Have you bought a home in the U.S.? Do you have experience with this?

I disagree that the current system is “prohibitive.”

And you are bringing up a subject different from the one I was addressing. Not interested in discussing solutions because in this political climate it’s useless. Too many rabbit holes to descend into. It’s at least one book length of material. Too many misconceptions and myths to bust, not to mention philosophical differences.

As for your last two questions they are irrelevant to the facts I presented in response to JD’s post, but the answer to both is yes.

Unless you are wealhy, if you want to buy a home in the U.S., you have to get a mortgage. In order to get a mortgage, you have to demonstrate A. enough income to pay it and B. A sufficient credit history. These things are nearly impossible to establish if you are poor in the U.S. presently.

Out of the people buying homes in the U.S., what % do you think rich parents as guarantors? I am willing to bet most. Generational wealth is what allows a continued pattern of home ownership.

You can put the bootstraps bumper sticker on any situation, but you obviously have no idea what it is to be working class or poor in America at the moment. Most don’t have money to pay rent, much less buy a house. These are facts. Sorry if they tire you.

What tires me is changing the subject. I correctly pointed out that the economy is more fluid than most people think.

I’m tired of the media scapegoating groups and pitting them against each other. In this particular case it’s the “wealthy.”

Of course it’s difficult for the poor to buy a house. You think they should get it for free? I’ve known plenty of immigrants that came to this country with nothing… yep, nothing. Worked hard, stayed married, lived below their means and eventually were able to afford a house. Sometimes that doesn’t happen until the second generation, especially if they came to this country later in life with no technical skills.

Currently around 64 percent of households have a home in the US.

Whatever problems there are, it does not help to unfairly pit groups against each other. That’s what the media and many politicians do best.

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Specifics?

I already gave one… the reference to the one-percent as if they are a static group of people… ie., just one percent. The media and folks like Piketty confuse age cohorts for a fixed class of people.

Eight graphs that tell the story of U.S. economic inequality - Equitable Growth

Take a look at these graphs and charts. They illustrate he wealth gap very well, and irrefutably. The media didn’t create this. They’re just reporting facts.

United States ranks 27th in mobility index, and that is dropping.

Global Social Mobility Index - Wikipedia

I hope the 1% aren’t as static as you think because I would love to join them. Out of the the 67% of home owners, what % inherited wealth from previous generations? Certainly the majority.

EDIT: I mean I hope you are right that the economy is more fluid. I typed that out poorly.

A partial and misleading set of facts. As I stated previously the folks making it into the top tiers of income percentiles change with age and there is a much wider participation in wealth creation than most people believe.

Of course those in the top tier will tend to increase their net worth faster than the poor who are unable to invest or save.

As one example of inequality, obviously if someone has access to stock or stock options in a start-up company and the venture takes off, they will become staggeringly rich. These kinds of events and opportunities in the US contribute to increasing the measure of inequality. I don’t think that is a bad thing .

Yes, that is one of the points I was trying to make with the stats I posted and the media seldom presents it as such, but only addresses the differences in income/wealth between groups.

For example, Paul Krugman (NY Times columnist, among other things) has referred to the “1 percent” as “the charmed circle of the 1 percent,” which as I have pointed out, is misleading.

If one is going to try to address problems one usually needs to better understand the underlying conditions and causes behind a problem.

Sure, and it gives us a chance to invest directly into companies that create jobs and keep the economic escalator moving. Some young teacher I work with said the old “The stock is gambling” trope the other day. I told him about NOVS, a SPAC that will combine with Appharvest, which will bring lots of jobs to NE Kentucky ie former coal country, with their 60 acre greenhouse full of fresh, organic veggies. I mean, hello.

Also a chance to wipe out your entire savings for retirement.