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“solution” to the housing crisis
A bipartisan proposal by Republican and Democrat morons:
Schumer and Lee want to provide visas to foreigners as incentive for them to buy houses in the US.
What’s the problem with this? If we get enough investors to sop up the excess inventory as these politicians hope, it would perpetuate the housing bubble.
Housing valuation should be priced according to household income. If people’s incomes cannot support such housing prices, then housing prices (and qty supplied) must gravitate downward. The last thing you want to do is attract rich foreigners to outcompete our own citizens and levitate prices.
What we need is for the housing market to crash and reach a new equilibrium where mortgages are affordable with respect to local income.
It’s time to OccupyDC!
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10 Replies
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You don’t own a house, do you?
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Actually, I do. So do my parents and siblings.
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So basically, we will let rich people to buy visas.
Woohoo! More 1 percenters!
Most importantly, this will not fix anything. There aren’t enough people buying homes at half a million, or enough half a million dollar homes, to make a dent. I think they allow you to go down to $250k for the house. Well, the vast majority of homes underwater are in the $100-$200k range…and this won’t help that entire group.
The whole plan is kind of stupid.
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[b]What’s the problem with this? If we get enough investors to sop up the excess inventory as these politicians hope, it would perpetuate the housing bubble. [/b]
[b][/b]
You have this way of trying to tie random events into logical causes or effects of problems that is downright amusing.
First off—- There is no housing bubble, it has already popped. There is essentially no significant building going on anywhere. The market has already crashed
Secondly— There is a huge glut of foreclosed homes in many parts of the country that is essentially dragging down the entire economy.
Third —- It will be very difficult to have an economic recovery until this glut of homes is lessened
Fourth—What is the problem of grantint a Visa to a homeowner if they can afford it?
Personally don’t think the plan would be of enough scale to make a real dent but the premise of you argument is so disconnected that it is quite amusing-
I totally agree that we need to confront the housing glut.
But this program is a joke, for numerous reasons.
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The canadians already have something like this. Instead of investing in a house, you have to put 1/2 mil metric dollars into a slush-fund run by the respective provincial goverment. You let them play with your money for 3 years or so, they give you citizenship and you get your money back. The idea was to attract bona-fide investors willing to bring their wealth to canada. All it has done is to create a new class of indentured servants. The people who have that kind of net worth rarely have a reason to move to canada (and if they want to, they have other avenues open through work). The shortfall is made up by not so rich, for the most part asian folks who borrow the 500k from one of their countrymen for a fee of something like 150k. Now, if they are lucky, they already have that money from something like overseas real estate, if they don’t they have to pay it back with whatever jobs they can scrounge up in cdn.
That said, there are already plenty of well to do european retirees who own real estate in the sunnier parts of the US and spend their winters here. They often have issues with the immigration service and the consulates to secure the visas or visa waivers for stays of several months length. If their visa issues got fixed, there would probably be a couple mor of them to buy condos in Ft Lauderdale. I doubt they would be able fix the down market in mac-mansions or the economic wastelands of michigan.
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ORIGINAL: kpack123
[b]What’s the problem with this? If we get enough investors to sop up the excess inventory as these politicians hope, it would perpetuate the housing bubble. [/b]
[b][/b]
You have this way of trying to tie random events into logical causes or effects of problems that is downright amusing.First off—- There is no housing bubble, it has already popped. There is essentially no significant building going on anywhere. The market has already crashed
Secondly— There is a huge glut of foreclosed homes in many parts of the country that is essentially dragging down the entire economy.
Third —- It will be very difficult to have an economic recovery until this glut of homes is lessened
Fourth—What is the problem of grantint a Visa to a homeowner if they can afford it?
Personally don’t think the plan would be of enough scale to make a real dent but the premise of you argument is so disconnected that it is quite amusing
Ahh, the village idiot speaks out of his a$s again.
#1 The housing bubble has popped but it hasn’t completely deflated to an equilibrium where people can afford to buy again with their existing income. If the bubble had completely deflated, there would be no need for this kind of BS plan. Prices may have gone down in bum fcking egypt but the coasts are still inflated. Ever heard of this thing called “shadow inventory”? If not, ask your techs.
#2 There is a glut of foreclosed homes because of massive overbuilding and this inventory will not be drawn down until these houses are priced at a level the market is willing to bear or until there are enough new household formation.
#3 There will not be a housing recovery until the market reaches a new equilibrium. That depends on jobs, housing prices, housing supply and household formation, among other things.
#4 Reason for granting visas is subject to debate and will vary according to personal beliefs. However, for the purpose of addressing the housing crisis, it won’t solve anything unless there is massive immigration. But massive immigration, without improvement in the job market, only causes more problems.
The housing bubble is very analogous to massive deficit spending. Future spending is pulled to the present. When there is no more future spending to pull, the bottom falls out and the pyramid collapses.
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[link=https://www.cnn.com/2022/03/30/homes/us-housing-market-bubble/index.html]https://www.cnn.com/2022/…rket-bubble/index.html[/link]
Signs of a housing bubble are brewing
US home prices have soared to new heights and keep on climbing, and now some researchers and economists are saying they have seen signs of a housing bubble brewing.
Home prices are rising faster than market forces would indicate they should and are becoming “unhinged from fundamentals,” according to a new blog post written by researchers and economists at the Federal Reserve Bank of Dallas.
Until recently, the possibility of a bubble wasn’t widely supported. But after looking at housing markets across the US, the Fed researchers said new evidence is emerging.
[/QUOTE]
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There was a good 60 Minutes on the problem of hedge funds out bidding qualified buyers with all cash offers. This type of market manipulation definitely leads to bubbles. It’s not just the price action that is good to look at.
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[link=https://www.washingtonpost.com/business/2023/01/25/white-house-renter-protection/?utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert]Washington Post[/link]
[link=https://www.washingtonpost.com/business/2023/01/25/white-house-renter-protection/?utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert][/link]
[b]White House unveils new tenant protections amid soaring rental costs[/b][/h1]
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[h2]Tenant leaders, housing experts and legal organizations have pushed the Biden administration to do more to make rent affordable[/h2]The announcement involves multiple federal agencies that will gather information on unfair housing practices. It also includes a Blueprint for a Renters Bill of Rights that, while not binding, sets clear guidelines to help renters stay in affordable housing. The White House is also launching a call to action, dubbed the Resident-Centered Housing Challenge, that aims to get housing providers as well as state and local governments to strengthen policies in their own markets.
After months of deliberation, the moves come as the housing market continues to pose a serious problem for people who dont own their homes and for the economy overall. While inflation has fallen for the past six months, average rental prices have continued to increase rapidly,[b] [/b]disproportionately hurting vulnerable households that spend the bulk of their budgets on rent. Meanwhile, the country is stuck in a massive housing shortfall, complicating efforts to lower costs or simply find enough places for the 44 million American renter households to go.
This is something the president identified as being necessary on the campaign trail, and is not necessarily purely a product of the current surge in rents, because this is much more expansive than thinking about this in the context of rent growth, said Erika Poethig, special assistant to the president for housing and urban policy at the Domestic Policy Council, in an interview with The Washington Post. Its about thinking about many other aspects of what contributes to a fair market.[/QUOTE]
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