Ethics of Real Estate Investment, NIMYism and the Housing Crisis

In reply to z31maniac :

yeah we get it with houses, cars and pets. 

bobzilla said:

Opti said:

GameboyRMH said:

In reply to bobzilla :

In business-to-consumer deals supply and demand generally has less effect than "how much you got?" (Edit: I think the proper economic term for that is "what the market will bear") 

I don't know what gave you that idea. "How much you got" is supply and demand

I was just about to say this. I don't think those words mean what he thinks they do.

They're not the same thing. Supply and demand driven pricing is usually seen in large-scale business-to-business deals in highly competitive markets, on things like grain prices for example, or common electronic components. Companies set a price to maintain a target profit margin and remain competitive, and they're driven very closely by supply and demand, to the point that there have been a number of incidents where electronic component manufacturers have been caught making price-fixing deals to get some control over the price. What the market will bear involves finding out the maximum your customers can afford and charging that, typically seen in less competitive markets:

https://hbr.org/2012/09/how-to-find-out-what-customers-will-pay

Anything you have to buy (or most often buy) in person is a prime candidate since the restrictions of practical travel lock you in, but it's prevalent on popular online shopping platforms too. Some very common places you see this are:

- Gas stations and movie theatres: Large differences in cost from place to place. You've probably heard of people with long commutes or who regularly make long trips stopping in a specific town for gas because it's much cheaper there.

- Some big-box electronics items: Headphones are the prime example. When Beats headphones came onto the market, this eventually led to the prices of most premium-brand headphones rising from $50~$120 into the $200~$500 range because they'd discovered how much people would pay for decent but fashionable headphones. That price range was the territory of nutty audiophiles before then. You can still find headphones with good audio quality for 2 digits if you shop around though.

- Online retail: Look at the cost of things on Amazon. Now see how much the same things cost on Aliexpress, where half of the stuff on Amazon is shipped from (generally any item with slow shipping, they'll even show up in the same envelope). You'll also find that a lot of websites, especially travel-related ones, can present wildly different prices depending on your browser history and user agent. Browsing with an Apple user agent string generally jacks up prices:

https://www.cnet.com/news/privacy/how-to-outfox-web-sites-trying-to-get-you-to-pay-top-dollar/

- Pharmaceuticals: Pharma companies spend more money on marketing than R&D and sometimes multiply the prices of meds on a whim. See also: Martin Shkreli. Early this year a bunch of different COVID vaccine manufacturers all announced that they would quintuple their vaccine prices in lockstep, but governments were having none of it.

- Car parts, especially aftermarket performance: The "rich guy tax" on parts for higher-end models is really just charging what the market will bear. If you look at a similar aftermarket performance part for different models in different price brackets, say a catback exhaust section with 1 pipe splitting into 2 muffler outlets, you might find that it costs $400 for an older Civic or Corolla, $800 for a Toyobaru, and $1500+ for an R35 GTR, and the prices will even change with vehicle depreciation or appreciation. It affects OEM parts to some extent as well - there's the famous "Porsche tax," and Lotus OEM parts cost far more than their Toyota originals or even some aftermarket performance replacements.

In reply to GameboyRMH :

I'm pretty sure there is a good bit you are missing in supply and demand. For instance, the economy of scale. 

Take your car parts paragraph for instance. You are making parts for a Civic that sold in numbers around 100k-200k per year and comparing them to parts for a R35 GTR that sold only 13k over its entire production. You can sell Civic parts for $99.95 because you can sell millions of them and spread your R&D and manufacturing setup costs across all of those sales. The R35 GTR parts are going to be substantially more expensive even if you sell them for every car produced. The R&D and manufacturing costs are the same for both cars but you have to recoup the R35 GTR costs in fewer sales.  That same is going to be said for every part on a high-end car vs. every pedestrian car. 

Fads have always brought in big money. That's the gullibility of the general public. Anyone who bought a $500 set of Beats got exactly what they deserved. I don't particularly mind them getting fleeced. A fool and his money...

Comparing Amazon, a first world company, to Aliexpress, a 3rd world company is hardly oranges to oranges. One comes with outstanding customer service and the backing of USA contract law and all the costs those entail. The other comes with basically zero guarantee and zero recourse in the case of lost items or fraudulent sales. People willing to take their chances almost always pay less. 

Gas prices literally are supply and demand. It doesn't come down solely to how much fuel a station has. Start with the cost of crude which has fluctuated over $4 in the last 5 days. Then you have to add to that distance from the refinery, the distance from pipeline depots, the number of gas stations in a given location, if the station is mid-block or corner located, local environmental regs, local and state taxes, and refinery capacity. All of that comes together to determine fuel prices and all of them change minute by minute. Stations that sell as fast as they can buy can sell for more. Stations that need cheap prices to draw people in are going to be cheaper. Stations close to refineries and pipeline depots are cheaper. Stations farther away have to recoup their shipping costs with higher prices. 

You are just describing different variables that go into supply and demand. Sometimes its slow to reach an equilibrium and sometimes its fast. All the things you are talking about can shift the supply or the demand curve.

I don't think I need to add to this. Well done gents. 

RevRico said:

But realistically, and sort of back on topic, you're in IT. Unless you're a parts swapper now, there is ZERO reason to be tied to a geographical area to work that job, and you should know that better than most. Putting yourself in such an expensive area was your own fault, especially if you aren't focusing on the areas that pay IT the best. Own it or make it better by going somewhere else, which shouldn't be hard as a programmer or developer, because all you really need to work is an internet connection. 

No wife, no kids, no criminal history, a clean passport, there is literally nothing stopping you from working anywhere in the world for pretty much any company. Take that opportunity and run with it instead of festering on about the box you put yourself in. As someone who does that every day, it's not healthy, mentally or physically. 

The IT job market is not as hungry and lucrative as the tech megacorps would like you to believe. Most tech jobs aren't at silicon valley giants that pay a quarter-mil a year, most are at lower-profile companies and have pretty ordinary pay, and a history of those kinds of jobs doesn't make you look like a rockstar that other jurisdictions will throw worker permits at. Traditional IT department jobs in sysadmin and development have largely been hollowed out by cloud services/SaaS, and those midlevel IT workers are either ending up in systems architect-type roles that require extensive specialization in very costly systems that will narrow your career prospects, or getting pushed down into technician-like roles where you spend your days endlessly crunching through support tickets at high speed (which was my last job). Recruiters don't knock down your door just because you can code, and sadly the doors are closing fast on remote work as well. A lot of companies are now calling their jobs remote in job ads but revealing during the interview process that you only get to choose which office you're going to regularly report to.

Excuses, excuses.

You are one of the smartest people I know. Don’t make excuses.

In reply to GameboyRMH :

Well you have convinced yourself it will never happen to you, and it's not your fault somehow.  At this point, one of those is true.

GameboyRMH said:

RevRico said:

But realistically, and sort of back on topic, you're in IT. Unless you're a parts swapper now, there is ZERO reason to be tied to a geographical area to work that job, and you should know that better than most. Putting yourself in such an expensive area was your own fault, especially if you aren't focusing on the areas that pay IT the best. Own it or make it better by going somewhere else, which shouldn't be hard as a programmer or developer, because all you really need to work is an internet connection. 

No wife, no kids, no criminal history, a clean passport, there is literally nothing stopping you from working anywhere in the world for pretty much any company. Take that opportunity and run with it instead of festering on about the box you put yourself in. As someone who does that every day, it's not healthy, mentally or physically. 

The IT job market is not as hungry and lucrative as the tech megacorps would like you to believe. Most tech jobs aren't at silicon valley giants that pay a quarter-mil a year, most are at lower-profile companies and have pretty ordinary pay, and a history of those kinds of jobs doesn't make you look like a rockstar that other jurisdictions will throw worker permits at. Traditional IT department jobs in sysadmin and development have largely been hollowed out by cloud services/SaaS, and those midlevel IT workers are either ending up in systems architect-type roles that require extensive specialization in very costly systems that will narrow your career prospects, or getting pushed down into technician-like roles where you spend your days endlessly crunching through support tickets at high speed (which was my last job). Recruiters don't knock down your door just because you can code, and sadly the doors are closing fast on remote work as well. A lot of companies are now calling their jobs remote in job ads but revealing during the interview process that you only get to choose which office you're going to regularly report to.

I'd be curious about what you mean by "code." Do you mean a little HTML5 and basic Java scripts, or a full-stack front and back end developer. Everyone I work that is a developer makes WELL north of $100k and we live in OKC, which is relatively cheap. 

Those two things are VASTLY different. The pay and opportunities reflect it. 

I'm getting ready to buy a personal laptop so I can learn Python and get a certificate. The only place as a Tech Writer I'm going to earn more than I do now, is if I start doing API documentation.  

In reply to z31maniac :

I've done full-stack front and backend PHP, C++, shellscripts, some Python and Java.

GameboyRMH said:

docwyte said:

In reply to GameboyRMH :

So wind back the clock 40-60 years.  Ok, but we'll all get paid those same wages then?  Interest rates will be 15% like they were back then?  As pointed out, the average new car costs $40k now, that's a far cry from the '60's.  You can't look back, you have to deal with the present and look forward.  Don't like what you see?  Then you need to evaluate what you can change in order to do something about it

The wages of 40-60 years ago would only be slightly less than today, and houses would still be far more affordable with the higher interest rates. Cars are only $40k now because they're still coming down from the heights of pandemic prices, not part of any normal price trend - in fact the otherwise relatively stable price of cars is a great example of how product prices can remain steady despite massive improvements in technology.

If you want to look beyond strictly home prices, it all depends on how much detail you want to go into for this hypothetical time-travel scenario. Enough detail and the whole idea starts to look questionable to anyone who isn't a straight white Christian man.

Great now we are racist. When do we get called nazis?

In reply to bobzilla :

I didn't say anyone in this thread was racist. The world of 40-60 years ago packed a lot more racism among other forms of bigotry, something any detailed time travel scenario should keep in mind.

In reply to GameboyRMH :

Yep, redlining was a thing.

I wouldn't know how to determine how much of a curve ball that threw into supply and prices.

In reply to GameboyRMH :

Bob's not the only one who heard you cry racism. I thought it was pretty far out of bounds. 

In reply to GameboyRMH :

Um, yes, salaries now are far different from the 1960's to 1980's. 

I saw a great movie last night, had Michael Pena in it, playing the kid of a migrant worker who ends up being an astronaut and going to space.  In one scene he's saying he'll never get chosen as they've rejected him several times.  His wife asks him, "What do the other candidates have that you don't?  Go do what they've done". 

So, turn that advice for your situation.  What have other people done to afford a house that you haven't?  Schooling, skills, whatever.  Go do that.

In reply to bobzilla :

Ok, but it still costs money to run the Fire Department.  Even if you don't have kids in the school, you still have to pay for it.  Same thing with the roads.  Doesn't matter how you slice it, the money comes from somewhere.  If you live in a state with no state income tax, you end up paying it in other ways.

In reply to SV reX :

Sorry, I've re-read it slowly many times now and I don't see it. Definitely not what I intended. I'll add contextual information to clarify:

If you want to look beyond strictly home prices [of the past], it all depends on how much detail you want to go into for this hypothetical time-travel scenario. Enough detail [of the past] and the whole idea [of time-travelling into the past] starts to look questionable to anyone who isn't a straight white Christian man.

In reply to docwyte :

We have income tax too. 

SV reX said:

In reply to GameboyRMH :

Bob's not the only one who heard you cry racism. I thought it was pretty far out of bounds. 

Yeah. I'm out. I can be called a racist in much better places. If this is what is considered acceptable behavior now than this place is not what it once was. Have fun with your excuses and whining about not being bothered to fix your problems. I'm out. 

In reply to docwyte :

Looks like a list of things we pay other taxes for also

Abolish property taxes

In reply to bobzilla :

I'm with Gameboy on this one, bud. He didn't call anyone racist.

What he said is that setting the Wayback Machine to the mid '60s may yield a better income-to-expenses ratio, but it comes with the collateral damage of a society that was not very tolerant of diversity.

He wasn't calling anyone in this thread racist. He said it had to be considered if you were contemplating the 'good old days' in purely economic terms.

In reply to GameboyRMH :

I realize you are too young to remember the wages and interest rates of  40-60 years ago, but I'm not. 

In 1982 the average US wage was $24,000, and home interest rates for a 30 year fixed mortgage hit 17%.  (NOT a misprint)

Claiming wages were only slightly different and that high interest didn't have an impact is nonsense. 
 

In reply to Duke :

I like the way you explained that, and suspect that's close to what GameboyRMH intended, but there are definitely different ways to interpret what he said. 
 

I don't think the cultural woes of the past have anything whatsoever to do with the income to expense ratio. 

GameboyRMH said:

In reply to z31maniac :

I've done full-stack front and backend PHP, C++, shellscripts, some Python and Java.

You've done it, or you have significant experience doing it? 

For example, this company runs our software.

Www.williams-sonoma.com