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Comment by jimt1234 | Hacker News Reader

I'm really curious about opinions regarding "how this ends..."

Seems to me that, if current trends continue, home ownership will basically become extinct; everyone will become renters. Home ownership will take the same path as music over the last 20 years, where we used to "own" music (CDs), now we just "rent" music through streaming services like Spotify. But that's just my 2-cents. I'm curious about others' thoughts.

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Will NIMBYs become an endangered species? A lot of regulations are aimed at keeping property values high with the idea that most (or at least a substantial portion of) voters own real estate and want it to appreciate. If we become a nation of renters with only a tiny minority owning real estate then who cares about keeping property values high anymore? It's not your problem! Your net worth will no longer be impacted by changes in the market value of the house you live in. Housing will be an expense, not an asset, and "the rent is too damn high!" might catch on.

It ends with a crash, like always. In 2008 home prices got cut in half. An REIT will overextend, miss loan payments and fail, flooding the market with homes, which will drop the market prices. This will cascade, taking out more REITs.

Failure would cause a house price crash you say? Sounds like "too big to fail".

Exactly. Marks said that a crash is often inaccurately thought to be caused by a valuation excess; except in reality, they're caused by credit excesses and a failure to meet obligations on said credit on a large scale.

If the housing markets crash, won’t the investors just buy at a discount?

The Case-Schiller Index is already over 7.0 and it usually has an asset crash after it crosses 6.0, it was at 6.3 in 2008.

REITs don't cary loans that are leins against the house. If they "miss loan payments" they'll still keep the homes.

They'll just get sold and transferred to another large REIT and the house will never hit the market.

The housing market isn't going to crash. I foresee something like Australia happening: the prices just continue to go up, for decades.

Then, 10 years on a revolution. This is the type of thing that will trigger massive civil unrest.

> Seems to me that, if current trends continue, home ownership will basically become extinct; everyone will become renters.

Yes, this seems to be the trend. In fact, it's not just home ownership that is now more commonly being rented, even the cloths on people's backs is up for rent. Between the rent-seeking behavior happening globally and the gig economy, it's hard to feel optimistic about the future. There's of course that famous prediction from the World Economic Forum: https://www.independent.co.uk/money/why-you-ll-own-nothing-b...

Agreed. The future for the masses is "freedom" to be a wage slave to whatever corporation provides a "job". It's weird how dystopian fiction seemed outlandish to me around 10 years ago, but now seems pretty on target.

I'd love to be proven wrong, but as you say, the rent-seeking is too damn high. I live in the US at the moment, but definitely looking to leave to somewhere with an actual social safety net / infrastructure.

Nowhere is perfect, but damn if the USA isn't moving backwards. I imagine the top plan to just hide in their fortresses / go overseas if it goes to hell (as the dystopian fiction tried to foretell).

No need to imagine this, read up on New Zealand.

At a certain point, I'll quit my job and go on strike if I have to deal with endless annual rent raises, moving between apartments, annoying landlords, etc. Can't imagine I'm the only one.

I don't see the analogy. I still own lots of music and don't rent it at all (unless you count listening to the radio). It hasn't gotten any more expensive to own music, either, digital tracks and CDs are still readily available and inexpensive.

The analogy imply that things are really good! The price of renting is so low, that even holding the price of purchasing constant people don't think it's enough savings to bother purchasing. People get to experience a wide variety of things, because the commitment is low. Multiple competing services aim to make consuming music (or housing) very easy.

The real analogy is furniture rentals for low income people. Paying 10x what something is worth for low quality alternatives and an inability to escape a cycle of being stuck renting when people want to buy.

I'm like you with music, but I feel obliged to point out that folks like us are outliers today. So the GP is correct in the sense that the majority of things are moving from ownership -> renting (though there'll always exist some die-hard holdouts).

Maybe, but economically music rental is nothing like housing rental. No one is renting music because they are unable to buy it or can't afford to.

You're right, and that is an important dimension to consider -- thanks for pointing it out!

I was coming from a perspective of ownership erosion, precipitated through the continuous encroachment of corporate rent-seeking behavior (because that leads to consistently growing revenue streams).

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