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bearishonhouses

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  1. bearishonhouses

    University Bubble Making Hissing Sounds

    I am not sure this statement is true - though it is hard to get much data. In the USA, tuition at public universities for in-state students varies from bargain rates of $7k in Florida to $20k in Pennsylvania. (More extreme examples at top and bottom end are very small states). However, many public universities charge extra for popular subjects when they believe market demand justifies it (e.g. Business, Engineering, Computer Science.) Tuition for out of state students (including international) is much higher - typically $20k to $40k. Private university sticker price of tuition is very much higher ($50k is not unusual) but they typically offer offer needs-based scholarships. However, if your household income is more than $100k, you are not getting a penny of needs-based financial aid. see: https://trends.collegeboard.org/college-pricing/figures-tables/2018-19-state-tuition-and-fees-public-four-year-institutions-state-and-five-year-percentage
  2. Is it not the case that if farming revenues (selling prices) fall, the reward to other factors of production. Whether the brunt of the decline is felt by labour, capital or land would depend on the elasticities of supply of each. I would think that supply of capital is very elastic (i.e. price is relatively fixed); supply of labour is somewhat elastic (would depend on local conditions of employment, welfare benefits available etc); and supply of land is almost totally inelastic. Farm land has few alternative uses because of planning restrictions. I do not doubt that economists have researched these issues thoroughly at some time, but I have no idea where to find quantitative estimates. Does anyone know?
  3. bearishonhouses

    Are We Heading Towards Another Housing Bubble?

    Some good news suggesting that even though the bubble popped in the US in 2008, it may well be popping again. https://www.nytimes.com/2018/11/15/upshot/housing-market-slumping-despite-booming-economy.html "When you look closely at the data, it appears this paradox of a strong economy and a weak housing market is, at its core, an illustration of a fundamental rule in economics: If something can’t go on forever, it won’t. Home prices in a given location are ultimately tethered to the incomes of the people who either live there or want to. But for much of the last six years, that relationship has come undone."
  4. bearishonhouses

    Are We Heading Towards Another Housing Bubble?

    But note that it is VI in the States - not here. They did have a bubble pop (in most places) in 2007 to 2009 and There might. Be more evidence for there not being another one yet. (I think some west cost cities especially San Francisco are in bubble land.)
  5. bearishonhouses

    I wish Rightmove allowed comments.

    I wonder if the sale includes the upstairs furniture - particularly the big double beds? It would be fun getting them out (and new ones in).
  6. bearishonhouses

    Delusion

    If: 1) there is a long-run-roughly-constant-ratio of house prices in London to house prices in Manchester, and, 2) in one period, London house prices have been rising faster than Manchester, then we should not be surprised if in the subsequent period, house prices rise faster in Manchester than London. Clearly, to the extent that in the long-run there are structural factors affecting the economies of Manchester and London differently, we wold not expect the ratio of house prices in the two cities to stay constant, but arguably, London prices have got out of line relative to the rest of the country and some catching up of prices relative to London is to be expected. (Of course, many of us would argue that prices overall are completely out of line with earnings/affordability and that either earnings will eventually g up relative to house prices - and we can discuss whether that long run equilibrium should be to 3:1 or 5:1.)
  7. bearishonhouses

    Examples of big & multiple drops

    Maybe not multiple drops - but here is some encouragement to anyone shy about offering 20% off the asking price: sold for:
  8. bearishonhouses

    1/3 have no Pension Savings

    I am generally a supporter of markets' abilities to allocate resources (as opposed to central planning etc). However, it never ceases to amaze me how much those (especially on the right wing politically) who believe markets are the be-all and end-all of economics and that Adam Smith's invisible hand will work wonders nevertheless ignore crucial assumptions on which his conclusion is based. For example, his model assumes that all buyers and sellers have access to perfect and costless information about what is on offer. The so-called market for labour is so opaque it is surprising to me it functions at all. How can 18 year olds make rational decisions about whether they wish to devote three years of time and many GBP of money going to a university if the information about the consequence for their future employment prospects is so vague. I have a 16 year old and 22 year old. The elder went to university - it was for sure a good idea. T'other parent thinks 'of course second child should go too' but it is not at all clear to me that it is a financially good idea. wrt earnings of newly qualified chartered accountants. About 25 years ago, the typical salary for a newly qualified accountant was about 80% of the 'top of scale' of a senior lecturer in higher education. I know because when recruiting lecturers to a polytechnic, we invariably had to put new recruits at the very top of the SL scale so that the pay cut taken by someone coming into the poly with 3 - 6 years post qualification experience did not have to take too big a pay cut. At present, top of SL scale is about £50k, so if the ratio of salaries has stayed the same (I do not know if it has) that would put typical newly qualified accountant salary at about £40k. (see for example https://www.jobs.ac.uk/employer/oxford-brookes-university)
  9. earlier drafts seem to be available at:: http://gatton.uky.edu/sites/default/files/Albanesi.pdf or http://www.jaromirnosal.net/uploads/6/0/7/5/60756213/newnarrative_august_2017.pdf
  10. bearishonhouses

    Property Log

    Another vote of thanks from a grateful observer.
  11. The aggression of some (including you) on this forum is really counter-productive. Name calling - and clearly, to you, 'landlord' is an insult - at best helps you feel good about yourselves but I cannot see that it helps bring about what most of us want (including me) - a reduction in house prices in the UK so that we can afford to buy just one house. Anyway, feel free to cast another pointless insult and have the last word, so that you can tell yourself that you won. I shall not respond further.
  12. The word credit comes from the latin credere - to trust or believe. Going back to the C14 when the term was first introduced in talking about accounting, the term credit refers to whether or not a lender trusted the borrower to do what they said they would - typically borrowing money, but also with respect to making good on a promise to share profits of a voyage.
  13. If the new owner lives in it for sufficient time to demonstrate that the building was her principal private residence (e.g. she really does live in it) I think any gain is exempt from CGT - in the same way that gains on most owner-occupied houses are exempt. If she sells it without living in it, I am pretty sure the 'gain' to be taxed will be the difference between sale price and market value at time of gaining ownership - same deemed value as that fro SDLT purposes. The whole point is that in the UK gambling winnings are tax-free. This rule is remarkably generous and unusual. Most jurisdictions tax gambling winnings. The reason the tax authorities do not is, I think, because they do not want to accept that gambling losses should be tax-deductible. For example, in the US, gambling losses are deductible - but only to the extent of gambling winnings within the same tax year.
  14. I do not know where you get your definition of 'credit history', it seems somewhat narrow to me. A more useful definition would recognize that a credit rating reflects the individual's past history of making good on their commitments and is an estimate of the likelihood that they will continue to do so in the future. Certainly, from an economic perspective, signing a lease commits the lessee to make certain payments. I would hope that when the bank lends out the money that I have lent to them, they will make a reasonable attempt to assess the likelihood that they will be repaid, and hence I will be repaid. Looking at an individual's history on keeping up with all commitments is relevant. The availability of credit ratings allows lenders to distinguish between high and low credit risks so that credit worthy borrowers do not subsidize less credit worthy borrowers. (You realize that if the banks cannot distinguish between the two, they banks are going to ensure they get their money back by charging an appropriately high interest rate to the 'average' borrower, right?) Having said that, I totally agree that unless such a reporting system could be set up in a way that prevents landlords to falsely report tenants' actions, the downsides do not outweigh the upsides.
  15. bearishonhouses

    No Place to call home - BBC2 (on now)

    I think this is an equal opportunity for blame. House prices around the wolf went crazy in 2000- 2007 - other than perhaps Germany and Japan. USA peaked then, bubble has popped and is now coming back, Australia still bubbling up, Canada not yet popped in Toronto or Vancouver, Spain & Ireland popped, China - later than everyone else to start but still bubbling, . But overall, the desire to get rich by gambling on real estate with someone else's money seems like a global activity.
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