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I get hammered for this, but the the United States should require all foreigners who buy realestate be citizens first. There should be no straw buyers.

I would like to see severe limits put on Real Estate Investment trusts. I would like to see them regulated out of existence.

I would like to see mandatory rental of properties after the third purchase. Example--A person buys a home and a vacation property. The third residential, or commercial property bought should be rented out if the particular county needs more rental property.

Personally, I don't like Realestate speculation if it involves renters. I always felt it was a slimy way to make money. That goes for mini-storages too. Yes, it's legal; I just don't respect Investors who make money off renters. If you are going to rent at a reasonable rate, and not nickel and dime the renter--fine, but I have never met a landlord who didn't get greedy with a good market.

I do understand buying a home to live in. I know a lot of you will say it's the same thing as buying rental property. I see nuances which make the two transactions different.

While, I'm at it, why are we still relying on realestate agents and brokers? It's 8 courses, a simple test, dubious experience, and a cheezy smile--and they have the nerve to ask for 3%? I have never quite figured out the full commission game. It just seems like a profession that should be extinct by now? Sorry Realtors--just don't understand your role in most transactions these days, other than your errors and omissions policy, which I can go after if things don't go smoothly?

Just venting people. I have seen long term residents being forced to move from the county they raised their kids in because of escalating rents. These are just regular people. They don't have fancy credentials. They don't have jobs that transfer. Many are on a fixed income. These are people who just want to be near their family, and friends, but are being kicked out of their county because of this crazy market.

Copenhagen does something like that in most of the city, but rather than a citizenship requirement, there is just an owner-occupancy requirement. Apartments with an owner-occupancy requirement have to be purchased by a natural person who registers it as their legal residence, so investors aren't able to compete for these kinds of properties.

I've read tons of reports that wealthy people from China had been descending on US soil and gobbling up pretty much everything on their way with entire deals in cash.

Similar things are said about London.

"All our 401Ks and retirement funds ultimately ends up at groups like Blackstone"

I really think we should abolish tax-deductible/advantageous defined contribution plans like 401k, IRA, Roth, college funds, etc. This automatic investing scheme is giving inordinate amount of power to wallstreet, and force money to chase after equities and securitized products because that's all they know how to 'invest'.

If you're going to invest in stock market, you should make conscious choice to do so using after-tax earnings just like other forms of investment. The only reason why people plow money into these accounts is because of tax benefits.

Take that away and people will find more creative ways to put their money to work.

That could ultimately be a good thing for this country

i would be slightly more targeted- abolish tax incentives for investment in real estate. investment in real estate is literally rent-seeking, unproductive and is widening inequality , particularly between young and old.

concrete examples: Mortgage tax deduction (up to $2.4mm in loans iirc), low property taxes from Prop 13 leading to lower running cost vs renting, and capital gains carryover upon a sale of primary dwelling and purchase of another one.

I am sure there are more.

I don't think there's a federal capital gains carryover on primary housing. There's an outright exclusion amount on capital gains for sale of a primary house (up to $500K IIRC)

You might be thinking about 1031 exchanges of business assets (including rental properties). IMO, that serves a generally beneficial purpose as compared to the others that you mention.

If by rent-seeking, you mean: using resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.

Then real estate is not "rent-seeking".

Real estate owners take the burden of home ownership off the shoulders of renters. Renteres choose to rent because they have an economic incentive to do so. Instead of a buying a home cash, or putting down a deposit, a renter can use that money for investing in other activities, spending on themselves or their family, or save. Of course, there are many renters who cannot afford a down payment at all. For them, the landlord is playing an even more important role by letting them rent in areas where purchasing would be impossible.

I do agree that most tax incentives for investing should be abolished. But I disagree that real estate is less productive than other types of investing.

In general you're right it's unfair to say that real estate investment is always unproductive and rent-seeking. However for major cities like London with tight supply, the flows of real estate investment that followed QE and zero interest rates haven't been matched by appropriate levels of home building. As a result affordability and ownership levels have reached historic lows, and many more people are becoming 'unwilling' renters, only able to service the financing costs of real estate investors. At this stage it becomes rent-seeking and unproductive, in my view, and there ought to be appropriate policy responses from government.

If you couple that idea with lowering taxes to a 10% flat rate for every single US resident, then I'd support that idea. Until then, the punitive and confiscatory tax policies of the United States Government are such that these potentially risky tax-avoidance schemes are preferable to letting te government steal your money.

It's insane that I got to give the U.S. Government 30% of my earnings from two jobs and I don't even live in the United States! The U.S. And Eritrea are the only countries in the world that tax worldwide income. If I worked less hard, I'd pay less taxes. That's completely backwards. Hard work and risk ought to be rewarded not penalized. So te reason people use these tax advantages accounts is because otherwise they'd be just throwing money down the taxation drain. With a simple and uniform tax policy: 10% of your earnings, no deductions, no credits, then the need for these complex tax advantaged "schemes" would disappear. However, Demicrats would never allow that to happen; they need the tax code as a means to penalize those that wouldn't vote for them in order to give things to those that would. If I hear "fair share" one more f'ing time from someone that pays zero income taxes while living in a rent stabilized apartment watching satellite TV, I'll probably kick a puppy. Meanwhile, it's Satrurday; I have work to which I must get back.

It's pretty obvious to anyone who does the numbers that there is more at play in bay area real estate than just tech salaries.

A mortgage payment on a SFH with a reasonable commute to the big tech companies (i.e. anywhere on the peninsula) is pretty much out of reach for a household with an income below $200-$250k, or without a huge down payment.

That's an incredibly high household income and basically requires both partners to be working in high income fields - or one partner that is incredibly successful - so overall a small portion of the population.

Foreign investment is driving up real estate prices, which is driving up rents by keeping those who would otherwise buy in rentals. Tech salaries are a factor at play, but they aren't the only one.

>Even if 2008 repeats, you might lose 5-25% of value unlike stocks where anything is possible.

That depends on the market. Palo Alto or Atherton won't budge in the next crash, but look what happened to Las Vegas.

As a layman if I had to theorise how this can be... I'd say

- Shifting cultures. In 1900 humans all over the planet were relatively collectivistic. That's moving towards individualistic societies. That means kids leaving homes sooner, getting married less, live in their own apartments despite having relationships. Partly that's due to wealth (an enabler), but more so due to culture (the driving force). After all in some cultures we still see wealthy enough people who live with their parents (e.g. lots of Chinese middle class who can afford living individually).

This means that the square footage per person radically increases.

- Population growth which adds demographically driven pricing pressure

- Lure of cities. Cities have always been concentrated areas of population, but never more than today. In 1870 about 50% of people worked in agriculture (and you can correlate it with where they lived: where the farmland was, i.e. spread out all over the US). Today that figure is generally deemed less than 2% in most OECD countries, and urbanisation is huge, growing from 25% in 1870 to 80% today. It's no surprise then that the value of these areas continues to skyrocket.

And that makes sense. Our value added isn't from the land. It's mostly in the services industry. (i.e. wheat costs 10 cents a pound, but a pound of cereal in nice packaging etc is 310 cents per pound). Crude example but this needs no explanation really.

Land prices being cheap elsewhere doesn't factor in the insane economies of scale and existing infrastructure in cities. Want to build a new house on cheap ranch land, be prepared to build your own sewage, water, electric, satellite internet etc. In that sense overpriced city apartments may actually be considered cheapish sometimes.

- Existing landowners tend to have political power in the area where they own land (and often thereby the buildings, shops, industry etc on top of it). It's in their interest to keep their land scarce, this increases the value of their land. So you now have people with power to keep something scarce, who have a reason to keep something scarce. Often this is pretty artificial, while some property owners oppose loosening restrictions for genuine non-financial reasons (e.g. I don't want a skyscraper in my backyard), many land owners don't really care for building limits if they increased their property prices, but because they usually don't, they oppose them.

On the one hand it seems like a very safe bet: real estate. On the other, here's what I wonder sometimes. Let's take a 50-70 year view, right? We're seeing pretty big leaps in sustainable energy and storage. (enables off the grid). We're seeing big leaps in information networks and coverage. (enables off the grid). We're seeing new generations growing up with ideals of authenticity, renewed mainstream appreciation for hiking, community based tourism, community supported agriculture etc. And finally we're seeing very interesting movements in VR and AR to the extent that working from home etc can get standardised into a human (read: not skype convos) experience closer to regular cooperation in an office. With housing prices growing faster than income, there has to come a point where, say in 20 years from now, a cheap, less urban location, enabled by new technology (less reliant on the grid, able to be very productive using VR/AR) etc will be much more appealing than living downtown in a $1m closet.

These are some extremely unsophisticated thoughts, of course, quickly written up as a layman in these technologies, real estate and sociological trends. Just want to put them out there to think about. I wonder if housing prices will be as safe a bet the next 50 years as they were the last 50.

There's also water privatization.