Why I don't want home prices to rise Part 2

GLUE

Thu, Jun 02 2022, 6:49 pm

Call me an unreasonable stupid millennial, that I don't want home prices to rise. After all is it not a good thing when property values rise?

Now houses are very expensive, Why?

For one thing there is a shortage of new construction, the reason can and does fill whole books. Another reason that is very really mentioned:
Someone who lives in a place that taxes are based on the price he paid for can't sell his house to downsize in his town. Because the taxes would be to much for a new place, so he is more likely to age in place. Which takes a house that a family might buy unavailable.
With the way capital gains taxes are many financial people are telling older adults not to sell their house and rent it out to avoid tax penalty. Another house that does not make it to the market.

A very big reason is investors, many investors carrying cash buy a house drain the equity from the house and then buy another one, about 1 in 6 houses in this country is sold to investors. This drains the market even more.

The most common response when people complain that they can't afford to buy a house is move to some place else. Guess what even cheaper cities are no longer cheep. Just because housing prices are lower in another city does not make the city affordable, or attractive for things like jobs to live there.
Another reason giving is that this generation just spends money like water, if they stopped their luxury lifestyle they will have enough to buy a house. Many people claim that this generation just spends to much on junk, refusing to acknowledge that the price of houses are much more inflated then their generation.

Many people will not acknowledge that there is a down side on the price going up, only talk about how great it is for the price to rise.

GLUE

Thu, Jun 02 2022, 9:22 pm

amother [ Hyssop ] wrote:

I agree with all your points. I was asking who argues against them?

Mostly people who have houses that went up in price.

Investors who want prices to go up.

There are people who get "crazy mortgages" and rely on being able to pay for them with the price of houses going up. This is one of the reasons the housing melted down in 2008.
Guess what people did not learn from that and are starting to do the same things that lead to the meltdown.

Other people look at their houses as an investment and would rather borrow from their house then other places. They also need the price to go up.