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Rising housing values probably don't help a lot of people who think they are getting a windfall when they sell their house either. Property taxes and 5% interes

Rising housing values probably don't help a lot of people who think they are getting a windfall when they sell their house either. Property taxes and 5% interest eat into the housing appreciation if anyone is willing to run the numbers. But there are other drivers of housing costs too, for example real estate agent fees, serve to guarantee that no one can actually afford to sell a house for less than they paid for it. Bottom line, is unless you happen to be lucky enough to live in a neighborhood experiencing >10% growth, its likely your just getting a refund on years of paying a significant portion of your income on housing.

breischl 10y ago
>>real estate agent fees, serve to guarantee that no one can actually afford to sell a house for less than they paid for it. That just makes it harder to sell if you haven't built up much equity. And if you're going to sell houses before you build up equity, you would've been better off renting anyway.
AnimalMuppet 10y ago
But see, if I didn't own a home, I still would have to live somewhere. So I'd rent. So then I pay the owner's interest and taxes, and more besides. So if you run the numbers of what I pay to own vs. what I pay to rent (because homeless is not a desirable option), then I think you'll find that housing appreciation helps the owner (if after many years the owner sells and then moves into something smaller, or else sells and then rents).
- StillBored 10y ago
  Owners that are paying interest on a note and passing it on to you are the reason that rents are out of control. If housing were a healthy market your rent would be the taxes+upkeep+something around market interest rates (on paid off property)-inflation. Which means you might be better off renting (economies of scale on maintenance/etc) and putting the extra cash into the stock market (or growing your business). AKA, your rent would be significantly less than the cost of taking out a mortgage to own the same properly. Obviously that isn't the case, and there are a number of reasons, starting with artificially low interest rates, government tax incentives for home ownership and backstoping 30 year mortgages for homes that weren't peoples primary residence.

breischl 10y ago

>>real estate agent fees, serve to guarantee that no one can actually afford to sell a house for less than they paid for it. That just makes it harder to sell if you haven't built up much equity. And if you're going to sell houses before you build up equity, you would've been better off renting anyway.

AnimalMuppet 10y ago

But see, if I didn't own a home, I still would have to live somewhere. So I'd rent. So then I pay the owner's interest and taxes, and more besides. So if you run the numbers of what I pay to own vs. what I pay to rent (because homeless is not a desirable option), then I think you'll find that housing appreciation helps the owner (if after many years the owner sells and then moves into something smaller, or else sells and then rents).

StillBored 10y ago
Owners that are paying interest on a note and passing it on to you are the reason that rents are out of control. If housing were a healthy market your rent would be the taxes+upkeep+something around market interest rates (on paid off property)-inflation. Which means you might be better off renting (economies of scale on maintenance/etc) and putting the extra cash into the stock market (or growing your business). AKA, your rent would be significantly less than the cost of taking out a mortgage to own the same properly. Obviously that isn't the case, and there are a number of reasons, starting with artificially low interest rates, government tax incentives for home ownership and backstoping 30 year mortgages for homes that weren't peoples primary residence.