5 ms·
>"I owe hundreds of thousands on my house [...] my net debt is zero." >"my house is worth significantly more than my debt" You realize the value of your house
by nonbel 8y ago
>"I owe hundreds of thousands on my house [...] my net debt is zero."
>"my house is worth significantly more than my debt"
You realize the value of your house dropping by 50% in a year would not be very surprising? And that would be mild, it is all up to which group of people the federal reserve chooses to benefit.
- heartbreak 8y agoAt the end of the day it's still a house.
- nonbel 8y agoWhat does that have to do with owing a bank 300k and then your assets are worth ~150k?
- cinquemb 8y agoI made the joke (about what is considered a depreciating asset or not) on an S&P e-mini forum a couple of days ago that went something this: Most people don't buy houses, they buy mortgages worth $x00,000 on an "asset" that goes to being valued at $x00,000 / 2 when interests rates double…
- posix_me_less 8y ago> value of your house dropping by 50% in a year would not be very surprising? That's crazy, does that happen often in the U.S.?
- nonbel 8y agoNot often. Actually there is an interesting distinction here between frequency and probability... but anyway there has recently been a ZIRP induced bubble (~2008-2016), which leads to high prices of various assets in a trickle down way: https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS