4 ms·

That's....okay? Most home prices are up well over 20% over the last couple years, so no real net loss for anyone that bought before the pandemic. Most likely, t

by Arubis 4y ago

That's....okay? Most home prices are up well over 20% over the last couple years, so no real net loss for anyone that bought before the pandemic. Most likely, the folks that bought at the peak will feel squeezed for a bit, and might be slightly underwater (which feels terrible), then time and inflation will even this out over a couple years. It does suck for anyone who's in a position where they _must_ sell their property right now, and not buy another one. It sucks, albeit somewhat less, for someone who got a nice APR on their mortgage and needs to move; their purchasing power is reduced, and they'll pay a premium on the new mortgage until the market's in a place that refinancing will make sense, which could be a while. But we're not seeing a 2008 right now, or a 50%+ drop in valuation, or anything crazy like that. We could get there! That would be scary! But this feels more like a correction than "tanking".

dfxm12 4y ago
That's....okay? Yeah, but consider the source. :) Bloomberg writes for the investor class. It does suck for anyone who's in a position where they _must_ sell their property right now, and not buy another one. It's important to note that investments can lose money. It's a risk one should understand. If you think this sucks, this is just capitalism. There are winners and there are losers.
- Arubis 4y ago
  > It's important to note that investments can lose money. It's a risk one should understand. If you think this sucks, this is just capitalism. There are winners and there are losers. Yeahhhhhh....and many of these are people's homes. I don't have a good solution without a socioeconomic reboot, but I do have sympathy for individuals whose primary reason for purchasing a home is to live in it. That houses have turned into an Investment Asset has a lot of knock-on effects, many of which are negative for the non-wealthy. Banks and funds can deal with losses. It's their job.
  - bombcar 4y ago
    And capital gains on houses are tax-free for a certain amount, but you cannot deduct a capital loss on a primary residence; fun times, eh?
deathanatos 4y ago
> are up well over 20% over the last couple years My parents' place was up 30% over the last 12 months earlier this year. Unscrupulous home buyers are hitting us, the children, up with text message ads. Last one I got was Saturday, so they don't seem to concerned about the market yet.
- bombcar 4y ago
  Those text-based buyers are always offering a hot 20-30% below market trying to catch out someone who hasn't been paying attention. It's a scam sold in scammy "real estate get rich quick" schemes.
bryanlarsen 4y ago
It's not okay because rising rates and dropping prices kill liquidity for a couple of stupid reasons. - people get stuck in a house because moving would cause them to lose the favorable rate they currently have. Everybody would benefit from some measure of mortgage portability -- the producer, the consumer, the mortgager, the mortgagee but instead we have this massive deadweight loss. - price drop causes house building to drop dramatically. We're in such a mess today because builders stopped building in 2008. In a normal market you'd be right. This isn't a normal market and regulators need to step up.
- A4ET8a8uTh0 4y ago
  It is not just ok, but it is necessary. The prices are artificially high due to partially FED insistence on stupidly low rates for much longer period than it was reasonable. My personal anecdata, our house practically doubled in value since we bought it over 5 years. That is not normal. That price needs to go down. The liquidity here is imaginary just like liquidity in just about anything else. It is worth what people are willing to pay for it. Finally, the change in rate will mean that they will be willing to pay less, because it will be harder to borrow more.
  - bryanlarsen 4y ago
    Sorry, poor phrasing. Yes, the prices need to come down. That causes secondary problems and we should fix the secondary problems themselves rather than propping up the price.
- yucky 4y ago
  > This isn't a normal market and regulators need to step up. The most regulated housing markets in the US are also the most expensive. Please spare us from the "help" of regulators.
  - dzhiurgis 4y ago
    Correlation != causation

by Arubis 4y ago

dfxm12 4y ago

That's....okay? Yeah, but consider the source. :) Bloomberg writes for the investor class. It does suck for anyone who's in a position where they _must_ sell their property right now, and not buy another one. It's important to note that investments can lose money. It's a risk one should understand. If you think this sucks, this is just capitalism. There are winners and there are losers.

Arubis 4y ago
> It's important to note that investments can lose money. It's a risk one should understand. If you think this sucks, this is just capitalism. There are winners and there are losers. Yeahhhhhh....and many of these are people's homes. I don't have a good solution without a socioeconomic reboot, but I do have sympathy for individuals whose primary reason for purchasing a home is to live in it. That houses have turned into an Investment Asset has a lot of knock-on effects, many of which are negative for the non-wealthy. Banks and funds can deal with losses. It's their job.
- bombcar 4y ago
  And capital gains on houses are tax-free for a certain amount, but you cannot deduct a capital loss on a primary residence; fun times, eh?

deathanatos 4y ago

> are up well over 20% over the last couple years My parents' place was up 30% over the last 12 months earlier this year. Unscrupulous home buyers are hitting us, the children, up with text message ads. Last one I got was Saturday, so they don't seem to concerned about the market yet.

bombcar 4y ago
Those text-based buyers are always offering a hot 20-30% below market trying to catch out someone who hasn't been paying attention. It's a scam sold in scammy "real estate get rich quick" schemes.

bryanlarsen 4y ago

It's not okay because rising rates and dropping prices kill liquidity for a couple of stupid reasons. - people get stuck in a house because moving would cause them to lose the favorable rate they currently have. Everybody would benefit from some measure of mortgage portability -- the producer, the consumer, the mortgager, the mortgagee but instead we have this massive deadweight loss. - price drop causes house building to drop dramatically. We're in such a mess today because builders stopped building in 2008. In a normal market you'd be right. This isn't a normal market and regulators need to step up.

A4ET8a8uTh0 4y ago
It is not just ok, but it is necessary. The prices are artificially high due to partially FED insistence on stupidly low rates for much longer period than it was reasonable. My personal anecdata, our house practically doubled in value since we bought it over 5 years. That is not normal. That price needs to go down. The liquidity here is imaginary just like liquidity in just about anything else. It is worth what people are willing to pay for it. Finally, the change in rate will mean that they will be willing to pay less, because it will be harder to borrow more.
- bryanlarsen 4y ago
  Sorry, poor phrasing. Yes, the prices need to come down. That causes secondary problems and we should fix the secondary problems themselves rather than propping up the price.
yucky 4y ago
> This isn't a normal market and regulators need to step up. The most regulated housing markets in the US are also the most expensive. Please spare us from the "help" of regulators.
- dzhiurgis 4y ago
  Correlation != causation