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We saw last time that there’s no political appetite to allow home prices to ever fall on a nominal basis. The politicians went about inflating a new, even large

We saw last time that there’s no political appetite to allow home prices to ever fall on a nominal basis. The politicians went about inflating a new, even larger, bubble ASAP. Why do you expect this time to be different?

cloverich 4y ago
Because inflation is having a real impact on the average Joe.
vanilla_nut 4y ago
If basic homes become unattainable for the working class and the middle class -- teachers, nurses, construction workers, etc. -- we either have to raise wages so folks can afford the new prices, or drop house prices back to a reasonable level. I guess it's a race between "rent-seeking folks who own investment properties" and "people who actually want to live and work in a community." Should be an interesting battle -- while the rent-seekers surely have the most lobbying power, literally everyone needs a home.
- notch898a 4y ago
  We could just create "mortgage perpetuals" where you perpetually pay an interest on the land value without ever paying the principle on the land itself. For the improved structures above the mortgage period could be the expected life of the structure itself. There's room to squeeze people a lot further than they're already squeezed.
  - vanilla_nut 4y ago
    Isn't that just renting with all the maintenance downsides of ownership? You should consider a career writing dystopian science fiction. This is pretty brilliant material.
    - notch898a 4y ago
      Think of it as property tax except the taxes pass directly to the barons at the top rather than to a politician and then the barons at the top.
    - renewiltord 4y ago
      It's called a leasehold and exists in many places. Americans will be familiar with it in Hawaii.
- bradleyjg 4y ago
  I’m actually cheering for the investment buyers. A fall in homeowners as a percentage of voters is the only way out of the mess that’s been created. With a supermajority of voters owning homes of course we see a higher is always better dynamic among politicians.
  - vanilla_nut 4y ago
    I'm sure this will happen eventually as the Boomers retire and die off. I suspect people who actually live in homes aren't as attached to rising house prices as politicians think. Personally I'd happily buy a house for $500,000 and drop the price to near-zero if it meant I didn't have to pay $10,000 a year in property taxes. At some point it's not about "building equity," it's about having a place to live that you control, where the rent won't skyrocket 20% per year, where you can raise a family or own a dog or install a patio or whatever.
woeirua 4y ago
Home prices did fall though after 2008. In some areas by as much as 30-40%. The real difference between this time and last time is that the Fed was trying to prevent deflation in 2008. That's why the cut to zero. This time, the fed is trying to prevent further inflation so they can't really cut without setting the economy on fire.

cloverich 4y ago

Because inflation is having a real impact on the average Joe.

vanilla_nut 4y ago

If basic homes become unattainable for the working class and the middle class -- teachers, nurses, construction workers, etc. -- we either have to raise wages so folks can afford the new prices, or drop house prices back to a reasonable level. I guess it's a race between "rent-seeking folks who own investment properties" and "people who actually want to live and work in a community." Should be an interesting battle -- while the rent-seekers surely have the most lobbying power, literally everyone needs a home.

notch898a 4y ago
We could just create "mortgage perpetuals" where you perpetually pay an interest on the land value without ever paying the principle on the land itself. For the improved structures above the mortgage period could be the expected life of the structure itself. There's room to squeeze people a lot further than they're already squeezed.
- vanilla_nut 4y ago
  Isn't that just renting with all the maintenance downsides of ownership? You should consider a career writing dystopian science fiction. This is pretty brilliant material.
  - notch898a 4y ago
    Think of it as property tax except the taxes pass directly to the barons at the top rather than to a politician and then the barons at the top.
  - renewiltord 4y ago
    It's called a leasehold and exists in many places. Americans will be familiar with it in Hawaii.
bradleyjg 4y ago
I’m actually cheering for the investment buyers. A fall in homeowners as a percentage of voters is the only way out of the mess that’s been created. With a supermajority of voters owning homes of course we see a higher is always better dynamic among politicians.
- vanilla_nut 4y ago
  I'm sure this will happen eventually as the Boomers retire and die off. I suspect people who actually live in homes aren't as attached to rising house prices as politicians think. Personally I'd happily buy a house for $500,000 and drop the price to near-zero if it meant I didn't have to pay $10,000 a year in property taxes. At some point it's not about "building equity," it's about having a place to live that you control, where the rent won't skyrocket 20% per year, where you can raise a family or own a dog or install a patio or whatever.

woeirua 4y ago

Home prices did fall though after 2008. In some areas by as much as 30-40%. The real difference between this time and last time is that the Fed was trying to prevent deflation in 2008. That's why the cut to zero. This time, the fed is trying to prevent further inflation so they can't really cut without setting the economy on fire.