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But the cash you get out is also decreased by 50%. Instead of selling at 400k and buying at 200k, netting 200k, you sell at 200k and buy at 100k, netting 100k.

But the cash you get out is also decreased by 50%. Instead of selling at 400k and buying at 200k, netting 200k, you sell at 200k and buy at 100k, netting 100k. Obviously housing prices need to come down in the long term. But OP has a point - we need to account for the fact that doing so will destroy any sort of wealth the current middle class has managed to build.

gorjusborg 3y ago
Policy makers often need to consider whether something is a 'net good' or 'net bad'. I would find it hard to believe that the current run-up of housing is a 'net good' in anything other than the extremely short term. There are always anecdotes and dreamed up scenarios that enter the argument, and while those are interesting on a personal level, shouldn't really be the basis of policy.
- dahfizz 3y ago
  Sure, and I said as much in my comment. Housing prices need to fall. But policy makers concerned with the "net good" would make a bare minimum effort to account for the millions of people they would harm with their policy. Something like allowing people to deduct their home's depreciation on their taxes would go a long way in actually getting policy support and passed. Try to allow for a little nuance sometimes.
ajsnigrutin 3y ago
Yes, but initial buying price is lower too, so since you've bought at eg. 200k instead of 400k, you have 200k left over that you didn't spend on buying the first house, so in the end, you're 300k up. (if you saved that money of course, if not, that's your problem).
- dahfizz 3y ago
  You're missing the point: people who currently own a house get fucked. An entire generation or two of people will be locked out of retirement if housing prices significantly fall. This needs to be accounted for. A majority of Americans own a home, so you're not going to get meaningful change in this area if it hurts most people.

gorjusborg 3y ago

Policy makers often need to consider whether something is a 'net good' or 'net bad'. I would find it hard to believe that the current run-up of housing is a 'net good' in anything other than the extremely short term. There are always anecdotes and dreamed up scenarios that enter the argument, and while those are interesting on a personal level, shouldn't really be the basis of policy.

dahfizz 3y ago
Sure, and I said as much in my comment. Housing prices need to fall. But policy makers concerned with the "net good" would make a bare minimum effort to account for the millions of people they would harm with their policy. Something like allowing people to deduct their home's depreciation on their taxes would go a long way in actually getting policy support and passed. Try to allow for a little nuance sometimes.

ajsnigrutin 3y ago

Yes, but initial buying price is lower too, so since you've bought at eg. 200k instead of 400k, you have 200k left over that you didn't spend on buying the first house, so in the end, you're 300k up. (if you saved that money of course, if not, that's your problem).

dahfizz 3y ago
You're missing the point: people who currently own a house get fucked. An entire generation or two of people will be locked out of retirement if housing prices significantly fall. This needs to be accounted for. A majority of Americans own a home, so you're not going to get meaningful change in this area if it hurts most people.