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They bought a starter home for say 100k which is now 200k. But the family home they now want tripled in the same time from 200k to 600k. So even though they now

by patall 2y ago

They bought a starter home for say 100k which is now 200k. But the family home they now want tripled in the same time from 200k to 600k. So even though they now have 100k more, they need 400k more for their desired house, while only 200k before (Numbers obvioulsy chosen randomly)

Spivak 2y ago
This still doesn't make sense because why would only homes on the low-end appreciate? If anything homes on the high-end should be appreciating faster because the people who live in them can afford to do more improvements.
- jb1991 2y ago
  It makes sense because both the starter homes and the larger homes appreciated. I'm not sure why you say "why would only homes on the low-end appreciate" when the example talks about two different classes of homes.
  - Spivak 2y ago
    Yes, that's what I'm saying. The idea that you can trade up your starter home without getting lucky and having your starter home appreciate much faster relative to other homes is daft -- especially when home prices appreciate by percentages the gap is always going to get wider over time. I don't think there's ever been a time where this "starter home" pipeline has ever worked in general.
    - falseprofit 2y ago
      I think they were lamenting the fact that the classes did not appreciate at the same rate, and that the more desirable homes appreciated faster. Didn’t claim not to understand it either.
- jajko 2y ago
  I don't think you understood logic of original statement, although its clearly explained with matching numbers. Btw those disproportional numbers can be easily real anywhere in the world even in much bigger ratios, I can confirm them from Europe - if you want to invest in properties, location is absolute top priority as we all know that. Those properties appreciate faster than average market, don't suffer much drops in crises, and of course are at most desirable locations for whatever reason.

by patall 2y ago

Spivak 2y ago

This still doesn't make sense because why would only homes on the low-end appreciate? If anything homes on the high-end should be appreciating faster because the people who live in them can afford to do more improvements.

jb1991 2y ago
It makes sense because both the starter homes and the larger homes appreciated. I'm not sure why you say "why would only homes on the low-end appreciate" when the example talks about two different classes of homes.
- Spivak 2y ago
  Yes, that's what I'm saying. The idea that you can trade up your starter home without getting lucky and having your starter home appreciate much faster relative to other homes is daft -- especially when home prices appreciate by percentages the gap is always going to get wider over time. I don't think there's ever been a time where this "starter home" pipeline has ever worked in general.
  - falseprofit 2y ago
    I think they were lamenting the fact that the classes did not appreciate at the same rate, and that the more desirable homes appreciated faster. Didn’t claim not to understand it either.
jajko 2y ago
I don't think you understood logic of original statement, although its clearly explained with matching numbers. Btw those disproportional numbers can be easily real anywhere in the world even in much bigger ratios, I can confirm them from Europe - if you want to invest in properties, location is absolute top priority as we all know that. Those properties appreciate faster than average market, don't suffer much drops in crises, and of course are at most desirable locations for whatever reason.