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I don't understand why everyone wants housing prices to go up. As a person looking to buy a home in the near future I certainly do not hope the housing prices h

by cglace 14y ago

I don't understand why everyone wants housing prices to go up. As a person looking to buy a home in the near future I certainly do not hope the housing prices head towards their prerecession levels.

phillmv 14y ago
Why, they're investments. Of course you want prices to go up! You're sinking a huge quantity of money - presumably, above that of an equivalent rental unit in your region - and by golly, you need returns on that or else you're just fritting it all away. It's all compounded by the fact that housing is the only major asset investment that the vast majority of people ever engage in.
- Joeri 14y ago
  They're only an investment if you buy more housing than you need. After all, you need housing, so when you sell that home at increased value, you will need to use that revenue to buy new housing which has also risen in cost. In short, only if you can sell your home and buy a cheaper home can it be considered an investment. Otherwise it's just non-liquid capital.
  - plorkyeran 14y ago
    In theory, if you buy enough housing to fit a few kids then you'll have more housing than you need by the time you're looking at retirement, so you can cash out your 'investment'. Of course, in reality this never seems to actually happen.
    - theorique 14y ago
      Lots of people are doing this / have done exactly this. My parents and many of their generational peers (boomers +/- 10 years) did the large house thing in the 1960s-1980s in order to raise the kids, then sold their large house and moved to a smaller house or condo as the kids moved out in the 1990s-2000s.
saosebastiao 14y ago
Because people are fooled into thinking that houses are investments as opposed to places to live. They all feel like fools for buying high, and want the world to adjust to their expectations.
mgkimsal 14y ago
Once you buy one, you'd certainly not want the prices to go up. Indeed, you may in fact want them to go up.
prostoalex 14y ago
Economic models suggest greater economic activity around housing booms - it boosts capital flows, job creation, employment for blue-collar workers. That's why "housing starts" is an indicator watched by economists and investors. That's the macro-economic view, and is usually favored by governments, who can create economic waves by tweaking incentives in one industry. From micro-economic perspective you're right, the cheaper the better, money you save on not paying your mortgage will be deployed somewhere else.

by cglace 14y ago

I don't understand why everyone wants housing prices to go up. As a person looking to buy a home in the near future I certainly do not hope the housing prices head towards their prerecession levels.

phillmv 14y ago

Why, they're investments. Of course you want prices to go up! You're sinking a huge quantity of money - presumably, above that of an equivalent rental unit in your region - and by golly, you need returns on that or else you're just fritting it all away. It's all compounded by the fact that housing is the only major asset investment that the vast majority of people ever engage in.

Joeri 14y ago
They're only an investment if you buy more housing than you need. After all, you need housing, so when you sell that home at increased value, you will need to use that revenue to buy new housing which has also risen in cost. In short, only if you can sell your home and buy a cheaper home can it be considered an investment. Otherwise it's just non-liquid capital.
- plorkyeran 14y ago
  In theory, if you buy enough housing to fit a few kids then you'll have more housing than you need by the time you're looking at retirement, so you can cash out your 'investment'. Of course, in reality this never seems to actually happen.
  - theorique 14y ago
    Lots of people are doing this / have done exactly this. My parents and many of their generational peers (boomers +/- 10 years) did the large house thing in the 1960s-1980s in order to raise the kids, then sold their large house and moved to a smaller house or condo as the kids moved out in the 1990s-2000s.

saosebastiao 14y ago

Because people are fooled into thinking that houses are investments as opposed to places to live. They all feel like fools for buying high, and want the world to adjust to their expectations.

mgkimsal 14y ago

Once you buy one, you'd certainly not want the prices to go up. Indeed, you may in fact want them to go up.

prostoalex 14y ago

Economic models suggest greater economic activity around housing booms - it boosts capital flows, job creation, employment for blue-collar workers. That's why "housing starts" is an indicator watched by economists and investors. That's the macro-economic view, and is usually favored by governments, who can create economic waves by tweaking incentives in one industry. From micro-economic perspective you're right, the cheaper the better, money you save on not paying your mortgage will be deployed somewhere else.