Housing has risen some 40% over the last two years, while this is certainly insane. If the trend continues the downside risk either becomes massive - or a mere 30% correction becomes inconsequential to the principal balance.
Re:Economic Pessimism Growing in U.S.
by baskethead on Tuesday May 31, 2022 @03:44PM
(#31573979)
My house almost tripled in 8 years. I made $2 million profit from selling my house last year.
Re:Economic Pessimism Growing in U.S.
by adamsmith143 on Tuesday May 31, 2022 @04:01PM
(#31574218)
And you did what, moved into a van down by the river or moved into another overpriced house immediately after?
If they owned multiple properties, then they needn’t move down to the river to liquidate the 2 million.
Good to see Adam Smith commenting on hacker news
Re:Economic Pessimism Growing in U.S.
by baskethead on Tuesday May 31, 2022 @03:43PM
(#31573968)
Homes have been going up in price for far longer than 40 years. The only time they have dropped is the Great Depression and the Great Recession. Otherwise there isn't an asset class that is more reliable over the long haul than real estate.
Re:Economic Pessimism Growing in U.S.
by ChuckNorris89 on Tuesday May 31, 2022 @04:00PM
(#31574198)
>Homes have been going up in price for far longer than 40 years.
Homes going up is not the problem though. Yes, they've been going up for longer than 40 years, but back in the 1950's their growth was basically tracking inflation and wage growth, or even going down in value since they were seen an any other depreciable asset, just a place to live in till you die.
It's in the last 40 years that housing massively outgrown wages, as it became a speculatory investment vehicle instead of just being a place to live, plus the introduction of NIMBYISM regulations to restrict supply, and that's where the issue is.
I strongly disagree with this. First off homes fell sharply in value just as recently as 2009. Secondly over time, globally, real estate barely keeps ahead of inflation. About 3% per year. For much of the last century you did about as well parking your money in a savings account. Finally, equities in globally have returned about 6.5% per year. That's much better. Better still in the US where they did more like 10.5%. Real estate as an appreciating asset is a lousy investment. If it's a place to live that's sometimes a different matter. If it's a rental property that's also different.
I think 2009 counts as part of the Great Recession.
Not sure what your point is though.
Re:Economic Pessimism Growing in U.S.
by fdgsdfogijq on Tuesday May 31, 2022 @03:27PM
(#31573795)
This is how you end up a wage slave
People buying homes in places that have only gone up in the last 40 years need to consider that that might keep going up for another decade, or they might be cresting the hill before correcting.