Housing has intrinsic value ???
It does, if you’re living in it or renting it out.
If its sitting vacant, and has been bought with overleveraged money … it doing nothing but costing you interest, maintenance, Mello roos, property tax, utilities and HOA dues.
Now in the past 99.9% of houses were bought to live in, and when they moved due to other circumstances, they became rentals. if that is the case, and they are succesfully rented they ahve intrinsic value. Vacant houses are much much much worse than stocks. Stocks are bought with money you have sitting around … stock tanks, and you lost all of it. Ironically, that limits your losses.
You buy a house with 100K of your money and 900K of the banks. The house drops to 900K, you are making payments on the 1 mil, then property tax, insurance, utility bills, HOA dues and mello roos bills come in … guess what, you are now several thousand under. Then lets say, it drops further another 50K … you are now 150K under …
Yea … not only did you lose your shirt, you lost your future shirts and undies too … OK you walk away … bank takes the 850K house and spends 50K on selling it at an auction for 850K … that is so lucky for you … but you’d now have a 1099C for 100K. You’ll pay taxes on that.
Intrinsic value … yes … but not in all cases.
Cool.
Cow_tipping.
