We are richer when house prices go down

[patientlywaiting]

“There’s nothing troubling about a gradual correction of home prices. If we keep our incomes at the current level and home prices go down we are richer, we can buy more housing,” Shiller said.

http://www.reuters.com/article/domesticNews/idUSN2126522720080222?pageNumber=1&virtualBrandChannel=0&r=undefined&sp=true

I love how Prof. Shiller is always calm and pragmatic when giving interviews.

In economic terms, if we can buy more widgets (or afford more shelter) for the same amount of money, then we are richer as a society. What’s not to like about that?

1) Why is it that people have a hard time understanding this simple concept.

2) Why do people have have such visceral negative reactions to dropping house values? I would guess that only the people who overpaid do. To me, overpaying in San Diego would be anything above 2000 prices.

[kewp]

Because all of the genius RE speculators leveraged one property into a dozen and are now left holding the bag. They can’t possibly have made bad investments, could they?

Or the borrowers that have been moving every two years after withdrawing all their equity via HELOC’s. They are left with the option of bankruptcy or spending the next few decades paying down debt.

Might also be the boomers, whom were counting on selling their home to finance their dream retirement, as they haven’t been saving.

I’m with Shiller, I rent, own no RE or related assets and am shorting the building and banking sectors. Its all sunshine and rainbows from my POV. And when I do buy, at the bottom, I will have money left over to put into investments and the local economy. Rad!

[kewp]

Because all of the genius RE speculators leveraged one property into a dozen and are now left holding the bag. They can’t possibly have made bad investments, could they?

Or the borrowers that have been moving every two years after withdrawing all their equity via HELOC’s. They are left with the option of bankruptcy or spending the next few decades paying down debt.

Might also be the boomers, whom were counting on selling their home to finance their dream retirement, as they haven’t been saving.

I’m with Shiller, I rent, own no RE or related assets and am shorting the building and banking sectors. Its all sunshine and rainbows from my POV. And when I do buy, at the bottom, I will have money left over to put into investments and the local economy. Rad!

[kewp]

Because all of the genius RE speculators leveraged one property into a dozen and are now left holding the bag. They can’t possibly have made bad investments, could they?

Or the borrowers that have been moving every two years after withdrawing all their equity via HELOC’s. They are left with the option of bankruptcy or spending the next few decades paying down debt.

Might also be the boomers, whom were counting on selling their home to finance their dream retirement, as they haven’t been saving.

I’m with Shiller, I rent, own no RE or related assets and am shorting the building and banking sectors. Its all sunshine and rainbows from my POV. And when I do buy, at the bottom, I will have money left over to put into investments and the local economy. Rad!

[kewp]

Because all of the genius RE speculators leveraged one property into a dozen and are now left holding the bag. They can’t possibly have made bad investments, could they?

Or the borrowers that have been moving every two years after withdrawing all their equity via HELOC’s. They are left with the option of bankruptcy or spending the next few decades paying down debt.

Might also be the boomers, whom were counting on selling their home to finance their dream retirement, as they haven’t been saving.

I’m with Shiller, I rent, own no RE or related assets and am shorting the building and banking sectors. Its all sunshine and rainbows from my POV. And when I do buy, at the bottom, I will have money left over to put into investments and the local economy. Rad!

[kewp]

Because all of the genius RE speculators leveraged one property into a dozen and are now left holding the bag. They can’t possibly have made bad investments, could they?

Or the borrowers that have been moving every two years after withdrawing all their equity via HELOC’s. They are left with the option of bankruptcy or spending the next few decades paying down debt.

Might also be the boomers, whom were counting on selling their home to finance their dream retirement, as they haven’t been saving.

I’m with Shiller, I rent, own no RE or related assets and am shorting the building and banking sectors. Its all sunshine and rainbows from my POV. And when I do buy, at the bottom, I will have money left over to put into investments and the local economy. Rad!

[5yearwaiter]

Well many want fast money and also peer pressure such as some one made half million just buying home – let’s do that If some one really thinks about children and Grand children style they never buy this kind of stuff when their earning not proportional with respect to these housing prices

5yearswaiter

[5yearwaiter]

Well many want fast money and also peer pressure such as some one made half million just buying home – let’s do that If some one really thinks about children and Grand children style they never buy this kind of stuff when their earning not proportional with respect to these housing prices

5yearswaiter

[5yearwaiter]

Well many want fast money and also peer pressure such as some one made half million just buying home – let’s do that If some one really thinks about children and Grand children style they never buy this kind of stuff when their earning not proportional with respect to these housing prices

5yearswaiter

[5yearwaiter]

Well many want fast money and also peer pressure such as some one made half million just buying home – let’s do that If some one really thinks about children and Grand children style they never buy this kind of stuff when their earning not proportional with respect to these housing prices

5yearswaiter

[5yearwaiter]

Well many want fast money and also peer pressure such as some one made half million just buying home – let’s do that If some one really thinks about children and Grand children style they never buy this kind of stuff when their earning not proportional with respect to these housing prices

5yearswaiter

[ucodegen]

2) Why do people have have such visceral negative reactions to dropping house values?

MEW. Mortgage Equity Withdraw? People living beyond their means by using the funny money within their home.. When the prices drop, their ability to withdraw that equity ceases.

[ucodegen]

2) Why do people have have such visceral negative reactions to dropping house values?

MEW. Mortgage Equity Withdraw? People living beyond their means by using the funny money within their home.. When the prices drop, their ability to withdraw that equity ceases.

[ucodegen]

2) Why do people have have such visceral negative reactions to dropping house values?

MEW. Mortgage Equity Withdraw? People living beyond their means by using the funny money within their home.. When the prices drop, their ability to withdraw that equity ceases.

[ucodegen]

2) Why do people have have such visceral negative reactions to dropping house values?

MEW. Mortgage Equity Withdraw? People living beyond their means by using the funny money within their home.. When the prices drop, their ability to withdraw that equity ceases.

[Author]

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