We are richer when house prices go down

[DWCAP]

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

Everyone wants to think they got a deal. Remember when the iphones came out. People were more than happy to fork over the $$$, but as soon as the price dropped they went balistic. This is for a stupid overhyped cellphone/pda. A house is still the biggest single purchase just about anyone makes EVER. Not suprising that we have the same reaction on the same scale of feeling having overpaid.

-Why is it that people have a hard time understanding this simple concept?

Simple, denial is a powerful copeing tool. One that we are very good at. “But, But, My property is Different!”

-Also remember Shiller said:”If we keep our incomes at the current level and home prices go down we are richer, we can buy more housing.”

‘Damnit, now all those damn_________(enter least favorite group of people, not necessary race, it can be age or income level or…….)_______ will start moving in and ruin the neighborhood.’
People think about themselves first, and would rather make 55k when everyone else makes 50k than make 105k when everyone else makes 110k. Wealth is all relative to those around you, and everyone wants to be the richest guy in the room (or atleast make everyone believe they are).

[Mean Reversion]

We are richer when house prices go down.

It is relative.

If no one owned housing, then it would benefit everyone. If everyone owned housing, then everyone would in fact be poorer if house prices went down.

As it stands, the market peaked exactly when there were a record number of home owners.

[Mean Reversion]

We are richer when house prices go down.

It is relative.

If no one owned housing, then it would benefit everyone. If everyone owned housing, then everyone would in fact be poorer if house prices went down.

As it stands, the market peaked exactly when there were a record number of home owners.

[Mean Reversion]

We are richer when house prices go down.

It is relative.

If no one owned housing, then it would benefit everyone. If everyone owned housing, then everyone would in fact be poorer if house prices went down.

As it stands, the market peaked exactly when there were a record number of home owners.

[Mean Reversion]

We are richer when house prices go down.

It is relative.

If no one owned housing, then it would benefit everyone. If everyone owned housing, then everyone would in fact be poorer if house prices went down.

As it stands, the market peaked exactly when there were a record number of home owners.

[Mean Reversion]

We are richer when house prices go down.

It is relative.

If no one owned housing, then it would benefit everyone. If everyone owned housing, then everyone would in fact be poorer if house prices went down.

As it stands, the market peaked exactly when there were a record number of home owners.

[golfproz]

It’s also how you look at it. If I buy a house that is 800k I will have little left over every month after paying the mortgage. So I will feel poor. It does not matter if that house goes up in value. I still have the same amount left after making the payment. I could not go out to eat very often or take nice vacations or buy big flat screens or even play nice golf courses. Now if that house drops to 600k and I buy it, I will have a much better quality of life. I will be able to spend that extra money on my leisure activities. I will feel richer! I’m hoping it drops to $400k, then I can play a few rounds at Pebble Beach 🙂

[golfproz]

It’s also how you look at it. If I buy a house that is 800k I will have little left over every month after paying the mortgage. So I will feel poor. It does not matter if that house goes up in value. I still have the same amount left after making the payment. I could not go out to eat very often or take nice vacations or buy big flat screens or even play nice golf courses. Now if that house drops to 600k and I buy it, I will have a much better quality of life. I will be able to spend that extra money on my leisure activities. I will feel richer! I’m hoping it drops to $400k, then I can play a few rounds at Pebble Beach 🙂

[golfproz]

It’s also how you look at it. If I buy a house that is 800k I will have little left over every month after paying the mortgage. So I will feel poor. It does not matter if that house goes up in value. I still have the same amount left after making the payment. I could not go out to eat very often or take nice vacations or buy big flat screens or even play nice golf courses. Now if that house drops to 600k and I buy it, I will have a much better quality of life. I will be able to spend that extra money on my leisure activities. I will feel richer! I’m hoping it drops to $400k, then I can play a few rounds at Pebble Beach 🙂

[golfproz]

It’s also how you look at it. If I buy a house that is 800k I will have little left over every month after paying the mortgage. So I will feel poor. It does not matter if that house goes up in value. I still have the same amount left after making the payment. I could not go out to eat very often or take nice vacations or buy big flat screens or even play nice golf courses. Now if that house drops to 600k and I buy it, I will have a much better quality of life. I will be able to spend that extra money on my leisure activities. I will feel richer! I’m hoping it drops to $400k, then I can play a few rounds at Pebble Beach 🙂

[golfproz]

It’s also how you look at it. If I buy a house that is 800k I will have little left over every month after paying the mortgage. So I will feel poor. It does not matter if that house goes up in value. I still have the same amount left after making the payment. I could not go out to eat very often or take nice vacations or buy big flat screens or even play nice golf courses. Now if that house drops to 600k and I buy it, I will have a much better quality of life. I will be able to spend that extra money on my leisure activities. I will feel richer! I’m hoping it drops to $400k, then I can play a few rounds at Pebble Beach 🙂

[Deal Hunter]

Hipmatt said,

"Not that its gonna happen, but I think that we need to end the home owner deductions. and /or give deductions to those who rent.(shelter is shelter) And stop taxes on money made in interest, investments, or dividends."

This is precisely what is outlined in Bush's Tax Reform Panel that was conducted in 2005. (http://www.taxreformpanel.gov/)

Part of the reform includes the elimination of the Mortgage Interest Deduction for homeowners as well as privitization of entitlements such as social security retirement.  Taxation of investment income would be effectively stopped.

This is actually pretty close to happening in 2008.  Bush's last budget had a short fall of about $90 billion.  The potential income from cutting the mortgage int deductions is $94 billion (according to the Tax Reform panel).  Is this a coincedence?  I think not!

So few are paying attention (and the panel and Bush's last budget come to the public's attention 3 whole years apart), but it really smells of a set up.  All of the budget shortfalls and the stimulus to the housing market somehow can be addressed by implementing the advisements of the Tax Reform Panel of 2005! 

 

 

[Deal Hunter]

Hipmatt said,

"Not that its gonna happen, but I think that we need to end the home owner deductions. and /or give deductions to those who rent.(shelter is shelter) And stop taxes on money made in interest, investments, or dividends."

This is precisely what is outlined in Bush's Tax Reform Panel that was conducted in 2005. (http://www.taxreformpanel.gov/)

Part of the reform includes the elimination of the Mortgage Interest Deduction for homeowners as well as privitization of entitlements such as social security retirement.  Taxation of investment income would be effectively stopped.

This is actually pretty close to happening in 2008.  Bush's last budget had a short fall of about $90 billion.  The potential income from cutting the mortgage int deductions is $94 billion (according to the Tax Reform panel).  Is this a coincedence?  I think not!

So few are paying attention (and the panel and Bush's last budget come to the public's attention 3 whole years apart), but it really smells of a set up.  All of the budget shortfalls and the stimulus to the housing market somehow can be addressed by implementing the advisements of the Tax Reform Panel of 2005! 

 

 

[Deal Hunter]

Hipmatt said,

"Not that its gonna happen, but I think that we need to end the home owner deductions. and /or give deductions to those who rent.(shelter is shelter) And stop taxes on money made in interest, investments, or dividends."

This is precisely what is outlined in Bush's Tax Reform Panel that was conducted in 2005. (http://www.taxreformpanel.gov/)

Part of the reform includes the elimination of the Mortgage Interest Deduction for homeowners as well as privitization of entitlements such as social security retirement.  Taxation of investment income would be effectively stopped.

This is actually pretty close to happening in 2008.  Bush's last budget had a short fall of about $90 billion.  The potential income from cutting the mortgage int deductions is $94 billion (according to the Tax Reform panel).  Is this a coincedence?  I think not!

So few are paying attention (and the panel and Bush's last budget come to the public's attention 3 whole years apart), but it really smells of a set up.  All of the budget shortfalls and the stimulus to the housing market somehow can be addressed by implementing the advisements of the Tax Reform Panel of 2005! 

 

 

[Deal Hunter]

Hipmatt said,

"Not that its gonna happen, but I think that we need to end the home owner deductions. and /or give deductions to those who rent.(shelter is shelter) And stop taxes on money made in interest, investments, or dividends."

This is precisely what is outlined in Bush's Tax Reform Panel that was conducted in 2005. (http://www.taxreformpanel.gov/)

Part of the reform includes the elimination of the Mortgage Interest Deduction for homeowners as well as privitization of entitlements such as social security retirement.  Taxation of investment income would be effectively stopped.

This is actually pretty close to happening in 2008.  Bush's last budget had a short fall of about $90 billion.  The potential income from cutting the mortgage int deductions is $94 billion (according to the Tax Reform panel).  Is this a coincedence?  I think not!

So few are paying attention (and the panel and Bush's last budget come to the public's attention 3 whole years apart), but it really smells of a set up.  All of the budget shortfalls and the stimulus to the housing market somehow can be addressed by implementing the advisements of the Tax Reform Panel of 2005! 

 

 

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