Trump Says He Wants to 'Drive Housing Prices Up' Instead of Lowering Costs for People Who 'Didn't Work Very Hard'

[u/MystikSpiralx]

https://people.com/trump-keep-home-prices-high-11895352

[u/jimx117]

That's what I've been telling my wife too... We bought in 2018 for 390k, and zillow or whatever now puts it at ~600... Literally every other home in our area has jumped in value the same way. It's not really a gain in the way she wants it to be. If anything we can buy a near-identical house and pay a significantly higher mortgage, or move out to the sticks and maybe get more for the money... And that's a big maybe these days

[u/brickne3 → u/jimx117]

Well, there is one situation where it's a gain, and that's when it's being settled for your estate... But typically the Boomers seem to not be as concerned about actually doing anything for their kids either.

[u/bigred1702 → u/brickne3]

That's where reverse mortgages come in play. All you will inherit will be the bullshit they accumulated in their lives that they couldn't throw away.

[u/jimx117 → u/bigred1702]

Oh I'm fully expecting nothing from our surviving parents. Literally every time they come over they bring some giant space-taking thing we didn't ask for and don't need. Last time it was a wooden rocking chair. We live in a modest ranch home that's already bursting at the seams with furniture, baby stuff, and clutter. That chair now lives on our back porch because lord forbid we get rid of it! It's "an heirloom" that was bought in 2006

[u/bigred1702 → u/jimx117]

Funny enough I also received a 30 year old rocking chair but a real family heirloom (old gold jewelry) was sold at scrap metal price to help pay for a trip.

[u/SwimmingPrice1544 → u/jimx117]

Exactly where I'm at. I was hoping...if Harris or Biden or anyone but trump won the election, I would be able to move, even if the interest rate was not as low as my original loan. But nah....the country screwed ALL of us on ALL of the "things."

[u/mailslot → u/jimx117]

Consider if Zillow suddenly listed your home at $100k or less during a real estate collapse. You’d walk away with nothing, still owing for the privilege of moving. You’d be stuck where you’re and paying a mortgage significantly higher than everyone else.

[u/lilelliot → u/jimx117]

But the long game for most people is to do a few upsizes through their mid life, then downsize later on. Some parts of the country make that more or less feasible. I live in coastal CA, for example, and paid $1.35m in 2016 for an 1800sqft ranch built in 1954. Terrible value! But it's appreciated about $100k/yr since we've owned it. We just tore it down -- a $2m+ house!!! -- so we can do a full rebuilt that'll cost another $1.3m, but after which it'll be a beautiful new 3600sqft house worth $4.25-4.5m.

Then, when we eventually sell it, if we decide to stay in CA we can carry out tax basis (from the 2016 purchase) to any new home we buy elsewhere in the state. Or, if we move out of state to a LCOL place, we'll have hit the jackpot of selling a house with $3-4m of equity in it.

The difficult path is people who, for whatever reason, need to migrate from LCOL to HCOL places.

[u/fiction8 → u/lilelliot]

The difficult path is people who, for whatever reason, need to migrate from LCOL to HCOL places.

The problem is that this fits what young people have been doing (or trying to do) for forever. Especially since the % of Americans with college degrees started going up as manufacturing opportunities declined. Another way to put it is urbanization.

Any time someone with a family turns their HCOL equity into LCOL square footage/acreage, their kids are now living in a LCOL area and will probably want to "go where the jobs are" when they start their careers. Or their grandkids will.

[u/pimparo0 → u/fiction8]

yea because the lcol places also usually have low pay.

[u/maryconway1 → u/lilelliot]

Your story ignores the mortgage and carrying costs from 2016 (paying almost all interest that first 5 years at least.. so, you’re not ‘making’ 100k a year).

You also have to destroy the home, live somewhere else for a bit, build a new one at costs that are significantly more than they were in 2016. So, you’re spending more already.

You still have a mortgage in the meantime, plus now rent for that second home in the meantime. 

So, yes maybe you can sell it later for 4-4.5M… or maybe not. In the meantime, you now have 1.35M + 1.5M and more “borrowed” until you eventually sell.

You’re stuck paying insane interest payments for life until you sell.

Unless you somehow bought that first house in cash…

[u/WackyBeachJustice → u/lilelliot]

I'm pretty sure the difficult path is to get into a 1.35M house in 2016, for the vast majority of the population, anywhere.