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Comment by pannSun | Hacker News Reader

It's so strange. If it was food or clothes or medicine, cheaper prices would be obviously good. Who can we thank that shelter getting more affordable has become a bad thing?

I'm guessing here, but probably the same people reaping the most profit from it.

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It's not that surprising. Homes are considerably more expensive than food , clothes, or medicine, so prices falling is a bigger deal, especially if someone recently bought a home and is underwater. The problem is that homes are seen as investments instead of merely dwellings.

Even if they're not seen as investment, a drop greater than equity means someone may not be able to move, and that's a problem that just doesn't happen if food gets cheaper.

This comes up in every thread about housing... If you think you may have to move soon then just rent, that's the whole point. How many people actually move after they buy a house?

In the UK people have historically (within recent decades) moved liberally and often even if they've just purchased because house prices have just gone up and up and rates down and down

Maybe it comes up in every thread because it's an actual issue. A lot of people move after they buy a house.

I don't believe the main issue is knowing whether you are going to have to move soon. The main issue is buying a house and then shortly thereafter being laid off/fired/company went under/etc" but with jobs available from somewhere not close enough for the current house location to be viable. If its a couple years or so and house prices go up, its not too harsh of a financial impact to sell and move. If houses are falling, moving for job opportunities are that much less amenable.

But the new house that you will have to buy will also be cheaper. On average, you are no worse off.

What new house are you going to buy if you don't have the cash to pay off the underwater mortgage to sell your current house?

Yeah, I don't like the investment aspect of it. I own a home but many of my friends and family members do not. I'd love to see prices go down.

What do I care? I can afford my monthly payment and plan to die in this house.

Absolutely! Just imagine the benefit, if the cost of shelter had as much progress as say clothing which is so cheap now, relative to 200 years ago.

Also, i think people are so levered up on their homes, they have ever more incentive to keep the ponsi scheme going. Where i live people sometimes but down payments as little as 20% or sometimes even 10%!

So, to answer the original question. if you have a down payment of 10%, say your entire networth, and the market drop 20%, it means you have 200% of networth lost!

The big difference is you can only build so many houses in a desirable location. Housing and the land they reside on are non-fungible. Medicine, food, clothing, etc. are essentially fungible since you can pump out more medicine, clothes, etc. and they're able to replace what was used/lost/damaged/etc.

There is a lot of undeveloped land throughout the USA. Why are we so focused on the prices of existing homes?

Almost nobody wants to live in the middle of nowhere. That's why nobody's there.

Conversely, if too many people want to live in the same place, of course it's going to get expensive.

which is why you upzone

Like New York, which is still too expensive.

New York isn't as upzoned as it could be. Not a lot of 20-30 story mediums priced apartment buildings being built like you'd see in Chinese cities.

doesn't have to be. Houston is one of the fastest growing cities in the US, and grew at a population increase rate x5 faster than SF, and yet it remains cost effective with far fewer homeless than SF.

on most undeveloped land, you're not allowed to build. In CA, you can go to the exurbs and there will be a tiny plot of land with maybe a couple hundred houses scrunched together like some kind of nazi concentration camp for houses, fenced in like a chicken coup. Meanwhile, there's nothing but open land in every direction you look. it's totally disfunctional and yet voters seem to love it.

Do you realize how much undeveloped land even California has that you are free to build on? Many many times the size of all the cities combined.

There are more acres than people, even in CA. But, you're certainly not free to build on it.

By all means, where is it?

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