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Comment by willcipriano | Hacker News Reader

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Shortsightedness like this tends to backfire spectacularly in the long-term.

It is amazing how once someone becomes a homeowner, they become cheerleaders for unsustainable home prices (and vice versa). And I understand where it comes from. The mistake was to make housing an investment.

People tend to be really shortsighted when it comes to home prices.

People get excited with the thought of selling their home and "extracting profit". But how do you extract profit?

You still need another home, right?

Unless you plan on downsizing then you are going to buy similar or larger to what you just sold. If your house value went up 30%, then likely the rest of your area did too. So if you want to buy something new, then all your profits go back to something that is the same as you already have. In the end you just end up in a similar home, but now with a worse interest rate.

So where's that value extraction that everyone gets so excited about.

Thats why home sales aren't happening right now. People fantisize about their home value but when they go to sell they realize they will probably end up worse off than when they started.

For example. Let's say you bought a home for $300k and now it is worth $400k. Let's say they owe $250k on it. Nice 30% value, huh? Great, sell it. Now you have a cool $150k burning a hole in your pocket. But then you remember, oh i don't have anywhere to sleep tonight. So you go and buy a home that is similar to what you just sold. Well all those houses now cost $400k, thats why you were able to sell yours for that price in the first place. So now you use the $150k of money that you "extracted" as a downpayment on another $400k home and guess what, you're back to a $250k loan, which is exactly where you started. You didn't gain anything. Just now you are paying 6.5% interest on it instead of 3.5% interest. Which means your monthly mortgage actually increased by ~$650 a month for the same house. Great deal, huh?

Nobody was "cheering" that I saw. The person above was simply pointing out that there's nothing to feel bad about. My house also went up in theoretical value (by a lot more than 10%, too). Why on God's green earth should I feel guilty over something I had no control over whatever? I am neither happy (since I haven't realized any gains and so it would be premature to celebrate), nor do I feel bad (since I had no responsibility in causing the current state of the housing market).

If my actions benefit me and not my neighbour to such a degree, the train will cease to function at all. And I don’t enjoy my comfort when I’m surrounded by people struggling. It’s poisonous to my community.

Your analogy falls apart because the 'train' you are 'on' is not moving. The people you are 'leaving behind' are still right there next to you. You don't live on Elysium. You have to go outside and interact with the people you're so smugly 'leaving behind.'

Do you think Do Kwon is still telling people that they're NGMI? I somehow think not.

Economically speaking the train is moving.

If you have only a high school degree your wages have declined in real terms[0], they continue to fall. With interest rates what they are now home ownership is a impossibility for most people who aren't going to inherit one or who didn't buy when rates were much lower.

I'm not driving this train, I dont want it to be this way, what good will blaming myself do here? Should I apologize for seeing this coming?

[0]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7745920/

> I dont want it to be this way

Okay, but the smug tone of your prior post kinda contradicts that, which is why me and others responded the way they did.

Hard to know how to have the conversation when you're responding like a completely different person from one comment to another really. Weird.

The "you can make more money renting and investing" crowd should consider my remarks smug. People too poor to afford homes who are now cut off from doing so for probably the next half decade, mainly because central banks would perfer they stave than asset prices fall, should probably riot.

Ah okay, the smug tone is because you want people to get frustrated and riot. Yeah, I kinda figured that already. Wrecker.

Perhaps if they believe in Democracy harder the same leaders that have been in power for decades will suddenly decide to care about them. I think the magic of Tinkerbell works in a similar way.

Going back to your first comment, you said 'the train is leaving the station brother' - that 'brother' part kinda implies that you and them are on the train together.

With that in mind, could you confirm that you are an American citizen living in America and that, metaphorically speaking, you are indeed on that same 'train' together? And that you aren't, so to speak, standing outside fanning the flames of unrest with your smug comments?

I'm a American who owns a house in America.

Okay... I mean, I see where you're coming from I just don't think that riots and unrest are the best answer. The best answer should be that the problems are solved actively and decisively but... that isn't happening, and the people in charge are just... staggering about like their strings have been cut, which is odd.

It is all very weird.

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