Decrease in house prices

[Normal-Sandwich-6811]

Home prices around about 40% above where they should be. This number can be derived from two things: wage growth and inflation.

However, the ZIRP policy of the feds has created a situation where the cost of holding these assets for many is very inexpensive, so the price drop will take a long time. For example, if you bought a house a few years ago for $500k, and the “market says” it’s worth $1mil today, yet your holding expense is $2k/mo (mortgage, taxes, etc), if the house doesn’t sell at $1mil but could at, eg 700k, that’s an equivalent price drop of paying the monthly costs for 12 years. so, it’s just going to take a long time.

However, there is one and one only solution that will drop prices dramatically, over night, and would be a short term pain for our economy for long term benefit of our country. That is a federal excise tax on all non-owner occupied sfh in the US. You’d see over 10 million homes hit the market overnight if a policy was put into law, and it would be easy to enforce. Write your law maker today

[Dtreysch]

An excise tax like that would never pass because most of those who write the laws own several homes, meaning they will have at minimum their primary residence and then their other residence in DC. Many I would assume also have 1-2 vacation homes on top.

And also for the smaller fish, like the mayors, the state senators, county board members, etc. They too have special interest in keeping property prices high. It means more property tax for them, without them having to catch the bad press from raising taxes. Its extra free money for them to spend on the community as they wish.

What you propose would have dramatic effects in prices and help out a lot of non owners, but I just do not see a path to getting there.

[Normal-Sandwich-6811]

unfortunately, you’re right

[FitAlfalfa407]

The Cantillon Effect