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The Shock of Sweden's Housing Market Is Hitting the Country's Currency

bloomberg.com

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Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#251

Post by chaostheory »

Danihan wrote: post #244
chaostheory wrote: post #225

Earlier quoted context omitted.

Maybe if the comment added to the conversation somehow it'd be more tolerable. However, all the comment does is insult someone without adding anything interesting. It's a waste of space and time for everyone else reading it. It doesn't belong in HN.

Expressing incredulity and frustration at the obtuseness of someone's complaint doesn't seem especially useless to me. Why is expressing emotional reactions pointless, in your mind? Doing so gives everyone more information about the reactions they might expect to their concerns... it enforces social norms, etc.

> Why is expressing emotional reactions pointless, in your mind? Doing so gives everyone more information about the reactions they might expect to their concerns

The problem is that the comment provides nothing else. You can do the same thing in a more civil and constructive way. Just look at your comments. You are providing logic and rationale for your argument. I don't agree with you, but you're adding to the discussion. Now compare that to "I'm sick of you people. Stop whining about other people's comments you big baby". Someone can correct me, but that doesn't belong here and that rule has been around since the beginning of HN. It's been written and clear along with the reasons why. It's the way things have been done here. If someone doesn't like it, they can post on reddit instead.

https://news.ycombinator.com/newsguidelines.html

"Be civil. Don't say things you wouldn't say face-to-face. Don't be snarky. Comments should get more civil and substantive, not less, as a topic gets more divisive.

When disagreeing, please reply to the argument instead of calling names. 'That is idiotic; 1 + 1 is 2, not 3' can be shortened to '1 + 1 is 2, not 3.'"

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#252

Post by lisper »

robrenaud wrote: post #245
lisper wrote: post #107

Earlier quoted context omitted.

> High housing prices are great for those who already owned houses Not really. Rising prices (not high prices) are great for people holding houses as investments . But for owner-occupied houses, rising prices are as bad for the owners as they are for everyone else. my wife and I own a house in Northern California, which we bought during the sub-prime crash. Since then it has nearly doubled in price. It is also too bi…

It seems like 3. is the real problem? If taxes were a function of current home value rather than at purchase home value, you wouldn't be stuck.

Well, it's all of the above really. But does it really matter? The point is that we'd be better off relative to our goals if prices were stable. So we are a counter-example to the claim that rising prices benefit all home owners. They don't.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#253

Post by jblow »

stevehawk wrote: post #242
lisper wrote: post #193

Earlier quoted context omitted.

I'm not asking anyone to feel sorry for us. I'm just pointing out that rising prices are not a panacea for owner-occupied primary residences. The result is bad for everyone because people like us end up staying in houses that are too big. That takes housing stock off the market and drives prices up even further. That's good for investors, but bad for everyone who wants to buy a house to live in.

Let's say the house didn't go up in value.. where would that leave you? Would you be any more capable to sell? (Serious question, not a rhetorical or sarcastic one.. just seems to me you'd still be in a hole, just a different hole)

The hole would be smaller, thus more likely to be affordable with wages / savings / etc.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#254

Post by collyw »

ppeetteerr wrote: post #115
opportune wrote: post #40

Earlier quoted context omitted.

I think a strong housing market may be the result of lack of productive capital, but I think it has more to do with supply and demand. Most average people pay for a house using a mortgage payment, so when buying a house, they'll be looking for a house that has an affordable mortgage payment. Let's say Joe wants to spend / can afford a $1000/month mortgage payment. If interest rates are 5% and the maximum mortgage per…

I agree with everything except for the "make them and their other rich buddies even richer." Let's not bundle all politicians into this. :)

I think it has been shown that the majority of politicians in the UK (or their partners) own extra properties.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#255

Post by bmm6o »

maxxxxx wrote: post #25
opportune wrote: post #14

When will we learn that a "strong" housing market is not necessarily a good thing? High housing prices are great for those who already owned houses but terrible for everyone else (e.g. the entire generations born after prices became inflated). Not to mention people are greedy and will over leverage themselves when interest rates are good. No country should let the "landed gentry" hold them hostage over interest rates…

Totally agree. It seems one of the factors that helped the US until the 90s was that housing was affordable so people could move around easily. A "strong" housing market seems to indicate that there are no productive places for investing and no wage growth so people need to gamble on houses to rise instead.

I don't think it's that there aren't productive places for investing. Housing is unique in that a regular person can get a loan to purchase an asset that normally appreciates, and they can deduct the interest from their taxes. There are a lot of transaction costs, so the market isn't as liquid as some others, but where else can the average person get that kind of leveraged investment?

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#256

Post by collyw »

samsonradu wrote: post #89
Gustomaximus wrote: post #57

Earlier quoted context omitted.

Homes are important to people and they tend to buy as good as they can afford. When employment is stable and interest rates are low people will spend more because they can and feel safe doing so. Early movers purchase a higher grade of home than they could have previously. Eventually this shifts the market as a whole as income distribution remains stable. Then people buy the same house they would have previously at a…

Isn't it inherently bad to buy "as good as you can afford"? Employment is rarely stable throughout a 30-year period. Shouldn't people be much more careful when maxing out their mortgage relative to 'the good times'?

I have been waiting 10 years for "emergency" interest rates to rise and the subsequent price fall here in Europe. So far it hasn't happened.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#257

Post by sliverstorm »

nitrogen wrote: post #235
mbesto wrote: post #223

Earlier quoted context omitted.

> With all the taxes and fees that you have to pay on the sale price you can't buy the equivalent of your house. So why on earth would someone want to sell their house and buy an equivalent house in the same area...?

Switch schools or districts, change neighbors, move closer to work, change floorplans, move closer to family, etc.

In short, what is important to people in their residence changes.

Friend of mine bought a house he and his wife loved. Five years later he came to understand what owning a Dr Horton house means, and they wanted a better-built house.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#258

Post by notyourday »

Shaanie wrote: post #174
notyourday wrote: post #144

Earlier quoted context omitted.

This is pure nonsense. Lateral move or downsize are two different transactions. Capital gains has no effect on the second one. People who are complaining about the capital gains taxes pretending that such taxes prevent them from either moving laterally or downsizing are complaining that other properties also appreciated in price. What they would have preferred is that their property appreciated and the properties the…

If I buy a house for 50k and want to immediately move laterally to another house worth 50k then the cost is 0 + overhead. If I buy a house for 50k and want to move laterally when it's worth 100k then the cost is the taxes of the 50k profit + overhead. This gets even worse if you want to buy a larger house (if appreciation is percentage based).

That's not correct.

In the second case:

You bought a house for $50k, which in a year appreciated to $100k. You sell the house for $100k, pay the capital gains of X% on the $50k of appreciation which gets you $100k - ($50k * X% ) to play with.

You lateral move would not be to a house worth $100k, it would be to a house worth $100k-($50k * X%) because you d not have $100k, you only have $100 - (50k * X%).

If you wanted to defer capital gains and play with entire 100k, then instead of doing a sale you would do 1031 exchange.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#259

Post by notyourday »

gjjrfcbugxbhf wrote: post #160
notyourday wrote: post #145

Earlier quoted context omitted.

If this is the case and Joe wants to bet that the housing prices will continue to rise, Joe gets an interest only ARM with a 7 year balloon.

Joe is probably risk averse and more concerned with having a place to live in the future than taking on risk.

In that case Joe is clueless and should stay in the same house he bought.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#260

Post by notyourday »

lisper wrote: post #176
notyourday wrote: post #144

Earlier quoted context omitted.

This is pure nonsense. Lateral move or downsize are two different transactions. Capital gains has no effect on the second one. People who are complaining about the capital gains taxes pretending that such taxes prevent them from either moving laterally or downsizing are complaining that other properties also appreciated in price. What they would have preferred is that their property appreciated and the properties the…

> Capital gains has no effect on the second one. Of course it does. A loss is a loss. It doesn't matter whether it comes out of your checking account or your home equity. > What they would have preferred is that their property appreciated and the properties they wanted to move to did not. That's generally not an option if you want to move locally.

if you sell your asset for less than what you paid for it there's no capital gain, and hence there's no tax.

> That's generally not an option if you want to move locally.

You don't get to have your cake ( gain money on a sale of appreciated house) and eat it too ( buy at the price before the appreciation )

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