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

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

#261

Post by Danihan »

chaostheory wrote: post #251
Danihan wrote: post #244

Earlier quoted context omitted.

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 discu…

I don't disagree that the comment is probably against the rules.

I just believe the rules tend to stifle people from expressing how they truly feel about topics, and are therefore information limiting and generally a net loss.

It's a fine line. Some people's feelings are toxic all the time and wrong-headed and truly add nothing of value. Other people, when they have a negative emotional reaction there is probably a lot of accumulated wisdom behind it and you should really listen instead of censoring or rambling on about civility. Very subjective though.

Also, in my opinion, the constant suppression of any negative speech is exactly what gets someone like Trump elected. "Finally, someone on TV is saying what I FEEL and no one can stop him!"

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

#262

Post by literallycancer »

dfhdfhfdh wrote: post #73
baursak wrote: post #17

I don't get it. When prices are high, it's a housing crisis. When prices are going down, it's a housing crisis. It's almost as if news articles just need to be written regardless of the reason.

Maybe housing shouldn't be a market system. Instead, housing should be free and landlords should be abolished.

How do you propose we decide who gets the best house? And who's going to pay for it?

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

#263

Post by el_benhameen »

Danihan wrote: post #199
el_benhameen wrote: post #172

Earlier quoted context omitted.

You arguably have a point (so does the parent), but this isn’t the way to express it in a respectful discussion.

I dislike the notion that discourse needs to be respectful at all times. Discourse shouldn't be baselessly disrespectful, sure. But the robotic, tsk tsk , shaming attitude that gets thrown around on forums whenever someone expresses any negative emotion gets old too. In any case, complaining about having to pay capital gains tax on gains OVER $500k really is the ultimate first world, privileged problem.

I agree that we don't need to be robotically respectful. If someone's a real asshole, I have no qualms with responding in kind, even if doing so is debatably effective. I wrote what I wrote because I thought that ttul's comment was baselessly disrespectful. The parent wasn't being a jerk, but ttul responded with out of place ad hominem attacks instead of addressing the argument.

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

#264

Post by sliverstorm »

ttul wrote: post #159
lisper wrote: post #155

Earlier quoted context omitted.

> if it's your primary residence you get capital gains relief on the first $500k. Yes, I know. But our appreciation is substantially more than that. The higher it goes, the more expensive it becomes to make a move. > which is less impactful since you've already made a profit on it Only if we move to a less expensive area. If we make a local move, that "profit" just gets rolled in to the next house. There's no way to…

Awww poor baby. You’ve made more than $500K, much of which will be untaxed, simply by owning a house. Jesus fucking Christ. Cry me a river. Most people would trade their arm in for that kind of leveraged gain.

Suppose they move horizontally to a similar house. I don't know, they want one story instead of two.

Since a rising tide lifts all boats, the new purchase is about even with the old sale- but they also owe taxes. So within this window, they are objectively worse off than your average Joe who can move across town without owning those taxes.

Anyone trading up is also impacted as well. Suppose you bought a condo at 100k, and SFH was 200k. In five years you want to trade up, but the market went up 100%. Your condo sells for 200k, but the SFH costs 400k. Despite the lovely appreciation on your condo, you'd probably prefer if the market hadn't moved.

Sure, there's people who have it worse. Owning any home at all puts them in better shape than most of the world. But it's still not enviable to be unable to move within your community.

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

#265

Post by mijamo »

margorczynski wrote: post #6

Are the regulations blocking the development? Considering the demand is so high wouldn't the supply follow by e.g. scaling vertically?

Contrary to popular belief there is no housing shortage in Sweden. There is howere shortage of new cheap housing.

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

#266

Post by [deleted] »

lisper wrote: post #127
Retric wrote: post #112

Earlier quoted context omitted.

#3 is real, but more a sign of California's disfunction than an inherent problem with high property values. PS: #1 only consumes a percentage of profits, so it can't make a sale unprofitable.

> #1 only consumes a percentage of profits, sit it can't make a sale unprofitable. Yes, that's true, but it makes a move less efficient. If we sell our house and buy another one of equal value, the higher the price, the more we lose in capital gain tax in the transition. If our house had not appreciated, we would pay zero cap gains. The higher prices go, the more expensive it becomes to move locally.

[deleted]

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

#267

Post by bzbarsky »

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)

> Would you be any more capable to sell?

Quite possibly, yes.

Let's plug in some plausible numbers. Say someone buys a 3-bedroom house for $300k (they have kids). At the same time, 1-bedroom houses sell for $200k.

Time passes, the kids grow up and move out. Say house prices didn't change at all. You sell for $300k, buy for $200k, pay some agent fees, have $85k or so left over.

Now say prices went up and the 3-bedroom house is $1,500,000. You sell, have a $1.2e6 capital gain. $500k is deductible, you pay taxes on the remaining $700k. That's taxed at 20% federal plus the ACA 3.8% investment income tax (because your income is way over that boundary) plus state capital gains taxes. In California, capital gains are taxed the same as other income, at first glance; let's be charitable and assume you avoid the higher tax brackets (12.3%) and get taxed at an effective 10% here. That's 33.8% tax. So your after-tax sale proceeds are $500k + 0.662*$700k = $963k.

Note that your house went up in price by 5x. If the smaller one did too, it costs $1 million and you can't pay for it anymore. If it went up by more than that (e.g. if the primary inflation was in land prices, which it often is) you might be even more in the hole.

Things are even worse if you're trying to sell and buy something equivalent instead of downsizing.

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

#268

Post by zanny »

lolsal wrote: post #93
dfhdfhfdh wrote: post #73

Earlier quoted context omitted.

Maybe housing shouldn't be a market system. Instead, housing should be free and landlords should be abolished.

Your mindset completely boggles my mind.

Alternate economic views are incomprehensible?

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

#269

Post by nerfhammer »

bluGill wrote: post #110
samsonradu wrote: post #89

Earlier quoted context omitted.

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'?

That depends. Location location location. The right answer changes based on what side of the city you live in. As such nobody can give a definitive answer. In all but the smallest cities you have options for a different job. They might not be as good, but there is an option. If you lose your job you can find a different job close enough to your current house that you don't have to move. Remember this is NOT an ration…

Strangling the growth of cities and labor mobility is very much a rational economic problem:

* https://www.axios.com/sky-high-home-prices-are-thwarting-thw...

* https://www.citylab.com/equity/2017/06/the-other-side-of-har...

Cf. China, which has seen unbelievably explosive growth in its cities in the last 40 years and China has also seen ~1 billion people lifted out of poverty during exactly the same time period.

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

#270

Post by sliverstorm »

skybrian wrote: post #188
sliverstorm wrote: post #86

Earlier quoted context omitted.

People don't consume more in a deflationary world, per the economists, because that dollar you've got today is worth more tomorrow, so you put off as many purchases as possible. Fewer people would take out loans as well, because the loan would become harder and harder to repay over it's life (which means fewer opportunities for investors)

On the other hand, prices of computers and electronics are always dropping due to technology improvements. Stocking up on computer equipment in advance rarely makes sense since next year it will be better. But this doesn't seem like a bad thing. Would you prefer the alternative, that technology improvements stop and computers become more expensive, so they become good investments? And people do still seem to buy lots…

Generally speaking, lower prices are better.

Not an economist, but I believe that statement needs to be indexed to inflation/deflation. Lower prices relative to income, in other words higher purchasing power, is good. But you can't inflate/deflate your way to lower real production costs or higher wages.

prices of computers and electronics are always dropping due to technology improvements

Right, the electronics market is in some senses an example of the behavior of a deflationary market, but it is also different than prices dropping due to financial wizardry.

Would you prefer the alternative, that technology improvements stop

In many parts of the market, improvements have stopped. Continuing improvement is clearly best, but not always an option. A gallon of milk or a shovel isn't getting any better next year. So what then?

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