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Why the New American Real Estate Dream Is Renting

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Re: Why the New American Real Estate Dream Is Renting

#21

Post by barrkel »

modeless wrote: post #9

This is why I cringe when I hear people say that the current economic crisis is an indictment of capitalism; a proof that free markets behave irrationally. To believe that you have to ignore the enormous distortions government has created, not just with recent legislation but with things like the mortgage tax deduction that are so entrenched and popular we take them for granted.

If the market were so perfect, why wouldn't it cope with distortions perfectly? In other words, why wouldn't it predict the effects of mortgage tax etc., and still come out OK in the end?

Re: Why the New American Real Estate Dream Is Renting

#22

Post by barrkel »

barrkel wrote: post #21
modeless wrote: post #9

This is why I cringe when I hear people say that the current economic crisis is an indictment of capitalism; a proof that free markets behave irrationally. To believe that you have to ignore the enormous distortions government has created, not just with recent legislation but with things like the mortgage tax deduction that are so entrenched and popular we take them for granted.

If the market were so perfect, why wouldn't it cope with distortions perfectly? In other words, why wouldn't it predict the effects of mortgage tax etc., and still come out OK in the end?

I find it very interesting that when this argument is presented, people don't post a counterargument - they downvote instead?

Re: Why the New American Real Estate Dream Is Renting

#23

Post by cema »

barrkel wrote: post #21
modeless wrote: post #9

This is why I cringe when I hear people say that the current economic crisis is an indictment of capitalism; a proof that free markets behave irrationally. To believe that you have to ignore the enormous distortions government has created, not just with recent legislation but with things like the mortgage tax deduction that are so entrenched and popular we take them for granted.

If the market were so perfect, why wouldn't it cope with distortions perfectly? In other words, why wouldn't it predict the effects of mortgage tax etc., and still come out OK in the end?

Market is not perfect, it works well under certain assumptions which are not always accurate after government interventions.

Re: Why the New American Real Estate Dream Is Renting

#24

Post by modeless »

barrkel wrote: post #21
modeless wrote: post #9

This is why I cringe when I hear people say that the current economic crisis is an indictment of capitalism; a proof that free markets behave irrationally. To believe that you have to ignore the enormous distortions government has created, not just with recent legislation but with things like the mortgage tax deduction that are so entrenched and popular we take them for granted.

If the market were so perfect, why wouldn't it cope with distortions perfectly? In other words, why wouldn't it predict the effects of mortgage tax etc., and still come out OK in the end?

Of course markets aren't perfect. They can cope with distortions like the mortgage tax deduction but the cost is reduced efficiency and resiliency. The mortgage tax deduction didn't trigger the crisis but it amplified the effects by increasing the number and size of mortgages.

(BTW, I'd like to clarify that I didn't downvote you and I agree it was uncalled for. I don't yet have the ability to downvote.)

Re: Why the New American Real Estate Dream Is Renting

#25

Post by DenisM »

randallsquared wrote: post #18
throw_away wrote: post #14

Earlier quoted context omitted.

why would renters be, by default, anxious? I would be anxious if I owned a home and saw the drop in value over the past two years. or if I were upside-down. or if my mortgage rate could reset in the future. or had to worry about fire, flood or earthquake wiping me out. as a renter, I don't care about any of those things. if my apartment building burns down, the thing I'll be most sad about is my macbook and some pers…

As a renter, I am living someplace at the sufferance of someone else. Yes, in some jurisdictions there are legal issues if they want to kick me out, and mostly they wouldn't want to anyway, as long as I pay my rent on time and don't annoy the other tenants too much, but the difference is that if you own a house, it's yours . There's always someplace you can go where no one has the right to make you leave. There's an…

The "ownership" isn't what it used to be - you have to pay property taxes, and if you don't you will be kicked out of "your home". In effect you are renting your home from the government.

Re: Why the New American Real Estate Dream Is Renting

#26

Post by throw_away »

DenisM wrote: post #25
randallsquared wrote: post #18

Earlier quoted context omitted.

As a renter, I am living someplace at the sufferance of someone else. Yes, in some jurisdictions there are legal issues if they want to kick me out, and mostly they wouldn't want to anyway, as long as I pay my rent on time and don't annoy the other tenants too much, but the difference is that if you own a house, it's yours . There's always someplace you can go where no one has the right to make you leave. There's an…

The "ownership" isn't what it used to be - you have to pay property taxes, and if you don't you will be kicked out of "your home". In effect you are renting your home from the government.

not to mention that until you pay off your mortgage, your home belongs to the bank. anecdotally, I know more people who have had to deal with foreclosure than with eviction.

so, OP, would you revise your statement to "boring, but secure in ways nobody really cares about, and even then, not really or interesting, but anxious (if you're prone to be anxious about things that rarely happen and even then are more hassle than hardship)."? I'm not having a hard time with this decision.

home ownership is great if you need lots of space for your things or your kids, or if you want to impress people. but that's not me. and I don't feel the slightest bit anxious about my choice.

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