Housing Market?

[Anonymous No.55560559]

I have a theory on how to solve the housing crisis. It's extremely simple in execution, but, depending on what country it's implemented in, would piss off a large number of very politically active people. Also, I'm sure it's been described countless times, but I don't see why it would actually be detrimental to the economy.

Investment in a house creates diminishing returns. Roof, floors, walls - highest value. Basic furniture, kitchen & bathroom necessities - also important. A nice, landscaped backyard, miles of coutertops, two family rooms and a living room - luxuries.

Yet, all of these are bundled into the minds of Americans, Brits and many others into either the idea of being "investments" or "net wealth neutral". Which is true on a personal level. As opposed to going on a cruise, the luxury of adding a fixed asset to a home is not necessarily detrimental to your wealth. It's not an investment in the economic sense at all, though, since it produces only a "higher standard of living" for the resident, and often (in the case of fixtures like a pool) actually has its own maintenance and deterioration considerations. So, the person improving the property has little reason not to take (generally low-interest-rate) debt, use savings and/or their own time to make luxury improvements to their home, using capital and labor that could have better served in other parts of the economy, even if it was just making more houses instead of improving existing ones.

So, my proposal. Take the amount you paid for the home, multiplied by a factor representing inflation in the housing market, and multiplied by a factor representing the change in square footage, if there was one. There should be no taxes on this amount. Past this, there should be a massive tax on any additional profit to the home (one caveat - if the home was not built yet or marked as unlivable, then this would be excused or lowered). This would prevent needlessly adding luxuries to homes and inflating the market.

[Anonymous No.55560600]

It's not that I don't think people should be able to have some luxury in their life - it's that I think people should have to choose between installing a pool and hot tub OR going on a 1 month cruise across Europe. Both of these are obviously luxuries, but only one of them will clearly cost the person making the decision. Now, when looking at this decision, lots of upper middle class families choose both, doubly burdening the economy with capital and labour going into something that didn't need to exist.

[Anonymous No.55560874]

My solution is 15 fuckin percent interest rates.

[Anonymous No.55561527]

>>55560559
I have an even simpler solution. Ban immigration and deport all H1Bs and migrants. I fixed the housing problem AND wage problem.

[Anonymous No.55561748]

>>55560874
Fed has already stopped raising rates. They're going to stay here for a while since 6.5% has flattened prices.

[Anonymous No.55561857]

>>55561748
>6.5% has flattened prices.
it hasn't. sellers are still chasing the 2021 top price, so its still going up for now, but its a desperate last attempt. only garbage is on the market, with the most degenerate gambling addict types trying to offload now.
in the next few years you will see more slowly come onto the market - overleveraged millennials that FOMO'd into a shitbox painted white with no inspection, failed new REI idiots, boomers dying off, foreclosures, etc. the high prices are just as unsustainable for a lot of new buyers as they are for prospective sellers.

[Anonymous No.55562087]

>>55561857
it's a melt up. How do manias end again?

[Anonymous No.55562185]

>>55561857
Its a matter of real vs nominal at this point as prices begin to flat line in most areas. Every day a home owner dosen't sell their house is another day inflation eats at their potential gains. If they care about that anyway.

[Anonymous No.55562637]

>>55562185
>If they care about that anyway.
If they're people planning to stay for a long time, they don't, and they probably don't need to. The reality is, a majority of new home purchases aren't these people, or even just gen x/millennials that will need to FOMO into something else soon enough.
>>55561527
>Ban immigration and deport all H1Bs and migrants.
Deportation would be logistically impossible and a waste of a shit ton of money, time, and labor. Banning immigration would be an easy step. Along with banning foreign investors in the housing market. Just because investment opportunities are shit somewhere else doesn't mean that should be an open door to fuck up housing for Americans. There's tons of videos of jeets on YouTube instructing other jeets on how to do shitty quick flips.

[Anonymous No.55562650]

>>55560559
Just buy in some souless flyover state

[Anonymous No.55562676]

>>55560559
Why wouldn’t you just buy houses with no improvement/amenities? This is ducking retarded

[Anonymous No.55562684]

>>55560559
How would you even determine the basis for the improvement? Should I hire a valuation firm to determine how much my gazebo should be taxed at? Pretty fucking dumb ngl

[Anonymous No.55563101]

>>55562676
People do, I'm trying to incentivize this behavior to make the market as a whole have more efficient
>>55562684
You didn't read the post lol
It's not based off of improvement, it's based on profit

[Anonymous No.55563123]

>>55560559
Can we get a zoomed out chart with inflation counted in

[Anonymous No.55563131]

>>55562637
>a majority of new home purchases aren't these people,
Right, there small or new to RE investing. I know people in this position and none of them even factor in anything but the value of the house on the paper.

[Anonymous No.55563151]

>>55562650
>t.citycuck landowner
Absolutely balding. (from pollution)