Realcent.org

http://www.marketwatch.com/story/inflat ... 2013-03-15

Time for more Stackage While FRN's continue to lose value

-The Great

Here is something I do not understand about rising prices. Why do we "celebrate" rising housing prices, but not everything else? For everyone selling a house there must be a buyer, and I am sure the buyers don't like rising prices. So when I hear on the news that housing has increased, why is that good news?
Using housing price logic, shouldn't we be happy that all prices are on the rise?
One question though, is the increase in price due to the dollar declining in value, supply and demand, or people just willing to pay more, or some other reason?

As far as I can tell nearly everyone (unless you got a pretty substantial raise) has a lot less purchasing power than in 2012. Both in actual dollars due to paying more in taxes across the board and also each dollar you actually get has less power.

I wonder if people will continue to tolerate this.

My guess is: Yes.

barrytrot wrote:I wonder if people will continue to tolerate this.

My guess is: Yes.

They will just cut back on the luxuries to pay for the necessities.
For every dollar I spend on my increased rent, gas fill up and other must have things, it is just one less dollar to spend on the less important things.
Problem there is that most necessities are controlled by huge corporations that are earning record profits, and the luxuries are mom & pop operations that are losing money every day. I see locally owned stores closing which probably cost a great deal to open and run and then eventually go belly up. I wonder how much that person lost trying to make a go of it?
I myself highly doubt that the economy is making a turn around.

ScrapMetal wrote:Here is something I do not understand about rising prices. Why do we "celebrate" rising housing prices, but not everything else? ?

IMHO, it's propaganda. The inflation in housing is easy to spin as a positive because there's a high percentage of people who own rather than rent. Why should they care if their children will ever be able to afford a house of their own when they're counting on their McMansion to fund their retirement?

Even though I'm a homeowner, I'm a contrarian who wishes housing prices would crash. Sure, I'd lose some paper equity, but my taxes would go down and I could upgrade cheaper. What's not to like about that?

The media also celebrates the stock market being at an all time high, but all it means to me is that I can afford to buy fewer dividend paying stocks. I'd welcome a crash there as well.

The average person just doesn't get it, and they're proud to brag of their stock "gains" which didn't even track inflation after you figure in capital gains taxes.

I'd be glad if prices would stabilize for years to come. At least one could save and do a self-regulated lay-away for things they wanted to buy years down the road. Imagine if you knew saving up for a down payment on a house could be easily planned if you knew houses would not go up dramatically in price over the years. Just a thought, there is nothing to guarantee money earned keeps up with prices.

Engineer wrote:Even though I'm a homeowner, I'm a contrarian who wishes housing prices would crash. Sure, I'd lose some paper equity, but my taxes would go down and I could upgrade cheaper. What's not to like about that?

I agree, although I own a house I have no plans to sell it so whether the price goes
up or down doesn't really affect me.

However...

If home prices in my city dropped a lot it would eventually be within my reach to
buy additional property that I could rent out to friends who currently live in apartments.
I could rent them a better place for the same amount as they were paying now if it was
a free and clear property like my house is.

Of course what would also help would be more hours of work so I could accumulate new
savings again instead of just scraping by. (A lot of the places I'd been applying to get
a second job seem to want part timers available all the time which means they can't
be a suplimental job, if someone was available 24/7 they'ld be looking for full time, not
part time. -_-) Though that's annother topic entirely...

Isn't an increase in the price of equities in the stock market indicative of inflation? Stock market goes up because there is no where else to put our frn's thus an inflated price. Also, with the amount of frn's floating in the system, they are finding a home in the S&P

Two cents from silver flake.

ScrapMetal wrote:Here is something I do not understand about rising prices. Why do we "celebrate" rising housing prices, but not everything else?

I cannot figure why home owners get all freaked about "Oh, that will cause my property values to drop!!!!"

Erm, isn't property tax linked to property value? How often do people pay property tax compared to how often they sell property? People /want/ their taxes to go up?

Property taxes are a MAJOR hinderance to investing in real estate.

Think about this, you don't really own your real estate.

You are leasing it on a long term basis from the government.

The government can change the terms of the lease from year to year.

Think I'm wrong? Try not paying your property tax...

I am very skittish about real estate. I can imagine the government putting the squeeze on property holders to boost their coffers.

Property owners are trapped, you can't pick it up and take it with you...

Wow, not a lot of property fans in this thread

Property taxes are almost always STATE or LOCAL. i.e. they actually HELP YOUR COMMUNITY. Roads YOU DRIVE ON. Schools your kids or neighbor kids attend. etc.

State/Local taxes I have never minded. I like my city and state.

National taxes are what you need to concern yourself with.


Also I believe my property tax is something like 3/4 of 1 percent. I think I'll deal with that over the 50% (essentially) national income tax I pay.

Also property is pretty rare if you think about it. There is only a finite amount of it and it's the same as it was 100 years ago. So having a piece of it, albiet with a 1% or less tax per year isn't a bad deal! I just bought a farm (started the process in August!) and I'm happy I did!

The Big Island of Hawai'i gets bigger all the time. The Kilauea Volcano makes more real estate every day. Of course you have to wait for it to cool before you can use it.