I only give away the land, not the property on it. I assume in the real world we'd get some financial engineering to holding companies and peppercorn rents and so on - but as with every other tax there is a simply an inflection point where receipts drop to zero (if you tax income at 100%, people will simply stop working).
If you give away the land to someone else, but still own the building on it, the person you gave the land to would have to pay land value tax and they would pass that onto you in rent.
The hardware store probably has a delivery service, because not everyone has a van or a pickup for those 2x4s. But if you DIY big stuff often enough for that to be a factor to consider, you're probably not the target group anyway. Just like people who need to drive 800 miles without a stop every other week aren't the target group for current EVs.
Is this a hypothetical future hardware store delivery service that enables a bus? No hardware store I have seen has a delivery service. I do a fair amount of gardening, and while most garden stores (not hardware stores, dedicated stores for landscaping and gardening) have the capability to deliver, it is always a very expensive service ($50-100 for a trip of less than 5 miles).
Most cars can fit a few 8' 2x4s as well as several bags of bulk dirt, and what hardware stores often have is a cutting service that lets you make those 2x4s shorter for transit. None of those would fit on a bus.
Home Depot and Lowes (the two largest chains in the US) both have delivery. Home Depot also has rental trucks, as does UHaul (trucks and vans) if you need to self-drive the product and decided to not own a car.
The local lumber/building supply companies also usually have delivery, though they can be harder to deal with than a consumer-oriented hardware store.
> it is always a very expensive service ($50-100 for a trip of less than 5 miles)
A.k.a the cost of not owning a car. Where I live, I could pay 100€ weekly for deliveries and it'll still be cheaper than owning and operating a decent (as in, not a 20th century rust bucket) car would be.
100%! The immediately after graduation sample is particularly useless; it's not surprising that entry level jobs do not pay well. But the bulk of the ladder climbing that is made available to people with college degrees and not to those without happens after more than ten years. (I think this disparity is bad and ludicrous, but I also think that it's real.)
I moved to a countryside 2 years ago, escaping from city noise. Now, I’m going back (although to the outer, more quiet side of the city) because I’m going mad - lawnmowers, dogs, tractors, diesel generators, dogs, dogs, lawnmowers, dogs, …
You need to get replacement air to the cavern when you pump the water up, and let the air to make room for the water when it's going down. So you need a separate shaft for airflow anyway. I assume the rest is just economics, it's probably a lot cheaper to have all the moving parts easily accessible on the surface.
Edit: Also the fact, that if the pump was at the very bottom and it failed, you'd need to have an alternative way to clear the cavern of water in order to go down and fix the pump.
Edit: Also the fact, that if the pump was at the very bottom and it failed, you'd need to have an alternative way to clear the cavern of water in order to go down and fix the pump.
Put the pump on a chain and hoist it up with a crane, like they do with pumps in lift stations.
The problem with falling prices is that it stalls the market. If you think you could wait an year to get the same house 10% (+ inflation) cheaper, why would you buy now?
Because you want to move in this year. Predicting another 2007 is a fool's game. Thanks to our system of mortgages that are implicitly backed by the government, house prices usually only go up. At worse the price just plateaus for a while. https://fred.stlouisfed.org/series/MSPUS
> house prices usually only go up. At worse the price just plateaus
From the article:
> Home prices have dropped 18% from the pandemic highs seen in May 2022, the most among the 50 largest US metro areas
If I lived in Austin, I would wait another year before buying a house even if I wanted to buy one soon. To the parent's point - it might get even cheaper.
Watching the "value" of your home drop 18% is emotionally hard for people, even people who don't intend to sell. It's risky if you just bought the house because it could put your loan underwater.
My home value has dropped 10% since I purchased it, but I sleep slightly better b/c even if I bought my home at the current market price, I would have a higher mortgage payment than what I do now.
Obviously, this isn't ideal and buying a home today at 7% interest rates (with no plans to increase rates further) would be a tough to pill to swallow if your value will drop further.
Is that "value" real though if nobody will actually pay for it at that "value"? The only thing that is real about that "value" is the property taxes assessed. Also, if you're not actively trying to sell the house, the "value" is meaningless. Unless you're trying to get some sort of loan against the equity, it's just a number on a paper like most of modern finance
If you took out a loan on a meaningless value where the value is later "corrected" to a more sane "value" that forces one to be underwater is not anyone else's fault but the person taking out the mortgage at the higher "value".
Just because someone doesn't have a mortgage doesn't mean they magically have free money. More than likely, they paying rent. Unless you're a zillenial that's moved back in with the parental units, but that's a tangential conversation.
> Just because someone doesn't have a mortgage doesn't mean they magically have free money.
I'm talking about people who have paid off their mortgage. They can re-mortgage their house, which would make a large sum available to them right then and there. I've even heard of people doing this when a house gains value: "extend" the mortgage, which gets you the gain of the house value in spendable cash ...
(and I definitely agree that's a horrible, terrible, no-good, even potentially financial-system-destroying idea, but people will, 100% certainly, do this)
> If you have a mortgage, it is so meaningless it can bankrupt you.
Not sure what this means?
Once you have the mortgage, if you can keep paying it you're fine. Whether the house value on paper is higher or lower doesn't make any difference.
My house has twice gone down in paper value below what the mortgage balance was at the time. As long as I want to keep living there, that doesn't mean anything.
People who need to move to places and will want to buy a house regardless, not merely wait until the price drops further. Being priced out by your logic also "stalls the market" but no one ever complains about that at least from that sort of argument.
What exactly is "stalling the market" and why is it a bad thing? The point of housing is to give people access to shelter in a reasonable location near to their family and work.
1. Some people who aren't time sensitive but intend to buy may wait to see if prices drop more.
2. Home builders obviously care about the price of houses they may build and sell. If the estimated prices of their future construction drop a lot from previous plans, they may abandon plans to build additional homes. Like all businesses, they buy in bulk, they deal with debt markets, they have multi-year forecasting, etc, and dramatic changes in the market may cause them to reevaluate profitability of future construction.
Point 1 may cause further drop in prices, and point 2 may restrict supply from growing.
If people are scared to buy because the price might drop even more, that means prices are still too high as a percentage of net worth. 60-80 years ago, nobody thought like this. You bought a place and didn't think twice about it. You wouldn't pay attention to the real estate market because there wasn't any point, housing wasn't 15-20x your annual after-tax income where one small mistake and 5 years of your life is down the drain. This obsession with price is a byproduct of high prices.
We need to rip this bandaid off and get it over with. There will be a temporary economic dip due to the wealth effect, but that painful transition only has to happen once.
Like stalling a plane: the useful momentum is lost. I.e. no one wants to buy (they wait for lower prices) or sell (facing uncertainity at how long it's going to take, and what price they'll get). Only people desperate to move will buy or sell anything.
It's bad because it directly eats into the purpose of housing you stated.
Do you know how happy gen z and lower income people would be if they had the option of doing what you're talking about? Having the ability to buy a house but choosing not to because the market might go down? You are either rich or a homeowner because clearly you don't know the circumstances of being priced out of the market. Tell a low income person "it's worse for your housing affordability if house prices go down" and they will laugh in your face, and deservedly so.
Because people are throwing a lot money into the rent black hole and even a little equity is an improvement over that and mortgage interest tax deduction can be huge
You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million ($500,000 if married filing separately)) apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017.”
This was my first year paying taxes with a full year's worth of paying a mortgage (which means it's also the year with the most mortgage interest paid). The mortgage deduction didn't matter, the standard deduction was still higher.
It used to matter more, before the Trump tax plan significantly increased the standard deduction. The mortgage deduction is bad tax policy but it's hard to get rid of.
Yes, and that only strenghtens the effect: if prices are dropping and they try to sell sooner, there’s more supply, prices drop even more. In a market with increasing prices, if they wait to benefit from increasing prices, supply decreases, and prices rise even more.
For someone who is physically functional, opting out is a "natural right" in the sense that it can't be removed: they can always find a way. Removing nicer options just means they'll go for messier ones, potentially causing more damage to the society, and to the individuals who have to witness the event or it's results.
