If houses depreciated like cars,wouldnt that solve most economic issues?

[Still Benefited]

This is the best reason google had as to why they dont depreciate


"A house is far more durable than a car and does not out of date every few years for 10% of its purchase price you can renovate a house and get 25–30 years value from those renovations."



If a bunch of homes were built in the 1980s and their original values were 80K. With depreciation, the value should be around 50K-60K now. The value of those homes shouldnt all be 120K. If you rennovate it,at best it should come back to its original value,maybe slightly higher. But this is why economics is a scam

 

[feelosofer]

Houses are the source of most people's wealth so them depreciating would cause bigger problems such as millions of mortgages being beyond worthless.

The bigger issue is that wages have been stagnant for the better part of 20 years.

 

[the cac mamba]

fail to understand supply & demand, brehs

 

[Still Benefited]

Houses are the source of most people's wealth so them depreciating would cause bigger problems such as millions of mortgages being beyond worthless.

The bigger issue is that wages have been stagnant for the better part of 20 years.

It wouldnt be a problem at all. The value doesnt have to go to zero. People would be paying off their homes faster and building up savings. Yes they would take a 20-30k loss on the home. But they can sell the house for 60K, and combine that with their savings. This would allow them to either go by a more up to date upgrade built in 2000. This home originally valued at 110K now has a value of 80K due to its depreciation. Or maybe they want to buy a home to rent out.



Do wages really need to increase if houses are depreciating?

 

[feelosofer]

It wouldnt be a problem at all. The value doesnt have to go to zero. People would be paying off their homes faster and building up savings. Yes they would take a 20-30k loss on the home. But they can sell the house for 60K, and combine that with their savings. This would allow them to either go by a more up to date upgrade built in 2000. This home originally valued at 110K now has a value of 80K due to its depreciation. Or maybe they want to buy a home to rent out.



Do wages really need to increase if houses are depreciating?

Maybe but there is a shortage of housing so even crappy homes are going to have inflated values. Hell car values have gone up the past couple of years because they are at a premium.

 

[Still Benefited]

fail to understand supply & demand, brehs

Its only a supply and demand issue based on the setup. The government has created a monopoly. Its a high barrier to entry where there shouldnt be.

 

[ItsPeople]

In some parts of the world houses aren’t seen as investments but merely places to live. Treating housing as a commodity is unethical.

 

[analog]

Its only a supply and demand issue based on the setup. The government has created a monopoly. Its a high barrier to entry where there shouldnt be.

Pretty much a policy/political issue. No one wants the value of their home to go down, and vote accordingly.

You look at a city like Tokyo that houses a population similar to that of Canada as a whole, but yet has cheaper real estate than Toronto which is by comparison.

 

[Uitomy]

No because most people don’t buy houses for shelter these days, they value money over everything in their lives, they’re in it for profit by any means

 

[Still Benefited]

Maybe but there is a shortage of housing so even crappy homes are going to have inflated values. Hell car values have gone up the past couple of years because they are at a premium.

Maybe there is a shortage because housing prices dont naturally depreciate like they should. So you have people who care about their home values, dictating zoning rules and forbidding apartment buildings. If homes depreciated like they should you wouldnt have these issues. We know these car prices wont just keep going up and up like houses. Not to mention you have cheap options with a car. Rather it be old and beat up or has alot of miles on it

 

[wongzini]

Houses do depreciate.
The land doesn’t.

According to the IRS.

 

[WetinBeDat]

You'd be better off capping the appreciation rate

 

[Kyle C. Barker]

Its only a supply and demand issue based on the setup. The government has created a monopoly. Its a high barrier to entry where there shouldnt be.

Actual houses do depreciate and that's evident by The fact that you have to maintain them as well.

Land on the other hand appreciates because the supply is limited.

 

[TM101]

Houses depreciating in value would LITERALLY crash the economy like it did in 2008...

 

[the cac mamba]

In some parts of the world houses aren’t seen as investments but merely places to live. Treating housing as a commodity is unethical.

we have that here in america, with public housing. doesnt seem to work too well