Yup, my wife and I are refinancing even though we're taking a massive hit on equity. We're not gonna ever be able to pay this house off, so might as well pay less per month towards an endless goal.

OK, so if all house values have crashed at the same rate (generally what happens in cases like this), the equity that they lost doesn't make much of a difference because they can buy a new, larger home with the difference still based on your new sell value.

Of course, this can mean being "underwater" but that literally does not matter in the big picture (besides of course the mental burden of having to give more than needed to corrupt banks), provided that you are still able to afford the mortgage. 2008 included massive job loss which means people would have had to walk away from their mortgages even if their houses appreciated as people without jobs could not buy the houses.

If you bought a mortgage you can't afford because you wanted a house during a huge bubble, then you already fucked yourself regardless of the market. Or if you lost you job in a bad market (like now), then it is really unfortunate and the billionaires and companies need to be compelled to actually pay their taxes to keep the unemployment payments running.

But that larger home lost even more equity.

Making you able to upgrade while taking on less debt, than if both houses rose 10%.

Then we have property taxes, which tends to be a yearly expense based on what nearby homes are trading for.

which you may not be able to keep paying if the economic downturn cost you your job.

That's a completely different factor, which isn't directly linked to housing costs. Housing can crash, if done properly without the economy being in a bad shape. Supply, demand and force owners to live in the house. Boom, price crash.

The people who gains something from house prices increases, are people that own multiple houses and people looking to downgrade.

People wanting to die in their current home, doesn't lose anything.

People looking to swap to a pricier home, doesn't lose anything.

People looking to enter the market, doesn't lose anything.

Capitalists have always hated competition, especially competitive markets. They'll rig markets to shelter themselves from competition if they can. They'll also take bailouts, subsidies, or any other kind of other people's money if they can get their hands on it.

Oh, yeah must’ve misread the 20k as 20%. Point still stands, buying a house at its peak price then immediately selling it will yield a loss. It’s like buying a new car and then complaining that you had to sell it for used car price.

He came from Phoenix, I don't see how it was any different from where he came from. Also, he's a surgeon, he was probably in a decently walkable area and decent by Texas standards is a 5 minute drive to an upscale strip mall.

You are the problem!

You know what you are, actually? You're like someone with an abusive spouse. "Yes, they beat me bloody from time to time—at the gas pump—but they make me feel good from time to time too. I love them."

Retail and cars are the only half decent investment vehicles that the average person can partake.

Those are both consumption, not investment. Cars are almost invariably a wasting asset. I've owned 15 cars in my life. I made a profit on only one, and that's not counting the labor I put into it. Just about anything you can buy retail also depreciates. Index funds and tax-free bonds at least earn you some money on your money.

You can now sell, downsize, pay off most of your debts… You can put yourself in a great position for the limited incomes of a 60-70yo.

I'm doing that now, though I have some savings and other investments as well. I have two houses and an apartment. We're selling the apartment, and the debt/equity ratio of the two houses now sits at 12%. We'll have the house we're living in paid off in a few months, before I retire, then I'm attacking the second mortgage on the other house (which is currently a high-end rental). After that, the first mortgage. The rental is running a positive cashflow already. There are tax reasons that it makes much better sense to hang onto the rental rather than selling it off.

If it works out according to plan, my disposable income post-retirement will be appreciably higher than it is now while I'm working full-time. So more free time, and more money. It'll go to my travel budget, I don't see increasing discretionary spending on anything else, I don't value material possessions, experiences matter more to me.

Bit of a long story, but the main point is that, with a bit of planning and a small amount of self-discipline, it can be done. I wasn't born into money, I grew up in a poor family. I don't have an absurdly large salary, but I'm good at planning, don't overspend and have never used credit except to buy houses. I married a woman who knows how to handle money. It may sound too easy, but there's not all that much to it. Stick to the priorities and have some contingency plans.

Now the only people who can afford boomer McMansions are boomers who all don't want to buy those but downsize instead.

Downsized housing is in the same type of homes first time home buyers also want, which is almost universally NIMBYed into oblivion, so now these downsized homes are a lot more expensive for what you get and there aren't nearly enough of them.

How boomers figured that them being the largest cohort, all owning giant homes, and all planning on selling them to smaller and smaller generations of people who've been largely locked out of home ownership would work for them is beyond me. Well they made that bed so I guess they get to sleep in it now.

You know it's bad when the Etsy home page has "sell home fast find buyers spell $15" as like the third promoted product from a witch in Minnesota.