Home Values

Orange_Beer Thoughts_2012-08-17

2013-05-29 – I saw a story yesterday about how home values are now up.

First they were up. Then they were down. Now they are up again. In all that time I didn’t move. It didn’t make any difference to me. I neither bought nor sold. The value of my house was to provide me and my wife a place to live and raise our boys.

During all this, we were never underwater. But what if we were? We had constant payments. I know they don’t call it rent, but it is rent. What I get for my mortgage payments is a place to live. I know that a high market value gives me some sort of flexibility and that I can play some sorts of arbitrage games with refinancing and all that. But to a large degree, the market value of my home is a fictitious number, as long as I am not selling it.

We live in a world of fiction. And in this world of fiction, the traders rule. Those of us who buy things and use them have no say.

We are boring. They don’t make reality shows about reality.

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