For just the second time, I sold a home last month.
It’s a good time to be on this side of the transaction, but I do have misgivings. I’ve always wondered if tax, regulatory and legal compliance professionals, as well as some investors, feel the same since they depend on government activism and largesse to make a living.
I don’t begrudge them for doing what they have to do to support their families. Since the turn of the century, I’ve been working in an energy industry whose booms arguably depend on the same poor policy that I just capitalized on with my house: weak money.
We have navigated the ups and downs of presidents and Federal Reserve officials who think they can tamper with this most basic of measurements.
All money does is relieve us of the burden of having to barter for goods and services. Printing more dollars does not spur growth any more than printing less will lead to ruinous deflation.
Seriously, how many price drops are Americans really likely to wait out before going shopping?
Incidentally, it’s that tendency that enriched other countries, and subsequently catalyzed a fear that the producers of those goods might (GASP!) make their home countries as prosperous as us.
That unfounded dread culminated in a recent presidential administration, enabled by enough party supporters with flexible principles, that sought to get even with not only our supposed trade adversaries, but also our allies.
And if there’s one textbook policy prescription that can be deployed in an effort to tip the scales of international trade, it’s a weak(er) currency.
Now that administration has given way to a squad, if you will, that has grandiose social spending plans, partially based on the ludicrously reimagined notion of “infrastructure.”
Progressives (an oxymoron if ever there was one) want to floor the accelerator by nominating an even more dovish Fed Chair, to ensure that financing these schemes is not obstructed.
House prices could yet have further to rise.
To be sure, housing, like the energy sector, is susceptible to basic market fundamentals. Texans know this as well as anyone.
As the latest Census, and subsequent gain of two seats in Congress has confirmed, we have seen a mass influx of Americans from other states over the last decade. Those folks need a place to stay.
This increased demand will push up prices. So will a continually abused dollar.
First off, when the greenback loses value, it simply takes more of them to buy stuff. Plus, when governments brazenly forbid their subjects from going anywhere and congregating, as they notoriously did last year, homeowners spruce-up the setting of their house-arrest.
Then there’s Investing 101.
When (potential) investors are looking for somewhere to put their (or their clients’) savings to work, they look for a degree of certainty regarding returns. Which project, or idea is most likely to bear fruit?
Even when they find a worthy venture, the risk that their reward could be in a currency with diminished value is enough to push some into the arms of assets that already exist.
Gold, fine art, and housing fit the bill. We’re seeing that now from investors, possibly foreign as well as domestic. The ill effects of all this filter down to the local level.
City and county government barely have to lift a finger to see an increase in property tax revenue. While some officials patronize taxpayers with a rate cut an ant would have difficulty seeing, others seem downright in cahoots with the feds by offering no cut at all.
Meanwhile, homeowners are pushed to the brink of having to sell to affluent buyers who are more able to handle the tax bill.
I’ll take the gain on the sale and make the most of it. My oldest just started her freshman year at UT-Austin, and she has three younger sisters who likely have college in front of them as well.
Ironically enough, the first house I sold was used to fund the 529 intended to help them.
I was able to do that because their mother and I decided not to sell it at the nadir of the last fallout of dimwitted government manipulation; the housing/mortgage crisis of 2008. (We rented it.)
While I’m happy to leverage one instance of government ineptitude to ease the blow of another, I can’t be the only fairly levelheaded person who would prefer that the state simply stop trying to “help” us.
