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Politics : Ask Michael Burke

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To: GuinnessGuy who wrote (117746)	2/15/2009 2:13:56 PM
From: Freedom Fighter	Read Replies (1) of 132070

I'm not sure I entirely agree with his analysis even though it has a lot of merit. A lot of the appreciation of real estate has to do with land values and not the homes and buildings on the land. As incomes rise (both real and inflation), land values tend to rise in sync over time. In addition, depreciation is a real economic cost even if it tends to be applied to quickly according to our tax code. It takes large capital expenditures over time to keep a building or home in good enough shape to attract top dollar in a resale. Plus, after a long enough time, the home eventually is more or less useless and gets knocked and replaced by a new one (another huge cost). I think the major problem with depreciation is that it's too accelerated.

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