4 ms·
The reason to buy a house would be the same as the reason to buy a car, or any other item: because you want to use it. If housing prices are guaranteed to incr
by davmre 11y ago
The reason to buy a house would be the same as the reason to buy a car, or any other item: because you want to use it.
If housing prices are guaranteed to increase, it means owners of housing are extracting unearned rents from the economy. Houses decay over time and eventually need to be renovated/rebuilt, so you should on average take a net loss from owning and occupying a house, just as you would a car.
- refurb 11y agoThe difference between a car and house is the house can't be replaced, a car can. If someone wants to live in San Francisco, they can't just substitute it by living in Portland. If more people want to live in San Francisco, then the price goes up due to the limited supply.
- theseatoms 11y agoThe land itself cannot be replaced. The physical house that sits on the land can.
- refurb 11y agoTrue, but most of the value is in the land. A derelict house in San Francisco is worth over $1M, but $800K+ is the land.
- theseatoms 11y agoYes, San Francisco is fairly unique in this regard.
- nasalgoat 11y agoNot really, it's the same thing here in Toronto. Developers regularly buy tear-down bungalows on 50' x 120' lots for $1.2M and proceeds to put two tiny houses on the lot that sell for $1M each.
- theseatoms 11y agoThere are a variety of reasons to buy a house. One is to use, or consume, the shelter that it provides. As a human, you'll always be a "natural buyer" of shelter. (Though not necessarily always where you own shelter.) Another reason to own property is to speculate on the valuation of the land or the house itself. These two aspects of home ownership are very often conflated. It's actually shocking how infrequently this distinction is discussed, especially given how common home ownership is.