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To the extent that the valuation is inaccurate, it's not based on the housing income created and sustained by demand. It's a based on a projection of the growth
by aminok 11y ago
To the extent that the valuation is inaccurate, it's not based on the housing income created and sustained by demand. It's a based on a projection of the growth in that housing income. I believe you're mis-blaming real demand for rental units the for the mistakes being made by real estate investors in projecting growth in housing income.
- IkmoIkmo 11y agoNo. Someone suggested that, to pop a bubble, you must 'short' by renting. I explained that no, that's technically not shorting, and no, if shorting the market is not an opportunity to you, then renting will indeed contribute to sustaining a bubble more relative to getting out of exercising demand on the market completely (i.e., not buying or renting but relocating). Both of those statements of mine are completely correct, and none of them imply that renting in and of itself creates a bubble, which are the words you seem to be putting in my mouth.
- deleted 11y ago[deleted]
- aminok 11y ago>then renting will indeed contribute to sustaining a bubble more relative to getting out of exercising demand on the market completely True. In relative terms, and in this context, you could say it 'contributes' to the bubble. I still maintain that the concept of normal (organic, non-speculative) demand contributing to a bubble is generally wrong. I don't think it's accurate to say that any and all sources of support for the price are contributing to the bubble. This conceptual framework will mislead people about the cause of a bubble. But in the context you're using it, it could be considered accurate. PS. you don't need to get hostile. I was explaining how I interpreted your statement, not 'putting words in your mouth'.