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I disagree that it's credit that's inflated prices. I think this might be true for certain segments like for-profit colleges. Supply and demand still works. Ho

I disagree that it's credit that's inflated prices. I think this might be true for certain segments like for-profit colleges. Supply and demand still works. Housing is still relatively cheap in the US, where population density is so low that the amount of land available to buy and build on is stupendously large compared to denser nations like the UK. Sure, certain markets have inflated prices, but that's just normal supply and demand at work. If you want to buy property to live on, you can move out to the sticks and do that for pretty darned cheap.

mindslight 11y ago
The level of that "demand" is essentially driven by the availability of money - people have an unwavering need to live around concentrations of economic activity, because that is where income is made. People budget for the real estate they can afford in terms of monthly payments. If you doubled interest rates, prices would essentially halve for any land not in "the sticks". Surely you'd agree that if we doubled the money supply by converting USD to USD' at a rate of 1:2, prices would double. So why not expect similar behavior from an individual sector, especially since it has both a direct connection to money generation and is also recursively self-appraising?