7 ms·

I think you've hit the nail on the head when it comes to houses - people form irrational sentimental attachments to their real estate.

Retric 10y ago
It's not necessarily irrational to want to stay in the same home after 40 years. Money is only indirectly beneficial. If you enjoy where you live that can be worth quite a bit.
sdenton4 10y ago
Human irrationality around shelter is a market inefficiency which the banks are happy to take advantage of. They're also happy to write documents that are incomprehensible to the buyer, providing terms in their favor, as they know they are not working with experts, 99 percent of the time. When individuals are put in opposition to large institutions, the individuals are going to lose. No amount of financial education is going to change that. Regulation and good governance are your best bets, though competition sometimes works as well; place another institution in the mix to take the burden off the individuals.
- intrasight 10y ago
  Yes, yes, and yes. I was not trying to shift the blame to the consumer. Information asymmetry is why we need strong consumer financial regulations.
aswanson 10y ago
Buying a home is a massive bet on the local employment market (in your niche) staying fungible over decades. At the rate of creative destruction happening in business these days and the associated deterioration of the employee/employer (implied) social contract since at least the 80s...this just doesn't make sense.
- dvtv75 10y ago
  > Buying a home is a massive bet on the local employment market (in your niche) staying fungible over decades. I've seen "fungible" used to indicate flexibility, and I've seen it used to indicate growth and decay. Are you using it to indicate either of these, or are you attempting to indicate a long-term steady state? When trying to communicate an idea, you may wish to use a word that has a fixed meaning and a reasonable chance of being understood, because to be brutally honest, I haven't any idea what you're actually intending.
deleted 10y ago
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Retric 10y ago

It's not necessarily irrational to want to stay in the same home after 40 years. Money is only indirectly beneficial. If you enjoy where you live that can be worth quite a bit.

sdenton4 10y ago

Human irrationality around shelter is a market inefficiency which the banks are happy to take advantage of. They're also happy to write documents that are incomprehensible to the buyer, providing terms in their favor, as they know they are not working with experts, 99 percent of the time. When individuals are put in opposition to large institutions, the individuals are going to lose. No amount of financial education is going to change that. Regulation and good governance are your best bets, though competition sometimes works as well; place another institution in the mix to take the burden off the individuals.

intrasight 10y ago
Yes, yes, and yes. I was not trying to shift the blame to the consumer. Information asymmetry is why we need strong consumer financial regulations.

aswanson 10y ago

Buying a home is a massive bet on the local employment market (in your niche) staying fungible over decades. At the rate of creative destruction happening in business these days and the associated deterioration of the employee/employer (implied) social contract since at least the 80s...this just doesn't make sense.

dvtv75 10y ago
> Buying a home is a massive bet on the local employment market (in your niche) staying fungible over decades. I've seen "fungible" used to indicate flexibility, and I've seen it used to indicate growth and decay. Are you using it to indicate either of these, or are you attempting to indicate a long-term steady state? When trying to communicate an idea, you may wish to use a word that has a fixed meaning and a reasonable chance of being understood, because to be brutally honest, I haven't any idea what you're actually intending.

deleted 10y ago

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