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As our economic productivity centralizes around cities, zoning laws protect existing property owner interests, which in turn, restrict supply. Foreign investmen
by JMTQp8lwXL 7y ago
As our economic productivity centralizes around cities, zoning laws protect existing property owner interests, which in turn, restrict supply. Foreign investment certainly plays a role, but I think it misses the forest for the trees.
Also the fact that people can leverage a home purchase 5-to-1. If mortgages weren't a financial instrument, few could afford today's prices. I won't go into detail here, since the chances of mortgages going away is near-zero, but the possibility of zoning changes is somewhat reasonably possible.
- mymythisisthis 7y agoDemographics is the real key issue. A bulge of kids had reached home buying age all at once (the children of the Baby Boomers). We're now on the other side of that curve. Prices are starting to stabilize in all large cities that have seen a bubble. The demographic bubble/bulge was made worse by foreign investors, zoning, speculation, etc., but fundamentally all the kids of the Baby Boomers entered the market at about the same time. Housing Shortage After WWII (aprox. 1945-1955) 30 years latter another housing bubble (aprox. 1980s) 30 years after that another housing bubble (aprox. 2010s) Incidentally Trump is a good reflection of America. His father made a fortune in the post war housing bubble, Trump is the face of the 80s housing bubble, and now he's back again for this housing bubble.