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I think you have a false choice in there somewhere. Yes we want housing to grow more than 2%. No we don’t need housing to grow by 500%.
by beamatronic 7y ago
I think you have a false choice in there somewhere. Yes we want housing to grow more than 2%. No we don’t need housing to grow by 500%.
- aidenn0 7y agoThat's not a false choice. If you grow faster than inflation than it's only a matter of time before your grow by 500% in total. If you e.g. grow by 4% annually then you will have quadrupled in 36 years.
- mattmaroon 7y agoIf housing grows by more than wages, it gets progressively more unaffordable. There is no number at which it is both a good investment and remains affordable because those two things are, by definition, opposite. Even in the best growing markets, like San Francisco, housing is still not a very good investment. It's only gone up about 8% per year over the last decade. That significantly underperformed the s&p 500. The real reason people want to use it as an investment is that you can get it at a very low interest loan, whereas you cannot with the s&p. this has the unfortunate effect of making well-off people more well-off, at the expense of making poor people poorer.