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This is a symptom of the problem of middle class single family home residential real estate being treated as an unreasonably-price-increasing bubble inflated in

This is a symptom of the problem of middle class single family home residential real estate being treated as an unreasonably-price-increasing bubble inflated investment and not a place for people to live in. The irrational exuberance in price increases in this segment of the market over the past 4-5 years is not sustainable. It is not logical, sane or normal for houses that were valued at $150k five years ago to now be valued at $400k in some suburbs and metro areas.

s1artibartfast 4y ago
It's logical or sane if you think capital investment options in New areas is going to dry up and existing assets are the best opportunity for preserving or growing your money. How much would you spend on the house if you're only alternative is to watch your capital disappear
- Dylan16807 4y ago
  > How much would you spend on the house if you're only alternative is to watch your capital disappear If I'm worried about 10% or 20% disappearing to inflation, I'm certainly not paying 2x on an investment to prevent that.
  - s1artibartfast 4y ago
    What if it is 10% per year until it is all gone?
    - Dylan16807 4y ago
      How many people think inflation is going to go to 10% and stay there for a decade or longer? Are they enough to drive up real estate this much?
      - s1artibartfast 4y ago
        Maybe not 10%, but I don't think we will see deflation anytime soon so cash will always lose value. Sometimes faster sometimes slower. Capital needs somewhere to go as long as money keeps being printed. If there is more capital than profitable investment opportunities, it will flow into housing. As a thought experiment to illustrate the point, imagine a world where there are no investment opportunities and the only place to store value is cash or housing. In this case, housing prices will continue to climb because money keeps being accumulated and there is no place to put it. Of course this is a hyperbolic example, but I think our world is moving closer towards it as truly valuable Investments dry up. Certainly in the short term, and possibly in the longer term as well

s1artibartfast 4y ago

It's logical or sane if you think capital investment options in New areas is going to dry up and existing assets are the best opportunity for preserving or growing your money. How much would you spend on the house if you're only alternative is to watch your capital disappear

Dylan16807 4y ago
> How much would you spend on the house if you're only alternative is to watch your capital disappear If I'm worried about 10% or 20% disappearing to inflation, I'm certainly not paying 2x on an investment to prevent that.
- s1artibartfast 4y ago
  What if it is 10% per year until it is all gone?
  - Dylan16807 4y ago
    How many people think inflation is going to go to 10% and stay there for a decade or longer? Are they enough to drive up real estate this much?
    - s1artibartfast 4y ago
      Maybe not 10%, but I don't think we will see deflation anytime soon so cash will always lose value. Sometimes faster sometimes slower. Capital needs somewhere to go as long as money keeps being printed. If there is more capital than profitable investment opportunities, it will flow into housing. As a thought experiment to illustrate the point, imagine a world where there are no investment opportunities and the only place to store value is cash or housing. In this case, housing prices will continue to climb because money keeps being accumulated and there is no place to put it. Of course this is a hyperbolic example, but I think our world is moving closer towards it as truly valuable Investments dry up. Certainly in the short term, and possibly in the longer term as well