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Wage growth can never make housing more affordable. This is such a common misconception. You can't "pay workers" your way out of a housing crisis. Give everyone

Wage growth can never make housing more affordable. This is such a common misconception. You can't "pay workers" your way out of a housing crisis. Give everyone $10k more a year and houses prices simply jump to accommodate it. You have to build new housing. It is literally the only fix (other than population decline).

astrange 3y ago
I was talking about building housing in that post. That's how we'd keep the housing prices flat (in nominal terms), by building it.
PaulDavisThe1st 3y ago
Ah, the myth of the sentient house price. Look at those clever little house prices! Somehow they just know that workers all got an extra $10k/yr. You can't fool them! Look, prices don't control themselves. They go up because buyers choose to spend more and because sellers choose to demand more. It's not automatic, and its not inevitable, but changing it requires a values shift.
- Workaccount2 3y ago
  I have no idea how to interpret this comment. In the first part you are mocking "sentient" house prices, but then in the second part you explain how house prices are "sentient". Surely you put together that making more money results in a "values shift", correct?
  - PaulDavisThe1st 3y ago
    House prices are not sentient. Humans are sentient, and given a value (+) system that prioritizes individual return on investment via maximising sale price, yes, more income on the part of buyers will cause buyers to be willing to pay more, and sellers to require more. But these are human decisions, and there are other outcomes possible. (+) moral, philosophical, personal values, not financial values
    - Workaccount2 3y ago
      Ok?
- glimshe 3y ago
  Parent is correct generally speaking. It's not that the prices are sentient, it's that sellers (of anything) are always charging as much as they can for their house and not a dollar less. If everybody suddenly has an extra 10K, the seller will notice that through an increase in bids for their house at price X, and a single surviving bid at price X+10K (the person who would have bought the house at X before everybody got the 10K). The option for the person who has X+10K would be to lose the bid, but they know they would face stiff competition at X for their next purchase attempt, thus they will eventually accept the higher price given that they have the money. Of course, this is an oversimplification. But looking at the market as a whole, the more money people have to spend, the more you can charge for the house.
- tbrownaw 3y ago
  The price will be whatever it needs to be for the market to clear. Want lower (real) prices? Either convince people to move elsewhere, or build more housing.

astrange 3y ago

I was talking about building housing in that post. That's how we'd keep the housing prices flat (in nominal terms), by building it.

PaulDavisThe1st 3y ago

Ah, the myth of the sentient house price. Look at those clever little house prices! Somehow they just know that workers all got an extra $10k/yr. You can't fool them! Look, prices don't control themselves. They go up because buyers choose to spend more and because sellers choose to demand more. It's not automatic, and its not inevitable, but changing it requires a values shift.

Workaccount2 3y ago
I have no idea how to interpret this comment. In the first part you are mocking "sentient" house prices, but then in the second part you explain how house prices are "sentient". Surely you put together that making more money results in a "values shift", correct?
- PaulDavisThe1st 3y ago
  House prices are not sentient. Humans are sentient, and given a value (+) system that prioritizes individual return on investment via maximising sale price, yes, more income on the part of buyers will cause buyers to be willing to pay more, and sellers to require more. But these are human decisions, and there are other outcomes possible. (+) moral, philosophical, personal values, not financial values
  - Workaccount2 3y ago
    Ok?
glimshe 3y ago
Parent is correct generally speaking. It's not that the prices are sentient, it's that sellers (of anything) are always charging as much as they can for their house and not a dollar less. If everybody suddenly has an extra 10K, the seller will notice that through an increase in bids for their house at price X, and a single surviving bid at price X+10K (the person who would have bought the house at X before everybody got the 10K). The option for the person who has X+10K would be to lose the bid, but they know they would face stiff competition at X for their next purchase attempt, thus they will eventually accept the higher price given that they have the money. Of course, this is an oversimplification. But looking at the market as a whole, the more money people have to spend, the more you can charge for the house.
tbrownaw 3y ago
The price will be whatever it needs to be for the market to clear. Want lower (real) prices? Either convince people to move elsewhere, or build more housing.