3 ms·

I'm in a mountain ski town, same dynamic. If you want housing prices to come down for real you are gonna have to pop The Everything Bubble. Moderately not ins

I'm in a mountain ski town, same dynamic. If you want housing prices to come down for real you are gonna have to pop The Everything Bubble. Moderately not insane interest rates haven't done that yet. Maybe this time it's different.

Manuel_D 3y ago
Interest rates aren't the issue. Many of these are all cash buyers as per the article. The issue is supply and demand. Building lots more housing in ski towns is what will bring prices down.
- dog_boxer72 3y ago
  The issue is wealth inequality - DINK households with 2 six figure incomes massively dwarf what’s possible for a regular American family (one breadwinner, 2.4 kids) - they’re the top 5% which isn’t Elon Musk territory, but as a group it’s distorting housing way more than a tiny amount of billionaires would Fwiw I don’t think there’s anything inherently “wrong” with it, the market is a brutal mistress
  - Manuel_D 3y ago
    And ultimately, the only way to let the regular American family buy a house is to build more houses. A desirable location, low density, and low cost. You get to pick two.
- recursivedoubts 3y ago
  That cash came from somewhere, and that somewhere is inflated asset values, and those asset values are from comically low interest rates for a decade.
  - Manuel_D 3y ago
    No, real value goes up. There isn't a fixed pie of value that never changes. The houses are expensive, because a lot of people want them and there aren't enough to satisfy demand.
    - recursivedoubts 3y ago
      When everything is expensive that isn't value going up, that's the value of money going down. That's not to say that there aren't shifts in preferences that cause relative valuation changes as well, obviously covid/remote work changed the situation wrt housing to an extent. But that shift is also superimposed on top of The Everything Bubble caused by a decade+ of negative real rates, which has dramatically inflated asssets relative to incomes, concentrating wealth and allowing second-home buyers, investors, etc to buy up these smaller towns. Let's watch and see if the market ever comes down and, if it does, if mountain town housing prices also come down. That will confirm or disprove my theory.
      - Manuel_D 3y ago
        Even without inflation, the real value of assets increases. Economies are not zero sum. The mountain town prices aren't going to come down until more houses are built (or other scenarios, like climate change reducing snowfall and closing the ski resort).
        recursivedoubts 3y ago
        I don't know why you keep focusing on zero-sum here. My claim is that a large component of mountain-town value increases is driven by second home, investor and semi-retirement of wealthy people driven by cheap credit and, now, by the asset gains of that cheap credit. There has been an inflationary expansion, the early receivers of that inflation (myself included) then can put that money into mountain towns. That doesn't mean that there aren't other factors, just that I believe it to be the major one. There are others, such as people fleeing chaos in the large western cities, remote work, etc. And, as you say, we can expect some increase in the land value of these places over time as well. If the market ever crashes and mountain west towns stay relatively expensive, I will be shown to be wrong. We'll see.
        Manuel_D 3y ago
        > My claim is that a large component of mountain-town value increases is driven by second home, investor and semi-retirement of wealthy people driven by cheap credit and, now, by the asset gains of that cheap credit. Then why is it still a problem when mortgage rates are so high? This is also explicitly contradicted by the article: many of the offers are all cash. Credit is not a factor there.
qazxcvbnmlp 3y ago
I’m also in a mountain ski town (same one as you after some profile snooping). Housing prices aren’t going to come down for a while, it’s gone from a happy little remote town to a nice-place-to-be.

Manuel_D 3y ago

Interest rates aren't the issue. Many of these are all cash buyers as per the article. The issue is supply and demand. Building lots more housing in ski towns is what will bring prices down.

dog_boxer72 3y ago
The issue is wealth inequality - DINK households with 2 six figure incomes massively dwarf what’s possible for a regular American family (one breadwinner, 2.4 kids) - they’re the top 5% which isn’t Elon Musk territory, but as a group it’s distorting housing way more than a tiny amount of billionaires would Fwiw I don’t think there’s anything inherently “wrong” with it, the market is a brutal mistress
- Manuel_D 3y ago
  And ultimately, the only way to let the regular American family buy a house is to build more houses. A desirable location, low density, and low cost. You get to pick two.
recursivedoubts 3y ago
That cash came from somewhere, and that somewhere is inflated asset values, and those asset values are from comically low interest rates for a decade.
- Manuel_D 3y ago
  No, real value goes up. There isn't a fixed pie of value that never changes. The houses are expensive, because a lot of people want them and there aren't enough to satisfy demand.
  - recursivedoubts 3y ago
    When everything is expensive that isn't value going up, that's the value of money going down. That's not to say that there aren't shifts in preferences that cause relative valuation changes as well, obviously covid/remote work changed the situation wrt housing to an extent. But that shift is also superimposed on top of The Everything Bubble caused by a decade+ of negative real rates, which has dramatically inflated asssets relative to incomes, concentrating wealth and allowing second-home buyers, investors, etc to buy up these smaller towns. Let's watch and see if the market ever comes down and, if it does, if mountain town housing prices also come down. That will confirm or disprove my theory.
    - Manuel_D 3y ago
      Even without inflation, the real value of assets increases. Economies are not zero sum. The mountain town prices aren't going to come down until more houses are built (or other scenarios, like climate change reducing snowfall and closing the ski resort).
      - recursivedoubts 3y ago
        I don't know why you keep focusing on zero-sum here. My claim is that a large component of mountain-town value increases is driven by second home, investor and semi-retirement of wealthy people driven by cheap credit and, now, by the asset gains of that cheap credit. There has been an inflationary expansion, the early receivers of that inflation (myself included) then can put that money into mountain towns. That doesn't mean that there aren't other factors, just that I believe it to be the major one. There are others, such as people fleeing chaos in the large western cities, remote work, etc. And, as you say, we can expect some increase in the land value of these places over time as well. If the market ever crashes and mountain west towns stay relatively expensive, I will be shown to be wrong. We'll see.
        Manuel_D 3y ago
        > My claim is that a large component of mountain-town value increases is driven by second home, investor and semi-retirement of wealthy people driven by cheap credit and, now, by the asset gains of that cheap credit. Then why is it still a problem when mortgage rates are so high? This is also explicitly contradicted by the article: many of the offers are all cash. Credit is not a factor there.

qazxcvbnmlp 3y ago

I’m also in a mountain ski town (same one as you after some profile snooping). Housing prices aren’t going to come down for a while, it’s gone from a happy little remote town to a nice-place-to-be.