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A sustainable and socially beneficial housing market has pretty flat prices, not meaningfully rising ones. Buyers put assets into a house not for an arbitrary g

A sustainable and socially beneficial housing market has pretty flat prices, not meaningfully rising ones. Buyers put assets into a house not for an arbitrary gain on its resale value, but (1) so that they no longer need to pursue ongoing income for your own housing, or (2) so that they can sell flexible housing opportunities to renters. Both of these are sound, profitable investments grounded in developing actual value for people. This is essentially the natural state of housing when supply and demand are approximately in equilibrium (ignoring physical decay and subsequent depreciation). Even in the current housing crisis, many communities outside of major metros still looks this way. Housing as an abstract investment that perpetually and magically gains resale value with no material change in what its underlying real property is a modern fiction and is essentially just the result of a prolonged speculative bubble becoming culturally normalized. So yes, housing is a large investment for people, and very often their largest, but in a functioning and sustainable market, that investment is not valued by gross appreciation in resale value (the topic of discussion) but in ongoing dividends and value delivery. The GP is right to be skeptical.

astrange 2y ago
> Housing as an abstract investment that perpetually and magically gains resale value with no material change in what its underlying real property is a modern fiction and is essentially just the result of a prolonged speculative bubble becoming culturally normalized. The underlying value increase is mostly from land value, not the actual house itself, which should depreciate. Increasing land value should be a good thing because it means the surrounding area is improving or becoming more productive. But if it's uncaptured (especially by restricting construction in the neighborhood) it causes value increases which only benefits the current homeowners, and then only if they're lucky.
lazide 2y ago
There is a lot of ‘shoulds’ here, and blanket assumptions that don’t line up with observed reality. I know of numerous people that bought precisely because of expected gains. I’ve also personally observed these ‘prolonged speculative bubbles’ occur 4 different times in the United States alone in the last 30 years, and know the same has occurred in China, several well populated area of Canada, India, Singapore, and Japan as well. If it’s so common, what is your point exactly? Because you seem to be denying a very large and very obvious part of the actual market reality. It doesn’t always go up and to the right of course, and I’ve seen numerous folks be ruined too.

astrange 2y ago

> Housing as an abstract investment that perpetually and magically gains resale value with no material change in what its underlying real property is a modern fiction and is essentially just the result of a prolonged speculative bubble becoming culturally normalized. The underlying value increase is mostly from land value, not the actual house itself, which should depreciate. Increasing land value should be a good thing because it means the surrounding area is improving or becoming more productive. But if it's uncaptured (especially by restricting construction in the neighborhood) it causes value increases which only benefits the current homeowners, and then only if they're lucky.

lazide 2y ago

There is a lot of ‘shoulds’ here, and blanket assumptions that don’t line up with observed reality. I know of numerous people that bought precisely because of expected gains. I’ve also personally observed these ‘prolonged speculative bubbles’ occur 4 different times in the United States alone in the last 30 years, and know the same has occurred in China, several well populated area of Canada, India, Singapore, and Japan as well. If it’s so common, what is your point exactly? Because you seem to be denying a very large and very obvious part of the actual market reality. It doesn’t always go up and to the right of course, and I’ve seen numerous folks be ruined too.