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Futhermore, attributing this run up to Covid is revisionist history. The Fed has been goosing the economy for too long. Even my dog knows this. And that has assisted those who are investing in residential homes (because office space has been slipping into the shitter).
This is Moody's and its WS family getting out in front of what's coming. Hear it enough times and we'll believe it.
I used to believe such things and then I did a median income vs price per square foot worldwide comparison and it turns out the United States is one of the cheapest, if not the, cheapest place in the world when it comes to the “affordability” (median income vs price per square foot). I think the issue is that the United States has been too cheap and finally that era of abundance at a low cost is coming to an end.
The money has changed, not the property. I’m now curious how undervalued it really is and what a huge accounting trick it was to play on everyone over the past two years.
Isn't this one of those "If everyone is crazy, you're crazy" situations? If every house is overvalued by some metric, then maybe the metric is wrong. People's perceptions of value are a large part of the actual value(meaning what someone would really pay) for things like housing that should depreciate over time.
Crazy if you believe most of our nation should be essentially indentured servants for basic housing.
Something like that, I think.
It doesn't help that corporations buy all these houses up at full price and well above listing just so they can use it as rental income.
Don't let NIMBYs think that that is the problem. We need more housing.
Isn't this one of those "If everyone is crazy, you're crazy" situations? If every house is overvalued by some metric, then maybe the metric is wrong. People's perceptions of value are a large part of the actual value(meaning what someone would really pay) for things like housing that should depreciate over time.
Earlier quoted context omitted.
Such a simple analysis ignores e.g. the higher wages in the US offset by the lack of social nets
The bigger reason is you can buy a house with 20% down (or less) in the US, where that is nearly impossible just about anywhere else in the world Edit: I should say anyone can buy a house for 20% down or less. In much of the world some can do this, but credit is not extended to nearly as many of the population as it is in the US
Isn't this one of those "If everyone is crazy, you're crazy" situations? If every house is overvalued by some metric, then maybe the metric is wrong. People's perceptions of value are a large part of the actual value(meaning what someone would really pay) for things like housing that should depreciate over time.
No because houses as an asset class could still be overvalued relative to other assets.
It doesn't help that corporations buy all these houses up at full price and well above listing just so they can use it as rental income.
If they are renting the house out, that means it isn’t being removed from the housing supply. Why would this distort the market?
I used to believe such things and then I did a median income vs price per square foot worldwide comparison and it turns out the United States is one of the cheapest, if not the, cheapest place in the world when it comes to the “affordability” (median income vs price per square foot). I think the issue is that the United States has been too cheap and finally that era of abundance at a low cost is coming to an end.
In any case, why not just continue the era of abundance? We aren't really running short on space, and there is at least some indication that the lack of housing availability is a policy failure (rather than an expected outcome of some physical process or limit).