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0 sats \ 6 replies \ @SimpleStacker 9h \ parent \ on: "Housing prices are not high by any historical standard" - evoskuil econ
Disagree with your framing. Gold is fixed supply --- why should we want housing to act like something with fixed supply?
Trying to downplay that as somehow natural is wrong. The lack of housing is a policy failure, not comparable to the price dynamics of gold.
It's not my framing, it's reality. Home prices are flat in "real money" terms.
Real estate is fixed supply, god quit making land a long time ago, yet the population is increasing that needs to live (and eat) on it.
Given that, and the cost of housing being flat, that's a miracle of market efficiency in land improvement. Home values are largely a product of the land it sits on, not the sticks it's built with.
So what we have is completely natural, costs are a mix of the thing we can't produce (land) and the things we can produce (wooden boxes, earthwork). Coming out in wash despite population growth is pretty amazing actually.
If there's a grievance to be had, it's that wages pay less gold ("money") than they used to. This too is completely natural, why should labor have the same value it did before technology was invented to obviate that labor?
Would we really want to return to an era where it took 100x more workers to farm the same acreage of land just to keep wages high? We'd starve to death.
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Would you agree that regulation artificially increases the cost of housing?
And, if so, would you agree that without such extensive regulation as is present in US and EU cities, housing would likely be (even) cheaper?
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Without being too precise, yes... the incumbent power will always fight entropy and lower prices are entropy. More efficient manufacturing should make housing "units" cheaper but I don't think it has a material impact on land prices in real-terms.
I'd also tell anyone looking for housing never to buy anything that's not a homestead that can be productive or premium waterfront, those are hard money.
If you want to live in a box on shared land, rent and hold bitcoin.
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What I'd really like to see are numbers that take land distortion out of the equation to the extent possible. That would necessitate controlling for density, like only comparing unit costs in a class of multi-family structures, you'd probably then have to look at the rents as a percentage of wages and not the assessed value of each unit.
That'd probably be a nightmare to gather data for though.
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The amount of land is hardly the constraint. The constraint is the amount of land which is allowed to be developed for a certain purpose, or the amount of structure that is allowed to be built on the land. The market for real estate is heavily distorted by regulations.
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That's a different set of goalposts and doesn't change the fact that housing prices are flat over time. By that measure Eric is 100% correct.
Now, to take the argument that housing should be cheaper than it is seriously, people need to quit whining about boomers sitting on equity-in-fiat terms (reality is that they're still down bad in real money terms).
In that much different conversation I'd agree with you completely. Government is what stands in the way between land-poors and this:
That would segue into a whole conversation about the nature of government, the shadow government, how the world actually works, and why Eric is correct to be adversarial in his thinking. To disagree with him on this, I assume in his view, is to be distracted by false narratives and therefore ineffective in achieving the greater goal.
A resourceful tact would be getting his insight on what he'd consider an effective path for lowering housing costs in the face of an incumbant power working to prevent it.
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