Blog topics include politics, economics, housing, and the stock market.
Ever since I found your housing bubble chart, I have thought of US owner housing in terms of the rise and fall of inflation adjusted prices. I am glad to see my area, Chicago, as having adjusted, because we couldn't take much more of this. But I am surprised such key coastal cities have not adjusted. But I guess, with bad CA prices due to chronic under-production, and east coast pollyana thinking, "we aren't losing tons of natives to other areas,'" that is to be expected. (Over-investment in housing and not infrastructure is an east coast thing.) I guess the message in all this is that local housing markets are going to be extremely various going forward. That is the disservice the S&P's "biggest markets" method does to clear capital market thinking about home price trends. I am glad to hear you explain that Zillow's reliance on value, not current price, is in better keeping with the long term, and almost commodity-like, trend in US home prices. Thanks for your graphs, they have been the only dry match in the whole soggy tent. I would suggest to you, just to say thanks for the graphs, that the trend in US population growth, which will also be unevenly distributed, is the best case for long term housing demand I could make. But once again, there is a world of difference between seriously aging PA and third world type *everyone is young" TX. Twenty years from now, these age structure differences will be only too obvious, like they are going to be in places like Russia and even China as well. So it is like the key question for housing anywhere will be: who has the thirty year olds? Business analysts usually presume that demographic trends, by and large, average out, so they can go ahead and say what they are thinking. But in housing, fixed levels of supply and demand are really, the only true game in this capital-intensive, but consumer-oriented market.
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James ParsonsWashington, D.C. area, USA
I'm a classical liberal, because I believe a system of personal freedom and free enterprise leads to greater human well-being than other legal and economic systems.