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Comment by skywal_l | Hacker News Reader

So is this finally the inflation that we were promised for so long? I guess all that money created during covid had to go somewhere. Too bad it's not going into education or healthcare...

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It's not inflation from money printing. Its reduced supply along with higher wages from income earners getting smeared across the country instead of inflating housing costs in traditional HCOL locations. Before, lower income earners in the suburbs and more rural areas didn't have to compete against higher wage earners who were previously stuck in cities. No longer.

In the Sunbelt, I see homes getting bought all cash by the wealthy and retirees (with some or all contingencies waived), driving up values beyond what income driven mortgagees will support. When asked how long this can go on for (by people who, naively, believe this to be a repeat of the 2008 housing bubble and are waiting on the sidelines to acquire property either as a home or investment), I respond "Until that wealth is depleted."

Go look at current and historical prices of homes (as well as appreciation rate velocity) in Dallas, San Antonio, Houston, Tampa, Orlando, Miami, and major North Carolina metros (as well as parts of Western North Carolina such as from Asheville to the NC-TN border) to see this. Rents are no better [1].

[1] https://www.bloomberg.com/news/articles/2021-08-18/housing-h... | https://archive.is/VGtt4 (Bloomberg: Landlords From Florida to California Are Jacking Up Rents at Record Speeds)

I would posit that it is a combination of things. To discard inflation all together would be an interesting take. The other bits of your argument are good however.

Also inflation is not necessary for people to act like it will happen. You may see investment firms looking to 'park the cash' into something they can just borrow against. Not enough inventory to cover that would make the problem worse. It is like the oil crunch a few years ago. We had plenty of oil. The problem was not enough oil to cover real usage and speculative usage at the same time so prices went up.

So if (when) more inventory happens. Then you will see a decrease in price. As that could spook the investor crowd and cause inventory to grow. Something akin to what 2008 looked like could easily happen. It will not be the same cause but the effect will probably be similar.

> Go look at current and historical prices of homes (as well as appreciation rate velocity) in Dallas, San Antonio, Houston, Tampa, Orlando, Miami, and major North Carolina metros.. Rents are no better

The rental market in these cities is in an unprecedented state, with hundreds of applicants for each of the precious few listings.

People with money in the bank are finding nowhere to live.

The eviction ban is arguably contributing to the shortage in rentals - people aren't interested in getting locked into a tenant who can stop paying rent at any time and who can't be evicted. A lot of landlords are eating the cost and staying out of the market, which restricts supply and drives prices up.

No, this is just the Chinese billionaires trying to hide their money before Xi Jinping takes it all.

https://techcentral.co.za/xi-targets-chinas-richest/110293/

Use yes-and rather than no, for better results. Reminding myself as well.

https://en.m.wikipedia.org/wiki/Yes,_and...

What's the yes-and version of that comment? Assuming you want to say basically the same thing then the answer to the question really is no.

Yes, and Chinese billionaires are buying up supply, adding to higher prices.

That's a different statement, and assuming they meant what they said, a lie. A technique doesn't get credit for being more persuasive if it requires that you throw out your message.

Pedantry does not persuade. It’s the whole point of the technique.

It’s obvious that high home prices are supported by inflation, low interest rates, laws, birth rates, nimbys, prop 13, AND speculation. And more in concert.

A “no, it’s really this one thing in isolation…” argument is not realistic.

>It’s obvious that high home prices are supported by inflation, low interest rates, laws, birth rates, nimbys, prop 13, AND speculation. And more in concert.

It's obvious that the the initial post didn't agree with that proposition.

>Pedantry does not persuade. It’s the whole point of the technique.

It wasn't pedantry. It was half the content of the comment.

I really hope this technique isn't being popularized this way. A person doing this outside of very specific brainstorming-type processes reads like a person willing to lie or say whatever in order to get agreement (even if they won't stick to it).

A trade deficit results in a capital surplus. The exporting countries can use their dollars to buy real estate and financial assets. It's only obvious that this must happen.

No. The first paragraph of the article states that these are inflation-adjusted prices.

> The average price of American homes, in real terms, is now the highest it's ever been

Core CPI understates localized inflation in certain assets. Real estate happens to be highly inelastic, illiquid, and has a limited supply due to NIMBYism. The federal government has also handed people tens of thousands of dollars in printed money through stimulus checks and extended unemployment benefits. That lets people stay where they live now instead of moving to a place they can afford, which takes supply off the market and brings up prices. Whether you think this is good is a political opinion, but you can't deny that there is an impact on prices.

I bet if you adjust by the price of SPY as inflation instead of CPI you'd get a different story.

It doesn't seem to me that overall, either supply or demand of houses should be more correlated to e.g. the stock price of Alcoa as compared to the price of aluminum.

A few thousand of covid money isn't going to buy you a a house. Low interest rates have a lot more to do with it than covid money: 1% to 2% lower interest rates mean buyers can afford to pay more for a house, they're in demand, and supply is low relative to demand.

For example, compare to the ore-bible burst in 2007, a $300,000 loan with prevailing interest rates at the time would have a roughly 40% or 50% more in monthly payment in 2007 than right now.

The property taxes on this bubble will go into education at least.

Which will then be squandered.

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