Comment by mlsu | Hacker News Reader

Comment by mlsu | Hacker News Reader

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this is one of those things that makes me feel like I'm insane.

- if housing is to be an investment

- it must appreciate faster than inflation

- if it appreciates faster than inflation

- it must become unaffordable

there is literally NO WAY around this, regardless of any mechanism by which housing appreciates. If housing is an investment it must become more unaffordable over time.

And yet it seems that literally 95% of people just... never think of this? Instead, the only discussion that ever takes place is centered on the mechanism by which housing appreciates: blackrock, airbnb, foreign investment, lack of rent control, lack of subsidies, monetary policy, immigration, or, the worst one: simply that "people are too greedy to build affordable housing."

every time, every single time I read one of these things I feel like I'm taking crazy pills.

We do need to separate housing-as-investment-vehicle from the experience of the couple in the article. Their retirement plan (own a large house, downsize to a small house) shouldn't depend on their home value appreciating faster than inflation. It should be possible to own a home outright just so you don't have a monthly payment while not banking on your house containing more wealth than you put into it.

Now, in the real world, home prices change and those changes aren't evenly distributed, so what happened to this couple is that they ended up getting priced out of a downsize (at least in the type of home they'd envisioned). But that doesn't mean that they were planning on appreciation, they were just not planning on appreciation leaving them behind.

Same. I keep trying to point out to people that the fact the US has pinned residential real estate as a bedrock growth investment asset necessarily precludes it from being affordable. It can't be both.

The last time US residential real estate had a chance to become affordable, the entire global economy fell apart. So much so, that the government stepped in for _years_ on end to prop up the asset class.

You’re definitely not wrong but I believe the idea is that with a growing population and expanding housing availability and differences in desirability based on a number of factors, you get a gradient effect where older houses have more value than new houses, but there are new houses for people who can’t afford those older homes which have increased in value to a point where few can afford it

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