Re:Stop Buying Real Estate in SF
by jusben1369 on Thursday January 14, 2016 @03:45PM
(#10904337)
Well we have to remember that when the stock market goes up 30% this year (or falls 30% this year) that's not inflation or deflation. That's a marketplace at work. Real estate is also an asset class that rises or falls. But those changes aren't inflation. That's market forces at work (supply and demand)
* QE was tremendously inflationary for all asset prices, including real estate prices which are not called "consumer prices" but it's not that easy to buy the argument behind it. Certainly for a lot of folks, real estate is their biggest expense, and it's very frightening to rent and not buy while housing prices go up all around you and you try to guess how far the cost of owning will become detached from the cost of renting. We can call people scared into buying overpriced houses "investors", but to me it's a bit of a stretch.
* Grandparent calls real estate, of all the asset classes inflated by QE, the new currency.
* You then, without agreeing with the grandparent, say QE isn't inflationary, as "understood" by many economists long ago. But if we stop calling houses "currency", is QE really not inflationary then? (I seriously don't think I fully understand it, BTW... So an honest question.)