RE: The Layout For The Globalization Of Real Estate

7 mo
2 Min Read
375 words

I've said this before and I'll say it again. This would hurt my net worth considerably if it happens but I would welcome a complete collapse of the real estate market because it would be so beneficial to young people trying to make a life for themselves. There's no logical reason for real estate to be so expensive, even in the most sought after places in North America or other first world countries. 75 years ago the cost of housing was cheap, and it became that way due to technology. I always think about that Chuck Berry song You Never Can Tell. He talks about a young couple who get married and the man takes a job. Then they buy a car and get an apartment, put some appliances and furniture in it and have a great life together. In the song it's all possible for an average married couple, and there's no mention of struggle to pay for it, and they don't sound like they have advanced degrees or come from rich families either. Most people had very little education and training back then, but they were able to do okay anyway.
On both sides of my family, my grandparents, who lived through this era as young people, started their own businesses and did quite well for themselves. They weren't rich by any stretch of the imagination, but they weren't struggling either. This is not the scenario that played out for their children, and it got even harder for my generation, their grandchildren. It's even harder now for young people than it was for us. This is due to massive market distortions inflicted by the government in my opinion. People think this is just how things go because this is the only thing most people alive have experienced, but they don't understand that what's happening with information technology now used to happen with things like housing, medical care and education before the government got involved. Living should be cheaper than ever and it's not, and it's because society decided to use coercive force to "fix" it. Hopefully we get back to a place where technological advances make it cheap to live again soon and my own kids and their peers can benefit from it.


Hopefully we get back to a place where technological advances make it cheap to live again soon and my own kids and their peers can benefit from it.

Any industry that technology enters are the base level will find itself having its costs reduced tremendously. The challenge is that housing, healthcare, and upper level education are all done just like they were 100 years ago (at their core). The healthcare system is still a break/fix model.

As for government intervention, you are correct in the market distortion. When governments guarantee things like loans, then predatory lending practices with no standards can occur. It creates a massive distortion of the market.

Of course, the areas mentioned are also going to be obliterated by technology over the next 20 years.

This wave is starting to accelerate. We have not see anything this powerful, from a societal perspective, in our history. This is order of magnitudes higher in its impact than the last Industrial Revolution. The difference is, this time, we can see things happening everywhere.

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I disagree with what you've written for this point-the cost of housing hasn't gone up if you take into consideration the payments people make in line with inflation. Cost of living has increased because...well...we have so many more conveniences we all think we need:
1 Television
2 Computers
3 Cell Phone
4 Internet
5 Air Conditioning
6 Hot water

There are many conveniences that aren't required to live, but have become so commonplace that we all spend our money paying for them. If someone were to cut out all of the above from their list, they'd save several thousands of dollars a year. That extra money put toward a house payment would pay it off in half the time if not 1/3 of the time...making it affordable...I'd rather have the conveniences :)


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Everything you've mentioned has come down in price in real dollar terms due to technological advances. Even with the added conveniences, housing should cost considerably less than it does due to the same technological advances. My old house in San Diego county, no property improvements on what should be a depreciating asset, the lot has been cut in half during this time too, but it has quadrupled in price from about $200k to $800k in the last 20 years. There is no reason for something like that to happen other than market distortions from things like currency devaluation, government subsidies and zoning regulations.
Similar story with my current house in Raleigh, NC. House is beginning to fall to pieces and needs major renovations. Again, no improvements to the property in the past 30 years since it was new, yet it has tripled in price. This has nothing to do with adding conveniences.

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Price has gone up, yes, but the cost has not if you compare price inflation and wage inflation. I have a video on my YouTube channel that shows the research...I'll have to find the link for you.

Funny enough, if you go back 30 years, take a 0 off the end of the price. Another 30 years before that, take another 0 off and so on...
In the early 90's in S. California, my current house would have sold for about $50K but is worth about $500K today. In the 1960's it would be about 5K. 1930's, about $500...and so on. It's not exact, of course, but it has rung true in many of the cases I've researched. Prices go up, but affordability goes with it because of wage inflation...

I dug up the link...


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Wages haven't gone up 10x since the early '90s.

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No, but wages have gone up in a ratio fast enough to maintain a payment on a loan for a house that has gone up 10x.

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This still supports my original assertion that it's an artificially high price though. This is due to artificially suppressed interest rates to ensure price inflation, which is part of the conflict of interest the government has holding a monopoly over currency. They do this because it devalues the dollars that they owe money in. As these prices climb, their revenues go up in nominal terms, but their debt obligations stay the same in those terms. Eventually even the low interest rates will run out of steam and people won't be able to make the payments on the huge loans. It will inevitably end catastrophically at some point. You can't run a pyramid scheme forever.

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You are right...especially if the interest tied to the underlying debt is adjustable... Great convo!

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5 mo

This is factually inaccurate if you look at the average statistics... You may be referring to the statistics of the Top 10% or above who have experienced both the highest % wage increases, capital appreciation through real estate and equity appreciation through the stock market and unfortunately it has been all at the detriment of the people on the lowest rung of the economic ladder...

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