Most houses are treated as being partially for use (an expendable consumer good) and partially an investment (a vehicle to preserve/increase wealth amidst perpetual inflation).
Obviously for the consumer good side, the house is only worth the value that someone can get out of living in it. No matter how nice that house is, there is a limit on how much a rational economic actor would be willing to pay to own and use it.
The investment portion, however, has no upper limit in terms of price. In order for that purpose to be fulfilled, it is just necessary for the price sold for later to be higher than the price paid today.
My opinion at this stage is that house prices are absurd now in most places, owing to decades of people observing that house prices tend to go up.
Prices go up meaning people think it’s a good investment and are willing to buy at ever-higher prices because they think it will keep going up forever.
I think the majority of the purchase price of a house nowadays is for the investment side rather than the consumer good side.
A house has been a good investment only because it has been one of the few things to consistently keep up with (or even beat) inflation.
With the rise of Bitcoin, the investment function of houses gets vastly diminished as Bitcoin is an even better long-term store of value.
I agree that house prices will collapse in real terms once the Bitcoin standard is adopted, and boy am I excited for it.
(Sorry for the long post)
EdwardDiamondhands / Edward Lightninghands
npub1kh…r6twl
2023-03-05 03:01:35
in reply to nevent1q…t84z
Author Public Key
npub1khgg4g4qaswewjx8rt5eyfu3mzs9nsn7n3va45829q2txldnldvqdr6twlPublished at
2023-03-05 03:01:35Event JSON
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"content": "Most houses are treated as being partially for use (an expendable consumer good) and partially an investment (a vehicle to preserve/increase wealth amidst perpetual inflation).\n\nObviously for the consumer good side, the house is only worth the value that someone can get out of living in it. No matter how nice that house is, there is a limit on how much a rational economic actor would be willing to pay to own and use it.\n\nThe investment portion, however, has no upper limit in terms of price. In order for that purpose to be fulfilled, it is just necessary for the price sold for later to be higher than the price paid today.\n\nMy opinion at this stage is that house prices are absurd now in most places, owing to decades of people observing that house prices tend to go up. \n\nPrices go up meaning people think it’s a good investment and are willing to buy at ever-higher prices because they think it will keep going up forever.\n\nI think the majority of the purchase price of a house nowadays is for the investment side rather than the consumer good side.\n\nA house has been a good investment only because it has been one of the few things to consistently keep up with (or even beat) inflation.\n\nWith the rise of Bitcoin, the investment function of houses gets vastly diminished as Bitcoin is an even better long-term store of value.\n\nI agree that house prices will collapse in real terms once the Bitcoin standard is adopted, and boy am I excited for it.\n\n(Sorry for the long post)",
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}