| Affordable places don't have jobs. This is not a trend that's reversing anytime soon. > Housing, on average, rises at the rate of inflation I don't care about the price of the average house in the country. I care about the price of a house within a commuting distance of where I can find gainful employment. Right now, the prices of homes in those areas are skyrocketing, while the prices of homes in areas that don't have gainful employment are nosediving. Take the average, and you'll find that it tracks inflation... And is a worthless metric. > Even if the housing market explodes in one area, there's almost certainly another area where it hasn't Yes, and none of those areas are ones where young people can make a living. The socially optimal thing would of course be for retirees to consider selling their million-dollar coastal metro homes and move to cheaper areas, like the interior. But as long as they have access to HELOCs, they don't feel any pressure to do them. They can just borrow money against their million-dollar home, instead of downsizing. This is also not going anywhere. It would be political suicide to force grandma and grandpa to move to the boonies, just so that their grandkids, who need to work in the city could afford to live in it. |
I really didn't like it for several reasons, but not too long ago I briefly lived inside the DC beltway and had a 10 minute commute to work, and paid $1000/month for half a 2 bedroom apartment in a mid-rise that was pretty decent.