[danans]

> Housing is overpriced because anyone can go to a bank and get as much cash as the house is appraised for, which is circular.

The appraised value is just a signal how much collateral a bank can rely on for the loan, which is why most loans with good interest rates have a maximum loan to value ratio. Banks don't want to own houses, they want to own a piece of the borrower's future productivity, manifested as interest payments.

The limited housing/transit supply (due to zoning restrictions) coupled with concentrated job growth are what drives up housing costs.

[mindslight]

I did go on to acknowledge the "underlying supply problem". But this thread is about financials, and without the endless supply of money, asset valuations would be much lower.