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by option 2254 days ago
yes, basic consumer goods didn’t see much inflation. But what about housing, education, even stuff like cars and travel. Of course, other factors are at play too, but abundant “cheap” money certainly increase prices of those
2 comments

I wonder about cars.

There are cheaper new cars...but people seem to choose cars with an ever inflating numbers of features.

It's American consumerism fueled by available credit.

What's really fascinating is that what you said applies to McMansions, and ... private aircraft too.

Cessna cancelled their basic $300,000 new 172 because people were only ordering the $400,000 glass panel model. The price is so high they took it off the website for the first time. (And older pilots were expecting it come in at $80,000. lol.)

Cubcrafters makes composite Cubs(!) that are priced starting in the $190,000 range for LSA and $317,000 for Part 23, and again, mainly sell the maxed out versions.

http://cubcrafters.com/compare

It's an interesting phenomenon.

It would seem that the inflation of these prices just don't bother people.

The fact that the most common inflation numbers (AFAIK) don't include real estate makes them worthless.
Shelter (rent and "owners' equivalent of rent") are included in the CPI.
The increasing volatility of future economic prosperity in most places, as well as concentration of burgeoning businesses into a few select cities is not factored into the CPI, and is probably not able to be factored.

The difference in probabilities of future life outcomes for living in certain prosperous neighborhoods and cities and the compound effect of children growing up in those is very material nowadays. This especially effects how much more housing and land costs in certain cities, and how much people are willing to gamble on it by leveraging more to "buy in" to those probabilities of future success.

Not only are they included they account for almost a third of CPI. Thing is it is measuring nationwide housing costs which may not be moving in sync with Bay Area rents
Or that the rise in stock prices unsupported by fundamentals isn't considered inflation either.