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I don't think you are thinking about this correctly. Have you considered the impact of compound interest? You say it cost you $100,000 plus "a massive amount of sweat equity" . I don't know what you consider massive, but let's guess at $50,000 worth. That is, if you were paying market rates at the time to professionals, how much would they have charged, plus the cost of hiring them, plus the taxes you would have paid to have the money to pay them, etc? Anyway, if we start with an actual "cost" of $150,000, you get to $250,000 with 11 years of compound interest at 5%. If we instead completely ignore your labor input, 11 years at 9% gets us from $100,000 to $250,000. Can you really not be convinced that "realistic market" might not have a 5% (or 9%) yearly increase in value? That's not to say it will always go up that much, but it doesn't seem unrealistic that it might. The bigger question of course is how we determine "value". Is $250,000 for a house today any more "realistic" than $100,000 to build it 11 years ago? Not by any objective measure. They are both just numbers, determined by how much people are willing to pay, which in turn depends on how much they have in their bank accounts, which in turn depends on how much someone is willing to pay them, which (circularly) depends on how much someone else is willing to pay for something else. There's nothing "realistic" about any particular numeric value. |
That doesn’t tell the whole story, however. The 2008 stimulus plan basically printed money in the form of increased stock valuations and cheap mortgages. Stocks and housing have inflated well over 3% per year since then, while consumer prices have not.
Eventually that has to unwind. One option is for the federal government to claw the money back. That will lead to deflation and immediate economic ruin, so they can’t do it.
The more likely option is that we eventually hit a patch of high consumer price index inflation as workers start charging a living (housed) wage for their time.