[bsder]

> [1] Real estate is generally a good investment and will hold value or appreciate in the long term, because supply will adjust to demand shocks to rescue values

Real estate is NOT supposed to be a good "investment" and only became so because the government started propping it up with bank bankstops, zoning, NIMBY, redlining, etc. If your pricing is working correctly, real-estate should be close to zero-sum.

Austin, in particular, had several nasty bust cycles where real estate prices tanked after overbuilding which is precisely what kept the cost of living under control. Alas, that is a thing of the past after 2008 when everybody realized that the federal government will backstop the banks "Real estate number must always go up! Brrrrr!"

[cuuupid]

For nearly every homebuyer, a home is the largest purchase they will ever make and the bulk of their net worth. It needs to be a good long term investment that at least reasonably paces with inflation, otherwise you are losing money by buying a home and everyone has to rent and then you have feudalism with extra steps.

The good news is this is totally fine with keeping cost of living under control and overbuilding, because prices will go back up over time. Most people aren't going to own their home until the 30 year mark so it really is a much, much longer term investment than anything like overbuilding or other factors can reasonably affect.

The problem is really that people started seeing 2x-10x returns on homes and started treating that like the norm. That is not a 'good investment' that is a 'money printer,' and in most cases the government does not want to safeguard that behavior, but it's hard not to when those same people panic like crazy if their home only goes up 2% in value in a year or, god forbid, decreases in value for a year.

There is really no good solution to that mentality, if there really was one then Wall Street would have uncovered it ages ago to get more people into long term ETFs.

[marcuskane2]

> a home is the largest purchase they will ever make and the bulk of their net worth

That's bad and a central part of the problem.

I accept that my car is depreciating in value every year I own it, and but I need a car so I buy one. I don't need it to be a good long term investment, despite it being a major purchase.

The entire mindset of treating a family's home as being an investment class rival to bonds and equities is a relatively new phenomenon, and one that's clearly been detrimental to many.

[jjav]

> > a home is the largest purchase they will ever make and the bulk of their net worth

> That's bad and a central part of the problem.

Why? Or to ask in a different way, how could it not be?

For nearly all regular working people, there is nothing they will ever buy that costs more in labor and materials than a home. So of course it will be the most expensive purchase most people ever make. How could it not be?

[cuuupid]

A home costs 10-20x more than a car, you are being incredibly disingenuous by boiling them both down to “major purchase.”

[bsder]

> It needs to be a good long term investment

No, it needs to be roughly zero sum but only over very long timescales. Anything else is a disaster.

If housing is a "good investment", it attracts rampant speculation and concentration of ownership to the capital class. You need regular wipeouts to force the speculators out of the market (doubly so if they are buying on leverage).

If housing is a "bad investment", people abandon the real estate and you get blight which becomes a self-perpetuating cycle downward.

Things need to be kept balanced in housing so that people can use it to be a place to live. We are currently in the middle of seeing the dysfunction that happens when being "shelter" is overshadowed by being an "investment".