@s8mb @bswud @SAshworthHayes @AlanMCole ok I'm sorry to just tag ppl out of nowhere I don't know how but invariably I end up getting stuck with someone arguing to me housing prices go up because of interest rates/debt over and over again , what are best articles/papers on this?
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Replying to @turrible_tao @s8mb and
Here’s what I wrote on this first: https://www.adamsmith.org/blog/where-house-prices-come-from … - it is true that interest rates influence house prices but they don’t affect affordability.
2 replies 0 retweets 6 likes -
Replying to @bswud @turrible_tao and
Interest rates don’t influence house prices in markets where housing supply is elastic and liberal (eg Houston, Atlanta, Tokyo), they *interact* with supply restrictions to drive prices in restrictive/inelastic markets
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Replying to @bswud @turrible_tao and
I was on a road trip when this happened so I couldn't reply before, but yes, this is it exactly. If you count home prices through two separate pieces--the structure and the right to build it--the structure itself isn't likely to be super-valuable far in the future.
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Replying to @AlanMCole @bswud and
Maybe it'll become super historically cool, but that's unlikely. Maybe it will still exist, but in a kind of ship-of-Theseus way where you've long since replaced all the parts. The current stack of wood and brick is most likely to depreciate.
2 replies 0 retweets 4 likes
I believe Megan McArdle said that annual maintenance costs on a house are 1% of house (not land) value. That immediately made me think of ship of Theseus.
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