The housing market is another inflated scam propped up by institutions. People call Bitcoin a bubble yet are asleep to the fake bubble that is the housing market. Can’t wait for the collapse one day that will be amazing for Bitcoin. Hopefully Bitcoin never gets bought up by too many institutions this early or we could be facing the same problem. We need more countries like El Salvador to make BTC legal tender before too many institutions get involved and buy up a majority of the network.
Discussion
Wall Street started running out of places to park cash and started parking it in real estate. Thousands of rental homes in places like Phoenix owned by Blackrock and others. It grossly inflated the market. If the market corrects hard in the next year, they'll be the first ones to the exit as well, while regular homeowners will end up underwater on their mortgages.
Most houses are treated as being partially for use (an expendable consumer good) and partially an investment (a vehicle to preserve/increase wealth amidst perpetual inflation).
Obviously for the consumer good side, the house is only worth the value that someone can get out of living in it. No matter how nice that house is, there is a limit on how much a rational economic actor would be willing to pay to own and use it.
The investment portion, however, has no upper limit in terms of price. In order for that purpose to be fulfilled, it is just necessary for the price sold for later to be higher than the price paid today.
My opinion at this stage is that house prices are absurd now in most places, owing to decades of people observing that house prices tend to go up.
Prices go up meaning people think it’s a good investment and are willing to buy at ever-higher prices because they think it will keep going up forever.
I think the majority of the purchase price of a house nowadays is for the investment side rather than the consumer good side.
A house has been a good investment only because it has been one of the few things to consistently keep up with (or even beat) inflation.
With the rise of Bitcoin, the investment function of houses gets vastly diminished as Bitcoin is an even better long-term store of value.
I agree that house prices will collapse in real terms once the Bitcoin standard is adopted, and boy am I excited for it.
(Sorry for the long post)
All good I fully agree. House prices should obviously go up with population growth and interest on the dollar as land is a limited asset. However housing prices have far exceeded inflation and population growth due to institutional investments. After the housing crisis in 2008 blackrock has been buying up so much housing instead of giving out easy mortgages to home owners. Bill gates is now buying up crazy amounts of farm land rich people keep buying up all this land leaving none for the average Joe. This is why rental rates are also going through the roof as average joes are forced to rent instead of buy.
Bitcoin totally changed this because even if one day a single BTC is worth $5,000,000 atleast you can buy a fraction of it. Even with a $1,000,000 down payment on a $5,000,000 house it still doesn’t make it worth it as an investment. However a $1,000 investment into BTC at $5,000,000 will be better for the average person. The future is bright for Bitcoin can’t say the same for the housing market.