Nostr Web Client

I hope I will be able to explain. I don't think you are mixing things up. #1 is true and #3 was true. RE has been used mainly as a SOV since 1971 (Nixxon Shock, introduction of a fiat based system).

Even though inflation was considerably high in the 70's, RE was still priced on its utility value and was thus affordable for our parents' generation. People then excessively invested in RE, which by now has become overpriced and unaffordable. This was a process of lets say 40-50 years ... I hope that clears up the confusion ?

d0enakalle🐇⚡ 2y ago

Okay, thanks for your answer!

But how to deal with #2 now? If you say #1 and #3 are correct, how can RE prices of today be the same as back then if we adjust for inflation?

Shouldn't #3 be wrong then? Without a relative increase in price there shouldn't be more problems for a family to buy a home today than back then.

OR is #3 still true because we need a #4:

#4 In comparison to inflation family wages have continuously fallen since 1971.

Is 4 true at all? Maybe I should visit wtfhappenedin1971.com once more... 😅

Reply to this note

Please Login to reply.

Discussion

d0enakalle🐇⚡ 2y ago

Or maybe I should say "wages haven't been rising as much as inflation"... ?

Leon 2y ago

#4 is true in the sense of: wages have not risen as much as the amount of money in supply. Since a lot of the money being introduced I to the economy finds its way I to real estate through loans, RE has risen almost on par with inflation. Makes sense ?

d0enakalle🐇⚡ 2y ago

Yes, now it does.

I think my confusion also came from this article I remembered reading last year.

What do you think about this article? It makes everything kinda complicated, as it introduces some side topics. I guess it's also hard to find clear answers concerning RE when prices can be so different from region to region...

#m=image%2Fjpeg&dim=1080x1871&blurhash=%5D28%7DDS_N00%25M00Rjofofj%5BWBt7ozRiofoft8WBWBofj%5Bx%5DofRjj%5BWBD%25M%7B%25MWBWB9Ft7t8WBoft8WBoff6WBt7Rjj%5BjtWB&x=190872556faa8e43fa00a89c99d1ad0bdc520d66d12095acaf8cb03f4022dd05

https://www.tagesschau.de/wirtschaft/verbraucher/immobilien-kosten-generationen-100.html