That would only be getting prices back toward the income/purchase ratio of a few decades ago. The big problem is that we goosed the market, yes, with leveraged help from Uncle Sam, such that a house was the best long-term investment—instaed of a more productive business investment. We’ve got massive, fancy kitchens and 5th baths in houses beyond the needs and reach of young purchasers.
2025 - $500,000
2026 - $480,000
2027 - $440,000
2028 - $400,000
2029 - $370,000
2030 - $350,000
2031 - $335,000
“That would only be getting prices back toward the income/purchase ratio of a few decades ago.”
There would have been a few million mortgage defaults, with big losses.
The prices may not stop dropping in 2031.
You might not be able to get a mortgage for more than the depreciated cost of the house itself.
depreciated cost of the house ~= comparable new build cost less costs to make it like new
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For Rent
Potter Realty
Protective zoning made it safe George Bailey to undercut Mr. Potter.
“We’ve got massive, fancy kitchens and 5th baths in houses beyond the needs and reach of young purchasers.”
Americans will pay more for big.
A house that has twice the square footage has:
1. floors and roof that are twice the size,
2. walls and inside plumbing line lengths only about 40% longer
3. only about 40% more cabinets in the kitchen
4. a sewer line, a plumbing supply line and an electric supply line of the same lengths and about the same cost
5. equal lot clearing, grading costs
6. equal subdivision and road layout costs
“such that a house was the best long-term investment—instead of a more productive business investment”
A bigger house allows more stuff to be stuffed into it.
My buying is mainly constrained by my house size even though I’m low income.
A house may have provided a comfortable living space for decades, and a potential $600,000 profit to boot.