2) Wages in real terms were stagnant for a long time, but not in nominal terms. Real estate has basically kept up with inflation despite larger homes and nicer homes than 40 years ago.
Housing only crashes when you have a ton of foreclosures. That is extremely unlikely to happen this time.
“1) Housing didn’t soar for 40 years. It kept up with nominal inflation. “
Inflation which has been in a constant upward long term trend for that time as well... so yes, housing has soared, compared to wages.
“2) Wages in real terms were stagnant for a long time, but not in nominal terms.”
If wages cannot purchase more than they purchased 40 years ago, then they are stagnant. There’s no way to rhetorically dance your way around that.
“Housing only crashes when you have a ton of foreclosures. That is extremely unlikely to happen this time.”
We shall see, but if they do not, then we’ll just be continuing on the same foolish path that any economy with undue government interference does.
Here in So. California, I expect we will see many foreclosures on the cracker boxes that sold for double and triple value. If people lose teir income, they won’t be able to make that $4K to $5K payment…and if that doesn’t do them in, the property taxes will.