“It’s funny to see the same arguments recycled twenty-five years later. “Money waiting on the sidelines” and “rich foreigners will always pay a premium” were permabull touchstones decades before this website was even a glimmer in the prof’s eye. We can never accuse the NAR of inconsistency.”
I agree that we are overpriced today, but this article has no relevance. Are you saying that housing was overpriced in the early 1980’s? I don’t have any fancy color charts to prove this point but I am fairly certain that if you were fortunate to “overpay” for a house in 1983 in a reasonable neighborhood anywhere in San Diego, it would be worth substantially more today (even inflation adjusted). You certainly would have refinanced the original mortgage a few times since then. You might have pulled out equity to send your kids to college.
Maybe you were smarter than almost everyone else and decided not to put a $20,000 down payment on the house (with an $80,000 mortgage). You decided to live in a garden style apartment for the past 22 years. You knew that Microsoft or Wal*Mart was a great value and bought $20,000 worth of stock. If you didn’t pay any income taxes on the stock, MSFT (which went public in 1986) would be worth $600,000 today @ $30 per share. WMT was $.75 (price adjusted)in February 1983. Your 26,666 shares would be worth $1,200,000 today which would buy you a nice tract home in Carlsbad or Carmel Valley.
Gold was $500 an ounce in February 1983, today it is $550.
