Many thanks to reader Matt for tracking down a copy of the academic research paper I discussed on Monday. The paper can be found here. I have just finished reading the entire thing, but scholarly tone notwithstanding I continue to think it’s hogwash.
In essence, their entire thesis boils down to the following:
- Low interest rates reduce monthly carrying costs. (obvious)
- Housing isn’t actually expensive considering lifetime-low interest rates. (untrue)
- Said lifetime-low rates should be considered a “fundamental.” (optimistic, to say the least)
- Since housing has gone up so much in the past, it will keep going up, which actually makes it less expensive to buy housing. (hilarious)
For those not inclined to read formula-laden academic papers, the same folks have also written a significantly briefer and snottier-sounding Wall Street Journal piece. Here, even our delusionally optimistic authors fess up to harboring a “nascent concern” about San Diego in particular. That can’t be a good sign.