San Diego Housing Market News and Analysis
Other reasons why housing prices rise
User Forum Topic
Submitted by Escoguy on September 5, 2016 - 10:27pm
Much of our discussion is based on comparing todays market with that of 10 years ago. Interest rates are a factor as well as a growing population and lack of new construction.
I think there are other reasons why housing prices can go up and be more sustainable than in the past and it has to do with general consumption patterns:
1. products like cars/computers last longer and have more features (replacing a car that lasts 10-15 years is a real discretionary purchase)
In effect, some of these trends mean that housing has the potential to absorb excess funds which in the past would have been spent on other items which are either no longer needed or have a longer lifespan. Or which can be bought cheaply.
Or conversely, there are opportunity to save everywhere else by economizing except for housing where policy limits urban redevelopment and new supply so the money flows to the item which has the tightest supply constraint.
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