“…the seasonally adjusted figures illustrate that since March 2009, we in the US have been bumping along the bottom of the housing market, just as we did for six years after the last housing bubble burst in 1991.
Although a new surge in housing prices might improve the macroeconomy, there is plenty to like in low and stable housing prices, and that’s what we should now expect in a world free from bubbly delusions of constant price appreciation.” …
“Homeowners, like myself, have lost from the drop in prices, But homebuyers have benefited an equal and offsetting amount.
Cheap homes make it easier for young families to buy. Given that our public policies tend to be rigged against the young, who will have to pay the cost for our current deficit and extraordinary spending on Medicare, I can’t begrudge them the benefit of lower housing prices.
In the long run, we should expect to see prices stay low in most of the U.S. We have an abundance of land. The U.S Census reports that there were 117 million households in 2010. So every U.S. household could have more than an acre of land and we’d all still fit into Texas.” …
“I hope that housing prices continue to be modest for decades so that ordinary Americans can afford to buy, and I see little good in government policies, like the homebuyer tax credit, intended to artificially boost housing prices.
My greatest hope, however, is that prospective buyers have learned the lesson of the past decade: Housing prices go down as well as up. The right reason to buy a home is not as an investment, but as a place to live a fulfilling life.”
Our thanks to ‘Zerodown’ for alerting us to this article, and who adds: “A smart, contemplative article. Even in 2006 I heard the view that expensive real estate is a drag on the real economy because it hogs capital itself and encourages capital intensive projects like trains and roads to suburbs (where people seek affordability). All this capital should be put to more productive use.”