[extropy-chat] Housing bubble looking good
hal at finney.org
Thu Mar 9 21:10:16 UTC 2006
Russell Wallace writes:
> I'm curious - why do you call it good news? Granted if you yourself own a
> house it is good for you personally, but overall, inflated house prices are
> a negative-sum game, an artificial scarcity that transfers money from some
> people to other people while harming society as a whole. (It is true that
> high house prices are correlated with general economic growth, but this is
> as an effect rather than a cause.)
That's a good point. I was wrong to offer such a simplistic assessment
of the story. In fact my kids will soon be of age to enter the housing
market and houses are so overpriced in my area that there is no way they
could hope to buy a house around here.
Mostly I meant to contrast the poll results with the "doom and gloom"
often found in discussions about an upcoming bursting of the housing
bubble, often with predicted disastrous consequences. On the web I often
read forecasts of collapses in prices, foreclosures, bank failures,
collapse of the dollar, stock market crash, etc. It is in comparison
to these kinds of predictions that the poll's picture of steady but more
moderate housing price rises looked like good news.
The relevance to our discussion here is the methodology of believing the
consensus view, when there are good reasons to suppose that the sampled
population would have an informed opinion. It will be interesting to
see whether the poll prediction turns out to be correct, since most of
what I read from "experts" seems more skeptical about prices continuing
to rise. The prediction of continued Fed rate hikes is another one
where the people seem to be somewhat in disagreement with the experts,
so that will be worth watching too.
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