“People think it’s a law of nature,” said Mr. Shiller, who teaches at Yale.
For the first half of the 20th century, he said, expectations followed the opposite path. Houses were seen the way cars are now: as a consumer durable that the buyer eventually used up.
From the NYT’s Real Estate’s Gold Rush Seems Gone for
Good.
It always seemed funny to me that everything else you buy goes down in value, but homes don’t. It’s really hard to argue that homes fall into the antique or colectible category of items that appreciate, so what else would make them rise?
This isn’t unlike the market for diamond engagement rings. They didn’t use to be the default, but a combination of social pressure and great marketing have completely changed our culture. With homes, the government enables our addiction with the tax breaks.
I can’t even imagine how different things would be if people didn’t treat homeownership with such reverence. It’d sure free up a lot of capital for other investment instruments.
