Adults learn to swim in 6 Day phoenix Vacation - End of Fear! (Advertisement)

Has any reporter ever used the correct term "House price inflation"?


By Patrick   Follow   Wed, 26 Dec 2012, 6:50pm   682 views   16 comments
In Menlo Park CA 94025   Watch (0)   Share   Quote   Permalink   Like   Dislike  

Just wondering.

Reporters always recognize food, energy, and medical inflation as inflation, but are always utterly blind to the fact that house price inflation is also inflation.

Challenge: can anyone show me any reporter for a mainstream paper that has ever referred to house price inflation using the correct term: INFLATION.

Please write all mainstream reporters (Bloomberg, NY Times, Washington Post) and ask them to reply here.

Viewing Comments 1-16 of 16     Last »     See most liked comments

  1. Kevin


    Follow
    Befriend
    41 threads
    2,655 comments

    1   7:09pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    They wouldn't use that term because it's not accurate. You also wouldn't refer to increasing cost of gold or stocks as inflation.

    Food, energy, and medical expenses aren't assets. When they cost more, you get nothing in return. When the price of a home goes up (and assuming that it stays up), the increase in price is retained.

    *Housing* costs can certainly inflate though. This is usually the term used when talking about rent.

    It's "housing" that's essential (and thus a target for inflation), not houses. Lots of things can be used for housing.

  2. New Renter


    Follow
    Befriend (3)
    28 threads
    5,019 comments
    San Jose, CA

    2   8:28pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    TKevin says

    They wouldn't use that term because it's not accurate. You also wouldn't refer to increasing cost of gold or stocks as inflation.

    Food, energy, and medical expenses aren't assets. When they cost more, you get nothing in return. When the price of a home goes up (and assuming that it stays up), the increase in price is retained.

    *Housing* costs can certainly inflate though. This is usually the term used when talking about rent.

    It's "housing" that's essential (and thus a target for inflation), not houses. Lots of things can be used for housing.

    Whaf about durable goods, would higher prices for say a no-frills dryer or couch be considered inflation? Cars? Clothing? All of these would depreciate over time even if they were never used.

  3. thomaswong.1986


    Follow
    Befriend
    24 threads
    5,641 comments

    3   8:46pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    perhaps over valued would also be fair game.

    as to Kevins comments.... expenditures like food, medical, gas and other can be overvalued compared to competitive compatible products.

    But homes are equal expenditures, our Govt inflation index uses rent equivalent as a measure to check home price inflation.

    Assets can also be equally over valued compared to when using basic fundamental analysis. But homes should not be considered an asset class, which it has over the past 12-14 yrs.

    Anyway, Shiller has already proved RE prices track rate of inflation.

  4. thomaswong.1986


    Follow
    Befriend
    24 threads
    5,641 comments

    4   8:49pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    New Renter says

    Clothing?

    LOL! $100 jeans vs $30 jeans. The only difference is the $100 jeans makes your ass look better...

  5. Patrick


    Follow
    Befriend (55)
    5,611 threads
    6,305 comments
    male
    Menlo Park, CA

    5   9:05pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    thomaswong.1986 says

    Anyway, Shiller has already proved RE prices track rate of inflation.

    Yes, good point, and that's because increasing house prices are exactly and only inflation.

    Stocks are radically different from houses because stocks can by themselves grow and produce more, becoming intrinsically more valuable.

    Houses never grow or produce more shelter than last year. They simply sit out in the rain and slowly rot.

    Gold is also different in that it is not something you need to live, like housing, food, energy, and medical care. But gold is similar to housing in that any increase in its price defines a decrease in the value of cash. The gold does not change or get more valuable. It's just that cash gets less valuable with respect to gold.

    The increase in the price of a house means the decrease in the purchasing power of cash and nothing else. They are perfectly opposite, making any increase in the price of a house the very definition of inflation.

  6. Kevin


    Follow
    Befriend
    41 threads
    2,655 comments

    6   9:18pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    It's not the house that increases in value, it's the land, but the land value is highly dependent on the house that sits on it. Just take a look at how value is assessed for an example (they pretty much always claim 50% value in land, 50% in improvements).

    You don't need land to live at all.

    Real estate is absolutely an asset. Just ask any landlord.

    "Durable goods" are not investment-class assets. They have some resale value, but (barring antique status), it will always be less than the fair market value of a new version of the same.

    Patrick says

    But gold is similar to housing in that any increase in its price defines a decrease in the value of cash. The gold does not change or get more valuable. It's just that cash gets less valuable with respect to gold.

    And yet the value of the cash remains constant relative to the cost of food and electricity.

    Sorry, but I'm not seeing this. If prices increase uniformly, then, yes, there's inflation, the value of the cash has gone down. But if cash is only down relative to a single asset class, it's clearly that asset class that has increased in value, since that asset will also have gone up relative to any other asset class.

    From 2001 to 2007 gold increased 131%. Housing increased 44%. CPI says 17% inflation.

    Clearly two of these things can't be 'inflation' if any one of them is.

    Schiller argues that housing will eventually match inflation in the long term, not that it 'tracks' inflation. If housing simply tracked inflation than housing prices never would have hit what they did. The 'long term' here is measured in decades, though, which means that you should definitely be treating houses as an asset class.

  7. jvolstad


    Follow
    Befriend (4)
    1,074 threads
    1,336 comments
    San Antonio, TX
    jvolstad's website

    7   9:23pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Patrick, it's not a "house", it's a "home". Let's get those Realtard terms right. :-/

  8. New Renter


    Follow
    Befriend (3)
    28 threads
    5,019 comments
    San Jose, CA

    8   9:23pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    thomaswong.1986 says

    New Renter says

    Clothing?

    LOL! $100 jeans vs $30 jeans. The only difference is the $100 jeans makes your ass look better...

    Kind of like this $370k (zestimate) East Palo Alto house:
    http://www.zillow.com/homedetails/1238-Westminster-Ave-East-Palo-Alto-CA-94303/15582364_zpid/

    vs this $1.05M (zestimate) Menlo park house?:

    http://www.zillow.com/homedetails/103-Chester-St-Menlo-Park-CA-94025/15583042_zpid/

    Less than a mile apart as the crow flies, of a similar size, and proximity to big freeway but still worlds apart...

    (Any $70 that makes your ass look better is money well spent!)

  9. New Renter


    Follow
    Befriend (3)
    28 threads
    5,019 comments
    San Jose, CA

    9   9:29pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Kevin says

    It's not the house that increases in value, it's the land, but the land value is highly dependent on the house that sits on it. Just take a look at how value is assessed for an example (they pretty much always claim 50% value in land, 50% in improvements).

    Kevin says

    real estate is absolutely an asset. Just ask any landlord.

    Dryers can be rented too - ask any laundromat. Cars, clothes, furniture, all can be rented.

  10. jvolstad


    Follow
    Befriend (4)
    1,074 threads
    1,336 comments
    San Antonio, TX
    jvolstad's website

    10   9:30pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    New Renter says

    Kind of like this $370k (zestimate) East Palo Alto house:
    http://www.zillow.com/homedetails/1238-Westminster-Ave-East-Palo-Alto-CA-94303/15582364_zpid/

    I've only been in the East Palo Alto area a couple times. Not an area that I would want to be in after dark.

    http://www.zillow.com/homedetails/2376-Menalto-Ave-East-Palo-Alto-CA-94303/15582572_zpid/

    $300K for this dump and it's pending? Amazing. In San Antonio this might sell for $50K on the East side of town.

  11. New Renter


    Follow
    Befriend (3)
    28 threads
    5,019 comments
    San Jose, CA

    11   9:32pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    jvolstad says

    New Renter says

    Kind of like this $370k (zestimate) East Palo Alto house:

    http://www.zillow.com/homedetails/1238-Westminster-Ave-East-Palo-Alto-CA-94303/15582364_zpid/

    I've only been in the East Palo Alto area a couple times. Not an area that I would want to be in after dark.

    http://www.zillow.com/homedetails/2376-Menalto-Ave-East-Palo-Alto-CA-94303/15582572_zpid/

    $300K for this dump and it's pending? Amazing. In San Antonio this might sell for $50K on the East side of town.

    Welcome to the SFBA!

  12. Kevin


    Follow
    Befriend
    41 threads
    2,655 comments

    12   10:18pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    jvolstad says

    Patrick, it's not a "house", it's a "home". Let's get those Realtard terms right. :-/

    Houses are a type of home. So are apartments, trailers, and cardboard boxes.

    When somebody says "home", they mean any of those things. The place where you live. "House" is a much more specific term.

    New Renter says

    Dryers can be rented too - ask any laundromat. Cars, clothes, furniture, all can be rented.

    The dryer is an asset here, much like the house. It's a deprecating asset that only retains value as long as it is maintained (and has a definite shelf life). The land part of the house is the non-deprecating asset. There is no equivalent for the dryer. The laundromat itself is an asset -- it's a business (and, yes, land is a factor even if the property being rented is an apartment).

    The dryer is not an investment-class asset though! The laundromat is.

    jvolstad says

    I've only been in the East Palo Alto area a couple times. Not an area that I would want to be in after dark.

    Bah, I went to EPA on accident several times, at night, and I never got murdered. Granted this was only to shop at IKEA. Apparently murders have dropped by more than 90% since 2001. So that's something.

    It's a real dump of a place, but around the edges it's being gentrified.

    I wonder where the dishwashers are going to live if the whole place gets gentrified though. It's so weird to see houses that would be considered a pretty good deal in the midwest in the middle of silicon valley.

    Honestly, though, if you don't have kids (because the schools are still shit), some of the newer developments there aren't bad deals by SV standards. I remember seeing 3bd townhouses listed for under $600k a few years back.

  13. thomaswong.1986


    Follow
    Befriend
    24 threads
    5,641 comments

    13   11:50pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Patrick says

    Stocks are radically different from houses because stocks can by themselves grow and produce more, becoming intrinsically more valuable.

    Houses never grow or produce more shelter than last year. They simply sit out in the rain and slowly rot.

    yes pretty much so... what has changed has been the public perception of their home...
    a piggy bank! Ugh...

  14. taxee


    Follow
    Befriend
    88 threads
    466 comments
    El Cerrito, CA

    14   5:22am Thu 27 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    It was 'exuberance'. Long live 'the maestro'.

  15. taxee


    Follow
    Befriend
    88 threads
    466 comments
    El Cerrito, CA

    15   5:26am Thu 27 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike  

  16. zzyzzx


    Follow
    Befriend (10)
    679 threads
    5,961 comments
    Baltimore, MD

    16   11:48am Thu 27 Dec 2012   Share   Quote   Permalink   Like   Dislike (1)  

    I'd like to see them use House price correction.

Patrick is moderator of this thread.

Email

Username

Watch comments by email
Home   Tips and Tricks   Questions or suggestions? Mail p@patrick.net   Thank you for your kind donations

Page took 79 milliseconds to create.