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How can prices be expected to go up when younger Americans already can't afford homes, as ownership rates have been slipping substantially?
2011 Sep 2, 9:32am 20,409 views 57 comments
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I live in DT San Francisco, and everyone in our two buildings were just given notice that all of our rents are going up between 75-100% at lease end.
Many buildings in downtown SF are going to corporate leases, so this really isn't a market rate. They realized that corporate leases are bringing in the $$$, at least temporarily.
The inflation we *might have doesn't have rising incomes.
Oooh oooh, grandpa, please tell us more stories about this magical type of inflation that we might or might not have.
I think rates really should go up
http://research.stlouisfed.org/fred2/graph/?g=20X
“Nessuna soluzione . . . nessun problema!„
I actually meant the raw Fed Funds rate which is currently 0- 0.25%
It is possible to have inflation imported. The OPEC embargo back in the 70s was a good example of this. Sometimes there can be the opposite like when silver collapsed due to the Hunt Bros. A more recent example is the collapse of Iceland actually led to lower lobster prices in the northeast (temporarily).
NYC has had rent control for over 60 years
http://en.wikipedia.org/wiki/Rent_control_in_New_York
Supposedly Cyndi Lauper was only paying around $1k a month for her place...a fair amount of celebs live in the area not so much because it is a city but because if you can lock in the rate you would be set.
Wasn't rent control a giant subplot of the Friends sitcom in the 90's? I never watched it but that's what I heard...
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http://www.calculatedriskblog.com/2011/08/lawler-census-2010-homeownership-rates.html
The only other explanation is that younger Americans don't want to buy homes, but either way there's no good mechanism to transfer housing from aging boomers to younger generations without wide-scale price declines. The long term trend in real estate prices that we have seen for the last 50 years - of a net return greater than inflation - seems unlikely to continue given these demographic trends.
#housing