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If you are trying to sell something in the market, and you are not getting any interest, you have probably overvalued the item. You might be able to sell it at that price if you wait long enough, but not because that item has that value generally. In that case, you’ve probably overvalued that item, and would be able to sell it if you reached the value others perceive it to have.
If I sell a cup of water to a man dying of thirst for $100, I shouldn’t expect that my next cup of water will sell for $100 on the market. The cup of water doesn’t have $100 worth of value, it just fulfilled someone’s needs or desires at the time enough that they were willing to pay more than its value to get it.
Again, the market has priced houses at the level they are now. You claim they are overvalued. You have not explained how that is determined. We're not talking about one house like your one cup of water, we're talking about most houses.
So, again, if the market sets the value, who determines those houses are overvalued?
I didn’t claim they are overvalued, I said that may be a case of overvaluation. Do you disagree that things can be overvalued? What do you think market corrections are in that case? It’s incredibly difficult to determine if a section of the market is overvalued before a market correction, and if I had that ability, I’d probably be rich.
Either the market has decided that houses are unaffordable for most people or they are overvalued. Which is it?
I believe that is a false dichotomy.
No, I'm basing it on what you said.
You said the market decides on value.
The market has decided the value of houses is beyond most people's ability to buy them.
Therefore the value of houses is beyond most people's ability to buy them based on your own reasoning.
And then you claimed they were overvalued despite the market deciding on value.
It can't be both.
Again, I never claimed they were overvalued. I do not know if they are overvalued. There are plenty of reasons the market can sustain things being overvalued though, like false scarcity or price fixing. If your definition of value means markets suffering from these practices are actually increasing value, then our definitions of value differ. So if that’s the case, I don’t think this argument is going to go anywhere.
Right, so, again, you believe that the value of homes is beyond the means of most people's ability to buy them because that is what the market has decided.
Also:
Do you see how I said “That may be a case of something being overvalued. That can especially happen when there is artificially limited supply.”
At no point did I say, “That is a case of something being overvalued.”
Right, so, again, you believe that the value of homes is beyond the means of most people’s ability to buy them because that is what the market has decided.
Weird how you refuse to respond to this despite me suggesting it over and over. I think we both know why.
And this whole "I didn't say it was overvalued, I said it might be overvalued" stuff is weasely as fuck.
Ok, let me see if I can clear up the confusion. It is incredibly difficult to determine if something like the housing market is overvalued. Professional economists disagree with each other about that, and I am not a professional economist. I’m not even an amateur economist. You can ask me all you want, but I’m not going to take a stand on it, because I simply don’t know. Whether you will accept “maybe” as an answer is really up to you.
I also don’t know why houses are priced where they are. I know of a few of the factors, like how regulations have made it harder to build affordable housing, and, surprisingly, harder to build luxury housing even. Whatever the factors are that are affecting this market seems to have priced out most people. We can agree on that. Why that is (and whether homes are properly valued or overvalued) is what we can’t agree on, because again, I just don’t know.