Rents and housing costs make up 30% of the Consumer Price Index. They’re its largest component. They’re soaring in real life. But not in the CPI.
Sweet Spot: Homes above $15 million.
Something has to give. And it’s not going to be the maxed-out American middle class.
The magic mix becomes toxic.
Not everyone is irrationally exuberant.
Housing Bubble 2: ballooning inventories of new single-family homes.
Profit grows on trimmed trees, freshly painted walls, and rehabbed bathrooms, and flipping volume soars, and nothing can go wrong. Then something goes wrong.
You’d think the housing market is in fine shape, based on the sizzling optimism of our home builders.
Homeownership hit the skids when homes became a highly leveraged asset class, flipped and laddered by speculators, rather than lived in by normal folks.
“These are trades that, three years ago, would have far surpassed anyone’s imagination.”