OT - Gas to hit 4.00

Dave Smith dave at thesmithfam.org
Sat Jun 21 00:25:35 MDT 2008

Andy Bradford wrote:
>> Houses haven't gotten cheaper over the decades.
> According to which standard of measure?

Here are a couple ways to measure it. Look at the ratio of median home 
price to median income today. Now look at the same ratio 30 years ago. 
The ratio is higher today. Same story if you compare the ratio of home 
price increases to inflation. Now compare the ratio of Toy prices to 
median income today and 30 years ago. Toy prices are *down*. Go look up 
the numbers for yourself. Everyone seems to have anecdotal evidence 
otherwise (including myself), but the numbers are widely published. 
Homes are more expensive today than they were 30 years ago. And yet, 
they are made with less quality (by others' and my admittance).

>> House prices have out-paced inflation at  least 5 to 1. Why isn't the 
>> quality going *up* if houses are getting more expensive?              
> I assume you have the answer. Care to share the wealth?

I already said it. Developer greed and population growth, leading to 
quality reduction and limited supply, respectively. Couple that with 
lots of home-ownership hype (stopping THROWING your money away in rent), 
and you get today's environment: expensive, crappy, ugly houses built on 
too little land.

That's my answer. What's yours? Here's the question, restated: If houses 
really are more expensive today (even inflation adjusted) than they were 
in days past, why isn't the quality higher? (Obviously some aspects are 
higher quality, like electrical, plumbing, roofing, etc.) That's an open 
question to everyone, but obviously it presupposes that you agree with 
me on the previous paragraph, which you perfectly well may not.

>> Houses are not Transformer toys. Toys have gotten cheaper. Houses have
>> gotten more expensive,  and yet both toys and houses  have gone *down*
>> in quality. Yes, comparing houses to toys is logical fallacy (proof by
>> false analogy, actually).
> Will you offer a proof by true analogy?

Frankly I don't see a need for any analogy when the situation is so 
obvious to me in the base case. :)


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