Boy, it that a cool idea for a video. Simply fantastic! The only thing I would have liked more would be to have attached to the roller coaster ride at certain points some sort of graphic reminder about where we were in the timeline. But other than that it's perfect!
As for the idea of rising home prices, I have a couple of observations: 1) if you read the text on the static graph, you see that a $100,000 home in 1890 would sell for $199,000 today...a 99% increase. While that sounds like alot, that is over a time span of 116 years, and so is not much at all...in fact, it works out to less than 1% return compounded over that time frame. That's hardly some sort of bubble...to average a 1% gain over a century... 2) The creator of the graph doesn't take into account the fact that the average home today is far larger and has far more amenities than the average home in 1890...there's no comparison. So the average home of today offers more comparable value to a homeowner. In fact, if one could adjust for size and technological advances, one might find that the home of today is a better bargain than the home of 1890. 3) The author adjusts for inflation, but doesn't take into account wage or productivity gains, which have outstripped inflation. It would be interesting to know how much of a percentage of the average income is/was spent on housing per period of time. Surely home ownership is far higher now than in 1890...why? It has to be because the avg. home has overall become more affordable to more people, taking into account all factors.
1 comment:
Boy, it that a cool idea for a video. Simply fantastic! The only thing I would have liked more would be to have attached to the roller coaster ride at certain points some sort of graphic reminder about where we were in the timeline. But other than that it's perfect!
As for the idea of rising home prices, I have a couple of observations:
1) if you read the text on the static graph, you see that a $100,000 home in 1890 would sell for $199,000 today...a 99% increase. While that sounds like alot, that is over a time span of 116 years, and so is not much at all...in fact, it works out to less than 1% return compounded over that time frame. That's hardly some sort of bubble...to average a 1% gain over a century...
2) The creator of the graph doesn't take into account the fact that the average home today is far larger and has far more amenities than the average home in 1890...there's no comparison. So the average home of today offers more comparable value to a homeowner. In fact, if one could adjust for size and technological advances, one might find that the home of today is a better bargain than the home of 1890.
3) The author adjusts for inflation, but doesn't take into account wage or productivity gains, which have outstripped inflation. It would be interesting to know how much of a percentage of the average income is/was spent on housing per period of time. Surely home ownership is far higher now than in 1890...why? It has to be because the avg. home has overall become more affordable to more people, taking into account all factors.
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