If people are using GDP as a proxy for agg. demand, that's problematic. It seems a better proxy for quantity demanded (or, even more accurately quantity exchanged). Hence, demand can go up & GDP can go down. Over the last 3 years, my demand to see Taylor Swift live has gone way up. Number of TS tix bought = 0. Addition to GDP due to my increased demand = 0.
No one is saying demand didn't increase in 2021 over what it was in 2020. Because demand in 2020 was suppressed by the pandemic. But when you look at 2019-2021, the net increase in real GDP was 2.8%, or about 1.4% per year. That's well lower than the average yearly increase in GDP that we've seen since the 2008-2009 recession.
To be far I don't blame those who bought real estate at a cheaper rate and are able to sale at 3x higher rate, good for them. I don't think there would be one poster on here that would be upset making that. If people weren't willing to pay that amount, they wouldn't be able to sell it for that. The greed is equally spread in every sector, employee pay and benefits, vehicles, insurance cost due to false claims or having to pay more for those receive it free. We could go on and on and on
It’s not about ability to sell high, it’s that there are a lot of shenanigans going on. Buying at $600k and relisting a month later at $900k with no upgrades. Real estate does not triple in value in 3-4 years. The market is broken. I’ve profited off of real estate, so I can’t be hypocritical, but what’s going on now is a deregulated mess largely caused by the historically low interest rates during the pandemic. It made access to money cheap and drive up the prices. We are now stuck with the inflated prices.
I agree with that. That's why a lot of mom-and-pop businesses sold in the last few years, corporations were getting loans at virtually no interest, which allowed them to offer 2x to 3x higher for that business than they would have years prior. I've been looking for a home in the NC mountains, these homes are 20 to 30 years old and need upgrades, they're asking $300 to $400 a sqft, yes that's just stupid. So I choose not to buy yet but set back and wait for an opportunity or I'll just by land and build exactly what I want.
Yeah, as soon as I posted that I was like “that is the slope dummy.” Some folks forget that inflation is Florida is above the national average for lots of reasons, not just food obviously.
Exactly. It's not that I don't think people are entitled to a profit, but at these prices I honestly don't get who these people are that are willing to overpay.
True. To get more in the weeds. Suppky curve shifted left, which all else equal would lead to lower real GDP and higher prices. But then via govt spending Demand curve shifted right, which further increased prices. So the quantity demanded probably stayed around the same but the demand curve shifted due to fiscal stimulus.
I still think you & everyone else is discounting the role that expected inflation has on demand, &, hence, inflation. expecting inflation can be a self fulfilling prophecy.
I worked on a project in summer 2022 which required a real estate consulting firm to give us an industry update. They said the market was under built since the last crash and the pandemic set it back further. Said 5 years to catch up. That’s 2027. We paid a lot so no way it’s wrong. lol.
expectations of higher future prices increases demand now to avoid those higher future prices which all else equals increases prices. This is why central banks are terrified of deflation - it kills demand
Yes, " greedflation." How much money that we don't have are our government idiots giving away to other nations... billions? And how many billions of out taxpayer's dollars are they giving way to these illegal aliens... aliens that they let come into our county? Yes, stealing other people's money and blaming our economy on the corporations. I know why they're attacking the corporations, becasue campaign contributions to these dirty rotten elected clowns is drying up... that's why these types articles are coming out. The Dems caused this crappy economy, and now these Dems can kill two birds with one stone by blaming the corporations. The same ones that are NOT giving these elected clowns free money anymore.
