Saturday, November 24, 2007

Is the "Collapse" of Housing Prices a Good Thing?

Sure is.

If you think that lower gas prices, lower tuition prices, lower insurance premiums, etc. are a good idea, then why wouldn't lower house prices also be good? Because maybe you have a house to sell? Well, someone else has your house to buy, so that's good for that someone else.

Or perhaps it would be "good for the economy" if, say, food prices doubled because it would mean better times for supermarkets and food shippers?

Why didn't the "collapse" of the price of memory chips, and for that matter, almost all technologies, prove ruinous for the economy?

What is an "economy" anyway?

Ideally, housing prices should drop to nothing. Just as the price of everything should drop to nothing in an ideal world of unlimited abundance. Unfortunately, though, they won't -- so, if you own a house, you'll always be able to sell it for something.

And, probably for much more that what you originally paid -- notwithstanding "collapsing prices" hysteria.

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