Lee Hachadoorian on Jan 22nd 2011
I recently participated in a survey in which I was asked if I thought the housing market would “improve” over the next year. I assume that they meant to ask whether I thought home prices would increase, but it does prompt the question, why are higher home prices an improvement? After all, if you thought gasoline prices would go up next year, and a survey asked you whether gas prices would “improve”, you would probably say “No”. And it would be plain bizarre to phrase the questions in terms of whether you thought the gas “market” would “improve”.
But the question surely captures the way most homeowners and many homebuyers think about housing, that higher prices are regarded as an improvement. Housing is unusual among consumer goods in its dual role as consumption good and investment vehicle. Continue Reading »