this post was submitted on 22 Sep 2024
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No, I'm basing it on what you said.
You said the market decides on value.
The market has decided the value of houses is beyond most people's ability to buy them.
Therefore the value of houses is beyond most people's ability to buy them based on your own reasoning.
And then you claimed they were overvalued despite the market deciding on value.
It can't be both.
Again, I never claimed they were overvalued. I do not know if they are overvalued. There are plenty of reasons the market can sustain things being overvalued though, like false scarcity or price fixing. If your definition of value means markets suffering from these practices are actually increasing value, then our definitions of value differ. So if that’s the case, I don’t think this argument is going to go anywhere.
Right, so, again, you believe that the value of homes is beyond the means of most people's ability to buy them because that is what the market has decided.
Also:
Do you see how I said “That may be a case of something being overvalued. That can especially happen when there is artificially limited supply.”
At no point did I say, “That is a case of something being overvalued.”
Weird how you refuse to respond to this despite me suggesting it over and over. I think we both know why.
And this whole "I didn't say it was overvalued, I said it might be overvalued" stuff is weasely as fuck.
Ok, let me see if I can clear up the confusion. It is incredibly difficult to determine if something like the housing market is overvalued. Professional economists disagree with each other about that, and I am not a professional economist. I’m not even an amateur economist. You can ask me all you want, but I’m not going to take a stand on it, because I simply don’t know. Whether you will accept “maybe” as an answer is really up to you.
I also don’t know why houses are priced where they are. I know of a few of the factors, like how regulations have made it harder to build affordable housing, and, surprisingly, harder to build luxury housing even. Whatever the factors are that are affecting this market seems to have priced out most people. We can agree on that. Why that is (and whether homes are properly valued or overvalued) is what we can’t agree on, because again, I just don’t know.
So the market always decides value except when it doesn't. I see.
I mean, yeah, kind of. The market is an indicator of value, but it can be wrong for a number of reasons (false scarcity, price fixing, monopolistic pricing, speculative investments, etc). Earlier you asked me how I would determine value, and I told you “consensus”. The market is a form of consensus, but not the only form. If I’m unsure whether the market is correctly valuing something, I’d try to get an expert consensus. For example, that’s actually what I do when I’m trying to buy a rare video game, because that market is volatile as fuck, and isn’t a reliable indicator of value.
I see. And what makes someone an expert on the value of a video game? Exactly what metrics do they use to determine this value and how do all the other experts come to this consensus? Do you even know?
If I did know, I wouldn’t need to consult them. Though, I’d imagine they use a similar technique to how I would appraise the value of a gaming PC, not that I’m an expert on consumer hardware pricing, but I’m fairly knowledgeable. But I would use historical data, performance metrics (although this wouldn’t apply to retro games), market conditions, conditions of the parts, and a certain amount of speculation.
The reason I’d look for a consensus is to account for outliers. If one expert is using some metric that causes them to over or under value a game, I’m less likely to get ripped off by having multiple expert opinions forming a consensus than if I relied on just that one expert’s opinion.
So you don't actually know what sets the value of the games you buy, you just assume the value is set in some rational manner.
I'm not sure what is leading you to make such an assumption.