The default housing position

A common misconception that many people have is that they assume that the default position for people with regards to housing is neutral. The idea is that people aren't exposed to the real estate market unless they buy into it.

This is not so, you have to actually live somewhere. Therefore the default position for housing is to be short the housing market one house.

There's a lot of implications that follow on from accurately understanding this fact. First of all everyone is exposed to the real estate market whether or not they like it. This means that for everyone who does not own a house they are effectively short one house in the housing markets. Sure there's some people who are homeless, but that's not exactly a good outcome for anyone and thus it doesn't change the core logic of the argument here.

When you are short a position you benefit from prices going down. The default position that everyone is born into is therefore to benefit from house prices going down. The default position therefore for societal health is that dropping real estate prices are good for society. The more that real estate ownership gets concentrated in the hands of fewer people, especially corporate real estate ownership, the more the average person benefits from real estate prices going down.

Because of the true nature of the real estate market, large rises in real estate prices are to come at the expense of many other important factors in society like political stability, birth rates, national stability, human rights, economic development, etc. A society with a real estate bubble is therefore a sick society. We see this sickness slowly spreading, the symptoms manifesting in many places but particularly impacting those who were not able to buy into the real estate market earlier on.

Many people make the mistake of moralizing about using various forms of the "just world fallacy". The reason these fallacies are unhelpful, beyond just being completely untrue, is that younger people are not getting access to the real estate market for no other reason than being born when they were born. There are many people talking about inter-generational tensions these days but this factor is a huge one in driving division within society. Divided societies are weak societies, weak societies ultimately are poor societies. The housing market bubble is actually making our overall society far weaker. Because people don't understand the difference between nominal and real wealth a lot of people are falling into the trap of thinking that they are getting richer when they are actually getting poorer. Never forget that currency is only as valuable as what you can purchase with it, and if the people controlling the money printing presses want to outbid you then your currency holds little to no real value. The Cantillon effect is maybe the most brutal form of wealth confiscation and destruction ever created.

A prediction I have is that the future will belong to the societies and nations that aggressively intervene in the residential housing market. The societies that do not intervene will start to basically die out. We are already seeing this with the birth rates in some places already falling below replacement rates. All societies are always within 50 years from extinction, something that many people forget, so its not exactly a hard thing for a society to effectively remove itself from existence if its sufficiently unwise enough to buy into the ideas of death. Thinking that real estate bubbles are a good idea is basically engaging deeply with the idea of death, a dangerous place to be for many reasons, a full discussion of which would go deeper than just a short sidenote in an economics article.

These thought process behind these predictions are much the same as other thinking on evolutionary pressures on the cultural and group level. When groups do things that negatively impact their overall group fitness those groups start to shrink and eventually they just die out entirely. We don't think about the fallen and dead civilizations that have existed in the past much in our day to day lives because those civilizations are dead and therefore unless we pay very close attention we do not notice them.