The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Clarksterh who wrote (50505)	1/21/2006 12:25:41 PM
From: gpowell	Read Replies (1) of 110194

b) RE Price vs RENTS Rent is determined by current supply and demand, while home prices are in part determined by investment potetential, or future supply and demand. Home prices may be quicker to adjust to shifts in rational expectations while rents only adjust when these expectations are realized. The spread simply reflects preferences and constraints under equilibrium conditions and cannot be used to determine value, except under equilibrium. Message 19695182 a)RE Price/Income (even adjusting for interest rates) is extremely high. Message 22043263 Also: Heterogeneous productivity, thus guarantees “inflation” in certain products. Message 21966901

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