If it was my oil field, for argument's sake, I could sell it 4% a year for 25 years and then never need another one. Why would I need another oil field? An oil producer might *want* another one, but they hardly need one. They can sell the field, put the money in the bank, and go home.
I want to live somewhere all the time, however.
If I sold my one house, I'd need another right away. Or I could keep it. My options appear to be keeping it, or selling 100%. For all practical purposes, there is no in-between.
With the oil field, if I"m selling 4% per year right now, I could up that to 5% or 6% if I think the price is going to crest soon, or perhaps cut back to 2% to 3% to help drive up the price. But either way, I get $$$ profit and I invest that somewhere else, e.g. gold or Chinese automakers.
You are needlessly quantizing the oil -- it's a reservoir and you can sell it a barrel at a time, generate income for 20-50 years. The house is just a single entity. It didn't matter one iota that my house price went up 200% in 15 years -- the other houses went up 200% too.
Rent differentials matter, but not much. There are many barriers to selling my house (school district, hassle, market forces). The market for oil is gigantic and liquid. |
