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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (56307)6/19/2006 9:08:48 AM
From: GraceZRespond to of 306849
 
Housing services have a value. It's not arbitrary, I can go out into the market place and price them. Do you really think in the twelve years I've owned my house that the services it provides me have increased in value by 400%? The price has increased 400% but the services haven't increased by any stretch by that much even though we did numerous improvements. If the price retreats back to where it came the value of those services will still have a value that can be determined independently from the sale price.



To: mishedlo who wrote (56307)6/19/2006 9:10:22 AM
From: MoominoidRead Replies (1) | Respond to of 306849
 
This is the basic idea of subjective valuation vs the exchange value in the market. When your subjective valuation is greater than the exchange value you buy and vice versa. That is the basic idea of utility maximization theory that we teach to every beginning economics student.


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