Secret #12 – Houses are Also an Investment Good
It’s a law of economics that higher prices reduce demand and lower prices increase demand but that’s only for consumption goods.
Houses are partly an investment good for regular live-in home owners, and houses are entirely an investment good for landlord owners.??
That’s why house prices can behave a bit like a hot stock in the stock market, when prices go up –?and enough people expect them to continue to go up –?more people buy, and then prices go up even more in a feedback loop.?
Some people buy houses, not despite the higher prices, but because of the higher prices when they expect the price increases to continue.