AI
Saturday, December 29, 2007 4:07:09 PM
>> I wonder when TOL-like houses (not to be confused with Toll-like receptors
) will finally fall out of fashion. Yes, I really mean fashion, which has been a substantial driver for the appreciation of these assets until recently, IMO.
I don't see housing size as a fashion statement. (No doubt it is that for some.)
Having larger homes is essentially a luxury - space (and all the things you can do with it) is the ultimate luxury. I see the increasing size of the average US home as a function of our increasing affluence driving luxury expenditures. That affluence has been driven by productivity gains that increase each year. In recent years we have seen much greater productivity gains (>3%) than we have historically (1%).
For now we have energy and interest costs tempering the demand for large homes. Topping that off we have a crisis of confidence in the financial systems. But if productivity holds up the taste for large homes will resume after the higher costs of ownership are absorbed.
JMHO
zip
) will finally fall out of fashion. Yes, I really mean fashion, which has been a substantial driver for the appreciation of these assets until recently, IMO. I don't see housing size as a fashion statement. (No doubt it is that for some.)
Having larger homes is essentially a luxury - space (and all the things you can do with it) is the ultimate luxury. I see the increasing size of the average US home as a function of our increasing affluence driving luxury expenditures. That affluence has been driven by productivity gains that increase each year. In recent years we have seen much greater productivity gains (>3%) than we have historically (1%).
For now we have energy and interest costs tempering the demand for large homes. Topping that off we have a crisis of confidence in the financial systems. But if productivity holds up the taste for large homes will resume after the higher costs of ownership are absorbed.
JMHO
zip
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