Replies to post #56799 on Biotech Values

[iwfal]

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 challenge you to find any time other than the Great Depression when we, as a nation, stepped backwards in house amenities. Size, insulation, air, kitchen, ... . I think we may be forced to temporarily step backwards here just because we, as a nation, over-extended in housing. But in 15 years we'll be buying bigger yet.

[zipjet]

>> 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