The market? Weird, because I’ve seen a lot of complaints that things like houses are priced too high to be affordable. And yet by your metric, their value is the correct one because the market has decided so. Is that really what you think?
If you are trying to sell something in the market, and you are not getting any interest, you have probably overvalued the item. You might be able to sell it at that price if you wait long enough, but not because that item has that value generally. In that case, you’ve probably overvalued that item, and would be able to sell it if you reached the value others perceive it to have.
If I sell a cup of water to a man dying of thirst for $100, I shouldn’t expect that my next cup of water will sell for $100 on the market. The cup of water doesn’t have $100 worth of value, it just fulfilled someone’s needs or desires at the time enough that they were willing to pay more than its value to get it.
Again, the market has priced houses at the level they are now. You claim they are overvalued. You have not explained how that is determined. We’re not talking about one house like your one cup of water, we’re talking about most houses.
So, again, if the market sets the value, who determines those houses are overvalued?
I didn’t claim they are overvalued, I said that may be a case of overvaluation. Do you disagree that things can be overvalued? What do you think market corrections are in that case? It’s incredibly difficult to determine if a section of the market is overvalued before a market correction, and if I had that ability, I’d probably be rich.
The market? Weird, because I’ve seen a lot of complaints that things like houses are priced too high to be affordable. And yet by your metric, their value is the correct one because the market has decided so. Is that really what you think?
That may be a case of something being overvalued. That can especially happen when there is artificially limited supply.
I thought you said the market determined the value.
So who determines if something is overvalued?
If you are trying to sell something in the market, and you are not getting any interest, you have probably overvalued the item. You might be able to sell it at that price if you wait long enough, but not because that item has that value generally. In that case, you’ve probably overvalued that item, and would be able to sell it if you reached the value others perceive it to have.
If I sell a cup of water to a man dying of thirst for $100, I shouldn’t expect that my next cup of water will sell for $100 on the market. The cup of water doesn’t have $100 worth of value, it just fulfilled someone’s needs or desires at the time enough that they were willing to pay more than its value to get it.
Again, the market has priced houses at the level they are now. You claim they are overvalued. You have not explained how that is determined. We’re not talking about one house like your one cup of water, we’re talking about most houses.
So, again, if the market sets the value, who determines those houses are overvalued?
I didn’t claim they are overvalued, I said that may be a case of overvaluation. Do you disagree that things can be overvalued? What do you think market corrections are in that case? It’s incredibly difficult to determine if a section of the market is overvalued before a market correction, and if I had that ability, I’d probably be rich.
Either the market has decided that houses are unaffordable for most people or they are overvalued. Which is it?
I believe that is a false dichotomy.
No, I’m basing it on what you said.
You said the market decides on value.
The market has decided the value of houses is beyond most people’s ability to buy them.
Therefore the value of houses is beyond most people’s ability to buy them based on your own reasoning.
And then you claimed they were overvalued despite the market deciding on value.
It can’t be both.