House Prices: People are Nuts

Every once in a while I browse Zillow in my area. Maybe next year I'll try to pick up a cheap foreclosure at auction, so I wanted to get a feel for home prices around here. I was pretty stunned at the high prices. It seems like there's just three categories of house here. Houses that are in the so called "allotments" in the nearby town start at $250k. That area was the cheap, working class neighborhood when I was in school. Nice middle class houses are now about $450k. Houses for professional people and business owner types are about $600k-$1M. At least in this area you get a lot for that kind of money: a huge house with multiple outbuildings, maybe a giant horse barn, plus lots of land and maybe a lake or something.

Anyway, I don't really understand how the economy is functioning now. The median income and median house price are pretty far out of alignment right now. I think the median house price is ~$400k in the US, but the median household income is around $75k if I remember off the top of my head. 400/75 = 5.33. Typically the median house price is about 3x the median income, so today people are paying way more for a roof over their head than "normal". (This article goes into the ratio in more detail)

Lots of the houses in this area that are $500k or $800k are "nice" but have absolutely no productive capability... in fact it's quite the opposite scenario, they're money pits that will vampire people's time and money in maintenance and cleaning. There are notable exceptions to that--people like Amish have productive property. Some people have businesses like a horse barn or Air BNB on their property, but almost every house I browse on Zillow is just a money pit.

Now when I look at pictures of a giant house with a fancy "great room" or some shit, I just think the people who get sucked dry keeping all that mess clean and organized are retards and probably super boring people with nothing better to do, and chances are they're kind of broke and living paycheck to paycheck on a big income. My wife has a friend like that; to me that woman seems completely delusional, well I guess brainwashed and groomed are more appropriate terms to describe it.

The only thing that appears to be driving these crazy house prices is the greater fool theory and inflation. The greater fool theory in this scenario is "house prices keep going up, so I will be able to sell this house for more than I paid for it to some retard, because I'm so smart." It works hand in hand with the destruction of the value of the dollar, because the price tag of houses keeps going up as the dollar gets devalued.

Inflation is not driving salaries up at the same rate, which is really pretty interesting.