Why Owners & Renters Alike Would Benefit from a Housing Market Cooldown

The Money with Katie Show

Money with Katie

Self-improvement, Education, Business, Investing, How To

4.8 • 1.3K Ratings

🗓️ 27 April 2022

⏱️ 46 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today's episode is about the current reality of the US housing market (and stock market, to some degree) and how it's—paradoxically—not actually good for anyone, renters and owners alike. The one group it is benefiting? Investors. The episode dives into why I think a cooldown is inevitable, and focuses more on why human shelter turning into an inflated asset class is dangerous for everyone who needs a house to live in. Look no further than Canada’s precarious situation and increasing homelessness for a cautionary tale. My guest this week (Brandon of Mad FIentist fame) lends his perspective as someone who narrowly escaped the bubble burst in 2008 and ended up losing money on his next property—only to be priced out entirely in 2022. For context, Brandon retired a multimillionaire at age 34. He rents. Cited Sources Philip Pilkington's dire warning about intergenerational "war" stemming from inflated asset prices Investor participation in the real estate market reaching new highs (Washington Post) Americans' inability to pay for a minor emergency Follow Along Blog Instagram Twitter Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome back rich girls and boys to the money with Katie Show.
0:10.3	Today's episode is one of those topics that's almost guaranteed to get me tart and feathered
0:16.0	in my own comment section, but I can't shy away from controversial topics just because
0:22.2	I am admittedly too sensitive for the internet.
0:33.0	And as with most things, the idea for this episode started with a DM.
0:38.4	It read, the housing market is going to eventually rise faster than the stock market.
0:44.3	And it was presented as fact in this message and it took me kind of a back.
0:48.9	My take on that is that, frankly, there's no way.
0:52.7	And as a human being that requires shelter to survive, we shouldn't want it to.
0:59.2	We don't want the roof over our heads to become even more financialized as an asset class
1:06.3	in this reporter's opinion.
1:08.1	Now the last few years have seen homeowner Jubilee summit new heights and as an outspoken
1:14.4	renter who believes that homeownership can be a suburban middle class scam if it's done
1:19.3	incorrectly, it's been an especially irritating bull run.
1:24.0	Now I know this may come off as anti-ownership, but that's really not where I'm coming from
1:28.8	because frankly, I don't think what's happening in the housing market right now is good for
1:33.4	anybody, whether you rent or you own.
1:35.8	I think we are heading in a dangerous direction and today I will tell you why.
1:40.4	But there are three major reasons why I don't think the crazy returns that we've been
1:46.2	seeing will last.
1:48.2	And the first is the way that both asset classes, property and securities derive their value.
1:55.0	The second is the fact that one is a human need and the other is not.
	...

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