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One more reason is the eminent arrival of self-driving cars. That will drastically affect the price of down-town real estate in the big coastal metropolis with tight building restrictions:
1. People will be able to commute farther away from work, because they can sleep, exercise, read or even having dinner (and cooking dinner!) during commute;
2. Downtown parking garages charging $40/day or $500/month will be out of business as self-driving cars can drive themselves to park and be called in to pick up the owner . . . assuming there will still be majority car ownership instead of self-driving Uber cars taking people to work and home; that means all those parking garages will be available for conversion into condos, further depressing downtown condo prices;
The rules I'm using now for buying houses now are:
1. It has to be substantially below replacement cost;
2. It has to generate enough rent in 5 years to pay for itself.
http://www.zerohedge.com/news/2015-07-25/should-you-buy-house
And it is written by a real estate professional. (Of course, no longer.) Still, how refreshing!
Nothing new here, but succinctly written. I enjoyed his affordability obstacle explanation:
"Housing, as a percentage of household income, is too expensive. A decade of ill-conceived government intervention and Federal Reserve accommodations prevented natural economic forces from driving house prices to equilibrium. As a result, not only is entry difficult, but many are struggling and are stuck in dire housing traps. Corelogic estimated that as of the 1st quarter of 2015, 10.2% of mortgages are still under water while 9.7 million households have less than 20% equity."
#housing