Uncharted Territories

Real estate has been a great investment for so long that people think it always will be. This is a mistake. I don’t think it will.

Powerful forces have been raising housing prices for decades. But they are now petering out, even reversing. As time passes, housing prices might shrink.

Data from even farther back gets a bit spottier because few countries have good records, but the finding generally stands. This is Amsterdam:

Each one of these four trends has been growing incredibly in the past few decades, but is unlikely to keep growing and may even reverse.

It’s true that population has grown since we were hunter-gatherers, but it has exploded in recent times in ways we have a hard time fathoming:

The US is mainly growing because of immigration (which we’ll discuss later), but even there, the growth rate is going to be lower in the future than in the past. That is true for the entire world.

Of course, all of this is driven by the fertility rate, which is shrinking all over the world, is already below replacement rate in most countries, and will likely become the case in all of them.

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