> Are asset prices insane? Home prices are high but in-line with the long-term trend on a real basis
They are insane compared to the relative growth, or lack thereof, of median wages, yes. If an assets continues appreciating even past the point it's accessible to the vast majority of the population, "supply and demand econ 101" is no longer working. When that asset is one of the most critical components of life (housing) and on which many lives are built around (be it where one lives and works, or how many kids one can afford to house, or the community one can have), this is unquestionably not good and can have wild ramifications. Disenfranchised young people are a dangerous political force, while population declines could break economic models as we understand them today (it's bordering on the impossible to have infinite growth when the population is declining).
They are insane compared to the relative growth, or lack thereof, of median wages, yes. If an assets continues appreciating even past the point it's accessible to the vast majority of the population, "supply and demand econ 101" is no longer working. When that asset is one of the most critical components of life (housing) and on which many lives are built around (be it where one lives and works, or how many kids one can afford to house, or the community one can have), this is unquestionably not good and can have wild ramifications. Disenfranchised young people are a dangerous political force, while population declines could break economic models as we understand them today (it's bordering on the impossible to have infinite growth when the population is declining).