This is an economists talk about the mind of the average American when it comes to money, and their perceptions of what is considered to be good rewards vs. bad rewards.
There are many good points here and they are even more intriguing to me when you relate them to real estate. People have real problems figuring out value when you add time into the equation.
Also, when thinking about real estate, it is an error to think about concepts in terms of money solely. There is value in owning and having shelter. It is like the example he gives in the lecture about whether you would spend $25 for a big mac….without telling you the circumstances.
Here in Ashland, and the Rogue valley I frequently have people from out of the area (not those from Northern California, but usually from other areas of the country) who comment on how much houses cost in this area as opposed to where they are from.
What seems to be missed is that the reason people want to move here IS the reason houses cost so much money. Ashland and its surroundings is an area of good weather, beautiful countryside, small population, low crime rate, high self awareness, culture, open-mindedness. Add to this the proximity to San Francisco, and the prices of Northern California houses…and bingo…
But if you ask yourself…where else can I spend that money…and get those qualities? Those that move here realize that it is very difficult, if not impossible, to have all of the above qualities, for what it costs to live here.
The reward is quality of life.