Say you live in a city where you bought a house for 200k back in the 90s and now the house is worth a million.
When the house is a million, generally only the 1% can afford it correct? I don’t think a household with 100k in income can get a mortgage for a 1 million dollar house.
But that house was bought in the 90s by a fairly middle class or upper middle class family. Now its being bought from them by a member of the 1%, who transfers a million in their wealth to the middle class family.
So does an inflated housing market shift wealth downwards, or does the wealth just end up going back up the ladder eventually when the new owners charge large amounts for rent?
A million homes bought by middle class families all over the west for low six figures a few decades ago going for a million each is a trillion in wealth transfer if they sell their houses to the 1%.