Except credit changes the math on that significantly. You aren’t constrained by your income, but by your risk of default (and even then… glances 2008-ward) Then you can afford to buy more by paying a higher interest rate.
That has nothing to do with what someone is willing to pay, it is everything about what someone is able to pay. Plenty of people are willing to mortgage their future for something they want now but have no current liquid assets to purchase it with.
“Willingly” is doing a lot of lifting, given the degree to which fraud, extortion, and price gouging play a roll in the national economy.
Fraud is all about deceiving the mark into willingly handing over assets. Extortion isn’t involved in free market transactions.
Even price gouging, particularly in the field of end stage medical care, is a sort of willing payment. You ask a dying person: are you willing to mortgage your children’s assets in order to maybe live a little longer? The answer is all too often: yes, and the children often willingly sign up out of sympathy for their dying parents.
Is that extortion? Sort of, but they always have the option to just let MeeMaw suffer in pain and die, instead of paying the hospital $300K to make her more comfortable.
Promotion (and deception and intimidation) drives sales. They create the illusion of scarcity and transform luxury into necessity.
I’m not so familiar with promotion that creates the illusion of scarcity. I mean, in Real Estate it’s not an illusion, there is only one property in the entire Universe like the one under consideration… High pressure sales is often driving the “don’t think, act now, close the deal ASAP” aspect of things. But most promotion for things like Coca Cola, or new cars, provides the marketing aspect of “easy to obtain, just go to your local dealer and pick one up, TODAY!”
They add perceived value among the unwitting and create implicit value through absence of harm.
Yes, and that perceived value is what provides willing consumers anxious to exchange their fungible currency for the goods. Evaluation of “actual value” is an impossible thing, it is like beauty: in the eye of the beholder. For some, an $800 T-shirt is a “great value” because of how it makes them feel to wear it, others’ perception of them wearing it, etc. That T-shirt might only wash once before falling to rags, but for those who are spending $800 on a T-shirt, they probably don’t care - they can buy more different ones at any time. Does that make them unwitting, or just obscenely wealthy in comparison to most people?
But what is the cost of housing?
Where do the materials come from to build the housing? Are those suppliers allowed to make a profit? And their suppliers?
Where does the labor come from to build the housing? Are the laborers paid by the job or by the hour?
And the land for this housing, is that obtained from the free market? Anybody price gouging there, or taking kickbacks?
Once this housing is built, it transforms from “cost” to whatever the market is willing to pay. If the land was downtown, on high bluff riverfront, “at cost” for free via eminent domain, one would assume that housing will become quite a bit more valuable than it cost to build the moment it is made available to the open market. How do we protect this housing as “at cost”? Is it first come, first served? Life estates? Transferred to children, spouses, designated heirs?
And, the opposite situation, when the public housing isn’t in a desirable area, and the residents don’t maintain the housing, who pays for the maintenance?
Easy to hand-wave a solution, harder to make it fit in the real world. At least let’s try to be minimizing:
there’s far too much of that already.