The Two Faces of Housing: The Home Depot, Inc. (HD) and More

There’s technical progress. Homes are a manufactured good. Back in 1900, homes were handmade, you know, craftsmen. But by 1950, we can get all kinds of power tools and prefab, and they were just better in 1950 than we were in 1900, so of course prices will go down. And on top of that progress, there’s the outmoding, the out-of-style factor. So what kind of houses will they be building in 20 years? They may have lots of new amenities. They will be computerized or something in some way that we can’t anticipate now. So people won’t want these old homes. To me, the idea that buying a home is such a great idea is just wrong. They may very well decline for the next 30 years in real terms.

This is the new housing story: Get ready for rising construction, but don’t wait around for a long-term boom in prices.

The article The Two Faces of Housing originally appeared on Fool.com and is written by Morgan Housel.

Morgan Housel has no position in any stocks mentioned. The Motley Fool recommends Home Depot.

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