REGISTER HERE for the December 16 live demonstration of VictorAI.

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On today’s show we are talking about the myth of the housing crisis. 

But first, I’d like to invite you to a webinar next week on December 16 where I will be demonstrating the use of our new AI tool which we affectionately call VictorAI. This is our own custom language model which is built on top of ChatGPT. We trained VictorAI with the contents of the Real Estate Espresso podcast and my book Magnetic Capital. It’s the difference between going to a family doctor versus going to a specialist. The specialist is always going to give you a more precise answer. Click on the link in the show notes and we will talk to you on December 16 at 2PM.

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Yes, there is a problem with affordability in the US. But affordability is not limited to housing. It is broadly based. Inflation has impacted virtually all aspects of daily life. The problem is that the US dollar has been devalued and that incomes have not kept pace with the devaluation of the currency. 

The problem is not a result of greedy landlords jacking up the rent above what ordinary people can afford. When landlords price their properties above market, they experience extended vacancy. A vacant property is losing money and will ultimately result in bankruptcy for the landlord.

The crisis of affordability is the result of inflation which has eroded the purchasing power of ordinary citizens across the board. It’s reflected in record levels of student debt, crushing levels of consumer debt, falling levels of home ownership, rising levels of automotive debt, and it’s affected the ability to afford basic groceries. 

The solution is not rent control, any more than price controls at the grocery store will improve the affordability of groceries. We have had a succession of governments on both sides of the political spectrum who have been using devaluation of the currency as a way to fund excess government spending.