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The Value of anything is based on how much one is willing to pay for it. The Value for a house for example is determined by the resale value, I.e. how much someone else is willing to pay for it. Therefore, most people’s decision-making is determined by resale value, which appears to drive the market. People are willing to drive great distances to work over time, which in their minds, will be made up by the resale profits from their homes. Who worries about micro-sales overtime? To save in resale of home somehow, in their minds, is better than loss in gasoline living farther away from work. People misrecognise the inefficiency in this equation. As gas prices rise, they find out that they must make a profit on their homes at resale.

The value is also determined by supply and demand. If supply supersedes demand then you will have the Walmart effect with lower prices. If supply does not (intentionally) meet demand (the Jaguar or BMW effect) then prices are intentionally inflated.

The opposite scenario would be to purchase a home nearer to work, and risk lower resale profits or losing money in resale value over time. The risk is worth it in terms of micro-sales over time. Most people think small, miniscule sales or payments (I.e. losses) are not hurting them. But viewed over time, they add up. Most people however, 90%, do not even carry a monthly budget. I know this, and that’s why I wrote my E-Book mentioned throughout most of my blog posts.