From 2021 to 2022, there was a phenomenon: the housing prices at that time had already shown clear signs of peaking, and the economic fundamentals clearly no longer supported such a high house price-to-income ratio, but the vast majority of people did not choose to sell their houses at that time.
What’s even more bizarre is that not only did they not sell, but many people took out huge mortgages to buy houses at the highest points in 2021 and 2022.
This includes some people who should have insight into the market. For example, a practitioner from a well-known financial company, because of the huge mortgage in Beijing in 2022, was unable to bear the consequences after the income fell and housing prices fell in 2023, and finally chose to jump off a building.
Besides these, there is another strange situation, that is, until after 2023, there are still many, many people who believe that housing prices can quickly return to the previous high points, and even many people believe that housing prices can still double.
In fact, as long as you pay a little attention to the economic environment at that time, it is easy to realize that the support for high housing prices no longer exists.
This is not because most people are stupid or dull, but because of a deep-rooted existence in human nature: path dependence.
Some people may say: Isn’t path dependence generally referring to the behavior of a country?
Indeed, but a country is originally composed of specific individuals, so path dependence is actually a huge weakness hidden in human nature, but it is difficult for us to perceive.
“Housing prices only rise and do not fall”, it now seems that this is similar to a joke, but when time goes back to 2022 and 2023, the vast majority of people hold this view.
On the one hand, it is because housing prices have indeed risen for too long. From 2009 to 2022, the housing prices that have soared for 13 years have made everyone accustomed to this, and they feel that it is impossible for housing prices to fall.
But the more important reason is that most people have become accustomed to using housing prices as almost the only means of investment and the only way to achieve wealth effects. In addition to the cash assets of wages, Chinese people almost only have houses as assets or passive income.
In other words, most Chinese people have psychologically and realistically developed a path dependence on the appreciation of real estate.
This path dependence, to a certain extent, will be internalized as a fixed “success mechanism”.
In the dispute between Jia Guolong and Luo Yonghao, we can see that both of them also have the problem of path dependence. The reason why Jia Guolong adopted tough public relations and constantly responded with his “old man” approach is because that was the way he succeeded for a lifetime. He became rich by that method and could not change his method on the spot – he could not change it either.
Luo Yonghao is the same. His path to success is based on his eloquent mouth, his sarcastic expression and the “straight man” style of “sticking to the end”, so in this dispute, he is also path dependent, following the past way of doing things.
But path dependence, sooner or later, will lead to a crash. Jia Guolong finally lamented that he did have a “fatherly” taste after this bloody “battle”, and he paid a very painful price to understand why others said he was an “old man”.
Luo Yonghao, in fact, also paid a price.
Let’s go back. The obsession with housing prices and buying houses is the path dependence of wealth for most Chinese people.
On the one hand, it is because they are indeed constantly reaping benefits: no matter when you get on the bus, housing prices will naturally continue to rise, and you will never lose money, it’s just a matter of how much you earn.
Another problem is that they don’t know how else to invest, how else to increase their wealth. Stocks and other things are not the main way for Chinese people to increase their wealth. About 70% of Chinese people’s wealth is deposited in houses.
The reason why this path dependence is said to be a psychological subconscious is because the mechanism it forms is actually difficult to resist.
For a young person in their 20s, their values are still being shaped, they are almost new every day, and they are constantly experiencing new things and generating new feelings.
But after the age of 35, life begins to gradually become solidified, becoming a constant cycle of repetition. This is not objectively determined, but a kind of psychology – because there is too much “old stuff” accumulated in the brain, so the speed of accumulating “new stuff” becomes very slow.
The key is that those “old things” are no longer fragmented knowledge, but have solidified into various fixed cognitions and ways of thinking, but they are unaware.
As soon as you open your mouth, others will know your way of thinking. This is why “old manization” is always easy to see.
This stubborn old pattern cannot be changed simply by learning a few popular online slang words among young people and playing with things that are popular among young people.
Just like a house, this is the path dependence in life – you have been like this for so many years, and you have already firmly believed in it.
A 45-year-old person, many memories and cognitions are actually still in the past ten years – when they were 35 years old. These ten years are almost equivalent to nothing, because after the age of 35, they have hardly broken any of their own cognitions.
So, is “old manization” really unavoidable? Of course not.
There are many people who, even at the age of eighty or ninety, can use various apps very skillfully, will buy various new electronic products and trendy toys, and are still talking about artificial intelligence and the latest ideas. This is because they have always done one thing: they are willing to break their old cognition.
The essence of “old man” lies in resisting “being destroyed”.
There is a theory of “destructive creation” in the theory of economic innovation, which is very classic. That is to say, any innovation must first destroy, break the old things, and then you can innovate.
If you only want to improve on the old things, the road to innovation will sooner or later wither.
The biggest sign of “old manization” is that you believe that the values or ways of doing things you have mastered are absolutely correct, and thus no longer accept any new reflection or self-destruction.
Self-destruction is very difficult. You have to lower your head first and not take yourself too seriously. When you exclaim “It turns out it can be done this way”, or “I’ll try this new method”, then congratulations, you have already taken the first step to get rid of the “old man”.
Instead of: “Let me tell you…”, or “In those days…”
But many people are dragged down by the word “dignity” and are unwilling to reflect on and negate any of their views.
Just as they firmly believe that housing prices will always rise – because they have never taken a good look at young people.
Why don’t young people like to buy houses? Why do they live “very negatively”? If you only understand from the perspective of an old man, there is only criticism. But if you lower your posture to seriously understand young people and empathize with young people, you will realize that the world has changed.
Therefore, housing prices cannot continue to rise.
In the final analysis, it is necessary to remain humble and at the same time maintain curiosity and thinking about the world – this is the only way to avoid path dependence in life.
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