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What happens when housing prices go down?

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Re: What happens when housing prices go down?

#31

Post by zahlman »

Aurornis wrote: post #11
billy99k wrote: post #2

"If “build more” was going to bring prices down and stabilize the system, we wouldn’t be seeing these mixed signals." Where have we seen anything close to 'build more'? Regulations in many major cities have prevented building more for decades and I haven't seen any loosening of these regulations (they were only increased during the Biden administration). "Prices are softening. Delinquencies are rising. Builders are w…

> Where have we seen anything close to 'build more'? Regulations in many major cities have prevented building more for decades and I haven't seen any loosening of these regulations (they were only increased during the Biden administration). Housing prices are high everywhere, not just major cities. Interestingly, in my state we have a lot of land for building houses if you drive to nearby cities. Some people uproot t…

> Housing prices are high everywhere, not just major cities.... So these big new houses remain cheap, while housing in the city remains expensive.

?

Re: What happens when housing prices go down?

#32

Post by roenxi »

> The theory says we should be celebrating and accelerating home production even more to get prices to levels that would actually be affordable. The reality demonstrates otherwise.

Reality demonstrates the well known - the people who celebrate house prices going down don't have a loud voice in political circles and are ignored. Almost by definition they're going to be representatives of the world which doesn't have vast amounts of money and influence.

> Price Drops Don’t Lead to Supply. They Kill It.

And I love this one, it is the inverse of "nobody goes there any more, it is too crowded". If the price is low that means there is more supply than the market thinks it needs and more people who want a house are finding a house to live in. That may well cause less new builds, but more builds probably aren't necessary if the price is dropping. More people are being homed. At some point prices drop low enough that new builds should cease altogether.

Re: What happens when housing prices go down?

#33

Post by hollywood_court »

lenerdenator wrote: post #7
billy99k wrote: post #2

"If “build more” was going to bring prices down and stabilize the system, we wouldn’t be seeing these mixed signals." Where have we seen anything close to 'build more'? Regulations in many major cities have prevented building more for decades and I haven't seen any loosening of these regulations (they were only increased during the Biden administration). "Prices are softening. Delinquencies are rising. Builders are w…

> Detroit is a good example of what happens in the long term when investors and businesses flee the city Let's be honest: it's a good example of what happens when some guys with a lot of money find a cheaper place to make something. Same with St. Louis, Baltimore, Chicago, Cleveland, Buffalo, Camden, Gary, and so on.

Yep. They moved their operations to the south where they don’t have to worry about unions or those pesky worker’s right.

I experienced this first hand when I worked for a Korean company that supplied parts to Hyundai and Kia.

They sent line workers from Detroit to train people in Alabama.

My coworkers in Alabama just could not believe the Detroit folks when they talked about how much money they earned.

We were being paid half as much in Alabama. And our area of Alabama had a much higher cost of living compared to Detroit and its suburbs.

Re: What happens when housing prices go down?

#34

Post by ta1243 »

ragebol wrote: post #24
andrewstuart wrote: post #9

There’s no such thing as “demand” in housing. Only supply. Housing has its own economics in which supply is the only solution ever put forward. Not a single politician or economist ever says that most dreaded and awful word “demand”. Property developers, politicians, economists, demographers, real estate agents, landlords all agree that supply supply supply will …….. errrr it will…… ummmmmm more supply will definitel…

Demand can be affected by people living together, or encouraging that in some way. Be it having roommates, elderly parents living in, staying with ones parents longer, communes. None of them popular long term I think. Hence: supply

> having roommates

People in cities and colleges have done that for decades. Not just "roommate" in the Friends sense where you have 2 people living in a 2 bed flat, but roommate as in sharing the same room - indeed 20 years ago I knew of some places where there where 5 people sleeping on 3 single mattresses in a single attic in London, with nuclear-dub style bunk sharing.

Demand for what people want (a place to call their own without having to live with strangers) is far in excess of the supply, and has been for at least the 25 years I've been an adult.

Re: What happens when housing prices go down?

#35

Post by Nursie »

andrewstuart wrote: post #9

There’s no such thing as “demand” in housing. Only supply. Housing has its own economics in which supply is the only solution ever put forward. Not a single politician or economist ever says that most dreaded and awful word “demand”. Property developers, politicians, economists, demographers, real estate agents, landlords all agree that supply supply supply will …….. errrr it will…… ummmmmm more supply will definitel…

They know about demand and do all they can to stoke it.

All the various government schemes in the UK and Australia (I have no idea about other countries) that are aimed at helping primarily young people to buy homes - low deposit schemes, part ownership schemes, tax discounts etc etc, they all masquerade as helping but they stoke demand and add to price inflation.

Re: What happens when housing prices go down?

#36

Post by nemomarx »

Aurornis wrote: post #11
billy99k wrote: post #2

"If “build more” was going to bring prices down and stabilize the system, we wouldn’t be seeing these mixed signals." Where have we seen anything close to 'build more'? Regulations in many major cities have prevented building more for decades and I haven't seen any loosening of these regulations (they were only increased during the Biden administration). "Prices are softening. Delinquencies are rising. Builders are w…

> Where have we seen anything close to 'build more'? Regulations in many major cities have prevented building more for decades and I haven't seen any loosening of these regulations (they were only increased during the Biden administration). Housing prices are high everywhere, not just major cities. Interestingly, in my state we have a lot of land for building houses if you drive to nearby cities. Some people uproot t…

If the condos aren't selling, shouldn't we see the prices go down? There's gotta be an equilibrium at some very cheap rent for them

Re: What happens when housing prices go down?

#37

Post by lenerdenator »

hollywood_court wrote: post #33
lenerdenator wrote: post #7

Earlier quoted context omitted.

> Detroit is a good example of what happens in the long term when investors and businesses flee the city Let's be honest: it's a good example of what happens when some guys with a lot of money find a cheaper place to make something. Same with St. Louis, Baltimore, Chicago, Cleveland, Buffalo, Camden, Gary, and so on.

Yep. They moved their operations to the south where they don’t have to worry about unions or those pesky worker’s right. I experienced this first hand when I worked for a Korean company that supplied parts to Hyundai and Kia. They sent line workers from Detroit to train people in Alabama. My coworkers in Alabama just could not believe the Detroit folks when they talked about how much money they earned. We were being…

Or out of the country completely.

Re: What happens when housing prices go down?

#38

Post by carlosjobim »

andrewstuart wrote: post #17

We all know it’s just a big game of lies and charades in which the winners keep winning and control the message and the policies. Without renters there would be no housing Ponzi scheme, so gotta keep the renters renting.

Even without renters, most owners would prefer being house-poor rather than selling any extra houses they own.

Re: What happens when housing prices go down?

#40

Post by O5vYtytb »

andrewstuart wrote: post #9

There’s no such thing as “demand” in housing. Only supply. Housing has its own economics in which supply is the only solution ever put forward. Not a single politician or economist ever says that most dreaded and awful word “demand”. Property developers, politicians, economists, demographers, real estate agents, landlords all agree that supply supply supply will …….. errrr it will…… ummmmmm more supply will definitel…

Huh? Demand is local. Where I live there's a lot of demand because it's a desirable city and leaders talk about this demand consistently.
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