What happens when housing prices go down? • Hacker News Board

Re: What happens when housing prices go down?

#51

Post by sim7c00 » Mon, Jul 21, 2025, 1:49 PM UTC

freejazz wrote: post #29

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…

> prevented building more for decades What planet do people live on? Go to any neighborhood in NYC and you are going to see tons of construction.

i am sure lots of ppl on this planet dont have the option to go around NYC to check out the construction. for various reasons.... also, lots of construction does not equal fixing lack of housing. it has to keep up with and overtake new ppl moving into the region, which often times it does not (so it has no impact on prices or availability, just population growth...).

idk about NYC specifics ofc. but thats how it work in my country. they build new houses, new ppl come in. still nothing available generally, and everything about 2x price over 10 years while income doesnt rise to compensate.

there is a lot of constructions of homes here too. but for the wrong reasons and with the wrong intensity.

Re: What happens when housing prices go down?

#52

Post by btbuildem » Mon, Jul 21, 2025, 1:49 PM UTC

This is because the overtly stated goals and the actual incentives are not aligned at all, they're closer to diametrically opposed.

The stated goal is "build more housing so everyone can have a place to live", but the current incentives are "bundle these materials and labour under guise of another product so you can sell it for a profit".

Of course developers walk away when prices drop -- their objective is to make money, not housing. The fact that they build homes people live in is purely incidental.

Re: What happens when housing prices go down?

#53

Post by projektfu » Mon, Jul 21, 2025, 1:50 PM UTC

I usually like Chuck Marohn, but it is a glaring problem when you claim that housing prices are falling in Dallas, and then talk about housing prices skyrocketing in Dallas, within a couple of paragraphs.

Re: What happens when housing prices go down?

#54

Post by echelon » Mon, Jul 21, 2025, 1:51 PM UTC

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

Demand is someone's desire to make the jump from renting to owning. Demand is someone's risk tolerance for moving. Demand is someone's appetite for a house just slightly out of budget. Demand is someone's desire for a second or third home. Demand is all of the buying forces in aggregate, regardless of the cause.

You can want a house, but if you can't pay the market price then there's no demand from you at that price point. So maybe you make a lower offer or look elsewhere.

Demand is simple. We're watching what low demand is like right now.

Inventory has been low (people like their locked in low interest rates), but it has been inching steadily up as people move, die, change or lose jobs, etc. The minute the supply significantly outstrips demand, the pricing will collapse.

Demand will stay low until the economy and housing market improves.

Re: What happens when housing prices go down?

#55

Post by conception » Mon, Jul 21, 2025, 1:51 PM UTC

nemomarx wrote: post #25

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…

I feel like we talk about demand a lot - Just in the form of first time home owner subsidies or etc. Subsidizing demand of course doesn't help the situation but I'm not sure how you sell reducing demand to the public exactly

Restricting foreign and corporate residential purchases, tax increases for multiple home ownership are a couple of ways to lower demand as well.

Re: What happens when housing prices go down?

#56

Post by andsoitis » Mon, Jul 21, 2025, 1:51 PM UTC

Eisenstein wrote: post #15

You know what always happens when the status quo everyone is depending on to get money changes? People freak out and they overreact. Everyone loves it when they can keep doing the same thing and make money and they hate it when it looks like that is going to change. You what what always happens a bit later? They adjust to the new normal and make money slightly differently and then get used to that and don't want that…

> Let's keep moving towards what will benefit everyone

And what is that?

Re: What happens when housing prices go down?

#57

Post by onlyrealcuzzo » Mon, Jul 21, 2025, 1:51 PM UTC

_heimdall wrote: post #26

blitzar wrote: post #16

> What Happens When Housing Prices Go Down? Government bails homeowners out and prices go back up.

At least in the US, the government could care less about bailing out homeowners. Banks are another story, we'll bail them out all day but tax payers and homeowners are left holding the bag.

If you drop interest rates to 0%, it's hard to argue you're not bailing out everyone who's in debt (which is every home owner with a mortgage).

Sure, maybe you are PRIMARILY bailing out banks.

But you are also bailing out everyone with a mortgage and enough brain cells to refinance and cut their by-far-largest monthly expense by 30-50%.

Re: What happens when housing prices go down?

#58

Post by rcxdude » Mon, Jul 21, 2025, 1:52 PM UTC

ta1243 wrote: post #27

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…

Are you saying that people routinely buy 5 or 6 houses to live in (thus excess demand) Or are you saying the only reason houses are expensive is because people refuse to live in cars in high enough numbers? What do you mean by demand?

There's two factors that have driven an increase in demand for housing above population growth: fewer people per household and a strong bias towards living in a city. Some of this is cultural: a stigma against living with your parents, for example, and higher expextations for what someone just starting their career should be able to afford, but it's also economic: cities are where the jobs are and they're often not where people grew up, so if they want any independance they pretty much must move away into a city with everyone else.

Re: What happens when housing prices go down?

#59

Post by jennyholzer » Mon, Jul 21, 2025, 1:52 PM UTC

Apreche wrote: post #13

The problem can not be solved by trying to manage supply or demand. We must ban the concept of the landlord entirely. https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-... A landlord gets a loan from a bank to develop a residential property. That loan is paid by the tenants who live in that property. At the end of the day, the landlord owns the property. This is fundamentally unjust. If the tenant paid off…

landlords sounding like mussolini in the replies to this comment

Re: What happens when housing prices go down?

#60

Post by dcow » Mon, Jul 21, 2025, 1:53 PM UTC

carlosjobim wrote: post #38

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.

House poor means you can’t afford to furnish the house you live in, not that real estate is your primary asset class.