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

Re: What happens when housing prices go down?

#61

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

octopoc wrote: post #47

hollywood_court wrote: post #33

Earlier quoted context omitted.

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…

Sounds like an improvement TBH. The quality of life improves for people in Alabama, and the company can pay people less. Sort of like the economic argument for offshoring people. The only people losing are the people in Detroit.

Not exactly. Everyone on the line in Alabama had to have second jobs because the pay was not sustainable for our area. Not to mention the vacations, extra benefits, and other protections the Alabama workers didn't receive compared to their peers in Detroit.

So the company makes more money by moving their operations to the south where they exploit their workers without interference from the government.

Re: What happens when housing prices go down?

#62

Post by Apreche » Mon, Jul 21, 2025, 1:54 PM UTC

jaccola wrote: post #19

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…

Obviously the landlord offers something of value or the tenant would just do what the landlord did. Your analogy is also somewhat unfortunate since people did, in the past, rent TVs! Now that supply is far greater than demand, a quality TV can be purchased for very little money.

The tenant can not do what the landlord did only because they are not already wealthy enough for the bank to give them a huge loan. Even if a bunch of tenants band together to collectively develop a property, a bank will not choose them when a wealthy developer is available instead.

Re: What happens when housing prices go down?

#63

Post by spicybbq » Mon, Jul 21, 2025, 1:54 PM UTC

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

Is anyone arguing that price drops "lead to" (i.e. happen before) increases in supply? It seems to me that it's the other way around: supply increases "lead to" price drops. This is what supply advocates hope to see in HCOL cities with expensive housing.

The author is concerned that builders will stop building when prices fall, but that's rational. Suppliers should respond to changes in prices.

Other policy goals are possible. For example, instead of "affordable housing", your goal might be to help the home building and financing industries never experience a down year.

Re: What happens when housing prices go down?

#64

Post by zesterer » Mon, Jul 21, 2025, 1:54 PM UTC

roenxi wrote: post #32

> 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 v…

Right, and if the original statement is true - that price drops are killing supply (without providing houses at a sufficient level) - then that implies that housing does not work like a traditional commodity. Which it doesn't.

Re: What happens when housing prices go down?

#65

Post by avmich » Mon, Jul 21, 2025, 1:54 PM UTC

indymike wrote: post #22

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…

> "If “build more” was going to bring prices down and stabilize the system, we wouldn’t be seeing these mixed signals." Bringing prices down is usually a losing idea with existing asset holders. Even a financially strapped homeowner does not want the price of her/his home to go down. Politically, this is a complete non-starter. Also, appreciating home values serve as a very strong way to attract talent to a city. > "…

> Why would a homeowner send 1-2 paychecks...

Can't the asset holder - the homeowner in this case - get rid of the asset which stopped performing? Why such a strange financial behavior? If the houses are financials - why not to deal with them as such?

Re: What happens when housing prices go down?

#66

Post by rpgbr » Mon, Jul 21, 2025, 1:54 PM UTC

newsclues wrote: post #21

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…

So you want the government to be the only landlord or does everyone get their own home from the government (if they can’t afford one)?

>[…] does everyone get their own home from the government (if they can’t afford one)?

Uh… yes? I mean, housing is a basic right in most countries. Also, a humanitarian, right thing to do. That housing became big business (or business at all) is the real tragedy here.

Re: What happens when housing prices go down?

#67

Post by 9rx » Mon, Jul 21, 2025, 1:55 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

> I'm not sure how you sell reducing demand to the public exactly

Especially when the current political pressure is to increase demand. The populace are complaining that, because of high prices, they can't afford to be a part of the demand.

Re: What happens when housing prices go down?

#68

Post by gilbetron » Mon, Jul 21, 2025, 1:55 PM UTC

bryanlarsen wrote: post #50

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'? It's considerably easier to build in Canadian cities than most American cities. Not easy, but easier. Over the past ten years Canadian cities have seen incredible growth, due to high immigration levels. Toronto is the fastest growing city in North America. Vancouver isn't far behind. Yet Vancouver has seen flat housing prices over the last 10 years. [1] (Though fla…

Median houses in Vancouver are $2-4m ?? Wow.

Re: What happens when housing prices go down?

#69

Post by avmich » Mon, Jul 21, 2025, 1:56 PM UTC

indymike wrote: post #22

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…

> "If “build more” was going to bring prices down and stabilize the system, we wouldn’t be seeing these mixed signals." Bringing prices down is usually a losing idea with existing asset holders. Even a financially strapped homeowner does not want the price of her/his home to go down. Politically, this is a complete non-starter. Also, appreciating home values serve as a very strong way to attract talent to a city. > "…

> Builders are walking.

Why? Builders are supposed to be doing the paid work, why would they walk out of it?

Re: What happens when housing prices go down?

#70

Post by ta1243 » Mon, Jul 21, 2025, 1:56 PM UTC

newsclues wrote: post #21

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…

So you want the government to be the only landlord or does everyone get their own home from the government (if they can’t afford one)?

Price is kept low so everyone can afford one, so the limited supply is rationed in other ways. I remember the local MP where I used to live boasting about how when she was a child her father managed to get a nice council house with the help of then then Local MP.

I.e. rationed based on party loyalty. Or nepotism.

We currently mostly ration on money, which is the least worse option if we refuse to increase prices. There is also rationing based on sexual favours, which I'd assume everyone would agree is terrible.

Many would prefer to ration on place of birth -- if you are not born in the city then you don't get to live in the city and don't get the job opportunities of the city.

If supply in say London suddenly doubled overnight though (magically make every borough the same density as Westminster - with all those big open parks), that would put downwards pressure on prices.

It would release the currently suppressed demand as those currently living in overcrowded situations could afford to live on their own, those currently living outside the city who don't want to could move in. I'm not sure what the supply would have to be to raise main-home occupancy in London to 90% with prices down at the same level as it is in Stoke, but it's far far higher than it currently is.