If cities won't make themselves more affordable, then people will simply stop coming. Maybe that's the goal. Who wants immigrants, right? Not gonna be so great when large companies decide that SV and NYC are no longer worthwhile to expand in, compared to Bangalore or Poland(sound familiar?). Prices must come down, and we've seen places that have successfully done it. Just because red cities are now falling into the same trap as blue cities doesn't mean that supply / demand doesn't apply. Yes people tied into the financial system will be hurt, but that's a price we need to be willing to pay to keep our economy healthy.
What happens when housing prices go down?
91–100 of 347 posts
Re: What happens when housing prices go down?
#92The 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.
> Obviously the landlord offers something of value or the tenant would just do what the landlord did.
I mean, yeah, they had access to capital.
As I understand it the traditional answer to this is "the landlord took the risk", but in practice I find that explanation questionable when propping up and supporting housing markets is basically political job #1.
I think the landlord was just richer, and was able to use that to exploit the renter.
Re: What happens when housing prices go down?
#93Earlier quoted context omitted.
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 w…
There are many reasons demand is increasing, all good.
In the past a typical housing unit would be husband, wife, two kids. A 3 bed house. Divorce rates are higher now (better to be divorced than in an unhappy marriage - so that's good), so you instead you have divorced husband and one or two bedrooms for shared custody of kids, and divorced wife and one or two bedrooms for shared custody of kids
Thus what used to be demand for a single 3 bed house is now demand for two 3 bed houses, with no change in requirements
You are also right about cities, and not just any specific city. If you were born in London and get a job in Cambridge because you want to work for Astra Zenneca for example, that's a good thing. Having workforce mobility is a good thing, just because you are the son of a farmer doesn't mean you should be destined to be a farmer. You've also got people meeting and marrying people from outside their immediate geographic area, at least one of them will have to move.
There's then the social appeal of cities in general -- if you're the "only gay in the village" that's a miserable life. If you live in a city there's far more choice.
"living with parents" is on the increase, despite any "stigma".
> The number of families in England and Wales with adult children living with their parents rose 13.6% between the 2011 Census and Census 2021 to nearly 3.8 million.
https://www.ons.gov.uk/peoplepopulationandcommunity/populati...
Adults living with parents is not a good thing, and in the west it never has been. Adults should be independent, and learn to fly the nest and build their own lives.
Then you've got massive external immigration. As well as people moving from country and older mining towns, you have massive inward migration (in the UK this has reached an increase of about 1% population increase per year). This is a good thing for the economy (more workers, more productivity, more taxes), but comes with other issues - including more demand for housing.
Re: What happens when housing prices go down?
#94Earlier quoted context omitted.
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.
During the 2008 crisis, the primary focus of the government response was to stabilize the financial system, which was seen as necessary to prevent a deeper economic collapse.
That wasn't just a short term fix though, they changed the entire banking system and solidified the concentration of wealth into a small group of megabanks by introducing new rules that killed off most of the competition from smaller/medium sized banks while the larger ones got floated cash, so they could merge into even bigger ones instead of dying off due to their own poor decisions/misbehavior. That sort of thing always has ripple effects over the long term.
Re: What happens when housing prices go down?
#95This article is a mess. From the third paragraph: > What happens when prices actually start to fall? Because that’s not just a hypothetical. It’s already happening in places like Phoenix, Atlanta, Miami, Dallas... Then two paragraphs later > In The Atlantic, Rogé Karma recently pointed out that housing prices are rising fastest in the very cities once seen as escapes from high-cost coasts, places like Phoenix and Dal…
Regarding the bit about Dallas being an example of rise & fall of prices it seems to be an issue of poorly worded (or explained) difference in time frame. I replied under another post with the details from the sources (https://news.ycombinator.com/item?id=44635228)
Re: What happens when housing prices go down?
#96There’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…
Now if you want prices to go down, are you really going to do it by trying to decrease demand? What are you going to do, make your neighborhood a slum on purpose? Absolutely nobody is doing that. No matter how nice a place people live, they always want it to be nicer. They want better schools, nicer parks, clean streets, quality infrastructure. They want to attract nice businesses and cultural institutions. The probl…
> No matter how nice a place people live, they always want it to be nicer.
I'm trying to make sense of your argument. No matter how nice a vehicle people have, they always want to have a nicer one. But we don't see normal cars costing 50-80 years of your life to purchase.
Re: What happens when housing prices go down?
#97"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. > "…
> Bringing prices down is usually a losing idea with existing asset holders
Good. They should lose because they abused government policies through NIMBYism to inflate their assets prices. Happy to see them lose
Re: What happens when housing prices go down?
#98Earlier 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…
Or out of the country completely.
That's definitely what many of the 'American' automobile brands have been doing.
Re: What happens when housing prices go down?
#99While there is a problem in how we treat shelter as a financial product, the basic thesis (lower prices aren't allowed to happen) is incorrect, at least in some states. Florida and Texas (including Austin, my hometown) already have prices going down, substantially. Colorado and California seem to have started to follow suit. This did actually happen post-2008, nationally. There are places where we don't let housing prices drop, but there are plenty of others where we do.
Re: What happens when housing prices go down?
#100The 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…
I agree with your sentiment and I wish there was more discussion on how to actually solve some of the issues at the core of this. I believe that home ownership is a strong positive for our communities. And our government does incent home ownership but it is still difficult for many. I also think we need to heavily disincentivize home hoarding.