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What happens when housing prices go down?

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Re: What happens when housing prices go down?

#131

Post by nemomarx »

conception wrote: post #55
nemomarx wrote: post #25

Earlier quoted context omitted.

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.

Yeah, but I think those are going to be small effects. You'd want to try and encourage people to move to smaller cities to really move the needle I think, but obviously the larger cities aren't interested in that. And the jobs have to move with in some fashion for it to work and everyone likes having access to larger pools for labor too

Re: What happens when housing prices go down?

#132

Post by poulpy123 »

jdsnape wrote: post #20
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…

Yes, I can imagine this for other things. We have exactly that model for TVs, other appliances, and most especially cars. Getting something on a lease is by no means restricted to houses. Sure, it's not always a great idea, but there are definitely circumstances where it is useful.

None of them increase or even keep their value during their lifetime. (Also: you really rent TV and appliance long term without leasing in the US ?)

Re: What happens when housing prices go down?

#133

Post by bethekidyouwant »

postflopclarity wrote: post #106
Workaccount2 wrote: post #90

Transpose the problem into a Taylor Swift concert and the problem becomes clearer: Everyone* wants to go see Taylor Swift. She comes to a stadium and the sell out is instant, the aftermarket is bloody and ruthless. The stadium has 90,000 seats, 2,000 floor spots, and they are gone before you can reload the ticket page. Taylor Swift is the embodiment of "good jobs". The stadium is the local housing market. Those VIP b…

> the experience for everyone becomes worse in a multitude of ways. your analogy requires the assumption that the stadium is already "at capacity" for the maximum comfortable number of seats 99% of American municipalities are nowhere even close to this capacity.

Analogies are always bad, but in this case, I would say that if I wanted to walk to see Taylor Swift within 15 minutes, then most municipalities are at this capacity.

Re: What happens when housing prices go down?

#134

Post by arethuza »

tsunamifury wrote: post #126
queenkjuul wrote: post #118

Where i live, NIMBYs just killed an ADU ordinance and were screaming just as loudly and about all the same things they would have if you were replacing their grandma's cottage with a high rise. They can't be rationed with. Social housing is the only thing that will really work.

This was tried the 60s in the us and uk, which gave rise to the ghettos torn down in the 2000s. There is little appetite on any side to re do that It’s amazing how little history people seem to remember or know. I think people might be open to trying again if you could address what went wrong last time (extreme crime and poverty traps)

A lot of "social housing" in the UK was perfectly decent and still exists - I grew up in a council house as did a lot of my friends. The main thing that has changed is that most of those houses have now been bought and are privately owned.

Yes, of course there were a lot of grim council housing estates (particularly tower blocks) that had to be knocked down but the causes were often a lot more complex than the concept of social housing being fundamentally flawed.

Re: What happens when housing prices go down?

#135

Post by tsunamifury »

eviks wrote: post #81

The whole article is a mess of basic misunderstanding and conflation of cause and effect and reasoning from a price change instead of understanding what caused it. > When prices actually go down, builders get nervous, lenders get cautious, financing dries up, and projects disappear. No, it depends on the causes that drove the prices down. Some of those will get builders nervous, while others will make them giddy. > N…

I find it funny how confidently hners criticize perceived incoherence with their textbook prognostications of how simple the models are when even the Fed and world renowned economics can’t give such confident solutions.

Re: What happens when housing prices go down?

#136

Post by paulddraper »

Workaccount2 wrote: post #90

Transpose the problem into a Taylor Swift concert and the problem becomes clearer: Everyone* wants to go see Taylor Swift. She comes to a stadium and the sell out is instant, the aftermarket is bloody and ruthless. The stadium has 90,000 seats, 2,000 floor spots, and they are gone before you can reload the ticket page. Taylor Swift is the embodiment of "good jobs". The stadium is the local housing market. Those VIP b…

What adding a new showing?

Or taking a smaller venue and expanding that?

Re: What happens when housing prices go down?

#137

Post by queenkjuul »

tsunamifury wrote: post #126
queenkjuul wrote: post #118

Where i live, NIMBYs just killed an ADU ordinance and were screaming just as loudly and about all the same things they would have if you were replacing their grandma's cottage with a high rise. They can't be rationed with. Social housing is the only thing that will really work.

This was tried the 60s in the us and uk, which gave rise to the ghettos torn down in the 2000s. There is little appetite on any side to re do that It’s amazing how little history people seem to remember or know. I think people might be open to trying again if you could address what went wrong last time (extreme crime and poverty traps)

Post war UK social housing was a huge success, and US social housing was deliberately turned into ghettos through deliberate lack of maintenance.

It's amazing how little history people who think they know history actually know

Re: What happens when housing prices go down?

#138

Post by andsoitis »

aprilthird2021 wrote: post #78
spicybbq wrote: post #63

> 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 re…

100%, supply leads to price drops. If it's not profitable to build anymore because housing costs have sunk, then there's much less demand for housing that needs to be met. The biggest political issue is that Americans have been led to believe their homes are assets which appreciate in value. The abundance mindset threatens the net worth of many such people, but they are not the landed gentry of a democratic society.…

> And the people who have nothing and can barely afford rent outnumber them and should vote for their interests.

my sense is they, too, want to buy free-standing homes with nice amenities that are not really necessary (not rent an apartment or buy a condo) and that appreciates in value.

Re: What happens when housing prices go down?

#139

Post by amanaplanacanal »

conception wrote: post #55
nemomarx wrote: post #25

Earlier quoted context omitted.

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.

I assume most people owning multiple residences are renting out the extras. What you are describing would make more houses available to buy at the expense of having fewer to rent. This wouldn't be a net gain of available housing.

Re: What happens when housing prices go down?

#140

Post by amanaplanacanal »

philipallstar wrote: post #41
ta1243 wrote: post #27

Earlier 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?

It's because it would mean looking at immigration numbers. If immigration creates far more demand than there is supply, as it does in various first world countries, then it makes house prices shoot up. But this is not a popular topic, as voters with houses don't care about their house prices going up, and voters without houses are generally younger and don't have the capacity to hear economic statements on immigratio…

Is immigration higher now than it has been historically? How did immigration impact housing prices in the past vs now?
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