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

Re: What happens when housing prices go down?

#221

Post by OldfieldFund » Mon, Jul 21, 2025, 4:08 PM UTC

tacticalturtle wrote: post #212

rwarfield wrote: post #77

This 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…

As soon as I saw it was the founder of Strong Towns it all made sense. Strong Towns, Not Just Bikes, and all those content creators are fulfilling the “hobby” of city planning (ie, watching hours of city planning YouTube videos, but never actually organizing at a local level) This is a really great video about one man’s experience with trying to improve his community, getting involved in local government, and his cri…

HackerNews folks are getting hooked on ragebait recently

Re: What happens when housing prices go down?

#222

Post by nobody9999 » Mon, Jul 21, 2025, 4:11 PM UTC

foobarian wrote: post #113

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…

Nice analogy. So it seems the solution would be to create more Taylor Swifts then, by investing in music schools and programs, talent shows, scouting, etc., where the analogous thing would be to create more "nice places to live" with all the desirable attributes like walkability, jobs, public transport, etc. It's a tall order since land and climate are the ultimate scarce resources, but there are probably some underu…

>...where the analogous thing would be to create more "nice places to live" with all the desirable attributes like walkability, jobs, public transport, etc. It's a tall order since land and climate are the ultimate scarce resources, but there are probably some underutilized spots that could support it.

Absolutely. And in fact there are lots of places that could support such things. In the US we call them "small towns" and "rural areas" and "the rust belt."

Areas where a lack of good jobs (as manufacturing left and farming became much less human intensive) drove folks to where decent jobs are (were?) more available.

Which drove up the costs of housing and, well, pretty much everything else, in those places.

However, with the technological changes we've seen over the past eighty years or so (Interstate highways, compute/semiconductor industries, ubiquitous networking, etc., etc., etc.), revitalizing those areas that have been left behind could boost both local economies as well as broader ones.

However, ALEC[0] and its corporate backers have sabotaged efforts to do so in pursuit of destroying competition and maximizing rent seeking. a lack of infrastructure maintenance is part and parcel of that -- as a lack of economic activity reduces the amount of tax revenue available for necessary infrastructure repairs and investments.

If companies could get symmetric, multi-gb internet, decent office space with decent road and rail connectivity to/from regional hubs in small towns and rural areas, more people would move in, prompting more housing development, more local businesses, more tax revenue, better infrastructure, etc., etc., etc.

This type of investment could have instant positive economic effects in poorer areas, and longer term (coupled with more housing), reduce the insane housing prices you see in NYC (median apartment rent in Manhattan is ~$4500[1]), SF, Boston, etc.

Unfortunately, statehouses appear to be fully captured by big corporations wanting to maintain their rents by stamping out any competition, the economies of those states be damned.

Sadly, the above can't happen unless the folks in those areas stop voting (in municipal/state elections) for the folks who are supporting policies designed to maintain the penury endured in those places.

There are so many good reasons to reinvigorate these areas, but we keep electing folks that won't bite the hand that holds their leash.

[0] https://alec.org/

[1] https://www.brickunderground.com/rent/nyc-manhattan-brooklyn...

Edit: Added the missing links.

Re: What happens when housing prices go down?

#223

Post by epistasis » Mon, Jul 21, 2025, 4:12 PM UTC

zesterer wrote: post #64

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.

That's faulty reasoning. If the price drops stop new production, but there's still "demand", it means that the cost of providing new production is higher than what this demand can afford to pay.

But a big problem is that people try to view housing as not a commodity. They think that people don't move, don't change housing, don't need different things at different stages of their life.

If instead we actually view housing as the commodity it actually is, we would realize that the reason old cars are cheap is because we build new cars that are more expensive. That day old bread is only cheap because new bread was made today. Houses fall apart, the housing itself is actually going down in value every day. The land is the only part that rises in value, because we restrict its use so much.

New housing is nicer and more expensive than old housing, yet for some reason we are saying those with the least ability to pay should only be allowed to buy new housing. There are a ton of aging people in gigantic old houses that would like to downsize into something newer and smaller so that they don't have to walk as they age, yet that sort of non-car-dependent community is largely banned.

Re: What happens when housing prices go down?

#224

Post by alexb_ » Mon, Jul 21, 2025, 4:20 PM UTC

tacticalturtle wrote: post #212

rwarfield wrote: post #77

This 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…

As soon as I saw it was the founder of Strong Towns it all made sense. Strong Towns, Not Just Bikes, and all those content creators are fulfilling the “hobby” of city planning (ie, watching hours of city planning YouTube videos, but never actually organizing at a local level) This is a really great video about one man’s experience with trying to improve his community, getting involved in local government, and his cri…

What? Strong Towns is not just their "content creation", they ARE local organizations. You might have a chapter in your city. This criticism tells me that you don't know what Strong Towns is, what they do, the actual specific policy guidelines they come up with and push that have real influence on local city planning.

Strong Towns gives actionable proposals all the time, and their main purpose is local organizations to actually do local change. To accuse them of being a content creation scheme that does no organizing tells me that you have not looked into this at all and are making immediate assumptions based on the aesthetics of their content.

Re: What happens when housing prices go down?

#225

Post by StableAlkyne » Mon, Jul 21, 2025, 4:25 PM UTC

have-a-break wrote: post #191

rwarfield wrote: post #77

This 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…

A huge portion of why home prices dont fall is because most people dont pay for their homes up front, the actual cost of the home after the interest is 2x the total loan amount. So people dont want to sell for what they feel like is a loss. I'd argue building more supply just makes the problem worse, since the builders almost always try to extract as much money from the potential buyers. With the internet and everyon…

> the actual cost of the home after the interest is 2x the total loan amount. So people dont want to sell for what they feel like is a loss.

You're not taking a loss though; any payment above that month's interest goes to principle. If you sell, usually you take that money and kill the rest of the principle and and end the mortgage.

YMMV outside the US, of course.

Re: What happens when housing prices go down?

#226

Post by reb » Mon, Jul 21, 2025, 4:26 PM UTC

OldfieldFund wrote: post #221

tacticalturtle wrote: post #212

Earlier quoted context omitted.

As soon as I saw it was the founder of Strong Towns it all made sense. Strong Towns, Not Just Bikes, and all those content creators are fulfilling the “hobby” of city planning (ie, watching hours of city planning YouTube videos, but never actually organizing at a local level) This is a really great video about one man’s experience with trying to improve his community, getting involved in local government, and his cri…

HackerNews folks are getting hooked on ragebait recently

I dunno about that, the HN community has had a curmudgeonly streak as long as I've been a part of it (~15 years). Not exclusively, but... persistently!

Re: What happens when housing prices go down?

#227

Post by stego-tech » Mon, Jul 21, 2025, 4:27 PM UTC

ch4s3 wrote: post #204

stego-tech wrote: post #89

Ultimately, there is no solution in which the core groups will all be appeased: * If prices keep going up, then home ownership remains a luxury of the wealthy and an exploitation of the poor. Asset holders will be thrilled with returns, but the majority struggling to get or stay on the proverbial property ladder will grow increasingly angry at sky-high rents and prices with stagnant wages * On the other hand, if pric…

> On the other hand, if prices come down then the broader economic engine will grow ornery and stagnate A rather small part of the economy relies on high long term returns on housing. You can build homes and sell them for rather small margins and that's good business. Many types of businesses happily run on profit margins that are single digit percentages. > Only a small subset of prepared buyers will be able to take…

You’re cherry-picking stats without offering a counter-argument, as if they alone dismantle the whole of the argument.

> A rather small part of the economy relies on high long term returns on housing.

Directly, yes, but don’t forget the wider array of businesses dependent upon this minority to survive: hardware stores, contractors, many tradespersons, mortgage companies, real estate agents, brokers, closers, lawyers, and more, all of whom get paid/earn less if housing prices come down in the short term (until theoretical volume makes up for the drop of individual transaction values).

It’s a wider web that shores up a market valued at ~$50tn. That’s hardly a minority.

> In 2024 87% of homes in the US were bought by people who intended to live in them or use them as a second home. If you only want to count primary homes the number is still close to 80%.

Taking those numbers at face value means a full 13% to 20% aren’t purchasing a home to live in them, which is problematic in a housing crisis. The fact you included second homes paints an even more distressing picture, because to have a second home means you not only have a primary home, but also the excess capital for a secondary domicile in the middle of a housing crisis.

Furthermore, those numbers - if true - are almost certainly national figures. Local ones can vary substantially, and the statistics show that affordable housing is predominantly being bought by investors for rent, not homebuyers to build equity.

> Factually the majority of US families live in homes they own, about [65% of US families own their homes])

That’s a grossly misleading statistic on its face, because it ignores demographic data to make the case that somehow a full third of the country simply doesn’t want to own a home. It does so by hiding the average age of homebuyers (which only goes up, indicating only those on the property ladder already are buying homes in large enough numbers to drive the average upward), the types of homes being bought (what about mobile homes/trailers? Or people who live entirely on the road in RVs? Why is it “ownership” if they’re still paying a mortgage to someone? Etc, etc), and regional or local policies that affect these demographics. FRED data is awesome, don’t get me wrong, but that figure is like pulling the U-1 for unemployment and saying everything is rosy.

Don’t come in here to blindly spout numbers without a competing or complimenting narrative of your own.

Re: What happens when housing prices go down?

#228

Post by doctorpangloss » Mon, Jul 21, 2025, 4:28 PM UTC

ch4s3 wrote: post #204

stego-tech wrote: post #89

Ultimately, there is no solution in which the core groups will all be appeased: * If prices keep going up, then home ownership remains a luxury of the wealthy and an exploitation of the poor. Asset holders will be thrilled with returns, but the majority struggling to get or stay on the proverbial property ladder will grow increasingly angry at sky-high rents and prices with stagnant wages * On the other hand, if pric…

> On the other hand, if prices come down then the broader economic engine will grow ornery and stagnate A rather small part of the economy relies on high long term returns on housing. You can build homes and sell them for rather small margins and that's good business. Many types of businesses happily run on profit margins that are single digit percentages. > Only a small subset of prepared buyers will be able to take…

> A rather small part of the economy relies on high long term returns on housing.

Uh, my dude, real estate is the #1 sector in the Los Angeles and San Francisco economies...

Re: What happens when housing prices go down?

#229

Post by Rendello » Mon, Jul 21, 2025, 4:32 PM UTC

tacticalturtle wrote: post #212

rwarfield wrote: post #77

This 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…

As soon as I saw it was the founder of Strong Towns it all made sense. Strong Towns, Not Just Bikes, and all those content creators are fulfilling the “hobby” of city planning (ie, watching hours of city planning YouTube videos, but never actually organizing at a local level) This is a really great video about one man’s experience with trying to improve his community, getting involved in local government, and his cri…

Strong Towns is "not meant to be actionable"? The whole modus operandi of ST is bottom-up change from local chapters of advocates who organize for change at the local level [1]. The organization develops things like the Crash Analysis Studio, which is a structured model for local citizens and municipalities to respond to car crashes in a similar way to aircraft crashes, and redesign streets to prevent further deaths [2]. Here's a panel for a city I lived in, Ottawa [3].

As for NJB, he's abrasive and I don't agree with everything he says or how he says it, but he does talk a lot about his past advocacy work with the local government on Toronto. He encourages action, but I don't understand what he's supposed to do here, make videos for specific local advocacy of every large city in the world?

1. https://www.strongtowns.org/local

2. https://www.strongtowns.org/crashstudio

3. https://www.youtube.com/watch?v=i8OSNwo4KBU

Re: What happens when housing prices go down?

#230

Post by sokoloff » Mon, Jul 21, 2025, 4:33 PM UTC

stego-tech wrote: post #89

Ultimately, there is no solution in which the core groups will all be appeased: * If prices keep going up, then home ownership remains a luxury of the wealthy and an exploitation of the poor. Asset holders will be thrilled with returns, but the majority struggling to get or stay on the proverbial property ladder will grow increasingly angry at sky-high rents and prices with stagnant wages * On the other hand, if pric…

Price controls work to ensure scarcity.

Flooding the market with new construction (at any price level, though ideally at all sizes and quality of housing) will do more to sustainably lower prices while leaving a functioning market.