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

Re: What happens when housing prices go down?

#231

Post by stego-tech » Mon, Jul 21, 2025, 4:33 PM UTC

doctorpangloss wrote: post #228

ch4s3 wrote: post #204

Earlier quoted context omitted.

> 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...

They’re just blindly quoting what they’ve heard instead of actually studying the data and environment to form a conclusion.

Anyone under fifty in the US who has tried to buy a home since 2019 knows first-hand what the situation is right now, at least in their area. Those of us who have been “in the game” longer see these same patterns repeating elsewhere, suggesting the issue isn’t local regulations so much as a fundamentally systemic problem with how housing is treated in America.

Re: What happens when housing prices go down?

#232

Post by davidw » Mon, Jul 21, 2025, 4:34 PM UTC

alexb_ wrote: post #224

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…

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…

On balance, I think Strong Towns has done a lot of good, but in terms of organizing on the ground, I think the two large YIMBY organizations are better at equipping people to make change in their communities:

* https://yimbyaction.org/

* https://welcomingneighbors.us/

I happily read and share a lot of Strong Towns content - they do put out a lot of good stuff despite the occasional dud. But in terms of learning how to show up and get things done, I think that's not their strongest spot.

Re: What happens when housing prices go down?

#233

Post by doctorpangloss » Mon, Jul 21, 2025, 4:36 PM UTC

alexb_ wrote: post #224

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…

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…

i'm not sure why you are being downvoted, but the people you are talking to are the reason "It's all projection" is true.

Re: What happens when housing prices go down?

#234

Post by tenthirtyam » Mon, Jul 21, 2025, 4:37 PM UTC

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…

In Ireland, politicians (make appearances of) are making a lot of noise about building more houses to address the severe shortage of housing supply (and consequent runaway house price inflation). However, my take is that the root of the problem is exactly what the author here describes, to wit, the minimum housing a person can buy is (for the most part) a semi-detached two- or two-and-a-half-bedroom* house on two floors. There are precious few one-bedroom apartments or anything similar on the market, meaning that single persons entering the market are competing with couples or young families.

I don't understand the details but I'm told the origin of this is that regulations have rendered apartments of any size unprofitable to build (anyone with more insight here?). Pretty much the only housing Ireland gets are sprawling suburban housing estates. I'm reminded of this graphic, 100 houses Vs 100 apartments [1].

* By 2½ bedrooms I mean two bedrooms plus a very small "box room" barely big enough for a single bed and a small wardrobe. Frequently used as either a storage room or small home office.

[1] https://i.pinimg.com/originals/78/f5/94/78f594ebb9216e50e396...

Re: What happens when housing prices go down?

#235

Post by Glyptodon » Mon, Jul 21, 2025, 4:37 PM UTC

Home builders being very short term doesn't seem related. If they won't build because they can only make mc mansions on tiny lots while land values inflate wildly, they're part of the issue and blasting land prices along with home prices to reset the cost of building should benefit them in the long run. But it does mean that they're paralyzed until land values stabilize at a lower value.

Re: What happens when housing prices go down?

#236

Post by intalentive » Mon, Jul 21, 2025, 4:37 PM UTC

bach4ants wrote: post #122

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 governments should try to reduce the number of humans?

By enforcing immigration law and prioritizing your own people? Yes.

Re: What happens when housing prices go down?

#237

Post by stego-tech » Mon, Jul 21, 2025, 4:40 PM UTC

epistasis wrote: post #198

almosthere wrote: post #144

Earlier quoted context omitted.

Simple to make people sell, make property tax near Infinity if you rent it out in the first 5 years of property purchase. Old rentals stay rentals, new construction is for people.

Still doesn't solve the problem of having enough houses. Rented houses are still housing people. The problem isn't renting, the problem isn't loans, the problem is there's not enough houses where people want them.

That’s not entirely true, for a number of reasons.

* Low-density housing that’s rented instead of sold drives up rent for the tenant and property values for neighbors, resulting in increased costs for everyone but the landlord (who offsets costs by raising rent)

* Investors are predominantly buying affordable homes, not luxury ones. Cheaper prices (even when paying cash to outbuy other bidders) means higher margins.

* Construction has fundamentally changed as a result. No longer are structures being built for sustainable operations, but simply to exploit valuation growth before being shoved off to the next buyer. The goal from everyone involved is maximum margin/profit, not quality and sustainable shelter.

* There’s a glut of “luxury” apartments in higher-density units that sit vacant as a result of gaming the local marketplace for higher rent instead of maximum occupancy.

We have enough houses at present. Really, we do! The problem is that because we treat them as assets and not shelter, the goal is maximum revenue, profit, and/or valuation instead of maximum utilization.

Hence, housing crisis.

Re: What happens when housing prices go down?

#238

Post by kmeisthax » Mon, Jul 21, 2025, 4:40 PM UTC

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…

> You can add more seats (this stadium happens to be extremely modular) but the experience for everyone becomes worse in a multitude of ways.

To keep your analogy... well, analogous, this is also a stadium where you have to buy tickets in groups of at minimum four seats, with generous buffer zones of at least two seats between each group, specifically to cater to a handful of extremely vocal Swifties who couldn't bear to sit next to a stranger in their life. We could easily double the capacity of the stadium without impacting anyone's experience.

Re: What happens when housing prices go down?

#239

Post by avmich » Mon, Jul 21, 2025, 4:41 PM UTC

AnimalMuppet wrote: post #110

avmich wrote: post #69

Earlier quoted context omitted.

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

If you buy a plot of land, go to a builder and ask them to build a house on it, sure, they'll do it. That's not what most builders do most of the time, though. Most of the time, most builders buy a piece of land, build a house on it, and then find a buyer (or at least while they're in the process of building the house). If they're having trouble selling houses, then they're left with a bunch of houses on their hands,…

> They don't want to be in that position.

Then where are the builders which do what they're asked to? Is the problem with the banks which don't do this operation? Then it looks like a financial opportunity.

You're effectively saying "this business model doesn't work". This doesn't mean there are no other business models which work in this case. Where they are?

Re: What happens when housing prices go down?

#240

Post by sokoloff » Mon, Jul 21, 2025, 4:41 PM UTC

bandofthehawk wrote: post #192

crazygringo wrote: post #129

Earlier quoted context omitted.

> The author is concerned that builders will stop building when prices fall, but that's rational. Suppliers should respond to changes in prices. Exactly this. Once you've built enough new housing and so the price has dropped to the point where it's not economical to build anymore, you're done . It's mission accomplished. The goal was achieved. But the whole point is that you have to actually build all that housing to…

That doesn't solve the issue of housing being unaffordable to new buyers. How do you address affordability if the prices stop dropping before they reach a price at which an average young worker can afford to buy a starter home?

If the prices dropping to the cost of construction plus a 20% profit margin isn’t enough to make housing affordable then those people just literally can’t afford to buy housing.

Build smaller, worse, and cheaper until they can.