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

Re: What happens when housing prices go down?

#241

Post by doctorpangloss » Mon, Jul 21, 2025, 4:42 PM UTC

sokoloff wrote: post #230

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.

a dreary part of this conversation is, nobody wants to play the game, what does random HN user sokoloff mean by the words "functioning market," "sustainably," "flooding", "ideally", "quality", and even "scarcity"? I don't know what you are saying, because you are leaning so deeply on an internal glossary known only to you, made worse by hijacking real words that everyone can look up in a dictionary.

Re: What happens when housing prices go down?

#242

Post by intalentive » Mon, Jul 21, 2025, 4:44 PM UTC

jacurtis wrote: post #167

onlyrealcuzzo wrote: post #57

Earlier quoted context omitted.

If you drop interest rates to 0%, it's hard to argue you're not bailing out everyone who's in debt (which is every home owner with a mortgage). Sure, maybe you are PRIMARILY bailing out banks. But you are also bailing out everyone with a mortgage and enough brain cells to refinance and cut their by-far-largest monthly expense by 30-50%.

Both you and the parent are correct. The "bailout" for consumers is that they lower interest to 0%. That's what we did in 2007. If people can refinance their homes from 7% to ~2% then they save a fortune and it spurs buyers back into the market and current homeowners to move around and shuffle inventory. Of course the Parent comment is also correct because banks get bailed out by low interest rates, but the governmen…

>consumers do need banks

We need banking services like accounts and transactions but there’s no good reason that couldn’t be operated as a public utility.

Re: What happens when housing prices go down?

#243

Post by pchristensen » Mon, Jul 21, 2025, 4:44 PM UTC

gota wrote: post #88

projektfu wrote: post #53

I usually like Chuck Marohn, but it is a glaring problem when you claim that housing prices are falling in Dallas, and then talk about housing prices skyrocketing in Dallas, within a couple of paragraphs.

Yes, that read weird to me, too, but it's because the 'lowering prices' are a snapshot, or recent trend (evidenced by the source being an index for April 2025 [1]) The 'sharpest rises' are from a long-term trend of a decade [2]: > Over the past decade, the median home price has increased by 134 percent in Phoenix, 133 percent in Miami, 129 percent in Atlanta, and 99 percent in Dallas. (Over that same stretch, prices…

"I like drawing silly plots in txt"

To thine own self be true!

Re: What happens when housing prices go down?

#244

Post by doctorpangloss » Mon, Jul 21, 2025, 4:46 PM UTC

Glyptodon wrote: post #235

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.

by all means, go invest in a REIT whose logline is, "We make money when land values go down!" How exactly would they be building housing in such a scenario? And why wouldn't an investor interested in this simply short real estate instead? Does this illuminate for you that you are right, short term isn't related, but you are wrong, and the truth is surely prices dropping is bad for investing in building houses?

Re: What happens when housing prices go down?

#245

Post by tracker1 » Mon, Jul 21, 2025, 4:46 PM UTC

thinkingtoilet wrote: post #160

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…

>Existing asset owners will be angry at losing (illusory/on-paper-only) money I wouldn't be. I bought my house to live in it, not as a financial vehicle. I would be thrilled if prices came down and others in my generation could afford a house because I had the dumb luck of purchasing one in 2018 before the shit hit the fan. I couldn't even afford my own house now.

Largely the same boat here, I refinanced in early 2020 near the lowest interest rates and eliminating the mortgage insurance payment. Of course since then, property taxes have gone up significantly. All said, I'm living here at a cost that I can sustain. I'd have trouble paying close to 2x the amount for a new loan of even the same total.

Way too many people got sold on the idea you could just flip a property every other year and move on/up... that kind of growth/inflation has never been sustainable in any industry ever for more than a couple years.

The closest, recent example I can think of is the cost of junk food. I no longer have it much at all, but even for calorie free soda options, the pricing seems to have more than doubled the past few years. More so than most food in general. They've maximized their profit margins and I don't think they'll be able to sustain it. People are cutting back on spending as a result.

I think the amount of mortgage defaults are as much about credit use in general as it is about the housing market. I've been unemployed 11 of the past 24 months, and currently working for about 60% of what I used to make. During that unpaid time, I built up a lot of credit card debt. Right now, it's not my mortgage that's killing me, it's the credit cart interest combined with a job that doesn't quite cover it all. I was working two jobs for a while and just couldn't keep it up. A LOT of people are in a similar boat.

Right now, I could sell my house, and just about start and 0 debt all over... but then I'm paying 2x as much for rent and not getting ahead without moving... and even with remote work, places try to pay "market" for where you live. The options are kind of crappy.

Re: What happens when housing prices go down?

#246

Post by ta1243 » Mon, Jul 21, 2025, 4:47 PM UTC

9rx wrote: post #116

ta1243 wrote: post #102

Earlier quoted context omitted.

The demand is still there, it's just restricted. Someone living in the back of a van in a gym carpark on an industrial estate is typically doing that because the cost of a 1 bed flat is too high. Lowering prices allows that demand to be seen. In the UK 8.5 million people in England are facing some form of unmet housing need. That's more than 10% of the population. https://www.housing.org.uk/globalassets/files/people-…

> The demand is still there It's not, though. That's the whole political contention. That demand is, because of high prices, not at the levels the population want to see. Demand is defined as having desire and willingness to pay for a good or service. High prices maintains the desire in most cases, but chases off the willingness. That's the whole point of having prices! > Even when it costs nothing, there's always a…

"Unmet demand refers to the gap between the demand for a product or service and the actual supply available in the market. "

Now sure, if you offer $50m for a 1 bed house someone will sell you one, at the expense of the person only offering $40m. That doesn't mean there is no unmet demand.

Re: What happens when housing prices go down?

#247

Post by richonpaper » Mon, Jul 21, 2025, 4:49 PM UTC

thinkingtoilet wrote: post #160

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…

>Existing asset owners will be angry at losing (illusory/on-paper-only) money I wouldn't be. I bought my house to live in it, not as a financial vehicle. I would be thrilled if prices came down and others in my generation could afford a house because I had the dumb luck of purchasing one in 2018 before the shit hit the fan. I couldn't even afford my own house now.

We bought a house 17 years ago. We could barely afford it and struggled to keep it for years.

The house more than doubled in value in that time. Great right?

Well the kids grew up, and we sold it and bought a smaller place.

Just the tax (GST on a new build) and the realtors commission amounted to two years worth of my gross pay.

We sold our old place that had a $400,000 balance on the mortgage for $1.7 million, bought the new place for $1.2 million and now have a 175,000 mortgage.

Just the costs of the transaction are greater than what my parents paid for the last home they bought.

These sky high prices are not good for the middle class. I would be much better off if my mortgage payments for all those years were small enough to allow for retirement saving. I'm basically fucked if I want to live indoors in my town after I can't work anymore.

Re: What happens when housing prices go down?

#248

Post by jonfromsf » Mon, Jul 21, 2025, 4:50 PM UTC

kiba wrote: post #83

carlosjobim wrote: post #80

Earlier quoted context omitted.

> Even condo complexes are having a hard time selling units. Because instead of purchasing a house, you're just purchasing the right to continue being a renter. Meaning that the only reason to buy is that you expect an even bigger sucker to buy it from you later. And with rapidly declining population and widespread poverty among the young generation, there aren't that many bigger suckers around anymore.

A condo just means the maintenance fee is explicit, rather than implicit.

And done by professionals, not homeowners. Honestly most people aren't very good at managing home maintenance, so this makes a lot of sense at scale.

Re: What happens when housing prices go down?

#249

Post by tacticalturtle » Mon, Jul 21, 2025, 4:52 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…

Yeah I think my original comment was too cynical and misplaced when lumping in all of the Strong Towns organization with Not Just Bikes style content. I’ll read through what they have today.

Admittedly my experience might be colored by the fact that they don’t seem to have much of a presence in my home town of Boston - it’s more other groups like the Cyclist Union showing up at meetings carrying forward things like bike lane advocacy, etc.

Re: What happens when housing prices go down?

#250

Post by projektfu » Mon, Jul 21, 2025, 4:53 PM UTC

gota wrote: post #88

projektfu wrote: post #53

I usually like Chuck Marohn, but it is a glaring problem when you claim that housing prices are falling in Dallas, and then talk about housing prices skyrocketing in Dallas, within a couple of paragraphs.

Yes, that read weird to me, too, but it's because the 'lowering prices' are a snapshot, or recent trend (evidenced by the source being an index for April 2025 [1]) The 'sharpest rises' are from a long-term trend of a decade [2]: > Over the past decade, the median home price has increased by 134 percent in Phoenix, 133 percent in Miami, 129 percent in Atlanta, and 99 percent in Dallas. (Over that same stretch, prices…

Increases in Dallas and Los Angeles are about average over the decade. (National average is 93.9%)

https://fred.stlouisfed.org/series/CSUSHPINSA

Here is another interesting chart:

https://fred.stlouisfed.org/graph/?id=CSUSHPINSA,SFXRNSA,LXX...,

Which place seems more expensive since 2000? Can you see the big drop in 2025?

I think the story of Atlanta and Dallas is a story of cheap housing being available for a long time until it started to get used up. In Atlanta, it's not just exurban development, a lot of in-city neighborhoods had some growing ability. But the mixture of people relocating to Atlanta and the constraints of a car-based city with difficult zoning have basically stopped new supply. Small single-family houses get replaced with larger single-family houses and the missing middle is harder to find.