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

Re: What happens when housing prices go down?

#291

Post by mlhpdx » Mon, Jul 21, 2025, 7:19 PM UTC

kjkjadksj wrote: post #266

mlhpdx wrote: post #262

The universal agreement that “we need to build more housing” baffles me. I see persistent vacancy rates, so the raw capacity is there. High commercial vacancy means more will come without new builds. If the issue is ownership versus renting (which is very important), building new will lead to more overcapacity in the system at large, won’t it? That won’t serve new owners well (or existing ones). It’s a difficult prob…

There is always some level of vacancy rate by virtue of people moving out or in and renovations. Even keeping a unit off the market if you don’t want to have to let it out at lower rent and devalue your asset which is priced in part on rent prices. And further in terms of inventory. What does it suggest to you in high demand cities when we see e.g. in socal virtually all available space already built to the limits of…

Isn’t that a bit of an aside? Folks not being able to afford to own a home is different than folks not being able to afford a home where they want. I’ve been in both situations and one is considerably more unpleasant (and difficult to escape).

Re: What happens when housing prices go down?

#292

Post by mlsu » Mon, Jul 21, 2025, 7:19 PM UTC

Glyptodon wrote: post #290

mlsu wrote: post #254

Quite simply, housing has to be either affordable, or an investment. Those two things are literally, by definition, mutually exclusive. If something is an investment it means that it must appreciate in excess of inflation over time. That means, by definition, that it will become unaffordable over time. This is why, whenever you hear terms like "affordable housing" you can safely shut your brain off. There will never…

I think it's possible to housing to be affordable and for it to behave more similarly to to something like gold than something like a bond or stock. That said, it's quite tricky because of property taxes - if they applied to gold imagine what it would do to gold bugs. Fortunately, real estate can be rented, which isn't really a thing for gold. But to complete the analogy, it seems like the goal should be for resident…

I lean reflexively libertarian on housing (mostly just my psychological NIMBY backlash). Therefore my take is that the market would naturally accomplish the scheme you've described, no need for policy, if we simply remove constraints on supply. Basically, the "stop hitting yourself" policy of housing :)

Unfortunately it doesn't work that way and never will, not just because of NIMBY but because of the reasons I outlined above.

Re: What happens when housing prices go down?

#293

Post by mcv » Mon, Jul 21, 2025, 7:26 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…

Is your argument that what Strong Towns and NJB are doing is somehow invalid because they're not also doing something completely different? Raising awareness is also a very important role. Sure, maybe 5 friends can get you elected to a local office, but first you need to convince those 5 friends. You need to get people to care.

Of course organizing is important, but so is awareness, and that's certainly what NJB is all about (I'm less familiar with Strong Towns). And organizing is especially unimportant to NJB, because he already lives in a country where this stuff is better organized than he'd ever been able to come up with. He's just spreading the good word and showing the contrast with North America. And he's very effective at that.

The witty snarky videos about organizing are better made by people who know more about organizing. If you think they're not emphasizing the thing you think is most necessary, why aren't you out there doing that?

Re: What happens when housing prices go down?

#294

Post by ta1243 » Mon, Jul 21, 2025, 7:31 PM UTC

9rx wrote: post #270

ta1243 wrote: post #246

Earlier quoted context omitted.

"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.

> That doesn't mean there is no unmet demand. Right, it doesn't tell us much of anything, but there does need to be some external mechanism that is getting in the way from transaction completion in order for demand to be unmet. A shortage is one example of such a mechanism, but there clearly isn't a shortage[1] in the housing market. Prices have risen just fine. There is probably some unmet demand in the fact that bu…

There clearly is a shortage. When 98% of available homes are used that is a shortage.

I just did a rightmove search for rental in London and checked the first 8 adverts, every single one was added today except for one which isn't available until september.

Your definition of shortage seems very different to mine so there's no point in continuing.

Re: What happens when housing prices go down?

#295

Post by ta1243 » Mon, Jul 21, 2025, 7:33 PM UTC

AlexandrB wrote: post #193

ta1243 wrote: post #93

Earlier quoted context omitted.

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…

You're forgetting AirBnB: turning housing inventory into hotel inventory since 2008.

No I'm not

This pressure group says there is too much airbnb

https://www.actiononemptyhomes.org/facts-and-figures

They say that over 97.5% of homes in London are in primary residential use, i.e not airbnb, not second home, not empty all year except for some wealthy oligarch coming for a couple of weeks.

The numbers might be slightly off as people are not reporting their use of airbnb, but

https://www.selfcatering.co.uk/reports/uk-airbnb-stats/

Claims just 50,000 airbnb homes in London, which is just 1.3% of the housing stock in London (and that 50k number includes those which are primary residential use but the current occupant moves out for a week if they get someone)

Re: What happens when housing prices go down?

#296

Post by mcv » Mon, Jul 21, 2025, 7:38 PM UTC

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…

Oh, come on, man. Read the sources he points to before you invent imaginary contradictions.

> The Phoenix housing market exploded briefly during the pandemic, when demand skyrocketed amid a housing supply shortage. Remote workers relocating to the relatively cheaper city brought up home prices and values. Between February 2020 and February 2025, home prices were up 53 percent in Phoenix and 56 percent statewide in Arizona, according to Zillow. During the same five years, prices grew by 45 percent nationally.

> But the city has been experiencing a price correction in recent years, as demand slowed significantly with return-to-office orders and buying properties in the city became unaffordable for many—especially locals. "There's a mass sell-off occurring, as pandemic investors and snowbirds sell out,"

Did you know that prices can vary over time? They can go up first, and down later. That's what the article is referring to.

> An increase in housing supply leads to a fall in prices, which leads to a fall in supply?

You mean basic free market reacting to a disruption and looking for a new balance? High prices make supply go up, high supply leads to more competition and lower prices. This is basic economics, man.

Re: What happens when housing prices go down?

#297

Post by itake » Mon, Jul 21, 2025, 7:46 PM UTC

mcv wrote: post #296

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…

Oh, come on, man. Read the sources he points to before you invent imaginary contradictions. > The Phoenix housing market exploded briefly during the pandemic, when demand skyrocketed amid a housing supply shortage. Remote workers relocating to the relatively cheaper city brought up home prices and values. Between February 2020 and February 2025, home prices were up 53 percent in Phoenix and 56 percent statewide in Ar…

The author says, increasing the supply pushes prices down which results in higher financial risks.

But then the author says we should also increase the supply… without addressing the underlying point that increasing supply creates financial instability

Re: What happens when housing prices go down?

#298

Post by mcv » Mon, Jul 21, 2025, 7:47 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…

The real problem driving up prices, both in housing and concerts, is scalpers. They create artificial scarcity. If you want to fix these sort of problems, you have to do something about scalpers.

Re: What happens when housing prices go down?

#299

Post by baggy_trough » Mon, Jul 21, 2025, 7:49 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…

There is nothing to solve; this is the best overall outcome.

Re: What happens when housing prices go down?

#300

Post by AnimalMuppet » Mon, Jul 21, 2025, 7:50 PM UTC

avmich wrote: post #289

AnimalMuppet wrote: post #278

Earlier quoted context omitted.

> Then where are the builders which do what they're asked to? These are independent companies. Who do you think is supposed to be asking them to do something? When a customer asks, they do it. What more do you want? > This doesn't mean there are no other business models which work in this case. Where they are? They made less money than this model over the last decade or two. So they are nonexistent, not in the sense…

> But probably, first some homebuilders who use the current model have to go bankrupt. I think it's not necessary. The different model homebuilders should pick up the orders, that's it.

They don't exist - today, at least not in any quantity. There are very few "different model" homebuilders waiting around to pick up the orders.

It's not like you think it should be, and the path from here to there is less smooth than you seem to think it is.