What happens when housing prices go down?
clmarohn.substack.com
What happens when housing prices go down?
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Re: What happens when housing prices go down?
#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 walking. And instead of asking what this reveals about the fragility of our system, we’re preparing to paper over it—again—with liquidity, leverage, and euphemisms. "
This is the plan from the potential future mayor of New York: Builders and investors will flee as a result of price controls and home value will plummet.
Detroit is a good example of what happens in the long term when investors and businesses flee the city. I lived there for 20+ years and it still has never really recovered.
Re: What happens when housing prices go down?
#3"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…
Cambridge MA just had a major shift on zoning towards "build more" in Q1. It will be an interesting natural experiment to watch.
https://www.boston.com/news/politics/2025/02/11/cambridge-el...
Re: What happens when housing prices go down?
#4"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…
It’s not just regulation either. Housing companies are not building as much as they did prior to 2008, which had substantially the same regulatory environment in most places.
The idea that we’ve started building enough to bring prices down is a non-starter.
Re: What happens when housing prices go down?
#5"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…
Austin. They’ve built more and prices have declined.
Re: What happens when housing prices go down?
#6"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…
Where I live, there are about a dozen new housing development sites. I pass by 3 of them on my way into work, and my drive is only 10 minutes long. I've lived here 15 years and haven't seen anything like it. Someone somewhere must think it's worthwhile.
Disclaimer: I don't live in a major city, I live just outside a minor one. It's all condos.
Re: What happens when housing prices go down?
#7"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…
> Detroit is a good example of what happens in the long term when investors and businesses flee the city
Let's be honest: it's a good example of what happens when some guys with a lot of money find a cheaper place to make something.
Same with St. Louis, Baltimore, Chicago, Cleveland, Buffalo, Camden, Gary, and so on.
Re: What happens when housing prices go down?
#8"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…
Mass upzoning in Auckland, New Zealand resulted in a rent reduction of 22-35% for three-bedroom apartments and 14-22% for two-bedroom apartments
https://cdn.auckland.ac.nz/assets/business/about/our-researc...
Re: What happens when housing prices go down?
#9There’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 definitely……. something.
Re: What happens when housing prices go down?
#10"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…
The problem is that housing is a major investment vehicle, people in these cities always complain about what's going to happen to their property values so they prefer exclusionary zoning.
Developers have a hell of a time building in these areas even once they get zoning variances, because abutters will show up and complain about every single detail and try to make the property as small and unprofitable as possible. You start off with a 12 unit building with no parking and you end up with a 6 unit building with 12 parking spots in a garage that no one uses.
There's one instance in my neighborhood where the city and developer have been meeting with residents over the course of a year to try and come to an agreement on what should be built. There's just a derelict single-family house on the lot.