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Of course it's properly functioning. There is a ton of demand and a lack of supply. Of course prices are going to rise and that's perfectly okay. But they ca
by pfarnsworth 10y ago
Of course it's properly functioning. There is a ton of demand and a lack of supply. Of course prices are going to rise and that's perfectly okay. But they can't rise ad infinitum. I think we're seeing the limits of how high prices people are willing to spend, and rising interest rates are going to limit that even further. I'm expecting a precipitous plunge in >$2M houses and the sweet spot will be houses in the $750k range after interest rates limited the crazy market.
- ericd 10y agoIt's functioning, but I wouldn't say it's functioning properly. Prices have had to rise much farther than they would in a less encumbered regulatory environment, and as a result, it's been very disruptive for a far larger number of people than it had to be. If there was less encumbrance, we would have seen a housing construction boom well before the prices got to the current, rather ridiculous levels. Compare the number of yearly housing starts and pricing in Seattle to see a more functional market, which happens to be absorbing a lot of SF's excess demand. If your bar for a properly functioning market is that prices rising have caused normalizing factors to kick in, then yes, of course that's the case, as always happens in markets that aren't completely messed up.