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> how Americans wanted (and maybe still want) to live In a free market economy, we should take home prices as an indication of how people want to live. The den

• dragonwriter 10y ago
  No, we shouldn't. In a free market economy with an equal distribution of wealth and income (which is unlikely to be a sustainable state), that would make some sense, but in a free market economy with a distribution of wealth and income similar to that of our real economy, prices are at best a wealth-weighted indication of preferences. And even then, you need to be careful about whether the variable you are looking at is really the demand driver. > The densest, most walkable city centers tend to have the most expensive homes. Manhattan being the extreme data point. Alternatively, places that are attractive places to live (e.g., because of climate and access to fresh water) or to locate trade centers (e.g., because of natural ports, navigable inland waterways, etc.) tend to be high demand places to live, driving both price and density. In this view, Manhattan isn't in demand because it's dense, it's dense because it's in demand.
• marcoperaza 10y ago
  That's fallacious reasoning. Price is determined by demand AND SUPPLY. There is way more housing capacity in suburbia than in urban centers, and it's much easier to build more suburban housing than it is to build more urban housing. It is completely possible that most people prefer suburbia, but that there is more demand per unit of available urban housing.