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That's not all that crazy to me, I can imagine many scenarios where that could happen. The answer is, as always, "it depends". It depends on what you build, h
by cle 9y ago
That's not all that crazy to me, I can imagine many scenarios where that could happen. The answer is, as always, "it depends". It depends on what you build, how you build it, where you build it, how it's perceived, the time interval across which you're measuring prices, etc. Price of stuff is way more nuanced than surface-level supply and demand. It all comes down to perception of value, and there are a LOT of factors that can affect perception of value outside of scarcity, and they're often very dependent on each other.
- quotemstr 9y agoIt's not as contingent as you think. We normally model the supply curve as a line going up and to the right, indicating that price increases stimulate the creation of additional supply. The demand curve has the opposite slope and effect. These curves form an "effective field theory". They explain what's happening at a high level. In reality, supply and demand curves aren't necessarily linear, and at small scales, they can wiggle around a bit. This wiggling is where your "it depends" factors come into play. It's disingenuous, however, to argue that this wiggling invalidates the crystal clear overall direction of the supply and demand curves or somehow invalidates the idea that the way to increase the amount of affordable housing is to increase the amount of housing.
- AnimalMuppet 9y agoNot necessarily. There are things called "Veblen goods". For them, the demand rises as the price rises, because the higher price confers additional status. You pretty much have to be in prestige, luxury goods for this to happen, though, so it's (probably) not relevant to a discussion of entry-level housing.
- d1zzy 9y agoThat doesn't seem to apply in this case however. This article is talking about people paying >$1 mil for shitty shacks in Silicon Valley. It seems very hard to think of people buying those because it confers "status", actually, anecdotal evidence from my coworkers and I, we are ashamed of telling folks back home how much we payed or showing pictures of our new house.
- AnimalMuppet 9y agoI agree; I don't think it applies in this case either. I was merely pointing out that one small part of quotemstr's argument didn't hold.