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Increased housing in high cost locations DOES NOT decrease prices. This is a complete fallacy. The problem is that the supply is limited and it solidifies comp

Increased housing in high cost locations DOES NOT decrease prices. This is a complete fallacy. The problem is that the supply is limited and it solidifies comps and makes people more sure that high prices are legitimate. Look at Bay Meadows in San Mateo. An entire community has been built in the last few years. There are a ton of condos, townhouses and single family homes built in quite frankly a well thought out community. Townhouses are over $1.5M and SFH, which are yards away from the Caltrain are over $2M. This is entirely new supply and their prices are higher than existing houses. The prices in the area didn’t go down, they went up because this legitimizes the high prices and solidifies them. The only way you get lower house prices is by killing demand like during the housing bust, not by increasing supply because supply doesn’t happen at the scale that is required to decrease prices.

cletus 8y ago
You're talking about a community of 2000 residents [1] out of over 7 million residents in the San Francisco Bay Area [2]. Do you really expect it to change the housing cost equation at all? In a largely unregulated market land use is largely dictated by how expensive that land is. Developers don't otherwise just decide to build high rises, mid rises, townhouses or SFHs. It's why the 3-6 story condo complexes you get in, say, Santa Clara County you don't get in Manhattan. Now obviously this is complicated by regulation, demand in different market segments, what the infrastructure can support, etc but the prices you give seem to suggest the land value is extremely high. Building low density housing on that is going to lead to really high prices. [1] https://baymeadows.com/2017/12/22/2017-lets-do-the-numbers/ https://baymeadows.com/2017/12/22/2017-lets-do-the-numbers/ [2] http://www.bayareacensus.ca.gov/ http://www.bayareacensus.ca.gov/
crooked-v 8y ago
> Increased housing in high cost locations DOES NOT decrease prices. This is a complete fallacy. [citation needed]

cletus 8y ago

You're talking about a community of 2000 residents [1] out of over 7 million residents in the San Francisco Bay Area [2]. Do you really expect it to change the housing cost equation at all? In a largely unregulated market land use is largely dictated by how expensive that land is. Developers don't otherwise just decide to build high rises, mid rises, townhouses or SFHs. It's why the 3-6 story condo complexes you get in, say, Santa Clara County you don't get in Manhattan. Now obviously this is complicated by regulation, demand in different market segments, what the infrastructure can support, etc but the prices you give seem to suggest the land value is extremely high. Building low density housing on that is going to lead to really high prices. [1] https://baymeadows.com/2017/12/22/2017-lets-do-the-numbers/ https://baymeadows.com/2017/12/22/2017-lets-do-the-numbers/ [2] http://www.bayareacensus.ca.gov/ http://www.bayareacensus.ca.gov/

crooked-v 8y ago

> Increased housing in high cost locations DOES NOT decrease prices. This is a complete fallacy. [citation needed]