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You're mixing up two things. When a lot of new premium housing is built, you might indeed see the reported "average sales price" go up, since there are lots of
by tlb 7y ago
You're mixing up two things. When a lot of new premium housing is built, you might indeed see the reported "average sales price" go up, since there are lots of sales of new fancy new houses.
But the price of older housing goes down. Because people who bought a new premium house, therefore did not buy an older house, which reduces demand for older houses.
There are lots of nice older (1940-1990) houses in SV that are good to live in. Before the tech boom they were perfect for middle class families: pleasant and affordable. They could be affordable again (and they're still pleasant) if the supply of premium housing were increased enough.
- rtkwe 7y agoThat depends on somehow not having the extra supply on the high luxury end being soaked up by foreign investment parking their money in real estate.
- tlb 7y agoSupply and demand works there too. There's a finite amount of people with a finite amount of money they want to invest in US real estate. If you create enough (by $ value) real estate for them to buy, they can't buy any more. For a city to have its real estate bought as investments can be troublesome, but at least it doesn't increase road traffic. So you can have tall, dense skyscrapers with condos all owned by foreign trusts, without it creating parking or traffic problems. https://en.wikipedia.org/wiki/Hudson_Yards_(development) https://en.wikipedia.org/wiki/Hudson_Yards_(development) seems like an example of this. If you don't create investable condos, then the foreign money buys single family homes that some family could otherwise live happily in.
- docker_up 7y agoThis is absolutely wrong. I live in an "old" neighborhood where the houses are about 60 years old or more. The house prices have doubled in the last 6 years, and they are almost 2M. Old houses go up much faster because they are in much much better locations.