5 ms·

How much do you think it will affect housing prices? Is there a model that can predict the effect? I'll be surprised if it helps a lot. Demand seems infinite.

• whack 7y ago
  > Is there a model that can predict the effect? Yes, the model is called supply and demand. When you increase the quantity supplied, the only way the extra quantity can be sold, is if the price drops. If you increase the quantity supplied without reducing the price, the extra units will never be sold. Why would they... anyone who was willing to pay the previous price, would have already done so and will already have a home in SF/Oakland. The only way to fill the new units is to entice new residents who aren't willing to pay the previous price point.
  • afpx 7y ago
    Obviously. But, are you expecting a 10% decrease in prices, or 0.5%? Why so defensive? I’m asking Because if it works, I’d like to sell the idea to skeptics. We all lean scientific here, right?
    • pertymcpert 7y ago
      It's not him/her being defensive, it's basic economics that shouldn't have to be explained...
      • afpx 7y ago
        Sometimes one has to understand intermediate economics .... For instance, in cases of inelastic demand and low liquidity (like housing), if prices are pegged at a maximum that buyers can pay, the actual equilibrium price could be much higher. In that case, a small amount of extra supply will not lower prices.