4 ms·

> It will not crash. There maybe a temporary double digit dip in prices described in hyperbolic "end of the world crash" terms to demand government intervention

by api 7y ago

> It will not crash. There maybe a temporary double digit dip in prices described in hyperbolic "end of the world crash" terms to demand government intervention to prop up prices. This is probably true. In the short-medium term housing will not be allowed to crash for the simple reason that homeowners vote. The soundness of the economy in general will be sacrificed to pump house prices. This feeds a feedback loop that makes housing an even more attractive place to park capital, further driving up housing costs. Of course eventually this gets so unbelievably ridiculous that we have some kind of revolution. Look for $2m starter homes before that happens.

samsonradu 7y ago
I’m hoping for a less drastic resolution, like people voting left-wing parties whom will more or less cap rents/increase capital/estate taxes to even things out a bit. Would you not see this possible?
- imtringued 7y ago
  I don't see how that is a resolution. Increased taxes mean more expensive housing. Capped rent means less available housing stock which will be fine for the first 10 years but over time more people come to the location and drive up prices again. There are two things you can influence either supply or demand. You're reducing supply but keeping demand the same or allowing it to grow. The answer is to increase supply and reduce demand. The thing is, the places that are supply constrained have optimized themselves into being in extreme demand. They know they don't have enough housing but that doesn't stop them from building more commercial real estate to enable new businesses. Those businesses could have been founded somewhere else but why bother when the most suitable city still has enough room for you (but not for the employees)?
  - thorwasdfasdf 7y ago
    This. I don't understand why there aren't more employees demanding to move the company out of the state.
    - leetcrew 7y ago
      people do ask for this. the trouble is they all agree they want to move the office, but can't agree where to put it instead.

by api 7y ago

samsonradu 7y ago

I’m hoping for a less drastic resolution, like people voting left-wing parties whom will more or less cap rents/increase capital/estate taxes to even things out a bit. Would you not see this possible?

imtringued 7y ago
I don't see how that is a resolution. Increased taxes mean more expensive housing. Capped rent means less available housing stock which will be fine for the first 10 years but over time more people come to the location and drive up prices again. There are two things you can influence either supply or demand. You're reducing supply but keeping demand the same or allowing it to grow. The answer is to increase supply and reduce demand. The thing is, the places that are supply constrained have optimized themselves into being in extreme demand. They know they don't have enough housing but that doesn't stop them from building more commercial real estate to enable new businesses. Those businesses could have been founded somewhere else but why bother when the most suitable city still has enough room for you (but not for the employees)?
- thorwasdfasdf 7y ago
  This. I don't understand why there aren't more employees demanding to move the company out of the state.
  - leetcrew 7y ago
    people do ask for this. the trouble is they all agree they want to move the office, but can't agree where to put it instead.