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Your analysis is wrong in assuming that when developers acquire permissions, demolish buildings, rent machinery and pour concrete, buyers still behave as if the
by hamilyon2 6y ago
Your analysis is wrong in assuming that when developers acquire permissions, demolish buildings, rent machinery and pour concrete, buyers still behave as if there is shortage of housing.
Nathan Robinson's analysis might be wrong too, but it is still more nuanced.
- strogonoff 6y agoBubble or no bubble, builders are going to build. If luxurious units drop in value after housing supply is no longer restricted, builders will go with thinner margins and build less expensive housing, rather than… what, just exit the business altogether? If OP’s vision is correct, when luxurious high-density housing in SF becomes oversupplied it will drop in price. If your counter-argument is correct, in this scenario luxurious housing will never be built. I reckon other housing will, though, and it’ll likely be tall buildings with higher margins. Either way the answer seems clear: using speculative investment to argue against new housing is misguided.