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I missed the news for when there was a house building boom. Oh, there wasn't? Then the law of supply and demand will keep housing prices high. People don't like
by taylodl 4y ago
I missed the news for when there was a house building boom. Oh, there wasn't? Then the law of supply and demand will keep housing prices high. People don't like being homeless and now the Boomer's children are having children and demanding more housing.
- adammarples 4y agoDemand is a function of money, not counting up people and dividing by houses. The supply of credit and discretionary spending is drying up at the same time.
- tmnvix 4y agoYou're forgetting that the demand side of the equation is very sensitive to the cost of credit. Put it this way. We know for example that a lot of homes are rented out as AirBnBs. We can safely assume that many of those were purchased for that purpose and that the purchase was funded with borrowed money. The AirBnB income and anticipated capital gains made the borrowing worthwhile. Is it still worthwhile if the cost of credit doubles and capital gains seem much less certain? It's likely that we'll see a lot of investment and speculative demand disappear leading to lower demand overall. In other words, demand isn't just for properties as homes - it's for properties as investments as well.
- analyte123 4y agoThe number of housing units under construction in the US is at a record high [1] and the number of people entering their homebuying age is going to slowly decline for the next 20 years [2]. [1] https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/UNDCONTSA [2] https://en.m.wikipedia.org/wiki/Demographics_of_the_United_States https://en.m.wikipedia.org/wiki/Demographics_of_the_United_S...