49 ms·

Developers build what the market will pay for. If they overbuild luxury houses, they'll go down in price. All new supply is good supply, period. We need everyth

Developers build what the market will pay for. If they overbuild luxury houses, they'll go down in price. All new supply is good supply, period. We need everything from SROs to luxury penthouses. That's the only way we land on affordable housing in a market economy.

eganist 4y ago
> Developers build what the market will pay for. Developers build for whatever profits the most, and they'll avoid taking a loss just as an entrepreneur will do what they can to avoid a down round. That's why we're short millions of housing units but no one's addressing the need; developers would rather create market at the top than address low margin markets at the bottom. > If they overbuild luxury houses, they'll go down in price. Tons of overbuilt supply isn't doing much against new build pricing (not enough to make it affordable. 10% tops when we instead need homes that are 50+% discounted relative to market). In fact, many developers are instead subsidizing points on mortgages through preferred lenders so they can justify that original pricing, and the points are often cheaper than a market adjustment on a home. > All new supply is good supply, period. That's not the case when developers would rather hold than sell at a loss. See my first point and the homes going off the market waiting for housing to pick up steam again. > We need everything from SROs to luxury penthouses. That's the only way we land on affordable housing in a market economy. Lol. That's the extent of my rebuttal. I'm not here to debate, I apologize. But I'd advise you sit down with a few local builders to understand their strategies to maximize gain in this market; quite a few are prepared to hold as long as needed rather than build cheap and sell to lower-margin markets. And that does exactly nothing to address today's housing problem; if it was a simple matter of supply and demand, it'd have already been addressed with the vast swaths of land we've got.
- arcticbull 4y ago
  Nothing in America is overbuilt, the nation is short about 6,000,000 housing units. That’s a huge part of why house prices aren’t going down in spite of high interest rates. > Lol. That's the extent of my rebuttal. I'm not here to debate, I apologize. Very eloquent. I'm sure you're right and this is the only market on earth supply and demand just doesn't work.
throwaway2037 4y ago
That's the only way we land on affordable housing in a market economy. For the record, the City of Berlin is one of the largest owners of rental property in... the City of Berlin. And, Germany is definitely a market economy. That said, in the United States, this would be probably be impossible. The economy and politics is much too classically liberal. (I'm not talking about Democrats == liberal.) Yes, I agree with your main point: "All new supply is good supply, period." Japan is very fair about this: The cities look visually sh-tty (during the daytime) -- architectural eyesore / concreted mess... but the prices are reasonable for middle class people. Noah Smith wrote about it: Japanese cities like Tokyo have managed to build enough housing to make housing costs fall Ref: https://noahpinion.substack.com/p/actually-japan-has-changed-a-lot https://noahpinion.substack.com/p/actually-japan-has-changed...

eganist 4y ago

> Developers build what the market will pay for. Developers build for whatever profits the most, and they'll avoid taking a loss just as an entrepreneur will do what they can to avoid a down round. That's why we're short millions of housing units but no one's addressing the need; developers would rather create market at the top than address low margin markets at the bottom. > If they overbuild luxury houses, they'll go down in price. Tons of overbuilt supply isn't doing much against new build pricing (not enough to make it affordable. 10% tops when we instead need homes that are 50+% discounted relative to market). In fact, many developers are instead subsidizing points on mortgages through preferred lenders so they can justify that original pricing, and the points are often cheaper than a market adjustment on a home. > All new supply is good supply, period. That's not the case when developers would rather hold than sell at a loss. See my first point and the homes going off the market waiting for housing to pick up steam again. > We need everything from SROs to luxury penthouses. That's the only way we land on affordable housing in a market economy. Lol. That's the extent of my rebuttal. I'm not here to debate, I apologize. But I'd advise you sit down with a few local builders to understand their strategies to maximize gain in this market; quite a few are prepared to hold as long as needed rather than build cheap and sell to lower-margin markets. And that does exactly nothing to address today's housing problem; if it was a simple matter of supply and demand, it'd have already been addressed with the vast swaths of land we've got.

arcticbull 4y ago
Nothing in America is overbuilt, the nation is short about 6,000,000 housing units. That’s a huge part of why house prices aren’t going down in spite of high interest rates. > Lol. That's the extent of my rebuttal. I'm not here to debate, I apologize. Very eloquent. I'm sure you're right and this is the only market on earth supply and demand just doesn't work.

throwaway2037 4y ago

That's the only way we land on affordable housing in a market economy. For the record, the City of Berlin is one of the largest owners of rental property in... the City of Berlin. And, Germany is definitely a market economy. That said, in the United States, this would be probably be impossible. The economy and politics is much too classically liberal. (I'm not talking about Democrats == liberal.) Yes, I agree with your main point: "All new supply is good supply, period." Japan is very fair about this: The cities look visually sh-tty (during the daytime) -- architectural eyesore / concreted mess... but the prices are reasonable for middle class people. Noah Smith wrote about it: Japanese cities like Tokyo have managed to build enough housing to make housing costs fall Ref: https://noahpinion.substack.com/p/actually-japan-has-changed-a-lot https://noahpinion.substack.com/p/actually-japan-has-changed...