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Only if there is zero market segmentation going on. My area is seeing a large number of new units go up, but they range from developments with no units below $1
by topkai22 4y ago
Only if there is zero market segmentation going on. My area is seeing a large number of new units go up, but they range from developments with no units below $1.5M to where all units are below $600k.
And even if you saw uniformity in the housing stock going in, the existing housing stock is going to vary. My parents just moved from a small city with a super depressed housing market. Current listings range from $90k to $900k- even in bad markets there are pockets high prices.
- AnthonyMouse 4y agoStill possible with market segmentation. Suppose the median home buyer could afford a $300,000 house, but the construction cost for the median existing house is $50,000. $200,000 houses then might exist and the median buyer could afford them, but maybe they have better uses for $150,000 than to buy a house with twelve bedrooms when they only need three.
- anonymouskimmer 4y ago> but maybe they have better uses for $150,000 than to buy a house with twelve bedrooms when they only need three. Especially when a proportion of households are older people who are downsizing. This isn't the Baby boom era anymore when the vast bulk of the home buying population is going after houses based on location to schools or jobs. The locations important for older people aren't exactly the same as for younger people.