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If there is ample supply in the housing market, as there is in a non-artificially constrained housing market, every landlord is incentivized to just slightly un
by gamegoblin 4y ago
If there is ample supply in the housing market, as there is in a non-artificially constrained housing market, every landlord is incentivized to just slightly undercut his fellow landlords, and supply and demand will do its thing.
Your example of "bidding higher" doesn't make sense when there is ample supply. My family in Arkansas is always mystified when I tell them that people bid up house prices here on the West Coast. In Arkansas, houses typically sell for 0-10% less than the list price, with no bidding wars. But that is because there is ample supply.
To your point, it is possible that the increased purchasing power does shift people's marginal propensity to consume housing. i.e. if you give people $1000/mo extra, they want to buy more housing (more space, better location, more luxury, etc).
But that is a different situation, because now the consumer is getting something for their money, rather than the rent being raised on what they were already getting.
- Eddy_Viscosity2 4y ago> as there is in a non-artificially constrained housing market Where is this glorious housing market you speak of? I would love to see it!
- HDThoreaun 4y agoChicago. Plenty of housing here
- gamegoblin 4y agoI mention in my comment that I am from Arkansas, which has among the cheapest housing in the nation. My 1940s, 1500 sqft house in Seattle would probably have been considered a teardown in Arkansas, or have cost < $50K. Go checkout redfin there if you want to be a little depressed about West Coast prices. Check out when you can get for the median SF house ($1.3M). Gated mediterranean style 8000 sqft mansion on land with pool on a golf course / lake in the middle of the city: https://www.redfin.com/AR/North-Little-Rock/5-Edenwood-Ln-72116/home/81372459 https://www.redfin.com/AR/North-Little-Rock/5-Edenwood-Ln-72... Southern style 7300 sqft mansion in the middle of the city for far below SF median https://www.redfin.com/AR/North-Little-Rock/18-Heritage-Park-Cir-72116/home/81373838 https://www.redfin.com/AR/North-Little-Rock/18-Heritage-Park... Obviously, the downside is you are in Arkansas and not SF! I moved to Seattle for a reason. The BBQ there is quite good, though, and I miss it.
- annoyingnoob 4y ago> it is possible that the increased purchasing power does shift people's marginal propensity to consume housing. i.e. if you give people $1000/mo extra, they want to buy more housing Giving people money drives inflation by driving demand. When demand increases rent goes up. People may want to buy more/better housing but they will find that $1000/month does not go as far as it did before UBI.