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> the long period of ultra-low interest rates we enjoyed resulted in additional productive capacity If there is evidence of that I'd love to see it. If this wa

• notaustinpowers 3y ago
  Even with the ultra-low interest rates, supply was kept low due to nervousness from home builders. Builders were decimated in the housing crisis and, honestly, never recovered. To them, the collapse came sudden and quick, and many housing projects and developments just sit half-finished even to this day. The focus was turned from single-family housing to apartments, specifically luxury apartments as the luxury housing sector picked up steam quickly as developers and investors jumped on those properties when they were at their lowest prices. So "luxury" apartments were built at low-costs and purchased by investment firms. The main focus was for the builder to get their money back and more as quickly as possible, minimizing their risk, and the investors in the new complex got a bargain "luxury" property that they can increase rents quickly on, while ensuring demand since fewer and fewer single-family homes were being built. The current issue of supply and demand for housing is, largely, artificially created, possibly accidentally. Single-family housing is just risky now, apartments are less risky. But as people are desiring yards and space again (due to COVID and WFH), we are now seeing the rental model extend to "build-to-rent" single-family communities.