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What that means is that significantly more Californians are trying to buy a home compared to what is available as inventory. If you somehow "reset" the price to

What that means is that significantly more Californians are trying to buy a home compared to what is available as inventory. If you somehow "reset" the price to some arbitrarily "low" level, it would immediately get bid back up to what it is today. On the other hand, if you somehow flooded the market with thousands of homes and there were fewer buyers than that, the price would plummet.

7e 3y ago
No, it means that interest rates have recently doubled. That's the primary driver of affordability. Typically a house is least affordable when it is first purchased, because it is obtained with a 30 year fixed interest rate mortgage. So, over time, the income of the owner goes up with inflation, but the cost of the house remains the same, making it more affordable over time. Older generations can easily afford their houses, but younger generations need to scrimp for a time.
bequanna 3y ago
It would take many, many thousands of homes. Demand is so much greater than supply almost everywhere in the US.
- seanmcdirmid 3y ago
  No. Just put the houses somewhere in California away from SF/LA, and you wouldn’t need too many to satisfy demand for people willing to live away from those two areas.
- amanaplanacanal 3y ago
  There is soooo much pent up demand. We need to build like crazy, probably for years.
  - beretguy 3y ago
    And then what? After we are done building for everybody?
  - system2 3y ago
    Companies which build houses also buy the current houses so it won't happen.
    - constantly 3y ago
      We need to continue to build more, affordable housing in desirable areas near public transit, and break the current cycle of the same companies buying as building.
      - cscurmudgeon 3y ago
        This makes sense only if we assume laws of supply and demand magically doesn't work for housing.
      - bequanna 3y ago
        What companies are building and buying? I’m not familiar with an builders who are interested in holding properties any longer than necessary.
    - ryan93 3y ago
      No they don't. Builders are desperate to get homes off their inventory. they dont speculate they want CASH.
- parker_mountain 3y ago
  > It would take many, many thousands of homes. Yes. It would. And we need to build them.
  - raldi 3y ago
    People act like this is some wild new idea rather than the way every city in human history worked until around 1970 when Americans realized blocking new housing was a way around the Supreme Court’s then-recent ban on overtly discriminatory housing policy.
  - beretguy 3y ago
    Ahh… planet earth has limited amount of space. We need less people instead. If need to build then we need to build vertically.
    - inamberclad 3y ago
      Vertical is the answer. California needs to get over it's aversion to high rise apartments and invest a in flourishing downtown residential system instead of relying on a 1950's mindset of home ownership. The current system is deliberately exclusionary and self preserving, but it will also fail the state in the long run. That, sadly, seems fine to many people.
      - xmprt 3y ago
        People also need to learn that vertical doesn't mean high rise apartments. There's a big gap between single story detached houses and high rise apartments. Townhomes, condos, row houses, and so on can all fill that gap.
        ryandrake 3y ago
        Vertical still means “close proximity to neighbors” which is what a lot of people object to when it comes to urban living. I will never again voluntarily live in a building with a shared wall or ceiling.
- rufus_foreman 3y ago
  >> Demand is so much greater than supply almost everywhere in the US It really isn't. Demand is so much greater than supply in the places you want to live, not in the places I want to live.
  - bequanna 3y ago
    Even in the rural areas I’m familiar with, there is an extreme shortage of high quality housing. On the other hand, if you want to move to Detroit or Philly…
- robocat 3y ago
  House prices are definitely not dropping in my city, even though housing supply is going up about 2.5% per year (urban sprawl in outer areas, plus some densification). Christchurch, New Zealand. I think because immigration grows NZ population fast enough to absorb the new housing.
  - robocat 3y ago
    Good information on NZ house policy and growth: https://worksinprogress.co/issue/upzoning-new-zealand https://worksinprogress.co/issue/upzoning-new-zealand
chiefalchemist 3y ago
Or, if you adjusted demand, prices you fall. The 30 yr mortgage was supposed to make homes more affordable. Instead, like higher edu, cheap and easy loans have driven prices up, up, up. I'm not sure what the solution is at this point. But it seems to be a bit of both...more inventory, and less demand.
- deleted 3y ago
  [deleted]
- quickthrower2 3y ago
  You will get less demand if any of: * More people per house * People leaving the state * More homeless * Long term: lower the birth rate * Increased death rate None of which are desirable. The first might be OK because it might bring families together and make people more social.
  - chiefalchemist 3y ago
    You also decrease demand by making mortgages less easy to get. Again, look what cheap and easy loans did to the cost of higher edu. The market was manipulated and it responded in kind. The current system is leading to sociopolitical situations that are also undesirable. And yet our only answer is, "Thank you sirs and madames, can we have another?" That's not sustainable. p.s. Prices can also be lowered by building smaller homes. The problem there is, the larger the home the more furnishings, etc. Larger homes help increase consumption which is good for the status quo.
    - quickthrower2 3y ago
      That doesn't decrease human demand. It will change the price point though. It might make it cheaper and encourage less debt, which is a good thing. But if there is a town with 4 houses and 5 families, then the price of a house could be $100 or $1bn, but there are still 4 houses, and 5 families. Building smaller homes is good. If you make the small, and put them close together, and sometimes on top of each other you can increase the chance of having a walkable city rather than a drive-only one.

7e 3y ago

No, it means that interest rates have recently doubled. That's the primary driver of affordability. Typically a house is least affordable when it is first purchased, because it is obtained with a 30 year fixed interest rate mortgage. So, over time, the income of the owner goes up with inflation, but the cost of the house remains the same, making it more affordable over time. Older generations can easily afford their houses, but younger generations need to scrimp for a time.

bequanna 3y ago

It would take many, many thousands of homes. Demand is so much greater than supply almost everywhere in the US.

seanmcdirmid 3y ago
No. Just put the houses somewhere in California away from SF/LA, and you wouldn’t need too many to satisfy demand for people willing to live away from those two areas.
amanaplanacanal 3y ago
There is soooo much pent up demand. We need to build like crazy, probably for years.
- beretguy 3y ago
  And then what? After we are done building for everybody?
- system2 3y ago
  Companies which build houses also buy the current houses so it won't happen.
  - constantly 3y ago
    We need to continue to build more, affordable housing in desirable areas near public transit, and break the current cycle of the same companies buying as building.
    - cscurmudgeon 3y ago
      This makes sense only if we assume laws of supply and demand magically doesn't work for housing.
    - bequanna 3y ago
      What companies are building and buying? I’m not familiar with an builders who are interested in holding properties any longer than necessary.
  - ryan93 3y ago
    No they don't. Builders are desperate to get homes off their inventory. they dont speculate they want CASH.
parker_mountain 3y ago
> It would take many, many thousands of homes. Yes. It would. And we need to build them.
- raldi 3y ago
  People act like this is some wild new idea rather than the way every city in human history worked until around 1970 when Americans realized blocking new housing was a way around the Supreme Court’s then-recent ban on overtly discriminatory housing policy.
- beretguy 3y ago
  Ahh… planet earth has limited amount of space. We need less people instead. If need to build then we need to build vertically.
  - inamberclad 3y ago
    Vertical is the answer. California needs to get over it's aversion to high rise apartments and invest a in flourishing downtown residential system instead of relying on a 1950's mindset of home ownership. The current system is deliberately exclusionary and self preserving, but it will also fail the state in the long run. That, sadly, seems fine to many people.
    - xmprt 3y ago
      People also need to learn that vertical doesn't mean high rise apartments. There's a big gap between single story detached houses and high rise apartments. Townhomes, condos, row houses, and so on can all fill that gap.
      - ryandrake 3y ago
        Vertical still means “close proximity to neighbors” which is what a lot of people object to when it comes to urban living. I will never again voluntarily live in a building with a shared wall or ceiling.
rufus_foreman 3y ago
>> Demand is so much greater than supply almost everywhere in the US It really isn't. Demand is so much greater than supply in the places you want to live, not in the places I want to live.
- bequanna 3y ago
  Even in the rural areas I’m familiar with, there is an extreme shortage of high quality housing. On the other hand, if you want to move to Detroit or Philly…
robocat 3y ago
House prices are definitely not dropping in my city, even though housing supply is going up about 2.5% per year (urban sprawl in outer areas, plus some densification). Christchurch, New Zealand. I think because immigration grows NZ population fast enough to absorb the new housing.
- robocat 3y ago
  Good information on NZ house policy and growth: https://worksinprogress.co/issue/upzoning-new-zealand https://worksinprogress.co/issue/upzoning-new-zealand

chiefalchemist 3y ago

Or, if you adjusted demand, prices you fall. The 30 yr mortgage was supposed to make homes more affordable. Instead, like higher edu, cheap and easy loans have driven prices up, up, up. I'm not sure what the solution is at this point. But it seems to be a bit of both...more inventory, and less demand.

deleted 3y ago
[deleted]
quickthrower2 3y ago
You will get less demand if any of: * More people per house * People leaving the state * More homeless * Long term: lower the birth rate * Increased death rate None of which are desirable. The first might be OK because it might bring families together and make people more social.
- chiefalchemist 3y ago
  You also decrease demand by making mortgages less easy to get. Again, look what cheap and easy loans did to the cost of higher edu. The market was manipulated and it responded in kind. The current system is leading to sociopolitical situations that are also undesirable. And yet our only answer is, "Thank you sirs and madames, can we have another?" That's not sustainable. p.s. Prices can also be lowered by building smaller homes. The problem there is, the larger the home the more furnishings, etc. Larger homes help increase consumption which is good for the status quo.
  - quickthrower2 3y ago
    That doesn't decrease human demand. It will change the price point though. It might make it cheaper and encourage less debt, which is a good thing. But if there is a town with 4 houses and 5 families, then the price of a house could be $100 or $1bn, but there are still 4 houses, and 5 families. Building smaller homes is good. If you make the small, and put them close together, and sometimes on top of each other you can increase the chance of having a walkable city rather than a drive-only one.