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What exactly is "stalling the market" and why is it a bad thing? The point of housing is to give people access to shelter in a reasonable location near to their

What exactly is "stalling the market" and why is it a bad thing? The point of housing is to give people access to shelter in a reasonable location near to their family and work.

vineyardmike 2y ago
1. Some people who aren't time sensitive but intend to buy may wait to see if prices drop more. 2. Home builders obviously care about the price of houses they may build and sell. If the estimated prices of their future construction drop a lot from previous plans, they may abandon plans to build additional homes. Like all businesses, they buy in bulk, they deal with debt markets, they have multi-year forecasting, etc, and dramatic changes in the market may cause them to reevaluate profitability of future construction. Point 1 may cause further drop in prices, and point 2 may restrict supply from growing.
- hackerlight 2y ago
  If people are scared to buy because the price might drop even more, that means prices are still too high as a percentage of net worth. 60-80 years ago, nobody thought like this. You bought a place and didn't think twice about it. You wouldn't pay attention to the real estate market because there wasn't any point, housing wasn't 15-20x your annual after-tax income where one small mistake and 5 years of your life is down the drain. This obsession with price is a byproduct of high prices. We need to rip this bandaid off and get it over with. There will be a temporary economic dip due to the wealth effect, but that painful transition only has to happen once.
  - chii 2y ago
    > 60-80 years ago ... didn't think twice about it probably because those who bought at that time were rich, and didnt need a mortgage, or their mortgage was small.
jusssi 2y ago
Like stalling a plane: the useful momentum is lost. I.e. no one wants to buy (they wait for lower prices) or sell (facing uncertainity at how long it's going to take, and what price they'll get). Only people desperate to move will buy or sell anything. It's bad because it directly eats into the purpose of housing you stated.
- hackerlight 2y ago
  Do you know how happy gen z and lower income people would be if they had the option of doing what you're talking about? Having the ability to buy a house but choosing not to because the market might go down? You are either rich or a homeowner because clearly you don't know the circumstances of being priced out of the market. Tell a low income person "it's worse for your housing affordability if house prices go down" and they will laugh in your face, and deservedly so.
  - jusssi 2y ago
    > You are either rich or a homeowner because clearly you don't know the circumstances of being priced out of the market. That feels like a reach from me simply answering a market dynamics question you asked. Chill maybe?

What exactly is "stalling the market" and why is it a bad thing? The point of housing is to give people access to shelter in a reasonable location near to their family and work.

vineyardmike 2y ago

1. Some people who aren't time sensitive but intend to buy may wait to see if prices drop more. 2. Home builders obviously care about the price of houses they may build and sell. If the estimated prices of their future construction drop a lot from previous plans, they may abandon plans to build additional homes. Like all businesses, they buy in bulk, they deal with debt markets, they have multi-year forecasting, etc, and dramatic changes in the market may cause them to reevaluate profitability of future construction. Point 1 may cause further drop in prices, and point 2 may restrict supply from growing.

hackerlight 2y ago
If people are scared to buy because the price might drop even more, that means prices are still too high as a percentage of net worth. 60-80 years ago, nobody thought like this. You bought a place and didn't think twice about it. You wouldn't pay attention to the real estate market because there wasn't any point, housing wasn't 15-20x your annual after-tax income where one small mistake and 5 years of your life is down the drain. This obsession with price is a byproduct of high prices. We need to rip this bandaid off and get it over with. There will be a temporary economic dip due to the wealth effect, but that painful transition only has to happen once.
- chii 2y ago
  > 60-80 years ago ... didn't think twice about it probably because those who bought at that time were rich, and didnt need a mortgage, or their mortgage was small.

jusssi 2y ago

Like stalling a plane: the useful momentum is lost. I.e. no one wants to buy (they wait for lower prices) or sell (facing uncertainity at how long it's going to take, and what price they'll get). Only people desperate to move will buy or sell anything. It's bad because it directly eats into the purpose of housing you stated.

hackerlight 2y ago
Do you know how happy gen z and lower income people would be if they had the option of doing what you're talking about? Having the ability to buy a house but choosing not to because the market might go down? You are either rich or a homeowner because clearly you don't know the circumstances of being priced out of the market. Tell a low income person "it's worse for your housing affordability if house prices go down" and they will laugh in your face, and deservedly so.
- jusssi 2y ago
  > You are either rich or a homeowner because clearly you don't know the circumstances of being priced out of the market. That feels like a reach from me simply answering a market dynamics question you asked. Chill maybe?