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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

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 3y 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 3y 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.