Comment by tokioyoyo
5 days ago
It’s a supply-side problem, but with majority of people being either indifferent to the problem or against downward pressure on the housing prices (most people don’t rent). The prices have skyrocketed, and most people who bought in the last 5 years wouldn’t want their assets to depreciate, if they spent 500K+ on it.
> most people who bought in the last 5 years wouldn’t want their assets to depreciate, if they spent 500K+ on it
If they spent any amount on it. The long-run equilibrium is managing housing prices like the Fed, with a commitment to building enough to keep median real home prices flat. (I'd argue for a one-time adustment to pre-Covid levels. But that's arguably an arbitrary threshold.)
Absolutely. I only pointed to the last 5 years, because there was an insane appreciation and a lot of people went the route of “becoming house-poor, but owning their homes”. Those people, who are on the younger side, won’t ever support depreciation of their assets.
Honestly, I have no idea how a government can resolve it without a large scale intervention or centralized action a la China.