Comment by mattmaroon
6 days ago
A 5% increase in supply annually indefinitely would crash the housing market there, induced demand be damned. To put it in perspective, a metro area growing at 2% is killing it, the highest growth rate is Austin at 3%. Denver only grows at less than 1%.
Cheaper homes may induce demand, they won't induce a 5% growth rate.
> A 5% increase in supply annually indefinitely would crash the housing market there
Only if population is held constant.
Housing supply is inelastic, but housing demand is somewhat elastic. As seen in Denver, an increase in housing supply would decrease prices. But those lower prices will increase demand from people that want to live in Denver but previously couldn’t afford it.
I think you missed my point. It won’t increase it to 5% because that’s basically an unheard of population level increase for a big city/metro. It’s like 5x your average fast growing big city. You may induce some demand, it will be nowhere near that much.