Comment by ipsento606
1 month ago
As property prices increase, developers are more incentivized to build new properties and increase density.
The increase in supply then lowers prices.
The problem comes when local laws and the planning permission system make it hard or impossible to increase the supply of homes. Then there's no balancing force to bring prices down when they go up.
I certainly agree with your last paragraph, however whilst I believe you're not wrong about the first I don't believe that is the only option for increasing supply.
For example, if you look at some of the densest cities in the world they are still predominantly single standing homes, just much more tightly packed, and in homes we can't huild. So I believe zoning and planning are the key issues, and I think property developers would actually play a smaller role in solving the supply problem if you allowed individuals to solve this problem themselves with less strict zoning and planning.
Obviously big developments still play a role, but at the stage American cities are often at, NYC excluded, I think zoning being more favourable to medium density would go a long way.
Price rarely ever goes down meaningfully.