A number of rich migrants have helped keep the high prices high. Sellers are most likely gambling that, if they hold out and don’t appear desperate, the buyers will meet them where they are. As long as they can stay solvent longer than the buyer can stay unhoused, they win.
I’ve seen a lot of this arrogance in the car market, too - I walked away last week and they seemed to think I was playing hard to get. The market is soft, but they act like it’s not.
sentiment does not change over night, going to need the market to do its thing however it does seem like some locations for housing aint budging while others like southern US are in decline.
During my “capitalism is the best and everything else is evil” education, we went over supply and demand.
Now, if the things everyone who recieved that education are true, this means that “condo supply high” should mean “prices start lowering to be competitive”
But we don’t see that. We see stagnant prices, or even, on defying all reason, an increase.
As for “Yay capitalism, supply and demand answers all”…
The wealthy have convinced government that they should never lose, only gain, and as such we’ve not seen them assume the “risk” part of “risk and reward” for a while.
It’s the same with investment: we, and by “we” I mean society in general, is expected to invest more and more to enable the wealthy to make money, but we’re also supposed to take less and less of the reward, while only are Galtian ubermenschen are entitled to profit.
The oil industry is a great example of this: it’s wildly profitable, and deserves not one red cent of subsidy or support, but we spend billions on it all while lowering royalty and taxation rates for…reasons. Real estate is similar: we’re practically bribe developers to build, but we won’t to anything in the way of restrictions.
Government should just build directly. It’d be more efficient than the bribes we’re paying now.
If you look at the actual dollar amounts that have been “gifted” to politicians in the weeks surrounding key votes that they flipped from their public stance on, it’s… Depressingly low.
Like “this politician sold out 11 million of their voters for less than the cost of a used car.”
Honestly if they decided “nah fuck that, I’m gonna take small kickbacks here and there for the next 50 years as I enrich my own constituents lives and they choose to reelect me year after year because I delivered them everything they need to thrive instead of taking one pathetic lump sum” they would not only make more money (most of them, we can’t all be supreme court members accepting millions in bribes while turning a blind eye to the would-be-dictator our spouses tried to help overthrow the government we work for)
But nah. Like corporate stooges, they are too short sighted and weak to see that long term profits are better than short term gains.
Regardless of your thoughts on capitalism, supply and demand works. The issue is that both supply and demand are high but there is a disagreement on pricing. So, transactions decrease until both sides accept what the demand curve looks like. There is high demand but only at lower prices. There is high supply but ( for the moment ) only at higher prices. Real estate is not like a factory. Sellers do not HAVE to sell, at least not at first. It is a game of chicken.
What we need to worry about is that supply and demand works. Builders are responding to the situation by cutting supply ( building less ).
So, we will probably see the price start to fall at some point. We may not get to enjoy it long though if demand continues ( likely ) and supply is being reduced ( reported ). Low building starts and high immigration means higher prices.
TL:DR - expect a short term pricing stalemate, medium term price drops, and long term price escalation.
But, given that prices for homes in the city failed to budge very significantly even with such dismal sales volumes last year, perhaps it is naive to hope for such good news for would-be condo buyers, even if the market is pointing in that direction.
Prices won’t change overnight, even a year is pretty fast. These are large assets and most sellers would rather wait a bit than risk selling in a short stall. Some sellers are also very emotional and think they know what it is worth.
But if the supply is increasing the prices should start to drop.
Unoccupied real estate should get taxed proportionally with the time they’ve been unoccupied, to put pressure on the owners to either sell for less or rent for less. Sitting on empty real estate is a huge waste of resources, and should never be the economically optimal choice.
Add comment