• @[email protected]
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    1 year ago

    People don’t move to a tent when they have a family

    They do when they can’t afford a house. Like, actually can’t afford a house, not just saying they can’t afford a house on an internet forum while occupying one just fine behind the anonymous internet username.

    it is going to keep going up until there are more units in the supply than the demand.

    Indeed, although BC prices peaked in 2022, so we’re already there. The higher cost of housing on the backs of higher interest rates has no doubt quashed some demand. A higher cost sees a decline in demand. Imagine that.

    • @[email protected]
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      21 year ago

      Its a slow in sales, not that housing demand got less. people are just forced into higher rent situations instead.

      • @[email protected]
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        1 year ago

        Sales have slowed and people have found alternative options, but demand hasn’t declined…?

        Formally, demand requires desire to purchase a good or service – which I imagine is still there when it comes to housing, but also willingness to pay the price – which has clearly eroded, by your own admission.

        In reality, the cost got too high and demand backed away. That’s how it works. That’s literally why we put a price on things which do not have an infinite supply – to scare excess demand away. Outside of a shortage, which is a situation where some external factor prevents price from rising, price will rise until enough demand is sacred away that the supply can meet what demand remains.

        • @[email protected]
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          11 year ago

          The houses get bought by the slightly richer class, demand for a house doesn’t stop here when we have tens of thousands of new people moving to vancouver area every year. It means people pay drastic rent or , sublet half their living room has a living space, with the hope of getting into the market. Rates and price inflation prevents those wanting a home to actually aquire one. As soon as somebody does eek out enough they are competing in bidding wars here because of a housing shortage. Shortage produces upward pressure on pricing in every market including housing. Nobody is setting fake high prices thereby curbing demand. The prices are that high because it will get sold at that price, the demand is there for it. We need more units, more density, and stop letting people have vacant homes. Once that happens the market will deflate because there will be leas demand on available supply of units. i would agree with you if we had un sold units sitting on the market forever and then you can say demand is low, But we don’t have that here, we have a shortage of dwellings.

          • @[email protected]
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            1 year ago

            with the hope of getting into the market

            But, again, hope is not demand. One must also have the willingness to pay the price. Running away to rent because you are unwilling or unable to pay the price is a clear sign of there not being demand from that segment of the population.

            Shortage produces upward pressure on pricing in every market including housing.

            Literally the opposite. A shortage is formally defined as a situation where an external mechanism, such as government intervention, prevents price from rising.

            It is a situation where demand exceeds supply, with price not being able to act as a corrective measure. Instead, a good or service will typically be acquired through lottery, first come-first served, etc. instead of going to the highest bidder.

            In practice, it is likely you experienced a shortage of toilet paper at the onset of COVID-19. Because of price gouging laws, vendors were unable to raise the price of toilet paper to scare away the poor, and as such everyone was still able to afford it despite there not being enough to go around. It didn’t matter how much cash you had in hand, there was no guarantee that you would be able to buy it.

            You may have also experienced a doctor shortage. As we require medical doctors to receive the same payment for the same care no matter who the patient is, this prevents you from trying to pay more to secure your spot ahead of the poorer guy next to you. This means that service is provided, typically, on a needs-based basis instead of a price-based basis.

            Price rising to correct for excess demand is in no way a shortage. That’s a normally functioning market. Calling that a shortage would mean that essentially everything in existence is in shortage, which would make for it to be a rather pointless distinction.

            The prices are that high because it will get sold at that price, the demand is there for it.

            Exactly. We’ve found equilibrium. The number of homes on the market is quite well matched to the number of actual buyers in the market. There are a lot more people wishing they could buy, yes, but that is absolutely not demand. Hoping and praying is quite different to actually putting money where your mouth is.

            • @[email protected]
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              11 year ago

              Here rent can exceed mortgage monthly price, the high prices mean higher down payment which many cant afford, but housing demand doesnt go down, there are more buyers than units, thus price remains high. Everything else you listed goes against supply and demand theory so I can’t have an on going conversation that contravenes known economic theory. Hope you have a good rest of your week.

              • @[email protected]
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                1 year ago

                Here rent can exceed mortgage monthly price

                No doubt. Mortgage costs are but a tiny fraction of the cost of owning a home. If rental costs are anywhere near the mortgage cost you have found yourself one hell of a steal!

                but housing demand doesnt go down, there are more buyers than units

                You really think that if I show up with a billion dollars, I wouldn’t be able to find a home to buy? That’s silly. Demand is perfectly satisfied by the supply.

                Those who desire, but lack willingness, are not satisfied by the supply, but they don’t matter. They’re just metaphorical 13 year old boys with a Ferrari poster on the wall, wishing that they could afford to have one. That’s not demand, literally. That’s just dreaming.

                Everything else you listed goes against supply and demand theory

                Go on.