How the housing market works, and what causes it to go so high or to crash

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Basically I understand that there are not many houses for sale right now, so supply and demand would dictate high prices. However, wouldn’t the high prices attract more people to sell? Is everyone just holding their houses hoping prices go even higher?

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Anonymous 0 Comments

Complicatedly.

How many people are born. How good of a job they can get. How loose banks are with loans. How loose the politicians are with banks. How good other investments are doing. How many houses people build. How much mayors want to attract new people and how hard they make it to build houses. How much homeowners want neighbors / high-rises / mixed housing / projects and how much influence they have over the mayor. The price of lumber. The price of of labor. The price of lumber labor. The price of specialized blue-collar jobs. The influence of unions on the blue-collar labor. How may blue-collar labor skillsets we train up. How many choose instead to go to college or the military or whatever. The Fed interest rate. The bank interest rate. How racist the bankers are and the racial composition of the place you’re trying to get a loan in.

>However, wouldn’t the high prices attract more people to sell? Is everyone just holding their houses hoping prices go even higher?

Not really. Most people live in their house. Selling means they have to… buy another house. Very few people sell their house for major profit and then choose to go live in an apartment. That’s really only an option for the elderly.

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