If the price of buying a house rises based on demand, how come the price doesn’t fall in areas that have large homeless populations?

Question

If there are so many people who can’t afford housing, why does the cost continue to rise? Shouldn’t the cost fall because there isn’t a demand?

In: Economics

Answer 1

Cost will only fall if there is no-one that can afford the property. There is still a high enough demand for it among those that can afford it to keep the prices high.