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The problem with a collapse in house prices is that it normally comes with a collapse in everyone's personal finances.
If you can't afford before a crash, there's a very good chance you won't be able to afford after a crash either.
The only thing that will bring house prices down is building a fuckload more houses, and building them in places that people actually want to live.
You could also introduce regulations to prevent houses being used as investments.
The reason houses are expensive is because investment firms are buying them up with cash.
There are entire neighborhoods owned by investment firms. A lot of these homes are empty and are just used to prop up housing costs.
The issue isn’t supply, it’s policy. The issue is reckless monetary policy combined with banks/investment firms controlling the market.
If you want cheaper housing building more isn’t the answer. The real answer is banning corporations from owning homes.
I've seen the idea thrown about to tax houses higher the more a single entity owns. IDK about the feasibility of that plan, but we need to do something. I feel like it would never happen, though, because rich people and, by extension, lawmakers own multiple homes and they wouldn't want to lose money.
Taxes don’t mean shit to the wealthy. They will find a loophole to exploit and end up never paying taxes.
Even still if they had to pay more taxes it’s nothing to them. They are swimming in money. It’s not even about the money at this point. They want to undercut the poor so the poor stay poor.
Taxes don't have to be to punish the wealthy from purchasing homes, it just has to be enough to make it so they can't profit from it.
If they can't profit from buying homes, they won't do it.
If they can buy 10 houses and pay $2000 / year in property taxes per house to hold on to it, but the houses go up in value by $20k per year, they profit.
If instead they pay $2k for the first, $4k for the second, $8k for the third, etc. there is no incentive for them to buy more than 3-4 homes since they will pay more in taxes than they are gaining in value.
That would be nice. I fear it will never happen tho. The concept of tax the rich sounds good on paper but some how we have to convince rich people to do it.
Our law makers ARE the rich.
Just to add to this, it's not just investment firms. I do title searches for a living and a lot of them are also bought by trusts and IRAs by people living in more well-off areas. It's basically a retirement plan for them. That should be included in the ban. There basically should be a ban on buying homes you don't plan on living in or doing significant rehabilitation work to (and with that second stipulation, we should actually inspect and ensure that the house flippers are actually doing much needed work to make the house liveable, not just slapping new paint on the bricks and installing faux shutters to the outside for a quick flip).
There was a great video years ago that detailed what would happen if house prices were to rise, fall, or stay stagnant.
You're right, if they were to crash, we'd all be a lot poorer, but there would also be a lot of (still) cash-rich people that would happily buy up all the cheap stock, and we'd be in an even worse position than before. We'd build more houses, but we'd ultimately create new billionaires, and given the low quality of some new builds, probably a two-timer system of ownership where the poors get the new houses on flood lands/with dodgy cladding, and the rich live in good builds.
The best thing to happen overall is a price cap per-area, dropping by a percent every year or two, with subsidies on sustainable renting (low rent fees, buildings being up to code, etc). The landlords that use their property as investments will bail right away, renters will see the market switch to their favour, and through legislation you could probably push rent-to-sell options for those that maintain homes and want to release over several years.
More homes need to be built, but that also means more infrastructure, and building all of this without selling those houses to the highest bidder. That all takes time, at a time where there are a lot of cash-rich people that would love more investment.
And doing away with Airbnb
I don't have finances, checkmate
We got a master class in that lesson in 2008.
You'd end up with unhoused boomers.
That's already going to happen. The ones that can afford to retire are nearly all there, the rest are going to be indigent and need our support lest they become homeless when they are physically too old to work.
America has become a nightmare for most.