79
votes
A law against selling any house cheaper than it was bought for, what consequences would that have?
That would be really, really bad.
Any house that loses value will be unsellable, and thus virtually worthless.
Most people living in such a house would be prevented from moving. They cannot sell it, ...
- 1,391
29
votes
A law against selling any house cheaper than it was bought for, what consequences would that have?
And everyone is safe, the crash prevented and everyone will keep making millions simply by borrowing more for risk free "investing" in simply owning ones own house, right?
It is true, your investment ...
- 401
18
votes
Why are high/rising property values considered a good thing?
Considered a good thing by whom?
Financial institutions and speculators: yes, since houses for them are just another asset. Higher asset prices is a key mechanism of profit making for financial ...
- 8,631
12
votes
A law against selling any house cheaper than it was bought for, what consequences would that have?
Mandating a house be sold at last price sold does not mean that people value it at that sticker price. I could mandate that water bottles only be bought for $1,000,000. This does not mean anyone would ...
- 97
11
votes
A law against selling any house cheaper than it was bought for, what consequences would that have?
If the housing bubble would burst in Scandinavia as it has done in many other places the recent decade, certainly all banks will immediately be wiped out and millions of Scandinavians will become ...
- 558
9
votes
Why are high/rising property values considered a good thing?
House prices usually don't rise in isolation. You make some very good points that are all valid. Nonetheless, house prices typically rise, when the economy is doing well, when unemployment is falling, ...
- 1,097
7
votes
Accepted
Economics of Homelessness: Are housing prices to blame?
This paper is close to what you want.
It is generally believed that the increased incidence of homelessness
in the United States has arisen from broad societal factors, such as
changes in the ...
- 16.4k
7
votes
A law against selling any house cheaper than it was bought for, what consequences would that have?
Bursting bubbles don't destroy actual wealth. Instead, they stop destructive processes which convert actual wealth into imaginary wealth.
Suppose it would cost \$120,000 to build a house that's ...
- 285
6
votes
Has an increase in housing supply in popular cities including Amsterdam led to an increase in house prices?
Let's just say that economists don't really agree with this thesis, and most city-level empirical evidence points in the opposite direction. E.g.
We ultimately conclude, from both theory and ...
6
votes
What are the economic ramifications of rent control?
There is a new paper forthcoming in the American Economic Review by Rebecca Diamond, Tim McQuade, & Franklin Qian on The Effects of Rent Control Expansion on Tenants,Landlords, and Inequality: ...
- 6,990
6
votes
A law against selling any house cheaper than it was bought for, what consequences would that have?
There will be a rapid rise in artificial schemes to get round the letter of the law. For example, an agent may charge you 90% of the minimum legal sale price to officially register your house as ...
- 451
6
votes
Accepted
If house prices appreciate, why do developers sell them?
They are different businesses.
Developers make more money developing than landlording. Some do both. But they are different businesses entirely. Also, there is a limited supply of capital and ...
- 1,109
6
votes
Accepted
Owner occupied public housing
In Singapore, a government agency called the Housing and Development Board (HDB) builds housing (mostly apartment buildings). HDB is not meant to be profitable. It loses money every year and is ...
- 320
6
votes
Accepted
A large spike in home ownership in the U.S. in 2020: why?
Warning up front - I am neither an expert in housing, nor in census data whatsoever.
It's an interesting question though. My conclusion is that it is almost entirely a result of changes in data ...
- 4,120
5
votes
Accepted
Does easy credit in a region cause property to be more expensive?
Theoretically, multiperiod borrow and lend models I am familiar with suggest that an increase in ease of credit (increasing the credit supply) should increase demand. This in turn raises the price of ...
- 661
5
votes
Accepted
If rent control "doesn't work" and supply induces demand, how can cities improve affordability?
Disclaimer: this answer was significantly rewritten to spell out explicitly how it answers OPs question and to add some sources (thanks to @Fizz). The gist remains the same.
The only case I know ...
- 967
5
votes
Accepted
How could real house prices tend to rise in the long-term?
As I read your question, you actually ask two distinct question, one whether house prices can be assumed to have positive trend, and one about whether population or something else causes prices to ...
- 58.5k
4
votes
A law against selling any house cheaper than it was bought for, what consequences would that have?
This would be a catastrophically bad idea. The next time the economy turns down, what happens?
Workers who own houses for which they cannot find a buyer at the same price they paid for the house, ...
- 261
4
votes
If house prices appreciate, why do developers sell them?
The simple answer is that if it is widely expected that the value of an asset will increase in the future, then the value should rise today as people bid up the price of the asset by trying to get the ...
- 691
4
votes
If house prices appreciate, why do developers sell them?
Why not hold onto the property, and sell it later at a higher price?
Here is a non-exhaustive list of why not:
Real estate bubbles going burst.
Depreciation and maintenance costs.
A location may ...
- 1,807
4
votes
Are short-let platforms really contributing to rising rent prices?
Yes an example of such study is this Sheppard, S., & Udell, A. (2016). Do Airbnb properties affect house prices. Williams College Department of Economics Working Papers, 3.
This is their ...
- 58.5k
4
votes
Why is imputed rental income for owner-occupied housing included in the measurement of household income?
The household owns an asset, the house, from which an income can be derived. The household could decide to let the house and with the income rent another house. Alternatively, the household could ...
- 851
4
votes
Current House Demand and Supply
The principles of demand and supply are always operating in the background so they are not pointless.
The magnitude of the effect that increase in price has on increase in supply is given by the ...
- 58.5k
4
votes
How could real house prices tend to rise in the long-term?
"conventional wisdom seems to back up the idea that real house prices tend to increase over time"
Not clear that's correct. See, for e.g., "House Prices and Fundamentals: 355 Years of ...
- 41
3
votes
A law against selling any house cheaper than it was bought for, what consequences would that have?
Price is the thing that balances supply and demand, if you fix prices artificially low then you create supply shortages. If you fix them artificially high you create demand shortages.
So people who ...
- 188
3
votes
When a land lords sells to an owner occupiers does it push up rents?
Your argument is sound (as a first approximation). In fact this is one of the basic examples discussed in chapter 1 of Varian's Intermediate Microeconomics (a standard textbook).
Suppose that a ...
- 29.7k
3
votes
How could real house prices tend to rise in the long-term?
First, notice that comparison of the change in the house prices with risk-free rate doesn't tell you anything about the change in the real house price. You need to compare the change in nominal house ...
- 101
3
votes
Accepted
Do property prices drive rent increases or do high rents attract buy-to-let investment?
There is substantial literature on the topic. In general terms, the relationship between Rent and Price often appears in literature. For specific studies for real estate markets, you can explore these ...
- 1,817
2
votes
Why do people not all live right on top of each other in monocentric city model?
The reason people do not all live on top of each other in the monocentric city is that people can attain the same level of utility further away from the city center by enduring higher transportation ...
- 3,840
Only top scored, non community-wiki answers of a minimum length are eligible