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78 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, ...
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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 ...
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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 ...
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  • 8,477
12 votes

What metrics would indicate a house bubble rather than genuine market values?

The first metric to look at is house-price-to-rent ratios. Rental prices capture the value of the housing (and housing-linked) services provided by a property, including things like how safe a ...
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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 ...
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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 ...
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11 votes
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What are the economic ramifications of rent control?

Well, rent control is the classic example used in many economics textbooks when talking about price ceilings. A price ceiling is a maximum price one can pay for a good, and is set by a governing body. ...
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  • 1,548
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, ...
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  • 1,057
8 votes

What metrics would indicate a house bubble rather than genuine market values?

While it is possible to rigorously define a bubble in principle (see for example asset markets where prices violate transversality conditions), in practice it can be difficult or impossible to ...
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8 votes
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Correlation between salary level and housing prices in a town

The graph below plots average house prices against average incomes for various US cities. The relationship is strong in the cross-section, especially if you ignore Honolulu. Richard Florida, Housing ...
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7 votes
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Historical US Housing Data Availability

I feel this barely qualifies as an answer, but doesn't Shiller have house prices data on his webpage? Currently here. Specifically: Historical housing market data used in my book, Irrational ...
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  • 1,048
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 ...
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7 votes
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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 ...
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  • 15.9k
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 ...
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  • 451
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 ...
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6 votes
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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 ...
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6 votes
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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 ...
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6 votes

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 ...
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5 votes
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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 ...
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5 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: ...
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  • 6,662
5 votes
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Authoritative Books on Subprime Mortgage Crisis

Trying to think of what's on my bookshelf... this is an incomplete list, but it should get you started. The Financial Crisis Inquiry Commission Report is the authoritative overview of the housing ...
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5 votes
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How much do real-estate prices correlate with apartment rental prices?

In theory there should be a direct positive correlation (especially in countries where house prices are a part of the index which is used to define rental rates), but in reality there is a lot of ...
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  • 1,218
5 votes

Why is airbnb more expensive than priceline?

It should not be at all surprising that different people choose different offers: the short-stay accommodation market (let's say 1-30 nights) is characterised by a great deal of product ...
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  • 8,012
5 votes

What metrics would indicate a house bubble rather than genuine market values?

With apologies for the somewhat journalistic answer (as others have noted, even defining a bubble in a rigorous fashion is difficult). Information on housing supply may be of some use. Demand for ...
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5 votes
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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 ...
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  • 567
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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 ...
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4 votes

What metrics would indicate a house bubble rather than genuine market values?

It's actually quite easy. The key things to know are 1) that the majority of house purchases are made via mortgage lending, and that 2) an excess of bank lending over bank loan repayment causes money ...
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  • 2,720
4 votes

Literature on factors affecting number of houses built

It won't help much with the high frequency variation of interest to you but this is a famous and important paper on this topic: I process satellite-generated data on terrain elevation and presence ...
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4 votes
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Listed property price v.s. transaction price

The listed price tells you something about the expectations of the vendor and their estate agent. It's a leading indicator, hinting at where the market may be going next. The transaction price tells ...
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  • 8,012
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, ...
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