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Comment by jeffbee | Hacker News Reader

Housing is not a bubble, at least not in the U.S.A. The prices are supported by a fundamental shortage of the product. It is not driven by speculation but demographic pressure.

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The reason there's a housing shortage is that almost all US cities have insanely terrible urban planning and zoning policies. There's no guarantee this will continue forever. In fact, I see quite a bit of evidence that Americans are gradually waking up to the fact it's possible to have decent, livable cities if you don't do everything completely backwards.

So, for instance, I think it's actually possible (not guaranteed) a substantial amount of housing will be built in the Bay Area in the next 10 years, which will decrease the willingness of people to pay $2M for a generic small house in a suburb.

I think there's been quite a lot of speculation in RE, actually. With rates so stupidly low, people have been purchasing rental properties as the only other investment besides stocks that made any sense in the last 2 years.

A bubble can still form on the back of strong fundamental growth trends. To the extent that people have convinced themselves that housing can't be a bubble because demographics are in its favour, they may also be willing to buy in at any price, and thereby make a bubble.

I heard the same thing in the last housing bubble before 2008

Really? It was obviously not true back then and is obviously true now. Housing starts hit nearly an all-time record high in the U.S. in January 2006. But then housing starts almost hit zero in 2009, and have never recovered.

> housing starts almost hit zero in 2009, and have never recovered

‘Have never recovered’ can be misunderstood as if they were still ‘almost zero’ (which is also a bit of an exageration).

https://fullstackeconomics.com/the-2000s-housing-bubble-was-...

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