So laws of supply and demand don’t work because “lmao”?
Edit: Folks blaming Capitalism, Sauron, etc., but none will open up a spare room vin their home for the homeless for free (due to "reasons"), lmao.
Edit: Folks blaming Capitalism, Sauron, etc., but none will open up a spare room vin their home for the homeless for free (due to "reasons"), lmao.
If I produce 100 widgets and am perfectly happy selling them for $10 and barely think I'll sell 10 of them.. but then they are highly popular and everyone wants them, you might see me constantly increasing the price because people like them and want to buy them. But that is literally greed in action. I did the math that I would make a nice profit at $10. But now that rich people decide they will pay $50 for each one just because they have the money and don't care, the people that could only afford $10 are priced out. And now the price has been increased and only people with a lot of disposable income can afford it.
Yeah, look at that "supply & demand" in action. Greed and and an excuse of "but wut could I do, the curves I plotted forced me to increase my prices even though I could have left them alone!"
The above is exactly a ticketmaster type example. We let "the market" set the price because people are willing to pay more and more, but those are the small percentage with a lot of disposable income that then get to have all the fun while people sit back and say "no one has a right to go to the concert [except those that can afford to keep on paying more and more]".
Economics is literally based on the assumption and ACCEPTANCE that everyone is a greedy asshole like yourself.
If you’ve cornered the market in ‘luxury’ widgets, someone else will make a ‘bargain’ widget and sell to those with less money.
Hotels are a good example. The luxury brands are competing for the wealthy. But, you don’t have to be a Ritz-Carlton to make money… indeed, you can often make more by selling rooms to the less wealthy (as there are more of them.) And, on it goes, all the way down to the Motel 6’s and the mom-and-pop motels.
I agree that there is no guarantee that building housing lowers prices, other causes (like increases in demand) may cause prices to go up (and the increased supply would lower the upward pressure). But I have a hard time to understand how increased supply would not have a downward effect on prices.
We can build housing much more efficiently and cheaply than we could 60 years ago, yet it's never been harder to buy a house.
The law of supply and demand only works as expected when used in an extremely simplified model.
If you account for all the other real factors (corporate greed, governmental intervention, NIMBYsm) that are skimmed over by economists, it becomes clear that the law of supply and demand should never be used alone to forecast future economic conditions.
If that was true, buying a house today would be as easy as it was in the 60s. In fact it isn't.
It does, if that is the only thing that happens. If land owners or existing home owners willingness to sell, prospective renters or buyers willingness to buy, or any number of different things also change then those effects can overshadow an increase in supply. As they frequently do.
Starbucks keeps opening new locations but that doesn't say much to the effect that the price of a cup of coffee will decrease.
The housing price could keep rising forever but the demand will always be high, it's not like people can just "give up on housing for this year".
Being a mega-landlord will also allow JPMorgan to influence the general market price.
So no, it's not really as easy as "the laws of supply and demand".
Edit: lol, never ever touch the dogmas of neoclassical economics on HN. Running into a church during mess and shouting profanity would get you a better reception.