What Happens When There Are Too Many Houses on the Market?
We have rarely known a real estate market where there are too many houses on the market.
Only in short bursts have we seen it, because for all of our lives populations have been growing. Until now.
The housing market that we know has had two HUGE factors making house price increases inevitable.
- Population has been increasing
- People moving into cities, and the city folk having more children, both increasing demand for city housing.
All of these have stopped.
The population is dropping, and people are moving away from large cities.
Suburban housing tracts are about to become ghost towns.
Times when there was too much housing
The biggest even was the Black Plague. After the plague was over, there was many houses available. If you wanted a mansion, all you had to do was move in and defend it from others also trying to move in.
The other large events was during mining booms. Especially gold mining. But also coal, and other minerals. The mine gets played out, and closes, and all the houses basically become worthless. The definition of a ghost town.
Scattered local events include factories shutting down, and the town that supported, and was supported by the factory, slowly dies. A big example of this is Detroit.
But, if we ignore these, then "house prices always go up" is the name of the game.
All forces will drive house prices down
We aren't just entering a time when there will be less people than houses available, it is like the universe is moving against high housing costs, saying, "no more"
- Demographics is falling, and may not recover.
- Banks closing limiting the availability of mortgages.
- Crime increasing in cities.
- Jobs decreasing, especially in cities.
- New houses selling for less than last years models.
- All causes mortality continuing to increase
- Boomers moving out; to retirement homes or mortuary plots.
Any one of these will affect the housing market. All of them together, and we will see houses sitting on the market for years, even marked down 50%. Even at 10% of today's price, many people can't afford the houses without a mortgage.
And the biggest emptier of suburban housing will be people moving to be with "family", to be with their tribe. These people will be building a small community with large, very energy efficient homes with many bedroom suites. Today's standard house design will be considered inefficient, a waste of space, not having any amenities that are necessary, and overall, just stupid places to live in.
Black Rock Will Try To Buy The All
So, Black Rock is trying to drive the housing market down to buy up all the places they want to build 15 minute open air prisons. Then they expect to make the market rise again by tightening up supply, and controlling all the rented houses.
You vill own nothing, and rent from us forever…
But, Black Rock doesn't realize that they can't keep empty houses. When prices and population drop too much, all that is left in cities are criminals and low class people. And they will see an empty house and move in. And as these conditions continue, most "city" people will ignore, more and more, property rights.
Black Rock will "own", in name only, all of these housing tracts, and there will be no one to enforce their claim. Black Rock will literally own a bunch of nothing. Swampland would be better.
The only variable is how fast this happens.
There is no coming back from a demographic decline of this size.
There is no way to stop people fleeing a city that is descending into chaos.
I doubt there is a way to stop the coming unCivil Wars which will decrease the amount of people even more, and destroy cities even more than that.
We've built a lot of pieces of crap, that we call "houses", and all they will be good for, in the future, is to collect scrap out of to build new houses.
Our city layouts are crap, our houses are crap, our lack of beauty in our surroundings is crap.
No one will pay for this crap in the future.