Captain Suave
Caesar si viveret, ad remum dareris.
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"Massively increasing supply" is only true relative to the recent all-time bottom. We're not even close to oversupplying the market. 2005-2010 is what a bubble looks like. And it's even worse than this chart would indicate because in the background the population has grown by 50% since 1980.
Here's the relationship between inventory and price. At best the current demand mismatch going to roughly flatten prices on an illiquid market. They just don't drop significantly unless people are forced to sell en masse like '08-'10.
Builders are not putting up starter homes. If owners of existing properties are underwater, who is going to sell low to first time buyers? Look at the activity of first-time buyers and the ages of people who DO buy. It's the same boomers/GenX churning houses between themselves and rolling over their wealth.
Yeah, I think the market is going to be mostly stagnant until inflation drives up wages to match the nominal home prices. Then the march up will continue. We might see some temporary adjustment of mid single digit percentages, or even 10%+, but that doesn't put a dent in the spike of the last five years. It's also going to be a only for a historically tiny number of properties with the vast majority of homeowners sitting in place.
There just isn't going to be some broad-based 40% recalibration for tens of millions of homes that makes housing feel affordable for everyone that could possibly want to buy. Housing is going to remain expensive until we catch up on 15 years of under-development and then build faster than the population grows. That doesn't seem likely to happen, so it's just going to remain expensive.
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