Considering how crazy expensive accommodations have become the last couple of years, concentrated in the hands of greedy corporations, landlords and how little politicians seem to care about this problem, do you think we will ever experience a real estate market crash that would bring those exorbitant prices back to Earth?

  • Cheesus@lemmy.world
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    1 year ago

    We’re starting to see prices decrease right now, since high interest rates are holding

    That isn’t really holding up this year. Interest rates are correlated with price increases. Prices corrected after the initial increase but have since continued to increase. While the cost to borrow has gone up, the reason for increased interest rates will always drive up prices. The federal reserve will raise interest rates if inflation is high (driving up nominal prices) or if employment is too high (increasing demand). Home prices will decrease if there is a recession but then the fed will lower rates to fight unemployment (assuming inflation isn’t an issue).

    In the US home prices are only down 0.5% year over year. In my high cost of living area (SF Bay area), prices are down 10% but climbing every month. At the current rate of home price growth, the Bay area will be back at all time highs this winter/spring.

    https://ycharts.com/indicators/case_shiller_home_price_index_national#:~:text=Case-Shiller Home Price Index%3A National is at a current,0.50%25 from one year ago.