What happens when thier is a large supply of houses ?

Question

And a large supply of buyers that cannot afford the prices of these houses? Can thier be a shortage of housing?

Answer 1

It depends on what time frame you are looking for...

There is not a shortage of housing because as you said, there is a large supply of houses! What there IS a shortage of is *affordable* housing (there is a difference!).

Now as with any product, if the supply if too large, the price will eventually fall because the people that built/own the houses are going to want to sell them. Even if they make less than they wanted to (or even lose money), they don't want to just have the house sitting there doing nothing. They may (depending on the situation) try and wait it out a bit and see if people get richer so they can pay the price the owners want, but in most cases, they are just going to drop their price until they can get sales. So there is a bit of a question of the time frame you want to look at (short vs long run, and even what you mean by "short" and "long").

But again, in general, a large supply, with people who can't afford the asked price, will cause a drop in price from the supplier in order to sell their product.

[Note that the drop in price is actually causing a rise in demand (from the people that couldn't afford before). The problem here is actually a lack of demand, not too much supply. It is bad economics to think of the sellers coming down to the consumers level. It is instead the sellers dropping their price until the consumers demand enough to sell the houses. They may sound like the same thing from different directions, but there is a distinction (mostly to do with rational self-interest).]

Answer 2

government owned utilities will probable proceed on a minimum of for awhile. inner maximum utilities may well be nationalized. The economic give way will at last be "fixed" by using the creation of a sparkling foreign places money - probable the Amero. and the yankee financial Union (additionally talked approximately because of the fact the yankee Federal Empire [AFE]) would be hatched. It additionally relies upon on how the foreign places money collapses. If that's a extreme deflation - a extreme credit crunch like the gentle one we've in sub-best mortgages interior the present - whatever proportion reserve notes the mandatory banks churn out, the melancholy keeps on till the banks have adequate self assurance to lend back, or some thing like a conflict bounce starts off the financial device like WWII ! there's a distinction between money and credit regardless of each and everything, and people who can now not qualify for the recent growth of credit are going to be skipped over interior the chilly [warmth] back... In a inflationary give way the greenback right this moment will become further and extra worthess while in comparison with the cost of what they're identifying to purchase, and human beings might desire to purchase stuff as right this moment as a threat, and salaries upward push slower in economic phrases than the hyper inflation. workers and those on fixed earning won't be able to shop up and fall into worsening poverty. Then an identical ingredient occurs - the government subjects a sparkling foreign places money, and redeems the old one at a very hefty surcharge - it is while people who've any money left will back lose what "cost" it has left. So, water will grow to be very costly in economic phrases like each and everything else, yet regularly replace currencies and barter help allieviate it. If it replaced right into a airborne dirt and dust bowl interior the 1930's there's a sturdy probability it is going to likely be a airborne dirt and dust bowl back. The wilderness cities import water - and la is a wilderness city! they would be paying hefty surcharges on genuine of cost inflation. i might plan on your senario. bear in mind that a extreme disaster brings rules against hoarding, and gold possession replaced into banned interior the US in the process the super melancholy, even with the undeniable fact that purely damn fools became it in. an identical ingredient is going to ensue interior the extra suitable melancholy, which could become the main extreme financial disaster to this ingredient - gold bugs everntually lose vast! they might't sell it because of the fact persons are the two too undesirable or it is unlawful...

Answer 3

Seems to me the buyer would be in the drivers seat on this one. If you really want to sell your home, you will make the best deal possible and that would have to be a price the buyer could afford.

Answer 4

Supply is high, then prices drop.

Financing rears its ugly head.

Subletting begins.

And time-shares are born.

Answer 5

then there are less homeless people....that's if these extra houses are REALLY affordable.