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52 sats \ 5 replies \ @Undisciplined 30 Sep \ on: Questioning the Shortage Narrative: How Small Assumptions ReW the Housing Story econ
@SimpleStacker, are they using "shortage" the same way we do?
It makes sense that all the taxes and regulations would create a shortage but I sense that they're using the word differently, especially since reducing taxes and regulations never seems to be in the solution set.
I didn't know that Freddie Mac uses such an ad-hoc method for estimating "shortage". Anything based on something as hard to define as an "ideal vacancy rate" or "target vacancy rate" doesn't have a lot of credibility to me.
But I think it's fair enough to say that housing demand has grown faster than housing supply (especially in major cities), which has put upward pressure on house prices and rents.
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Sure, but that's not a shortage
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I'm fine with the colloquial term... I don't know what
Q_D > Q_S looks like in real life, or how we'd even know, because Q_D would be unobserved in that instance.I guess we can detect it with the presence of non-price based allocation mechanisms, like lotteries, lines, etc. But with a market as heterogeneous as housing, I'm not sure how easy that is to observe.
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That's fair, and I don't generally mind colloquial terms either.
I just wanted to know how I'm supposed to interpret the statement. Seems like it boils down to "3.7 million fewer homes than some bureaucrat thinks there should be."
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Yeah, pretty much. And then people bandy about these numbers as if they were gospel truth. Which is annoying.
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