Wouldn't this have a huge effect on real estate -- indeed, isn't that population graph the primary driver of what happens in the real estate market?
I'm not sure the last century provides a meaningful guide here.
Today, those prices are much higher than they were in 2007.
Land supply is an almost straight line with a slight growth, probably something on the order of y = 1.2x, mostly due to innovations in transport speed, cars & metro. So unless we get maglev metro that travels at 200mph, RE prices will continue to reach new highs.
but there are certain areas that can't go much higher and sooner or later each area will reach a price point where prices can't go any higher. Ultimately, it just depends on how much people can afford to pay: which comes down to salaries, commute distance and # of wage earning people per roof. Sooner or later all the coping mechanisms will be exhausted.
The bottom line is, RE prices can't outpace salaries forever. If you double the number of wage earners per roof, you can double the RE price. But, after that it becomes harder and harder, as people aren't willing to live with multiple families per house.
Hypothesis is many people live close to the cities because they hate commuting. But if commuting means work on a laptop or watch a movie, then the commute time is less significant. It's the near ring suburbs that will take the biggest hit. Small towns outside the suburbs will increase.
I predict that most people would not elect to live 2 hours away from offices despite being able to have access to entertainment and work while commuting.
The evidence is already here: various tech companies run shuttles to far-flung areas (Google has shuttle service from Stockton to Mountain View), yet employees aren’t moving to these lower-cost areas in large numbers.
Workers with families will have upper bounds to how long a commute they’ll endure. Their families are more important to them than being able to have entertainment, and meeting times limit the amount of time that can be used for work done while commuting. At that point, it’s approaching remote work, which is a promising idea, but isn’t a solution for long commutes by itself.
I see self-driving cars changing last-mile and replacing hub-and-spoke commutes as a replacement to taxi services and short-distance shuttles.
I think maybe in the short term, but in the long term I can imagine self driving traffic moving much faster than regular traffic. Cars all accelerating at the same time at lights, Uber pool in vans becoming super cheap. Roads could dynamically add and remove lanes in a direction without needing infrastructure, since all the cars will just "know" which lanes are available. Personal cars (hopefully rarer) can drive themselves home rather than take up parking space in cities.
Taken to its logical extreme: If people could teleport from one place to another instantly, there'd be almost no value at all to congested urban spaces. Similarly, if anyone can hail an affordable driverless Uber in seconds and reach their destination faster (due to improved routing / traffic flow and smaller cars) without having to think about parking, a bus schedule, or similar, the value in being physically close to other places decreases.
In that scenario, having your office out in the suburbs at a much lower cost becomes more reasonable. Transportation becoming more frictionless inherently makes longer distances more conceivable for travel (including commutes and office placement).
So, like if we start being able to do our jobs in VR?
I think self-flying electric vehicles will do what self-driving cars cannot.
I've been taking an express bus into the city center from a rural location for a few years now. The time on the bus is between 35-50 minutes each way. Initially, I figured the same thing: I could get an extra hour of work done, work on side projects, etc.
The reality is that although the buses have WiFi, there are not many people working on them beyond the occasional email check. One major issue I found is that it's a lot harder to use a keyboard on something that's travelling on a road surface vs. a railroad. I even joked with someone about this last month as he was sitting next to me trying to write Javascript.
Most people on the bus are either playing video games or listening to music and I suspect that being that the people in this area are older and have families to get home to, having a more pleasant commute isn't remotely as important as having a shorter one would be.
Certainly some people live in city centers out of necessity. But the super-wealthy could live anywhere they want. They choose Nob Hill and SoHo (and so on). And they will continue to do so. Transportation options have very little to do with it.
Better transportation options for everyone else will be great! But the U.S. is an enormous place, so it's really only the city centers that should continue to see price pressures (because there's plenty of room everywhere else and better transportation options improve that situation).
In San Francisco, I suspect it’s mostly jobs, not love for the city, that is causing growth and fueling housing price increases.
I and everyone around me live in urban centers because of the community and environment around your residence.
kids can just go out the font door and play. you get inspired by life and commerce by just looking out the window. etc
assuming you will drive and real state prices only impact how long is very californian.
The 15 minute walk/subway combo I have does solve that
The first apartment I rented in midtown Manhattan was a 1BR condo in a fairly new building. The owner had bought it in 2006 for about $775k. In 2010, I looked it up on Zillow to see if I could afford to buy the place (I could not), and it was around $850k. Within a couple years of the crash, it had not only recovered, but appreciated a fair bit.
He sold it in 2014 for $1.2M, and according to Zillow it's now worth nearly $1.5M.
The biggest expense that the average person pays for is rent and home mortgages.
The world be auch better place if a >1/3 of everyone's paycheck wasn't going to rich landlords.
Housing costs are the biggest transfer of wealth in the world, and the higher costs are, the less money there is in the average person's pocket.