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Comment by ricardobeat | Hacker News Reader

> If there’s a massive bubble then it seems like that system didn’t control prices.

The bubble mostly affects new home buyers, which are the ones who need the least protection.

Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost. Everyone living in social housing still has a home, and won't be evicted so that another person can come in to pay 2x the rent. Seems pretty good to me.

I don't know much about Detroit but it seems to demonstrate that the simple supply-demand model does not reflect reality. Prices should have dropped significantly, but instead it followed the same curve as the rest of the USA, with those $500 properties being a localized phenomenon.

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> The bubble mostly affects new home buyers, which are the ones who need the least protection.

So now you (or more generally the government) get to decide who is more deserving of appropriately priced housing? Why do new home buyers need less protection?

> Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost.

This is precisely the problem with this policy. When price doesn’t feed through to the market, the market can’t adjust. People simultaneously argue that the free market doesn’t work while endorsing policies that prevent the market from working.

> it seems to demonstrate that the simple supply-demand model does not reflect reality

The population dropped from its peak by 1.2mm people. Prices subsequently fell so much that it was possible to buy houses for $500. That’s exactly what the supply/demand model would predict.

Those $500 homes are not inhabitable. As someone who was in Detroit less than 24 hours ago, I can tell you I was surprised at how expensive the housing was. Not that it was close to Bay Area prices, but I was expecting to see places I liked for 300-400k. The reality is more like 600k for less than 2,000 square feet.

> The reality is more like 600k for less than 2,000 square feet.

"In June 2022, Detroit home prices were up 32.3% compared to last year, selling for a median price of $99K. On average, homes in Detroit sell after 27 days on the market compared to 23 days last year. There were 463 homes sold in June this year, down from 512 last year."

[0] https://www.redfin.com/city/5665/MI/Detroit/housing-market

You absolutely can get houses for 300-400K in Detroit. Where exactly were you looking at? Houses that you're describing are definitely possible in hot areas like Downtown and Downtown adjacent areas like Corktown, Indian Woods, and Midtown.

I was looking in those areas.

Agreed that you can find $300k houses (and cheaper). I was just surprised that the nicer areas were still pricy. I mean Indian Village, and the neighborhoods you mentioned, have some nice homes, but those neighborhoods feel like an oasis surrounded by areas that are dealing with very tough economic situations.

Again, I was just surprised at the price for places I liked. If I wanted to take a chance on a neighborhood that might turn around in the next few years I could find some deals (although a lot of those homes need a lot of work).

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