All else equal, it seems reasonable to think an increase in demand would tend to cause an increase rather than decrease in prices. Unless you have a deep-seated ideological urge to believe otherwise.
I think it’s very instructive to look at a cost breakdown on new build housing. When I built in my small town in the exurbs it looked something like:
Labor and materials: 40% (I don’t remember but let’s say it was half labor and half materials)
Land: 25%
Taxes, impact fees, sales cost, etc: 35%
So the labor cost of the house was only 20%. This is why when people say “what will the cost of housing be if you don’t have all those immigrant construction workers” doesn’t make much sense to me. If I think the immigrants are driving up things like land, taxes, and fees then even if that 20% labor gets a boost I’m losing on the rest of it.
Id add too that property taxes are a cost of housing. Over thirty years they will add up to 30% in a low tax area and 60%+ in high tax areas.
All else equal, it seems reasonable to think an increase in demand would tend to cause an increase rather than decrease in prices. Unless you have a deep-seated ideological urge to believe otherwise.
I think it’s very instructive to look at a cost breakdown on new build housing. When I built in my small town in the exurbs it looked something like:
Labor and materials: 40% (I don’t remember but let’s say it was half labor and half materials)
Land: 25%
Taxes, impact fees, sales cost, etc: 35%
So the labor cost of the house was only 20%. This is why when people say “what will the cost of housing be if you don’t have all those immigrant construction workers” doesn’t make much sense to me. If I think the immigrants are driving up things like land, taxes, and fees then even if that 20% labor gets a boost I’m losing on the rest of it.
Id add too that property taxes are a cost of housing. Over thirty years they will add up to 30% in a low tax area and 60%+ in high tax areas.