Recent studies challenge the notion that increased housing supply automatically leads to lower prices for all income levels.
The Supply-Side Skepticism Movement
In recent years, a substantial body of research has emerged that constitutes a movement known as supply-side skepticism.
Sweeney’s 1970s Theory
This movement is based on an old thesis dating back to the 1970s, developed by Sweeney, which examines housing market dynamics.
How Luxury Housing Depreciates Over Time
Sweeney’s theory posits that even when the housing market builds cheap, moderately expensive, and luxury homes, over time the most expensive properties age and lose their original exceptional characteristics.
Implications for Lower-Income Buyers
As these premium properties depreciate, they may eventually become accessible to lower-income buyers or renters, potentially expanding housing options across different economic segments.
