If commercial real estate never recovers because people continue to work from home, then I can see it being converted into residential which would increase the supply without necessarily increasing the demand.
If the population as a whole, or just the population of those capable of buying a home, flattens or begins to decline permanently then that would also signal long term declines in real estate values.
If the idea of a single family stand alone home is no longer considered a necessary part of the "American Dream" then single family homes will go the way of the buggy whip.
If Baby Boomers decide to scale down as they retire, especially if they fear increasing heating and AC bills in the future, then at least the larger homes will no longer go up in value but will be seen as a liability.
I believe that the reason why both Dems and Pubbies look the other way on massive legal and illegal immigration is that they believe that an ever-increasing US population means that all of the corporations that fund their elections will be guaranteed increasing profits going forward. The thing that corporations fear the most is permanent declining demand which would be the case if immigration stopped since our low birth rate is not replenishing the supply of consumers.
I worry about the day they stop making new property. That’ll upset the supply and demand curves.
(it’s an old real-estate joke — “they aren’t making any more property”)
“If Baby Boomers decide to scale down as they retire, especially if they fear increasing heating and AC bills in the future, then at least the larger homes will no longer go up in value but will be seen as a liability.”
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Retirees have more than just higher energy bills to worry about. Home insurance, property taxes, and general upkeep and maintenance costs are all rising. And for many people retirement incomes are not rising fast enough to keep up, so it makes sense to downsize.
Buy a smaller home in a nice area and enjoy your retirement.
You get to the crux in the end of that post. I think the dirty little secret is that the more civilized countries are seeing population declines, so they need to allow lots of immigrants to keep the population growing. I think even the republicans, secretly, believe we need all those people flooding in across the border to keep the whole ponzi scheme from utterly collapsing.
Oh, and if investors (e.g. chinese investors) bow out of the home market, values would really plummet. Housing is almost like concert tickets being scalped. Take away the scalpers nd the prices plummet.