The prevailing narratives emphasizing the need for increased "housing supply" oversimplify the issue. They fail to tackle the core problems of affordability and disregard broader economic factors like induced demand and the differing elasticities between supply and demand in densely populated urban areas.

This video unmistakably illustrates the paradox of rising home prices in Milwaukee, even as people are relocating elsewhere. It highlights the need for a more nuanced understanding of the housing market beyond simplistic solutions.

Home Prices up 7% this year in Milwaukee despite 29 years of population decline: https://www.youtube.com/shorts/zFSLH0cg31U

When realtors use the term "housing supply," they specifically refer to the count of homes listed for sale at a point in time. It's important to note that while homes are constructed over months and then exist for decades contributing to density, their listing duration is just a small fraction of time, especially in certain areas. Additionally, some properties are transacted off-market, and others may not be sold at all, undergoing conversion into second homes, rentals, or short-term rental units.

Developers advocate for a seemingly straightforward solution: build more homes. However, they often stigmatize those who challenge this perspective. Paradoxically, these developers are quick to halt construction when prices decline, engage in inventory concealment to artificially inflate prices, and opt for promotional rates rather than reducing prices to maintain high list prices in a given area. The oversimplified view of supply and demand, coupled with the call to "build more," can be doing more harm than good...