People are not keen on buying houses, nor can they afford to buy them. When developers stop acquiring land to build houses, will housing prices continue to fall lower and lower? It's not necessarily the case; just look at the United States as an example.

The current real estate situation in the United States is what many Chinese people who resent the real estate industry hope for:

1. Chinese people resist the idea of using houses to tie down marriage, hoping that the "mother-in-law economy" will collapse soon. In the United States, there is no need to buy a house before marriage, and many people are still paying off their college loans at the age of 35.

2. Chinese people dislike high-rise residential buildings, considering them to be pigeonholes.

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(Note: The translation is provided up to the point where the original text ends.)The United States is vast with a sparse population, allowing for the possibility of living in suburban villas instead of being crammed into high-rise buildings in urban areas;

Domestic rental security is poor, there is a call for equal rights for renting and buying,

The United States has long achieved this, not to mention the assessment of damages with a lantern, even if tenants owe rent, you can't do anything about it;

People in China call for a crackdown on real estate speculators, to impose property taxes on those who have multiple houses, the United States has been collecting property taxes for 200 years;

Moreover, the proportion of real estate in their GDP is between 15% and 18%, buying a house is consumption, and the main investment is in stocks.

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Each of these points is highly damaging to the real estate industry,

Compared with Chinese real estate companies, American real estate developers are facing a level of difficulty akin to hell.In a market like this, you'd think housing prices wouldn't be able to rise, right?

If you truly believe that, then you are being quite naive—

In fact, housing prices in the United States have always been on the rise. Even after the subprime mortgage crisis in 2008, which was a significant event, the prices quickly resumed their upward trend.

In 2020, the housing price index increased by 11.3%, and in 2021, the increase was even more exaggerated, reaching 20%.

Moreover, it's not just a regional phenomenon. Major cities like San Diego, Los Angeles, Washington D.C., and New York, which are often mentioned, are not the only ones experiencing this trend. The entire United States is seeing a rise in housing prices.

In February of this year, the composite housing price of ten major cities in the U.S. rose by 8%, and the 20-city composite housing price increased by 7.3% year-over-year.

Even in Detroit, which is often compared to the old industrial base in Northeast China, housing prices have risen by 8.9%.

Even though the U.S. has been continuously raising interest rates, with the current mortgage interest rate as high as 7.23%, can you imagine what that means?

If you take out a loan of 3 million with equal principal and interest repayment over 30 years, you would have to pay back 20,000 per month. Previously, with a mortgage interest rate of only 3% in the U.S., you would only have to pay back 12,000 per month. This is a direct doubling of the monthly payment.

Such pressure would typically lead to a housing market winter in other places, but in the U.S., new properties are sold out as soon as they are released, and second-hand homes attract a crowd of viewers as soon as they are listed.At the top of the capital market, it is often said that the U.S. stock market is dominated by technology stocks, but this year, the real estate market in the U.S. has even outperformed AI.

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Why has it risen so absurdly?

The reason is not complicated; there are too few houses available for sale in the United States.

The construction of new homes in the U.S. has always been lagging, with a shortage of developers,

and the area of new residential construction is also insufficient. In 2018, the severity of the U.S. housing shortage reached a 40-year high, and it has not eased since.

As of February 2024, the inventory of existing homes in the United States is about 1.07 million units, which is at an extremely low level since 2000.

Why are U.S. developers not enthusiastic about acquiring land or building?

Firstly, the subprime mortgage crisis at the time scared them. During the economic recession from 2007 to 2009,

many builders and developers went bankrupt, and the number of building permits and new housing starts decreased by 30% and 43%, respectively.After this, the number of registered construction industry enterprises in the United States has always been very low.

Moreover, American developers do not pursue speed like China; the normal pace is twice as slow.

If you compare it with the high turnover ratio that Country Garden achieved in 2016, there is no comparison at all.

After 2020, the cost of building materials and labor in the United States soared, and the developers' response was also very simple: if they couldn't recruit workers, they would halt construction first, and if materials increased in price, they would wait for the prices to drop.

Nowadays, many real estate projects in the United States take more than two years to build. This leads to a situation where the supply of newly built houses cannot keep up with market demand.

Between 2019 and 2021, the number of houses in the United States only increased by 1.7%.

As for second-hand houses, the sellers of second-hand houses are the most astute.

When the price of new houses rises, many Americans are not willing to sell, or they raise the price.

Especially for those who bought houses when the mortgage rates were low, asking them to sell their old houses with a 3% mortgage and then switch to the current high mortgage of 7%?

That is obviously impossible. Therefore, the supply of second-hand houses in the United States is now in short supply. As long as you dare to list, the house viewings can break the door, so how can the price not rise?So, the real estate market in the United States, although it may seem like a developer's hell with all sorts of unfavorable factors at play, if translated to the Chinese property market, developers would all become like Xu Jiayin.

But as long as the number of newly constructed houses is reduced annually, the supply will still be unable to meet the demand.

Therefore, the adjustment of the real estate market should still be handed over to the market.

If a place sees fewer and fewer new residential constructions, developers stop acquiring land, and the government stops selling land,

it can be determined that the future supply of newly added houses will definitely be decreasing.

This is definitely a long-term trend, which may not be apparent for the time being, but you must pay attention.

What do you think about the impact of this long-term trend on housing prices? Share your thoughts in the comments.