"No doubt there was a change in housing preferences. But why wouldn’t those also occur if the market suddenly increased supply in the absence of the COVID experiment?"
A post-hoc explanation is covid causing two shocks with different timings. There was a first "two weeks to flatten the curve" uncertainty shock that lasted a number of months where people put their moves/purchases on hold and bunkered down with what they had access to - a negative demand shock in cities. This phased into a "new normal" positive demand shock where people realized Work-From-Home would likely last for years and employers committed to no return-to-office for some time or even forever. In this second phase, later in 2020 and 2021 and likely still being worked-out, that demand really picked up rural and urban as people made purchasing decisions for home offices and extra space; the historical person/household metric became a large undercount of demand if it was ever so reliable in the first place.
This then wouldn't have happened with absence of covid because there wouldn't have been the new WFH demand.
I don't think the questions well joined. Lots of things happen so that when A follows B it will be hard to figure out the cause. To me the questions is, would a relaxation in legal/regulatory restriction X in place Y be a good thing to do. The "good" might take the form of lower purchase prices or rental rates in place Y. But if not, so what?
"No doubt there was a change in housing preferences. But why wouldn’t those also occur if the market suddenly increased supply in the absence of the COVID experiment?"
A post-hoc explanation is covid causing two shocks with different timings. There was a first "two weeks to flatten the curve" uncertainty shock that lasted a number of months where people put their moves/purchases on hold and bunkered down with what they had access to - a negative demand shock in cities. This phased into a "new normal" positive demand shock where people realized Work-From-Home would likely last for years and employers committed to no return-to-office for some time or even forever. In this second phase, later in 2020 and 2021 and likely still being worked-out, that demand really picked up rural and urban as people made purchasing decisions for home offices and extra space; the historical person/household metric became a large undercount of demand if it was ever so reliable in the first place.
This then wouldn't have happened with absence of covid because there wouldn't have been the new WFH demand.
Excellent analysis again Cameron
Are the numbers inflation adjusted (even just CPI excluding dwellings).
If so, did rents really increase 20% in cpi adjusted terms from 2012 to 2020? Seems a bit high.
If not, the graphs are simply misleading considering the high level of inflation in the last two years.
I don't think the questions well joined. Lots of things happen so that when A follows B it will be hard to figure out the cause. To me the questions is, would a relaxation in legal/regulatory restriction X in place Y be a good thing to do. The "good" might take the form of lower purchase prices or rental rates in place Y. But if not, so what?