Title:

Why Housing Prices Don’t Fall: A Case of Institutional Stasis

Tags:

Economics, Institutions, Forecasting, Politics

Preview

For years, housing prices have remained high, yet crashes never materialize. This isn’t a bubble waiting to burst—it’s a market in stasis. Losses are redirected onto renters, young households, and institutions rather than reflected in valuations. This essay explores the mechanisms behind this stasis, how to monitor it, and what would falsify the thesis.

Body

Introduction: The Wrong Question

Why This Is Not Another “Big Short”

The Architecture of Housing Stasis

Who Adjusts Instead

Monitoring Framework: What to Watch

Falsification: How This Thesis Could Be Wrong

Housing isn’t crashing because it has been re-engineered to resist clearing. Prices stay high while losses are quietly absorbed by people and institutions. Monitoring institutional, political, and distributional signals is how you track this slow-motion structural crisis.

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The Housing Market Is Not Broken. It Is Frozen.

On stasis, loss allocation, and why prices don’t fall anymore

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I. The Wrong Question

For several years now, housing has occupied a peculiar psychological space. Prices feel high—uncomfortably so—but not obviously insane. Affordability is strained, sometimes catastrophically, yet forced selling remains rare. Transactions have slowed, but valuations persist. Everyone seems to agree that something is wrong, and yet nothing decisive happens.

This has led to a familiar question, endlessly repeated in different forms: When does housing crash?

It is the wrong question.

Crashes are events. They require mechanisms that force recognition of losses—margin calls, refinancing failures, liquidity spirals. They are violent, fast, and legible in hindsight. What we are living through instead is slow, ambiguous, and structurally stable. Prices do not clear because clearing is no longer the system’s objective.

What we are observing is not a bubble waiting to burst, but a stasis regime: a market that has been deliberately engineered—through policy, finance, and political incentives—to resist downward adjustment even when fundamentals deteriorate.

Once you see this, the puzzle dissolves. The absence of a crash is not mysterious. It is the point.

The real question is not how does this work?

It is: Who absorbs the adjustment instead, and how long can that cont...

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