You see this a lot with new condos, where the only kind of condos being built are "luxury condos" with fancy amenities and features. There's some theorizing that these will eventually become downmarket units as they age, but I'm somewhat skeptical.

I once lived in a condo built in the 70s and the materials used were very pedestrian - linoleum counters and flooring in the kitchen, carpet everywhere else. Ceilings were 8'. No balcony. I don't see today's granite and hardwood condos with 10' ceilings ever becoming downmarket.

I've heard the theory that high-end housing still creates opportunities for lower-end housing. If a desirable neighborhood gets new expensive units, that means (1) some residents who now earn more than when they first came can "upgrade", leaving their older and cheaper units open, and (2) people who can only afford the older units don't need to compete as much with wealthier buyers.

>That means the buyer does not have choices in their preferred price range and must buy above what they actually want

But we don't see this happening though. Even in this scenario, there would still be downward price pressure. The market should (or would, rather) reach some equilibrium here.

Instead what we see is UPWARD price pressure and vacancy despite legitimate market forces and environment.

I've kind of already laid it out in the previous post but the next question anyone should have is "why is that happening?"

And it's not because the units don't exist or need to be built.

I know in California there are so many requirements and fees on home construction that companies are incentivized to build larger expensive homes to dilute those costs.