[alistairSH]

Are there any real examples of this actually happening?

Local to me, Arlington and Reston VA have both seen massive building sprees over the past 20ish years (mostly adjacent to the Metro). Home values have never been higher in either location.

My own personal example... I live ~1 mile from the Metro, so just outside the building boom zone. There was next to zero housing in that zone - it was all office parks - and now it's a mix of $1+ million townhomes, $1+ million luxury high-rise condos, and dining/retail. My own home value is up 50% since COVID and that's true for just about any house in my zip code.

And without the redevelopment/infill, I posit the whole area would be less desirable. NIMBYism feels more about "change is bad" than property values.

[BobbyJo]

Literally the entire peninsula of the bay area is an example of this happening. You have people voting to "keep their small town feel" sandwiched between San Francisco and San Jose.

[alistairSH]

I meant examples of increased density reducing values, not NIMBYs stopping development.

[BobbyJo]

Ah, well I still think it applies as a counter example. Avoiding density makes values rise, especially when combined with increasing office space density/local job growth.

In general I don't think it requires all that much thought in terms of why/how price changes happen. Housing demand is inelastic, and you can find examples of that causing both rapid price increases (metro areas with high friction building requirements) and rapid price decreases (metros with population declines) when out of equilibrium in either direction, which is exactly what you'd expect of a good with inelastic demand.

[giaour]

Yeah, I live in Falls Church, which has seen more build-up than other areas in Northern Virginia because the city has never had the kind of restrictive zoning that the anti-"Missing Middle" campaign is still fighting in Arlington. The value of my single-family home peaked in 2024 and has dropped slightly since. To my understanding, this is generally true of my zip code and not true of comparable zip codes in the area.

But Falls Church is much nicer now that a few mid-rise apartment buildings with ground-level retail have gone in! As a resident, I am very happy about all the new development. I expect that over time, that will have a positive effect on property values, but there is an observable short- and medium-term effect working in the opposite direction as the increased housing supply eases demand on the existing housing stock.

[alistairSH]

Do you believe that small drop is a result of new development or just a blip in the market? Price increases near me definitely slowed as interest rates increased, but we haven't yet seen a drop. But, as far as I know, this is one of the only walkable areas outside the Beltway, so there's a lot to like if you want to be untethered from a car for much of the week. It's also a relatively affordable area (vs inside the Beltway and some SFH neighborhoods) - my TH 1500sqft (1800 if you include finished basement space) would currently sell for ~$700k. The new-build THs are 2500sqft, with a garage or two, and sell for just over $1 million.