For almost all goods, price increases will decrease the amount purchased. If there's still insufficient excess supply capacity after substantial price increase and decreases in people's purchasing power and consumption, then the reason competition isn't lowering prices is because that's the actual market-clearing price where demand is equal to the amount that can be produced.

This can't be fixed by forcing companies to lower their prices since they won't be able to supply the demand that exists at a lower price, and attempting to do so anyway via price controls inevitably leads to empty shelves.

> For almost all goods, price increases will decrease the amount purchased...

Except that housing, at least in America, has dynamics which are nothing like that. And housing is by far the largest living expense for a very large fraction of Americans.

High housing prices do reduced demand, just not by much. People living with roommates or parents are example of people priced out of the market. This is demand reduction.

No, that’s a just lower quantity demanded, not lower demand; demand is the function mapping price to quantity demanded.

Its possibly that price level could over time effect actual demand (as well), that is, it could convert people who would buy at price $X to people who would only buy at a price lower than $X or not at all, but that’s not what your example is.

(It does, actually, induced demand from availability it observed, anf the reverse from the opposite condition would be logical.)

You are right that I'm talking about the quantity of goods demanded. I think this is relevant because we are talking about the price per good demanded as well. Your classic supply and demand curve which we're talking about is units supplied, units demanded, and price per unit.

If you want to think about absolute demand for housing in absence of a price reference, the demand is enormous. If houses cost $0, I would probably demand three or four large ones for myself before getting to the point where I refuse a free house.

> You are right that I'm talking about the quantity of goods demanded

Right, that's different than demand. Demand is the function mapping price to quantity demanded (just as supply is the function mapping price to quantity supplied.)

There are things that shift demand, but price changes resulting in a different quantity demanded are not evidence of shifts in demand, just evidence of a normal shape of demand curve (which is not to say that price conditions over time don’t shift actual demand, that’s just a more complicated thing to demonstrate.)

I think you are right that demand is a function. I would quibble that it is pretty clear that "demand" refers to the quantity demanded when stated with the other variables of the function. e.g. "what is the demand for $10 coffee in a desert".

In the context of this discussion I thought it was pretty clear which I was talking about.

>>>For almost all goods, price increases will decrease the amount purchased.

>>Except that housing, at least in America, has dynamics which are nothing like that.

>High(er) housing prices do reduce demand...

Do you have any thoughts on if price impacts the quantity of homes demanded.

That makes assumptions that don't hold in the round. Once you have a lack of supply capacity such that there is inflation, then everybody can pass on the price changes and the amount purchased doesn't change.

That's the problem.

Somebody has to stand the loss, and for that to happen there has to be an expectation that you can't pass on the price shift somewhere in the cycle, which then forces that somebody to reduce the quantity purchased or shift it to an alternative supplier.