By the time you are able to read this, we will or should know voters’ choices in New Jersey, New York City, and Virginia. I assume most watchers will be surprised in one way or another. There have been notable ironies in the preparations for them.
First, New York City voters show by polling surveys that we may see our first Mayor of this beleaguered world capital who openly avows Communist policies. The younger voters who cannot afford to buy any housing units apparently blame capitalism for their plight. Well, why are housing prices so high everywhere in the country?
Brian Wesbury and Robert Stein of FT Portfolios point out that the US money supply under the control of the Federal Reserve has tripled in just the last 18 years.1 This has tremendously inflated the prices of everything, but especially assets that are more difficult to add such as housing or companies issuing stock. If housing had tripled in supply in the same 18 years, prices could be almost stable (except for the increase in size and creature comfort improvements). So, blame government, not free market capitalism.
In the case of New York City, you have a perfect storm. First, capitalism has not been allowed for years through rent controls. If rental prices do not rise naturally in the short term, the supply of rented housing will not be created. The good news I suppose is that the hated rich and others have fled the city and state primarily for states with better weather and more capitalistic policies. This allows for those remaining to have a slightly larger supply of housing.
Because of the area limits of New York City, there has been great demand for housing in New Jersey and Southern Connecticut for decades. Where there is unusual demand versus supply, prices will rise unless they are prevented by edict. As mentioned above, if prices are controlled in some way, then the increase in creation of supply will be hindered so that prices inevitably are lower than with the greatest imbalances of demand and supply. Economics 101.
The horribly high prices of the District of Columbia area in Virginia and Maryland continue the same principles. On a business trip to Vancouver, BC, in June of 2024, I was reminded of the same situation of limited land space and incredibly high rents and housing prices.
In our own area, when prices rise to relatively high levels in downtown Kansas City and the Plaza area, you saw a jump over the state line to Johnson County, as well as Blue Springs and Lee’s Summit. When the same occurs in Leawood, you see more growth to Gardner/Edgerton, Stillwell and further out.
The beauty of the fundamental principle of our life in the US is that, given price and opportunity constraints, we all get to choose where to live. If you want the greatest affordability, there is a list on social media of the five lowest cost areas in the country. Several of them are in central, rural Nebraska.
1 Internal publication, Capitalism vs Socialism, FT Portfolios, November 3, 2025.
(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)