They don't _automatically_ do anything because the usual home buyer bids 7-8 times before getting a purchase. A mansion goes to large home, large home goes to home, home goes to townhome, townhome to condo, condo to keeps renting.
This is fixed supply, with foreign entrants, which means new home buyers that invested into planning, saving, and starting the process aren't going to just keep blowing money on renting because their first home is a townhome.
>Buyers who become frustrated tend to shift from looking in popular urban core neighborhoods to suburbs where competition is less intense, or from single-family homes to condos
