I stayed at an Airbnb recently And I was curious what the actual value of it was so I looked it up on Zillow. Sold in 2015 for 350k, sold again in 2022 for $750k, now listed for sale 1.2 million. It’s a cabin in North Carolina, literally nothing special. I remember back before 2020 there was tons of mountain and cabins and homes and stuff like that anywhere from 2:50 to 500K. Now you won’t find a single one less than 800k…
Regular homes are just as bad. I’m seeing homes in my area that sold for around $200 to 300K in 2019, now they are 500k and above. I don’t understand how this makes any sense? Salaries were not doubled, but somehow the price of all homes are now twice as much. Is this some sort of cost fixing scheme by the real estate industry to just drive up the price of homes and double them or something? Because it doesn’t really make sense to me I guess.
The market saw an unexpected dip post pandemic as a result of higher and higher interest rates as fiscal authorities mingled with threats of inflation.
Now that the interest rates are falling, prices are rising so that the monthly payments on loans and mortgages stay roughly the same, because it is the actual determining factor of if a property will sell.
I remember back before 2020 there was tons of mountain and cabins and homes and stuff like that anywhere from 2:50 to 500K. Now you won’t find a single one less than 800k…
WFH and good satellite internet were a bit of a game changer here. You could now live in a remote place and work a job with a high income.
Regular homes are just as bad. I’m seeing homes in my area that sold for around $200 to 300K in 2019, now they are 500k and above.
Supply and demand here. There aren’t enough houses being build for people (and private investors) that want to buy them. The price rises.
I don’t understand how this makes any sense? Salaries were not doubled, but somehow the price of all homes are now twice as much.
Lots to unpack with this one. First, some people’s salaries were doubled. There has been some niche sectors of industry that have seen large year over year increases in income, specifically some STEM fields. Second, housing price rises are not linear across all pricepoints. The cheaper house are going up significantly faster than more expensive homes. Why? Because there are more people shopping at the lower pricepoints. When we bought our new-to-us house a few years ago buying a house $150k more expensive than the house were were living in got us very little more house. However, buying a house $250k more expensive got a lot more house (larger, better neighborhood, more outside space, etc).
I get roasted for this every time I mention it because I think people on sites like this generally fit in this category and feel personally attacked, but I honestly believe a large part of it is from WFH becoming more widespread during COVID. People were able to leave the large cities where their jobs were all located and could move wherever they wanted to so that competition for housing drives prices way way up. The few friends I do have all work in software development and all moved during COVID away from their offices and into houses. They all had a similar story “the realtor told me any house that’s on the market for more than 5 days (that’s crazy crazy short) has a major issue, stay away from those.”
Tie that into the expansion of investment companies buying houses with the intent of renting them forever and the NIMBYism that keeps new construction from being made because “My PrOpErTy VaLuE!” and it’s just a recipe for disaster…
I hate that I’m going to be stuck renting someone’s garage or basement and paying their mortgage in rent prices for the rest of my life…
But apartments in the middle of cities are more expensive than ever
Except the rapid real estate inflation started years before COVID. WFH may play a part but it’s hardly a major reason.
You get roasted because it’s at least not entirely making sense. Prices in cities went up a lot as well. That’s not due to people moving away. I’m staying in my apartment that’s too big for one person because I would have to pick one half the size to at least keep my rent at the same level. And I’m one of those software dudes.
Yeah, it has more to do with huge corpos like Blackrock and Zillow buying up every piece of property they can physically get their hands on than the WFH crowd ever could drive the prices naturally. Here’s a link about How wall street put homes for rent.
Yes, people from cities moving to rural towns does impact housing prices which should be a net benefit for the town as it bring in income from outside. It could be a negative when the volume of outsiders is high enough to displace long term residents, but in a vacuum people moving into an area that isn’t overpopulated already should be a good thing.
Now outsiders moving in, then buying up homes to make into BnBs, plus companies buying up homes combined is probably going to cause problems for existing residents and maybe that is what people are pushing back on. Being one part of a larger problem that wouldn’t be a problem if only their part was happening.
Yes, people from cities moving to rural towns does impact housing prices which should be a net benefit for the town as it bring in income from outside. It could be a negative when the volume of outsiders is high enough to displace long term residents, but in a vacuum people moving into an area that isn’t overpopulated already should be a good thing.
It’s absolutely a negative for those in the area. I’m literally priced out of the entirety of long Island now. There is literally nowhere I can afford that isn’t in an uninsurable flood zone and I’m too “worthless” to move. Anywhere with work for someone like me is just a shithole city so I just move from renting to renting in a worse environment. :/
TIL Long Island is a rural town.
The east end actually is considered rural, at least according to ups/postal deliveries lol
Housing shortage - not building enough homes. More people. Costs to build rising.
Prices are only rising in good locations in NE and midwest.
South and west both are in decline over all.
Artificial restriction of supply þrough ð purchasing of properties on speculation by landlords and hedgefunds for ð explicit purpose of cashing in on ðem eiðer as rental properties or as property flips.
Ðere are more empty units ðan ðere are unhoused people. In any oðer market ðat would be called an excess in supply and precipitate a drop in prices.
what is happening what is this
Seems like someþing folks should legislate against… ðat is unless ð lobby have all ð politicians in ðeir pockets. 🙃
Prices are falling in Florida, and inventory is stacking up.
My home value hasn’t started falling yet, according to Zillow, but the appreciation seems to have leveled off.
Land is the only commodity that’s actual worth anything, perpetually.
True but not the cause of this massive change in real estate values.
True, it’s not the only thing, But a big part of it.
mixture of housing supply shortage, empty homes, fucked investments, a bit of zoning laws, and nimbyism, and airbnb
housing supply shortage
younger generations want to live in cities because thats where both employment and “fun” is reletively speaking. the demand is very high for limited space.
empty homes
in some areas, there are homes that are completely empty, some due to negligence, inheritance and some just to artificially decrease supply. to put an example, San Jose, CA legitimately has more empty homes than it does homeless.
fucked investments/nimbyism
some people see housing as an investment instead of putting it into stocks. the investments keeps proces high because its seen as profit rather than a basic necessity to live. people who own houses will use all their power to prevent more houses to be built because more home lowers procing because of more supply.
zoning laws
some places, they restrict building to strictly residential or strictly commercial building. as WFH becomes more mainstream more land needs to be made as residential land. or remove the zoning alltogether
airbnb
airbnb gets you more money in popular areas. it takes away a potenial home for a local worker in favor for maximum investments, which is bad for the city, because it circumvents hotel taxes, and takes away potential income tax from someone who would have lived and worked in the area.
The answer is very location dependent, and often multifaceted. However here in Canada it’s a combination of neglecting affordable housing construction for decades, a huge uptick in immigration raising demand in some areas, a total lack of political willpower (most of our MPs report housing income, many actual landlords), and an economy that’s over-leveraged on real estate in general.
The commercial real estate market has taken a big hit since COVID and RTO is generally unpopular. In North America this has led to a shift to buying residential housing for rental or resale.
It varies by region and country but the big underlying factor is not enough new homes are being built. It’s creating an artificial scarcity which is driving up prices. Some other factors come into play depending on where you live. For example, I’ve read in America that a lot of the homes are being bought by trust funds and big corporations that can just overbid everyone. Now there are even less viable homes to sell. Here in Canada, we have a big problem where our federal government brought in a large amount of immigrants for its Temporary Foreign Worker program and its foreign student programs which created a big spike in population, especially in the major cities. The local governments are responsible for house building and didn’t do anything about accommodating a bigger population despite them knowing it was coming.
- for its* Temporary Foreign Worker program
- and its* foreign student programs
Corrected, thank you person with the best and most relevant username :).
Investors.
China’s entire modern “economic miracle” is founded on housing as an investment vehicle.
You can in part blame Canadian Conservatives in BC, specifically Bill Vanderzam, Christy Clark, Gordon Campbell and Kevin Falcon; as well as federally, Brian Mulroney and Stephen Harper, for importing this behaviour and concept from Asia and its rise here. Initially in the late 1980s and early 1990s it was about attracting the elite of Hong Kong, who were afraid of what the handover of Hong Kong to the CCP would mean. (And rightly so, as it turns out.)
Vancouver BC is infamously unaffordable, and its entirely because of investors, both national and international using its real estate as a ridiculously effective investment vehicle. If you had purchased a home in the suburbs for 500k in 2006, that home would be worth well over 2 to even 3 million dollars today.
When Vancouver started capping out and hitting limits investors moved on to apply the same practices all over the continent.
The biggest reason that is often overlooked is wealth inequality. The rich keep accumulating wealth, and real estate is a scarce form of wealth that holds value, produces a return, and can be accumulated. It probably accelerated recently because of the large amount of money that was dumped into the system around covid; that was yet another opportunity for the wealthy to grab a bigger share of the pie.
If things keep going this way, we’re going to get into a situation where regular people don’t own houses anymore, and rent is a much larger percentage of your income.
Crime.
