Current Events > Why does housing have to be so expensive

(+) Yeah! (+)

Is it a demand issue?

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More like supply

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its an issue with boomers and capitalism

It's getting pretty ridiculous here too.

One of my older buddies bought a house 15 years ago for $275,000.

He listed it earlier this year for $850,000 and it sold within a few days for $975,000

It's a small house too.
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it doesn't, move away from the coast and find the land of affordable housing.

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I'm curious about getting the house I JUST bought appraised and possibly selling it. I bought it for 97.5K and it appraised at the time for 104K. This was in early October. Since then the market has only went higher. I wonder if it's somehow worth like 120 and I can sell it and keep the profit and flip it into something nicer.

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I Like Toast posted...

it doesn't, move away from the coast and find the land of affordable housing.

I can't move atm

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WrkHrdPlayHrdr posted...

I wonder if it's somehow worth like 120 and I can sell it and keep the profit and flip it into something nicer.

I think the issue would be that the price of all other properties went up as well so you really wouldnt really be able to flip it because prices went up across the board.

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It doesn't. We're just used to getting fucked

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It's a supply issue, along with how easy it is to buy a second home. Rich people are using that to make money and crowding out first time buyers

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I cringe at thinking about what Toronto condo prices will be in 10 years...

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MedeaLysistrata posted...

I cringe at thinking about what Toronto condo prices will be in 10 years...

you wouldnt be cringing if you owned it.

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Hellmuth posted...

you wouldnt be cringing if you owned it.

Sure, but you see the thing is I don't own it

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Drpooplol posted...

It's a supply issue, along with how easy it is to buy a second home. Rich people are using that to make money and crowding out first time buyers

My gf's dad just closed on 2 homes in Texas that he will rent out. There's companies out there where rich people simply give them money and they go out and buy the houses, rent them out, and do all the management and maintenance. All it takes is some capital.

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It doesn't need to be so expensive and it has little to do with supply. Most western economies are propped up by their high cost of housing which has been intentionally inflated since the 80s. In reality, there are more than enough homes for everyone, even accounting for overpopulated cities like New York or London.

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Pretty simple example of supply and demand here.

Take a decade of high income growth in the US:
https://fred.stlouisfed.org/series/MEHOINUSA672N

And add a decade of historically few homes being built:
https://i.imgur.com/xeQ4NTI.png

...and what did people think we'd get?

I live in the GTA also but I'm looking to buy to rent out so I need 20% down. I can only get approved for 350k to 450k maybe and need 80k to a 120k to put down.

Sucks i have no one to co sign with or help out so I have to come up with everything myself. Houses are already out of the question selling at a million in addition to being over bid by 90k.

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Right now it's more of a supply issue. Building has slowed to an extreme for the past year and a half as have production for building materials.

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Supply issue that's made difficult by people(other home owners) restricting the building of new housing due bad reasons.

Doesn't help that people see home ownership as their main wealth building tool, so some people make decisions that help keep their home prices high...which means it's unaffordable for others.

Hard to have affordable housing and also have housing as a wealth building tool
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Solid Snake07 posted...

Right now it's more of a supply issue

even if they somehow created extra land to make apartments/houses. i'm doubtful it'll lower the prices across the board. it has always stayed the same.
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emblem boy posted...

have housing as a wealth building tool

Yeah, there's a myriad of incentives for people that own homes to make it as expensive as possible.

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This is why landlords are reviled. Sure it's one thing to just rent a room of the house you live in, or have one extra rental property, but super rich people/corporations buying property en masse screws the market. Here in Colorado lately there have been these companies buying shit on cash offers well over the list price. That's very attractive to a seller. Then sellers see that houses are being overbid by 10k, they raise their ask by 10k, then these companies still outbid so prices just keep ballooning. Now that kind of thing has to burst at some point but the bottom line is that profiteering off housing makes the market more inaccessible and the more that large entities do it, the worse we are off.

It's a bubble and it's going to pop. Hold onto whatever position you're in before you buy, it's not going to stay where it is (or sell fast if you're trying to sell)

AirBnB caused a lot of the shortages, and the current cost of lumber doesnt help

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It's further complicated by foreign investment groups coming in and buying up inventory

CoorsLight posted...

This is why landlords are reviled. Sure it's one thing to just rent a room of the house you live in, or have one extra rental property, but super rich people/corporations buying property en masse screws the market. Here in Colorado lately there have been these companies buying shit on cash offers well over the list price. That's very attractive to a seller. Then sellers see that houses are being overbid by 10k, they raise their ask by 10k, then these companies still outbid so prices just keep ballooning. Now that kind of thing has to burst at some point but the bottom line is that profiteering off housing makes the market more inaccessible and the more that large entities do it, the worse we are off.

I hate to break this to you guys but housing has literally always been a commodity. Like you think rich people only just now figured out they can charge rent on a home? Really?

This is entirely a supply issue. Local governments have been fucking people over with this NIMBY shit for decades and now they need a scapegoat.

This is actually an issue where it's too democratized. Local homeowners have too much power to veto and slow down new building projects in their community.
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No I don't think rich people just figured this out but it's yet another symptom exacerbated by worsening wealth inequality and wage stagnation oh wait I see who's posting

There are more vacant homes than homeless people, but "it's a supply issue"

Because rich people have realized real estate is one way to build wealth. So they buy low and flip it for a higher price.

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CoorsLight posted...

There are more vacant homes than homeless people, but "it's a supply issue"

So you don't understand what vacancy means, don't realize the homeless and vacant homes are not evenly distributed and think the homeless are the only people who suffer from a housing shortage.

God, imagine being some NIMBY fuck on a city zoning council constantly blocking housing from being built so your own property rises in value. All the while knowing there's people like coors who will literally defend what you're doing.

You're jumping to a lot of conclusions there

Trump loved to reduce issues down to being all about too much red tape, it was basically his only idea for fixing anything

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CoorsLight posted...

You're jumping to a lot of conclusions there

Just trying to understand why you would falsely claim it's not a supply issue.