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.
This is a pretty good read and explains that it’s not a supply issue.
https://pluralistic.net/2024/10/24/i-dream-of-gini/
A paradox: in 1970, everyday Americans found it relatively easy to afford a house, and the average American house cost 5.9x the average American income. In 2024, Americans find it nearly impossible to afford a house, and the average American house costs…5.9x the average American income.
Here’s the nested article, i.e. the article your article is talking about: October 23, 2024, By Blair Fix; The American Housing Crisis: A Theft, Not a Shortage
Reads very well, really puts this in perspective. Extreme income inequality is the root of most Americans problems.
I like that the line you quoted from the article is pretty much a bait and switch.
*I kinda dig the layout of that website.
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.
Greed. And the genuine belief that “the world is not enough”
a home I bought in 2010 for around 300k is now 600k+, I couldn’t afford it now, even though it’s exactly the same. we upgraded and expanded the kitchen while living there, added a bathroom. so… yeah, wtf.
AirBnBs are one reason. My wife’s home town is trying to pass a law regarding short term rentals because close to half of the houses in town are airbnbs. A developer started to build a new housing development specifically to be bnbs.
Another reason is corporations are buying property as investments.
Also private investors from around the world are buying US property. Americans think of their homes as wealth building investments and it turns out that they are not the only ones thinking that. Housing markets elsewhere are too regulated or volatile or stagnant but snapping up US housing has in a way created its own motivation. The more people do it, the better the returns are on doing it. It’s a bubble, in other words. However that bubble has resisted popping because historically, housing has never been priced according to its true value. These days we’re seeing prices rise on things like food and housing because shit, what are you going to do, not live and eat?
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…
Except the rapid real estate inflation started years before COVID. WFH may play a part but it’s hardly a major reason.
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
The answer is always speculation investment. People are on average richer and real estate is the only trully limited economic resource as we have limited land especially in desired locations.
Seriously lookup how much of real estate is uninhabitable.
People are richer, the tech is better and everything we know about economy would indicate that real estate should be more accessible but that’s not the case because the market is manipulated.
The best part? If you invest in a stock index you’ll almost always out do real estate ownership almost anywhere in developed world. So people are hustling this stupid game while they could just sit back and watch money do money things.
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 stayed at an Airbnb
Nothing funnier than source of the problem complaining about the problem :D
Because houses past your primary residence are not taxed enough. Houses you own should be taxed at an exponential rate. Primary residence means you live there >80pct of the year.
Is there a limit to the size of your primary residence?
One million square kilometer!
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 :).
Because population is increasing faster than new housing is being built. There is a supply problem and demand is in elastic. The supply problem is the result of government’s continual suppression of new construction, via permitting red tape and overeager density zoning.
I guess it’s by country basis. A lot of places have negative population growth yet the prices skyrocket. It does make me think what is the actual reason in those places
Housing shortage - not building enough homes. More people. Costs to build rising.
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.
