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.
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
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…
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. :/
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.
Housing shortage - not building enough homes. More people. Costs to build rising.
Prices are obly riaisng in good locations in NE and midwest.
South and west both are in decline over all.
