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.

Maybe because with Airbnb instead of renting out a house for $2000 a month to someone looking to live there they can rent it out for $1000 a week to tourists and double their profit.

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.

Greed. And the genuine belief that “the world is not enough”

1. Land is scarce where people want to live, it’s always going to get more expensive as more people want to live there.
2. Low interest rates caused large investment firms to seek higher rates by being rental owners instead of mortgage owners. This forced up rent to make returns on investment. As the realities of being a landlord are realized this might get better.
3. New building nationally wasn’t keeping pace pre covid, but it was by a negligible amount. Post covid, new building is years behind where it needs to be.
4. High interest rates now has effectively got people stuck in existing homes, because a new mortgage would be double the payment.
5. Inflation happened, 20% of the increase since 2020 is just inflation.
6. Short term rentals have devasted the residential market in popular tourist areas, forcing them to charge hotel taxes and follow those regulations is hopefully going to start correcting this.

Land is the only commodity that’s actual worth anything, perpetually.

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.

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.

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.

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.

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).

Crime.

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, 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 million dollars today.

When Vancouver started capping out and hitting limits investors moved on to apply the same practices all over the continent.

I feel the main reason is corporate entry into the market. Foreign and domestic. The ROI is larger on real estate than any other investment.

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.