How many are currently flying? How many are currently for sale?
Falling home prices only affects those who are trying/ intending to sell their homes. Otherwise, it means next to nothing for most homeowners. I suppose it might give those old folks who decide to reverse mortgage their home, but that's generally a poor idea as well.
The Bank of Canada's approach (under both Conservative and Liberal governments) has been to try to keep letting air out of the housing bubble slowly and cautiously rather than encouraging it to inflate. I don't know if it will work this time, but it did in 2008 when we dodged a lot (not all) of the global financial crisis.
And with high inflation, the cost of houses rise. I thought it was strictly low mortgage rates pushing the real estate, but I’m seeing cash offers on $200-300,000 houses that we are remodeling.
Where do you find houses that cheap in 2021 (at least within an hour's commute of a city of any size)?
If people are coming in from more affluent areas of the country, no wonder they're putting down cash. That's barely a downpayment for a house in Toronto, and not close to that for the Bay Area, NY, etc
If paying cash, then how do low interest rates make any difference? I see this as well heeled, city denizens fleeing to the country as they realize that city living is becoming less attractive. I see it everyday. The problem is that it really messes things up for the locals. Only the realtors benefit. The newcomers are refugees.
I'd think of the people moving into less-prosperous areas and snapping up homes less as refugees than as profiteers. They had homes worth >$1m (often) in well-off areas, but that wealth was hard to access and vulnerable to a future housing crash.
No kidding
Actually we are just west of Atlanta, bought a few there and 3 south west of Atlanta. These aren’t move in ready, by any stretch of the imagination. The key is buy them before they get listed. One we are starting on today hasn’t been occupied for 4-5 years! The owner left the utilities on, and they checked on it weekly. It’s completely full of junk, not like a hoarder, but he moved in with his kids and all his stuff is still there. We’ve got a dumpster being delivered today and will probably fill it by tomorrow.
That is exactly what is happening here except people are bringing bay area remote salaries with them so they have no problem driving up prices competing with each other and not with locals.
I can see how that would be tempting to people coming from hotter property markets. In my urban neighbourhood in Ottawa, ON (not one of North America's hottest markets by an means) you'd be lucky to get a teardown for CA $800K/US $650K, and there would probably be a bidding war.
I wonder if they'll also start bidding up the price of airplane hangars, marina slips, etc and push them out of reach for locals as well.
You can say that again. Except here, they perceive themselves to be saviors of the backward rednecks. If I see one more social media comment complaining about the lack of a Trader Joe’s being unacceptable, I’m going to lose my mind. Thing is, there is exactly one in Town. Their selection is way smaller than most of the grocery stores and aren’t price competitive, either. Same goes for the one Whole Foods.
Which is why interest rates need to return to historical normal.
you have a Trader Joe’s? I am two hours away from the nearest Trader Joe’s and happy for it. I went a few times when I was up in the big city. For a while there it was kind of an exciting novelty for the wife but even she doesn’t really care to go anymore. Same with Costco. We bought a membership last year. It’s two hours away. I have been back twice. I don’t think we’re going to renew our membership. I was thinking about taking them up on their one year refund. And then going out to dinner with the proceeds but my wife decided that that’s cheating.
If they're looking for Trader Joe's etc, it sounds like they might be more suburbanites than urbanites. Supermarkets are a last resort when you live in a walkable urban neighbourhood with local shops. Suburbanites are also more likely to flee, because they spend much of their lives stuck in cars commuting in and out of the actual city (rather than walking/cycling to work).
The high house prices are good for older people, who might have lost their decent working-class jobs 10-20 years ago and be just scraping by on low-wage jobs with little/nothing in retirement savings — that's a common situation in the Canadian Maritime provinces, for example — because the windfall from selling their houses to affluent come-from-away types gives them a second chance at a dignified retirement. Those same high prices not so good for local younger people who want to buy their first house.
Yikes! The median home price in Canada is CA $720K (US $570K). There must be a lot more economic disparity in the U.S. But you do have to consider population distribution rather than geography — an awfully big percentage of the U.S. population lives in states like NY, CT, NJ, CA, etc. with hot property markets.
re my earlier question, has that population growth (and the arrival of people with lots of money to spend) affected the cost of buying/renting hangars, etc? Are they driving up the cost of flying like they've driven up the cost of real estate?
That is very inexpensive.
I meant disparity when you consider the distance between the national mean and the cost of single-family dwellings in (e.g.) the Bay area or NY/NJ/CT. I agree that the U.S. economy as a whole is doing great, but the economic variation from region to region must be pretty stark.
Except that California alone has over 10% of the U.S. population, and when you add in other rich states, you're looking at big chunk of the American people living around the hot property markets, even if they occupy only a small portion of the U.S. geographically.
Most of the cost of RE in California, particularly the Bay Area, is self inflicted. Very restrictive zoning, rent control, eviction protection all add up to not a lot of incentive to build anything other than more expensive single family housing on the very limited land available. No one is building "affordable housing", unless it's government funded and then it costs multiples of what it would cost in other US regions. It becomes a bit of a vicious circle, no one can afford to live there, so only rich people do. (and a ton of homeless). Outside of the bay area and LA basin, it's a bit more sane and lower cost, always a California premium though.
