All the market efficiency in the world won't stop the continual increase in prices from bad zoning and missing middle housing.
That scarcity exists is the whole reason we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason that housing is so expensive in popular cities, which is scarcity.
None of these things will matter one whit to housing affordability. "Helps in some way" is fine as long as we understand that it has nothing to do with high housing prices. "Helps in some way" is fine as long as we measure our claims and admit that this is about basic fairness and respect for the law. "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!"
Every one of these things should be dealt with. Canada should probably have anti-racketeering laws. Real-estate boards should have less power and should be compelled to publicize their sales data. Etc, etc, ...
Just quit the bullsh*t about this being about addressing housing affordability.
> "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!"
That isn't what the commenter you originally replied to was stating, nor was it my position. While your argument may have merit, it's a non-sequitur when used as a rebuttal to either that commenter or myself.
> Just quit the bullsh*t about this being about addressing housing affordability.
I get it, you have a point you want to make. There are more constructive ways to do so than to misconstrue the arguments of the people you are replying to.
The poster is literally responding to a news article about housing affordability with the declaration about blind-bidding, "This is such a huge deal".
It really isn't. This is the difference between English vs Dutch auctions and the relative merits in an open and sane market can be debated. Sealed auctions are not a market failure. Sealed auctions do not necessarily lead to higher bids. Sealed auctions do not necessarily lead to market asymmetries. The effects of these two auction choices is largely irrelevant as long as we have the demand curve pushed out to crazy-town.
Do research on the property! One of the big advantages of Dutch auctions is that bidders don't get information on how you value something! Except of course that everything is valuable because of scarcity so yeah actually I guess sealed bids won't really provide a lot of value for the buyer.
Adjust your bid as others bid! English auctions allow you to make lots of adjustments based on what other bidders think something is worth! Oh, except of course everything is in demand so everyone just keeps bidding and the frenzy makes other participants unpredictable... so yeah, actually I guess open bids won't really provide a lot of value for the buyer.
I get it, you have a point you want to make. There are more constructive ways to do so than to misconstrue the arguments of the people you are replying to.
I'm really just tired of the bs.
This isn't really true though. Housing is expensive everywhere, even in unpopular cities, even in cities losing population. (Except for a few specific cities), housing is not scarce, we just pretend it is because we pretend all these fake financial transactions count as valid 'demand'.
> we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason that housing is so expensive in popular cities, which is scarcity
And why is housing "scarce"? Because we waste housing on fake buyers (every single thing you just mentioned). That's why it's all in focus so much.
My midwestern city has built 2x to 3x more housing units than it's received in new residents, for almost 15 years straight now, and housing still goes up 15% each year like clockwork. You can outbuild new resident growth (many places already do), but you can never outbuild investor demand while housing is federally forced to appreciate like this.
I'm so sick of people bullsh*tting that 'zoning' and 'nimbys' are why housing is expensive, when we have dozens of major cities with no meaningful zoning restrictions, no 'nimbys', and no restrictions on growth or construction of any kind -- and even in these cities, housing is shit and expensive.
Calgary? Its a hugely popular city, with a similar growth rate as vancouver and yet housing is much cheaper (relatively speaking)
I disagree. Depending on the jurisdiction (in the US), part of the issue is the 10% net loss you end up with. 5-6% on the agent fee(s), another 1% on "mansion tax", in NYS/NYC there is a 1% and 1% transfer tax and 1/2% mortgage tax. Different jurisdictions are less (or more). Throw in more for the lawyer and you're down 10% on the sale. The sales agent fee seem fair for tough markets but even 1% sales agent fees seem preposterous given the market. If the house flips in 1 day, how is that worth 5 or 6%? These days people are negotiating that down to 4% but even that is preposterous given the market.
The problem with the extra 5 or 6% agent fees is: that people dont want to buy/sell as much, because you're effectively losing 20-30% of your 20% down equity on the sale (you'll lose more on the buy with the the 1-2% Title Insurance.) Effectively, you're losing half your 20% down equity.
Of course then...even if sellers want to sell, they dont because they need to bypass the frictional hurdles. Because if you sell and host half your 20% down equity, how the heck do you buy the next home?
The resulting price boom isn’t a mere 5-10% increase, but hundreds of percent over the course of only 5-10 years.
I’ve seen condo prices double three times in five years in places.
My point is that if you reduce the red tape (and deadweight loss) there are actually people who want to sell, but wont sell if they are losing a ton of money on the sale. Reduce the loss and more supply appears.
In the US this is a huge issue. If you switch cities twice and sell each time, your entire downpayment has disappeared in fees/taxes. You literally have nothing left to buy your next home with. So people stick around in houses they dont want in cities without ideal jobs because they have no choice.
It is not that there are people that aren’t selling, it’s that there aren’t enough houses for the number of people in the country. House prices have risen enough to cover all of the fees, except that there is nowhere in the country you can move to where this isn’t happening.
(And if they are choosing to rent after they sell, that just shifts unaffordable home prices to unaffordable rents, as rental demand increases without a corresponding increase in supply.)
You forgot cheap debt. There's also a ton of speculation. Jack up those interest rates and see where we're at.
Making it too expensive to buy a home does 'help' with prices, but it's more like treating the symptom than the cause. The result is there still isn't enough affordable housing in places where it is needed.
Consider the long term consequences of this debt economy. We’re just kicking the can down the road. It won’t magically get better. The sooner we (society) learn that massively over borrowing has consequences, the better.
I agree though that building more housing (or maybe radically changing the way housing works) should also happen. Maybe once everyone wakes up from this real estate debt fantasy there’ll be the political will to actually do something about it.
Average house price in Canada has ballooned. It’s like a crypto scheme, only instead of a bunch of shady YouTubers selling it, we have an entire industry of snake oil pushers. I don’t think your average Jane really gets how ridiculous it is… yet.
I've sold 3 houses myself, and bought 3 without a broker.
They are doing work, so the real question is whether you feel they are overcharging or not for whatever it is that they do.
Also, I think you meant to say "you lose practically every buyer WITH a buyer agent". This has not been my experience.