House prices are surging once again
economist.com
economist.com
Why does real estate remain relatively strong in some countries? Likely because savvy investors either want to live there or believe others will.
Real estate prices in California are at their peak, and while the media might anticipate a housing crash, it's unlikely. With large amounts of money needing a place to go and states like Florida enacting xenophobic policies that deter investment, California remains an attractive option.
[1] [NAR Realtor Blog](https://www.nar.realtor/blogs/economists-outlook/the-share-o...)
[2] [CNN](https://amp.cnn.com/cnn/2024/06/17/homes/florida-law-bans-ch...)
How this often works is a cash offer financer completes the purchase from the seller and in turn sells it to the buyer once their mortgage has been secured. The buyer rents the house from the financier until this happens. Sometimes the agreement is the financier will only purchase the property if the buyer doesn’t have their mortgage in place by the closing date.
Probably trying to escape the silent home insurance crisis in FL more than any other reason.
As an Australian house owner, I consider the local perception that house prices have recently been increasing[0] to be largely based on domestic misconception. Rationale: If you take in to account USD/AUD currency shift[1] over the recent period, house prices are functionally flat or thereabouts. This view also accords better with cost of living shifts. Given this 'boots on the ground' view, I find it strange and remarkable that the Economist, which usually has fairly well reasoned journalism (and excellent editing), selects Australia as a stand-out market casually based upon some inspecific Goldies' analysis.
[0] https://www.abs.gov.au/statistics/economy/price-indexes-and-... [1] https://www.macrotrends.net/2551/australian-us-dollar-exchan...
Also the fact that you compare it to the USD/AUD is silly, 99+% of us aren't paid in USD. If I could barely afford a 1.1M house in 2020 that is now 1.6M, we have a big problem.
The affordability crisis is local first.
We were lucky we bought our house in 2018. It's doubled in value since. Rejoice? No. Why? Because if we sold, it's not like we could afford any better. We've just raised the floor for everyone, essentially locking out the youth. This isn't good by any metrics.
It doesn't help that an unprecedented amount of immigrants, mostly illegal, have been let into the country to suppress wages. That puts upward pressure on house stock.
If the current zoning regulations are an attempt to have people not die in fires, they’re not working that well.
It has everything to do with restrictive zoning and building codes. NYC is a prime example, there are tons of empty commercial office buildings. But they will never house people because building codes require every room to have natural light. Rules also restrict share and boarding houses which used to provide affordable housing to many people.
No one said affordable housing needed to have windows in every room or home very room to have a bathroom. They're affordable for a reason and this is the norm in every other part of the world.
It's time to start thinking like every other country and culture.
Also, NYC has a lot of new residential buildings going up. I see them all over. But every time I look up what’s it’s for, it’s for the ultra-wealthy - $10s of millions per (huge) condo.
It is hard to overstate how much housing would need to be built. To get housing affordable, Sweden committed to building 1M units over a decade in the 70s when the population of the country was 7M. In the 2010s, NYC had a population over 8M and built about 200k units.
While the Bloomberg administration had a reputation of being developer and upzoning friendly, it actually also did a lot of downzoning, and net housing capacity barely budged. https://www.politico.com/states/new-york/city-hall/story/201...
The layperson is generally not using a thirty year rolling average as a baseline, and the headline makes no attempt to say it is a historic anomaly.