Let’s talk housing

originally posted by: IAMTAT
a reply to: JAGStorm

Been looking at homes in Florida...and they sell almost as soon as the listings go up...often with multiple bidders and selling above asking.

Just got back from a FL trip, holy cow has it changed in the last 10 years, ain’t no way no how I’m moving there again!

a reply to: nonspecific

Vacant housing in dense urban centers have been a problem for a while now. Entire blocks of units and town homes are being bought up and just sitting empty. That article is from 2017, and it has only gotten worse.

Here in the Toronto area condo high rises are still going up, and more are on the books. Investment firms like Blackwater are usually behind the big property grabs.

It's been a somewhat back of my mind interest of mine, since the housing market has become over saturated with buyers here in Canada, apparently almost 30% of our GDP right now, comes from housing. Something is going on, and it's worldwide. Houses that are 700sqft are going for 400-500+ thousand dollars, with 20+ offers on them. It's insane.

So with so many vacant properties why are rental prices rocketing across the globe?

Assume I'm not too bright and explain what the reason behind this is?

originally posted by: strongfp
a reply to: nonspecific

Vacant housing in dense urban centers have been a problem for a while now. Entire blocks of units and town homes are being bought up and just sitting empty. That article is from 2017, and it has only gotten worse.

Here in the Toronto area condo high rises are still going up, and more are on the books. Investment firms like Blackwater are usually behind the big property grabs.

It's been a somewhat back of my mind interest of mine, since the housing market has become over saturated with buyers here in Canada, apparently almost 30% of our GDP right now, comes from housing. Something is going on, and it's worldwide. Houses that are 700sqft are going for 400-500+ thousand dollars, with 20+ offers on them. It's insane.

a reply to: Edumakated

Those who remained employed have been able to refinance to lower rates which in itself is kind of a stimulus. People buying can afford more expensive properties. Money is practically free right now...

Yes, but if the entire market crashes that expensive property might only be worth 1/2 what they paid..
Do you not believe that will happen?

a reply to: nonspecific

Simple supply and demand. It's scarcity. It's also from air BnB, and other homeshare type 'investments' for people.

For the most part, from my understanding, a lot of them aren't even being used for air BnB or something similar. They are just sitting there, rotting basically.

originally posted by: JAGStorm
a reply to: Edumakated

Those who remained employed have been able to refinance to lower rates which in itself is kind of a stimulus. People buying can afford more expensive properties. Money is practically free right now...

Yes, but if the entire market crashes that expensive property might only be worth 1/2 what they paid..
Do you not believe that will happen?

I don’t think the housing will crash, nor will properties become worth half of what was purchased. Its definitely not like it’s 2005-2007 when banks were giving out huge loans to anyone who had a heart beat. It’s a bit more strict and the inflated fake super high appraisal scam is over.

originally posted by: JAGStorm
I recently read that apx 20 million renters are behind on rent, a portion of that very severely late.
There are apx 43 million renters in the US. So roughly half of all renters are somewhat behind.

I've been giving this a lot of thought. We own 2 rental houses, working up to our first Hotel - yeah, I played Monopoly a lot when I was younger.

First - this is by far not only about renters. A much bigger problem is those with mortgages that are now way behind. Once the forbearance comes to an end, unless a law is passed that basically resets the clock on the mortgage to pick up where it left off, then there are going to be a whole lot of people selling, trying to get our from under. Some will succeed, some won't, but those with the most equity have the best shot, but they'll have to take a lot less than they would have been able to get before the crash starts.

Luckily, neither of our renters have had a problem paying, but...

What I'm considering doing is selling now, while we're at the top of the market, hang onto the cash, then buy 3 or 4 when residential real-estate crashes. The only things I'm not sure about is when to sell (I think we'll be ok until the forbearance comes to an end, so we'll likely wait until 2 or 3 months before it is set to end, we think there will likely be at least one, but at most 2 more extensions, so we'll have to gauge things when it gets close), then, the big question is, where to put the cash while we're waiting for the market to settle before buying.

originally posted by: IAMTAT
a reply to: JAGStorm

Been looking at homes in Florida...and they sell almost as soon as the listings go up...often with multiple bidders and selling above asking.

Same in this area. People are fleeing the states that are locked down for places where they can live and work. A lot of the houses here are bid up by people fleeing California, and it's easy for them to do because they can sell their places for so much out there. That will obviously stop soon because who's going to move there for work that doesn't exist?

People have also been dumb.

The ones who weren't using their unemployment to pay their rent were the same ones who turned down going back to work because unemployment + $600 was better money even though it was temporary. They took advantage of the rent moratorium even knowing they'd be on the hook to pay it back eventually.

For people like that, tomorrow never comes until it does and then it's always someone else's fault that they don't have the money.

originally posted by: nonspecific
Who is buying them all?

Big investment companies I would imagine, who else has the cash and the balls to be investing small scale right now?

I'm far from what anyone would say is a saavy investor, but I don't see that. Big investment companies buy when the market is low(er), right now it is peak+, which is why I'm considering selling. I'm even considering selling the house we live in (and the 2 rentals), and just renting until the market crashes (the house we're in now is worth a lot more than the other two), then cash in.

I just wish I knew a safe place to park the money that might actually give us a little return (but safe/liquid is more important than the return).

originally posted by: strongfp
a reply to: nonspecific

Simple supply and demand. It's scarcity. It's also from air BnB, and other homeshare type 'investments' for people.

Interesting point. I wonder how the AirBnB business is these days?

a reply to: tanstaafl

I wonder how the AirBnB business is these days?

AirBnb with indoor pools are going for 900+ a night here.
I'm assuming that won't be the case when Covid is cleared (if that happens)

I can't imagine Airbnb apartments/townhouses are doing as well.

www.airbnb.com...

Seems to me we have been tap dancing on a landline while whistling past the graveyard with the Covid economy.

I’d say if you can grow vegetables, plant way, way more than you need and buy mason jars and lids now. You can always sell food and people will pay for it.

If you can make things, quit weekend binging on Netflix and start cranking out things to sell. Soap, candles, w/e handy crafts you are into. Make purses, shoulder bags, haversacks if sewing is your thing.

In the end, you will be entertained if nothing happens. Or you’ll be ready to make a buck if you need to do so.

originally posted by: tanstaafl

originally posted by: strongfp
a reply to: nonspecific

Simple supply and demand. It's scarcity. It's also from air BnB, and other homeshare type 'investments' for people.

Interesting point. I wonder how the AirBnB business is these days?

Very well. A lot of professionals have bugged out to airbnbs in more rural areas or cities without draconian lockdowns because they can work remotely.

a reply to: strongfp

It's gone absolutely insane here in the Kitchener Waterloo area in Ontario. Average increase of 24.9% for residential properties compared to January last year!

I don't know how the hell young people will be able to afford a home one day.

originally posted by: Edumakated The housing market is booming, particularly suburbs as urbanites flee to from cities. Prices are high because financing/mortgages are cheap. The professional class that is still gainfully employed can borrow at historically low rates which allows them to afford more expensive properties but also drives up prices.

Exactly the same happening in the UK right now. Not sure eldewhere but in Britain the property market has gone full bore mental for the reasons you listed just there, in addition to which the Prime Minister gave temporarily abolished any taxes on property sales / purchases during Coronas and this has sent the housing markets crazy

a reply to: TortoiseKweek

They blame it on low interest rates. But when you break it down, buying a home isn't really about the down payment, it's about your net income. Either everyone is either making 120k+ a year solo or combined, or, the banks are giving out loans to people who should not have them, OR in most cases I have seen parents dive in to co-sign or plant a massive down payment to ensure their kids or what ever get the home.

And then, there's the 'conspiracy' or 'foreign investors' (Chinese) coming in and buying up property. Either way, it's not adding up. Too many loose ends to justify these insane house prices here.

a reply to: strongfp

Agree 100% ! A LOT of what's happening in the Canadian housing market is not adding up at all. A number of years ago (10 or so) I thought we were in a bubble, so I held off, but it kept going up, so eventually I pulled the trigger on buying my home. Just as well as I did, cause I couldn't afford it now.

I still think we're going to see a correction... but I was wrong before

Technology and services have improved so much by this point that any young people who are willing to save a lot of money on rent can do so.

Buying and camping out in a van/estate is a small investment that could save more than $10,000~ a year.
Showering, washing clothes, washing pans - a 15L water container with tap, will provide all the water you need. need hot water? boil some water on the fire, problem solved.
Washing yourself could be be hard, especially in the winter months but people were washing themselves without showers 100 years ago, if you really need a shower go and find a leisure centre with showers available.
take all your dirty laundry to the local laundrette.

As for entertainment - Get a chrome book, they can be charged over USB-C and all you will need is a few power banks to be re-charged while at work or via running the engine.

Governments have more control over their population when the cost of living goes up, It's a trap remember that.
If you have children, I am sorry and I do not recommend any of this. Children need a proper home and access to school.

a reply to: TortoiseKweek

I have my theories. And strong opinions, my family doesn't talk about housing around me. It angers me, especially what is happening in Hamilton, I work there and I hear a lot of heart breaking stories from co workers wanting to get into the market and start a family.