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Home buyers need 80% more income to buy than 4 years ago

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Re: Home buyers need 80% more income to buy than 4 years ago

#61

Post by itake »

pfannkuchen wrote: post #57
aodntkem wrote: post #52

Earlier quoted context omitted.

this sounds alright in textbooks, but in reality housebuilders realise they make more money when house prices rise as they build..

Who generally makes more money overall - luxury brand with a small market or run of the mill brand with a massive market?

I think the margins are better for the luxury brand, so builders focus on luxury.

It is much easier to focus resources ($$ and labor) on building 1 luxury building with 20% margin than building 10 buildings with 2% margin (and much higher risk that a single misstep results in a loss).

In theory, this reduces pressure on the mass market properties, because it reduces the number of high-income people in the marketplace.

Re: Home buyers need 80% more income to buy than 4 years ago

#62

Post by pfannkuchen »

rtev wrote: post #11

This appears to be what happens when rich people that don’t need houses buy them anyway as investments. There should be laws preventing a person from owning more than three houses in the United States.

More like the Fed playing chicken with prospective sellers. Prices haven’t fallen much due to limited inventory, but eventually the inventory will come. A property is only worth as much as it would sell for today, no matter how rich the current owner is.

Re: Home buyers need 80% more income to buy than 4 years ago

#63

Post by prepend »

pfannkuchen wrote: post #58
paulddraper wrote: post #19

Earlier quoted context omitted.

So..... Now they have to permanently "rent" them (maybe from a company they have ownership in)? Maybe we should just build more houses.

Builders really seriously need to make condos/apartments with sufficiently sound proofed walls, floors and ceilings. I would happily live in a condo if I was confident that I wouldn’t be able to hear my neighbors and have my sleep disrupted etc.

They exist. My last home before my free-standing house was a poured concrete and brick condo. You could jump up and down with an elephant and the downstairs neighbors wouldn’t hear you.

You just have to test before purchasing. And, of course, this costs more.

Re: Home buyers need 80% more income to buy than 4 years ago

#64

Post by Arn_Thor »

d6e wrote: post #10
zrn900 wrote: post #2

Capitalism working its magic. As the resources and people to exploit abroad dwindled, it started eating itself from inside out to profit as was predicted. https://www.reddit.com/r/canadahousing/comments/tose5z/landl...

This is a cartel, not capitalism. It's literally voters doing regulatory capture and preventing new housing because they want their property values to go up.

That used to be the driving factor, politically at least. But things have changed. As older folks retire and sell to fund their end of life care, funds, corporations and the super rich have swept in to buy the properties, increasingly pricing out regular folks who depend on an (also more expensive) mortgage which the investors don’t have to worry about. So on the margin, fewer and fewer homes are in regular people’s hands. That is capitalism’s inevitable consequence: those that have wealth can ever more quickly acquire more of it.

Re: Home buyers need 80% more income to buy than 4 years ago

#65

Post by qeternity »

The cure for high prices is high prices.

There are a lot of conspiratorial comments blaming everyone from investors and speculators to contractors and developers. The reality is that it's largely homeowners and the government to blame. The number of homes bought by investors is a rounding error. And developers will build homes as long as there is profit margin.

The government (and society) turned housing into a retirement plan. We decided to enact policies to push people onto the "housing ladder". We confused cause and effect, and the result is the largest misallocation of capital in human history. Blame NIMBYs and ZIRP. Want to get rid of speculators? Stop making houses an investable asset. People should not be relying on a commodity for their retirement.

Re: Home buyers need 80% more income to buy than 4 years ago

#66

Post by Jensson »

aaomidi wrote: post #44
Buttons840 wrote: post #24

Earlier quoted context omitted.

This makes sense to me, if 10 families want a place to live and there are 8 places to live, housing prices will trend towards infinity, until people give up and multiple families live together. We need more places to live, at the end of the day there's no way around that. Regulation might help though. If we regulate it so that it's harder to profit from real estate, then people will find other investments instead. Th…

Yes you did miss something. You missed that it’s 10 families, with 20 houses. With one family owning 18 of them.

So you are saying 80% of homes aren't lived in? I don't believe you, there is no way those numbers are anywhere close to accurate.

Re: Home buyers need 80% more income to buy than 4 years ago

#67

Post by lifestyleguru »

turnsout wrote: post #29
lifestyleguru wrote: post #9

Earlier quoted context omitted.

> the market is dual-income couples with high salaries This is some kind of memic impossibility. It's impossible to move into a city for a high paying job AND have a partner AND the partner earning a lot too. The closest I've ever been was when my job and the relationship disintegrated at the moment the partner got such job after over 5 years of searching, and I really don't feel like trying again ever.

As much as it pains me to say, people with good salaries can sometimes meet other people with good salaries in their city and fall in love.

This is scenario in realm of possibilities of a Disney fantasy. Well off woman will not look for sharing in half high living costs. If you haven't learned this yet, you will.

Re: Home buyers need 80% more income to buy than 4 years ago

#68

Post by lifestyleguru »

Kirby64 wrote: post #20
lifestyleguru wrote: post #9

Earlier quoted context omitted.

> the market is dual-income couples with high salaries This is some kind of memic impossibility. It's impossible to move into a city for a high paying job AND have a partner AND the partner earning a lot too. The closest I've ever been was when my job and the relationship disintegrated at the moment the partner got such job after over 5 years of searching, and I really don't feel like trying again ever.

One partner does remote work, and the other moves for a job? That seems trivial and not particularly unusual.

Haven't encountered anything like this.

Re: Home buyers need 80% more income to buy than 4 years ago

#70

Post by lifestyleguru »

JambalayaJim wrote: post #27
lifestyleguru wrote: post #9

Earlier quoted context omitted.

> the market is dual-income couples with high salaries This is some kind of memic impossibility. It's impossible to move into a city for a high paying job AND have a partner AND the partner earning a lot too. The closest I've ever been was when my job and the relationship disintegrated at the moment the partner got such job after over 5 years of searching, and I really don't feel like trying again ever.

Most of these couples are people who grew up in and/or have strong networks in those cities to begin with.

Such couples have something inherited or presented by parents.
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