3 ms·

My unproven suspicion is this is the consequence of the much-celebrated flight from the suburbs and return to the city. - Take a large population spread over a

My unproven suspicion is this is the consequence of the much-celebrated flight from the suburbs and return to the city. - Take a large population spread over a big area. - Consider that they are used to 2,000sqft homes and not the 300sqft apartments of decades long past - Squish them all into cities Boom, you've got yourself runaway prices.

staticint 11y ago
I agree with you entirely. I read recently that the population growth of downtown Toronto has tripled in the past five years. Assuming that is a trend consistent with most major North American cities, the cost of housing has to compensate.
- wj 11y ago
  I don't read this site very often but did read this article about renting vs. buying using Toronto as an example. With his math you come out way ahead by renting in a new building downtown vs. buying a house in the suburbs. http://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ http://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ Of course, you might not agree with his math.
- kevin_thibedeau 11y ago
  It isn't. Toronto has been building new housing at a rate higher than any other North American city. The city is filled with cranes everywhere. The growth is just from people filling up the newly created space. Something that isn't happening elsewhere on such a scale.
hardcandy 11y ago
Thanks to zipcar, uber, postmates etc it's becoming easier than ever to survive without a car. That's traditionally been a huge expense. Now those dollars can be redirected to housing instead.
- sliverstorm 11y ago
  To what end though? Housing prices are just a bidding war to allocate desirable real estate. More and more wealth becomes trapped in real estate. It's an effective market-based method for allocating scarce resources- a classic tactic. But I'm beginning to wonder. America's real estate is worth ~$25T. Suppose property was simply assigned. An unfair system, probably vulnerable to corruption and nepotism and such, but on the other hand that's $25T that can be invested in other pursuits. What might that additional liquid $25T do for us? A gross oversimplification to be sure, and perhaps completely wrong-headed. But it seems like the key difference from many other bidding wars is the money doesn't leave the system. When I sell my house, I probably take the proceeds to buy another house. The seller of that house takes his proceeds, to buy another house, and so on. It seems rare that anyone downsizes houses, and takes the proceeds out of the market.
  - hardcandy 11y ago
    In my experience people will spend as much money as they can to get into desirable real estate. So if demand exceeds supply then prices rise to a high % of income. This is why I don't believe in minimum wage increases in HCOL urban areas. Real estate prices just rise to adjust. One way to hack the system is to have LCOL in a HCOL area, like living in a van in SF. But few people have the fortitude (or whatever) to do this.

staticint 11y ago

I agree with you entirely. I read recently that the population growth of downtown Toronto has tripled in the past five years. Assuming that is a trend consistent with most major North American cities, the cost of housing has to compensate.

wj 11y ago
I don't read this site very often but did read this article about renting vs. buying using Toronto as an example. With his math you come out way ahead by renting in a new building downtown vs. buying a house in the suburbs. http://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ http://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ Of course, you might not agree with his math.
kevin_thibedeau 11y ago
It isn't. Toronto has been building new housing at a rate higher than any other North American city. The city is filled with cranes everywhere. The growth is just from people filling up the newly created space. Something that isn't happening elsewhere on such a scale.

hardcandy 11y ago

Thanks to zipcar, uber, postmates etc it's becoming easier than ever to survive without a car. That's traditionally been a huge expense. Now those dollars can be redirected to housing instead.

sliverstorm 11y ago
To what end though? Housing prices are just a bidding war to allocate desirable real estate. More and more wealth becomes trapped in real estate. It's an effective market-based method for allocating scarce resources- a classic tactic. But I'm beginning to wonder. America's real estate is worth ~$25T. Suppose property was simply assigned. An unfair system, probably vulnerable to corruption and nepotism and such, but on the other hand that's $25T that can be invested in other pursuits. What might that additional liquid $25T do for us? A gross oversimplification to be sure, and perhaps completely wrong-headed. But it seems like the key difference from many other bidding wars is the money doesn't leave the system. When I sell my house, I probably take the proceeds to buy another house. The seller of that house takes his proceeds, to buy another house, and so on. It seems rare that anyone downsizes houses, and takes the proceeds out of the market.
- hardcandy 11y ago
  In my experience people will spend as much money as they can to get into desirable real estate. So if demand exceeds supply then prices rise to a high % of income. This is why I don't believe in minimum wage increases in HCOL urban areas. Real estate prices just rise to adjust. One way to hack the system is to have LCOL in a HCOL area, like living in a van in SF. But few people have the fortitude (or whatever) to do this.