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I don't understand how present housing prices are possible. Don't markets require buyers? Look at prices in most cities vs. the average family income and it's b

by api 11y ago

I don't understand how present housing prices are possible. Don't markets require buyers? Look at prices in most cities vs. the average family income and it's beyond insane. Who is actually able to buy at these prices and where are they coming from? IMHO it's much crazier than the "unicorn" phenomenon, since that can be explained by crazy term sheets and a lot of private investor cash sloshing around. I can't understand how present housing prices are even possible.

seiji 11y ago
Popular city housing prices are global markets, not local markets. Turns out foreigners have lots of money to burn that locals can't match. Things like http://sanfrancisco.cbslocal.com/2015/04/28/realtors-printing-brochures-for-silicon-valley-homes-in-mandarin-to-attract-chinese-buyers/ http://sanfrancisco.cbslocal.com/2015/04/28/realtors-printin... and http://www.sfgate.com/business/networth/article/How-and-why-buyers-from-China-are-snatching-up-5924991.php http://www.sfgate.com/business/networth/article/How-and-why-... and http://www.bloomberg.com/news/articles/2015-10-14/nyc-s-luxury-condo-king-shifts-gears-in-bid-for-chinese-buyers http://www.bloomberg.com/news/articles/2015-10-14/nyc-s-luxu... and http://www.nytimes.com/2015/02/12/nyregion/russia-time-warner-center-andrey-vavilov.html http://www.nytimes.com/2015/02/12/nyregion/russia-time-warne... and http://www.nytimes.com/2015/02/08/nyregion/stream-of-foreign-wealth-flows-to-time-warner-condos.html?_r=0 http://www.nytimes.com/2015/02/08/nyregion/stream-of-foreign... and http://www.theguardian.com/business/2015/jul/12/chinas-rich-seek-shelter-from-stock-market-storm-in-foreign-property http://www.theguardian.com/business/2015/jul/12/chinas-rich-... etc
- api 11y ago
  So basically we're paying feudal land dues to Russian oligarchs?
hdctambien 11y ago
In my neighborhood all the houses going up for sale are being bought sight unseen, over asking price, by investors who replace the carpet, paint the walls, then rent them out.
- api 11y ago
  Yes, I've seen this too, and in Orange County (SoCal) there are houses being bought like this and then nothing is done with them at all. They just sit there. I guess you can get away with it in a climate that never freezes so no issues with the pipes bursting, etc. The owners are foreign corporations, off-shore funds, etc., and a lot of Chinese. I think the only solution is some kind of state or national tariff on foreign purchases of property or a tax on property owners that do not reside in the state. Of course then they'd incorporate shell corps but it would at least reduce the phenomenon a bit.
- ap3 11y ago
  Do you think this is due tonthe low interest rates? People with money in the bank are not getting anything for it. Therefore it's better to buy a house at current low rates and make it back month by month?
pyb 11y ago
What happens is that in a low volume housing market, prices are determined by the activity of relatively few sellers and (wealthy) buyers. Prices can easily go up and up in a rarefied market.

by api 11y ago

seiji 11y ago

Popular city housing prices are global markets, not local markets. Turns out foreigners have lots of money to burn that locals can't match. Things like http://sanfrancisco.cbslocal.com/2015/04/28/realtors-printing-brochures-for-silicon-valley-homes-in-mandarin-to-attract-chinese-buyers/ http://sanfrancisco.cbslocal.com/2015/04/28/realtors-printin... and http://www.sfgate.com/business/networth/article/How-and-why-buyers-from-China-are-snatching-up-5924991.php http://www.sfgate.com/business/networth/article/How-and-why-... and http://www.bloomberg.com/news/articles/2015-10-14/nyc-s-luxury-condo-king-shifts-gears-in-bid-for-chinese-buyers http://www.bloomberg.com/news/articles/2015-10-14/nyc-s-luxu... and http://www.nytimes.com/2015/02/12/nyregion/russia-time-warner-center-andrey-vavilov.html http://www.nytimes.com/2015/02/12/nyregion/russia-time-warne... and http://www.nytimes.com/2015/02/08/nyregion/stream-of-foreign-wealth-flows-to-time-warner-condos.html?_r=0 http://www.nytimes.com/2015/02/08/nyregion/stream-of-foreign... and http://www.theguardian.com/business/2015/jul/12/chinas-rich-seek-shelter-from-stock-market-storm-in-foreign-property http://www.theguardian.com/business/2015/jul/12/chinas-rich-... etc

api 11y ago
So basically we're paying feudal land dues to Russian oligarchs?

hdctambien 11y ago

In my neighborhood all the houses going up for sale are being bought sight unseen, over asking price, by investors who replace the carpet, paint the walls, then rent them out.

api 11y ago
Yes, I've seen this too, and in Orange County (SoCal) there are houses being bought like this and then nothing is done with them at all. They just sit there. I guess you can get away with it in a climate that never freezes so no issues with the pipes bursting, etc. The owners are foreign corporations, off-shore funds, etc., and a lot of Chinese. I think the only solution is some kind of state or national tariff on foreign purchases of property or a tax on property owners that do not reside in the state. Of course then they'd incorporate shell corps but it would at least reduce the phenomenon a bit.
ap3 11y ago
Do you think this is due tonthe low interest rates? People with money in the bank are not getting anything for it. Therefore it's better to buy a house at current low rates and make it back month by month?

pyb 11y ago

What happens is that in a low volume housing market, prices are determined by the activity of relatively few sellers and (wealthy) buyers. Prices can easily go up and up in a rarefied market.