3 ms·
Sure, but supply is limited in part because of the wealthy folks buying properties they will not use as a residence to hedge against inflation. That real-estat
by sojournerc 5y ago
Sure, but supply is limited in part because of the wealthy folks buying properties they will not use as a residence to hedge against inflation.
That real-estate is the least risky manner to protect wealth is a result of low interests rates and inflationary monetary policy. Printing as many dollars in the last year as there were in existence before, has perturbed a "normal" real-estate market. More dollars flying around means overbidding 10% is possible, especially since the additional interest is relatively negligible (wealthy folks will still take a loan in such conditions since rates are at rock-bottom).
- jonfw 5y agoSupply is mostly limited because demand is up among millennials and material shortages have increased costs and delayed construction.
- sojournerc 5y agoI'll agree there is natural price pressure upward, but the recent acceleration is concerning, both in equities and real estate values. Millennials were buying houses before all this too (I am and have) without this level of inflated prices (depending on where you are and how "free" the market is).
- TheHypnotist 5y agoWell that's exactly it. In my area, inventory is scarce because of an influx of people who are used to paying an arm and a leg to live. In certain counties, prices are up 20-30% simply due to demand. Speaking with my own realtor, competition bidding is very common now. Rarely do you see a house go for asking or below asking.