I stayed at an Airbnb recently And I was curious what the actual value of it was so I looked it up on Zillow. Sold in 2015 for 350k, sold again in 2022 for $750k, now listed for sale 1.2 million. It’s a cabin in North Carolina, literally nothing special. I remember back before 2020 there was tons of mountain and cabins and homes and stuff like that anywhere from 2:50 to 500K. Now you won’t find a single one less than 800k…
Regular homes are just as bad. I’m seeing homes in my area that sold for around $200 to 300K in 2019, now they are 500k and above. I don’t understand how this makes any sense? Salaries were not doubled, but somehow the price of all homes are now twice as much. Is this some sort of cost fixing scheme by the real estate industry to just drive up the price of homes and double them or something? Because it doesn’t really make sense to me I guess.
This is a pretty good read and explains that it’s not a supply issue.
https://pluralistic.net/2024/10/24/i-dream-of-gini/
A paradox: in 1970, everyday Americans found it relatively easy to afford a house, and the average American house cost 5.9x the average American income. In 2024, Americans find it nearly impossible to afford a house, and the average American house costs…5.9x the average American income.
Here’s the nested article, i.e. the article your article is talking about: October 23, 2024, By Blair Fix; The American Housing Crisis: A Theft, Not a Shortage
Reads very well, really puts this in perspective. Extreme income inequality is the root of most Americans problems.
I like that the line you quoted from the article is pretty much a bait and switch.
*I kinda dig the layout of that website.
Maybe because with Airbnb instead of renting out a house for $2000 a month to someone looking to live there they can rent it out for $1000 a week to tourists and double their profit.
a home I bought in 2010 for around 300k is now 600k+, I couldn’t afford it now, even though it’s exactly the same. we upgraded and expanded the kitchen while living there, added a bathroom. so… yeah, wtf.
Greed. And the genuine belief that “the world is not enough”
- Land is scarce where people want to live, it’s always going to get more expensive as more people want to live there.
- Low interest rates caused large investment firms to seek higher rates by being rental owners instead of mortgage owners. This forced up rent to make returns on investment. As the realities of being a landlord are realized this might get better.
- New building nationally wasn’t keeping pace pre covid, but it was by a negligible amount. Post covid, new building is years behind where it needs to be.
- High interest rates now has effectively got people stuck in existing homes, because a new mortgage would be double the payment.
- Inflation happened, 20% of the increase since 2020 is just inflation.
- Short term rentals have devasted the residential market in popular tourist areas, forcing them to charge hotel taxes and follow those regulations is hopefully going to start correcting this.
I think you elude to it, but just to clarify…VC’s and companies have been buying homes like crazy, thus reducing an already anemic inventory.
Land is the only commodity that’s actual worth anything, perpetually.
True but not the cause of this massive change in real estate values.
True, it’s not the only thing, But a big part of it.
I get roasted for this every time I mention it because I think people on sites like this generally fit in this category and feel personally attacked, but I honestly believe a large part of it is from WFH becoming more widespread during COVID. People were able to leave the large cities where their jobs were all located and could move wherever they wanted to so that competition for housing drives prices way way up. The few friends I do have all work in software development and all moved during COVID away from their offices and into houses. They all had a similar story “the realtor told me any house that’s on the market for more than 5 days (that’s crazy crazy short) has a major issue, stay away from those.”
Tie that into the expansion of investment companies buying houses with the intent of renting them forever and the NIMBYism that keeps new construction from being made because “My PrOpErTy VaLuE!” and it’s just a recipe for disaster…
I hate that I’m going to be stuck renting someone’s garage or basement and paying their mortgage in rent prices for the rest of my life…
You get roasted because it’s at least not entirely making sense. Prices in cities went up a lot as well. That’s not due to people moving away. I’m staying in my apartment that’s too big for one person because I would have to pick one half the size to at least keep my rent at the same level. And I’m one of those software dudes.
Yeah, it has more to do with huge corpos like Blackrock and Zillow buying up every piece of property they can physically get their hands on than the WFH crowd ever could drive the prices naturally. Here’s a link about How wall street put homes for rent.
Yes, people from cities moving to rural towns does impact housing prices which should be a net benefit for the town as it bring in income from outside. It could be a negative when the volume of outsiders is high enough to displace long term residents, but in a vacuum people moving into an area that isn’t overpopulated already should be a good thing.
Now outsiders moving in, then buying up homes to make into BnBs, plus companies buying up homes combined is probably going to cause problems for existing residents and maybe that is what people are pushing back on. Being one part of a larger problem that wouldn’t be a problem if only their part was happening.
Yes, people from cities moving to rural towns does impact housing prices which should be a net benefit for the town as it bring in income from outside. It could be a negative when the volume of outsiders is high enough to displace long term residents, but in a vacuum people moving into an area that isn’t overpopulated already should be a good thing.
It’s absolutely a negative for those in the area. I’m literally priced out of the entirety of long Island now. There is literally nowhere I can afford that isn’t in an uninsurable flood zone and I’m too “worthless” to move. Anywhere with work for someone like me is just a shithole city so I just move from renting to renting in a worse environment. :/
TIL Long Island is a rural town.
The east end actually is considered rural, at least according to ups/postal deliveries lol
Except the rapid real estate inflation started years before COVID. WFH may play a part but it’s hardly a major reason.
In my area:
- My area is a relatively Low cost of living area surrounded by people that have money. When they want to work remote but still stay in the same state, some % come east for cheap housing. They can pay cash for houses.
- Corporations are buying houses, then renting. Less houses on the market. They also pay cash for houses.
- People with multiple houses can use the aforementioned houses to buy up more housing to rent, creating a investment loop. Its in their best interest to keep the houses as small businesses/revenue streams.
- There are apps that hook into MLS (example: https://www.mlslistings.com/more/mobile-app/) which means investors can make an offer faster than the general public or set up alerts (think stock market) that hook into the API. Ever wonder why some houses get multiple offers before or right after they are listed? This only works if the company/entity selling the property decides to add in the info into MLS and not just go with the defaults.
- More people are alive today than yesterday. They need housing. There are less houses getting built, or being built for owning. For renting: https://www.youtube.com/watch?v=mrxZqPVFTag
Source: Used to work for a company that did this sort of buy/selling of properties.
Because houses past your primary residence are not taxed enough. Houses you own should be taxed at an exponential rate. Primary residence means you live there >80pct of the year.
Is there a limit to the size of your primary residence?
One million square kilometer!
The answer is always speculation investment. People are on average richer and real estate is the only trully limited economic resource as we have limited land especially in desired locations.
Seriously lookup how much of real estate is uninhabitable.
People are richer, the tech is better and everything we know about economy would indicate that real estate should be more accessible but that’s not the case because the market is manipulated.
The best part? If you invest in a stock index you’ll almost always out do real estate ownership almost anywhere in developed world. So people are hustling this stupid game while they could just sit back and watch money do money things.
I stayed at an Airbnb …
That’s why.
What if It’s only listed as an Airbnb because they can’t sell it though? It’s been listed on the market, and it has not sold obviously. What else would you do with a home that you’re not living in and you’re actively trying to sell? That’s what’s not really making sense to me. For example say I have a vacation home in Pennsylvania or something like that. I put it on the market for the valuation that it has, 500k, hundreds of other homes just like that, no one’s buying it for months and months and months… But I’m still paying for it. What exactly is wrong with putting it on Airbnb?
At 1.2 million, it’s overpriced. They’ve likely priced it that way because it’s now an Airbnb - “look at all the income you’ll make by buying this property!” But what really changed in the two years they owned it? Did they remodel the whole place? Possibly, but probably not enough to warrant adding $550k to the price. This house is now an investment, not a place to live.
I have noticed a particular attitude with a lot of sellers, though. They think because other sellers have been having great windfalls that they can just list for any high amount and it’ll work for them too. Those are the ones that sit, and they’re usually priced at 1m or more.
The homes flying off the shelves, so to speak, are the starter homes. You have both younger and older generations fighting for the same small affordable homes, and developers generally aren’t building as many of those.
Or maybe the valuation is bullshit? Naaaah, couldnt be…
remember, the houses you see on the market are those which did not get sold.
Housing prices are based on comparable homes sold in the area, so what are you guys talking about?
I won’t argue that speculation hasn’t caused prices to rise drastically but this is an industry-wide issue not an issue with homes that “did not get sold” because they happen to be on the market at the time you viewed the available listings. You’re implying that any home on the market is priced too high simply because it’s on the market.
Quick, everybody down vote op for asking a question
The tribe says AirBnB bad therefore OP is bad and a group outsider for staying in one.
The tribe says AirBnB bad
the “tribe” here is literally everyone except for the people who parasite on it.
Nothing is /wrong/ but without airbnb you’d probably drop the price or offer other incentives to buyers. Now that you can easily just rent it, why sell it all really. You’re making more than you were not renting it so you can just hold on until the market meets you where you want it to be instead of where it’s at. This help props up the price of real estate and decreases downward corrections in housing prices.
Nothing is /wrong/
a lot is wrong. illegal hotel chain is a shady way to privatize profits and externalize the negative effects of running a hotel.
AirBnBs are one reason. My wife’s home town is trying to pass a law regarding short term rentals because close to half of the houses in town are airbnbs. A developer started to build a new housing development specifically to be bnbs.
Another reason is corporations are buying property as investments.
Also private investors from around the world are buying US property. Americans think of their homes as wealth building investments and it turns out that they are not the only ones thinking that. Housing markets elsewhere are too regulated or volatile or stagnant but snapping up US housing has in a way created its own motivation. The more people do it, the better the returns are on doing it. It’s a bubble, in other words. However that bubble has resisted popping because historically, housing has never been priced according to its true value. These days we’re seeing prices rise on things like food and housing because shit, what are you going to do, not live and eat?
My guess is that as the need for housing has increased (population growth, short term rentals taking up supply, etc), we haven’t been building the right kind of homes to fill the void.
Nobody is out there using land to build “starter homes”. It’s either large, expensive houses or apartment complexes, so the demand for home ownership is high, but the ones available to buy aren’t cheap.
It would be like if nobody made affordable cars, so most drivers were stuck either leasing or saving up for a Lamborghini. (Hyperbole, but you get the idea)
Prices are falling in Florida, and inventory is stacking up.
My home value hasn’t started falling yet, according to Zillow, but the appreciation seems to have leveled off.
Housing shortage - not building enough homes. More people. Costs to build rising.
