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In the US and Canada, housing prices have been steadily increasing.
In Australia, it is ridiculously high.
In China, Japan, Korea, it ridiculously high as well.
Europe...same thing.
Did everyone around the world suddenly decide that homes were undervalued and started outbidding each other for a house or something?
Or is it a consequence of increasing population and lack of land?
Think of places like London where it's literally becoming too expensive to live there; I remember reading somewhere that home values are rising by about $27 a day or maybe an hour there on average, imagine those neighborhoods such as Chelsea.. Could be rising by the thousands per week.
Speculation........The age old enemy of home buyers is at work again. Most of the rise in price can be attributed to a lot of cash floating around and little investment opportunity that could possibly compete with the potential for return found in the housing market. A lot of people thought this kind of buying frenzy was a thing of the past but it isn't, investors are looking for short term rolls that offer hefty ROI. All of those properties that you see sitting vacant are being bought up by folks who dream of making one last big score (rentals & sales) in the housing market, not that the dream will actually come true but American investors were never all that keen on taking a long term view when the short term beckons with promise. Making money has little to do with morals, it's a no holds barred situation for those needing homes, and in the absence of laws we'll see more unrestrained speculation in those markets for life's necessities.
It's ironic to think that the U.S. government at one time created lending laws that essentially discouraged speculation in housing. H.U.D., V.A., G.I. and other agency's requirements favoring home owners over speculators created a huge class of home owners, now the renting class is back, minus the house they lost in years past. Speculation in housing is thought to be a good way to enrich ones self, and it does, but, on a national scale it makes the citizenry poorer. Rising rents is the real evil out there today, and that comes from the fact of these foreclosed homes being bought and used as rentals. This is the way in which money continues to make more money, and often to the detriment of the majority. Young people are once again being caught up in the greed of investment schemes. Here's a clip from the Huffington Post.
For the millions of homeowners who saw the value of their properties plunge during the housing crash, a new report out Tuesday that indicates home prices are increasing at the fastest clip on record comes as welcome news.
But to some housing experts and local-level real estate professionals, the spikes are worrisome and don't reflect a truly healthy market.
"A lot of people may be making the wrong bet right now," said Scott Samuels, a realtor in St. Petersburg, Fla., whose clients include local small investors who are betting on future rapid price increases, as well as ordinary buyers.
Originally Posted by Here's a clip from the Huffington Post.
..."A lot of people may be making the wrong bet right now," said Scott Samuels, a realtor in St. Petersburg, Fla., whose clients include local small investors who are betting on future rapid price increases, as well as ordinary buyers.
USA/World investors now understand that Gov't(s) will bail out homeowners/investors that predictably get into financial trouble--it's called MORAL HAZARD! ALL opportunistic slob-debtors need to be held accountable for 'sleeping/colluding with the enemy'.
- land is limited
- population is increasing (Exploding in developing countries)
- people have more money ( developing countries are "developing")
- As the cities develop, trains / transportation facilities are incorporated, specially in a third world country, land picks up in value.
I can personally vouch for a having witnessed a property rise in value from worth about $20k in 1998 to about $1.5M in 2013. Don't even calculate the percentage there.
That does not explain rising prices every else aroudn the world.....
I don't know about the world but I know housing deal a few very specific Eastern European countries. As an unknown in USA Russian writer said (my paraphrase), "If there are money in circulation, there are people who have lots of money". It's very true, USA, China, USSR or North Korea. So some people got money they can't possibly consume. What's next? Economics 101 says that they will invest in factories and such, but they don't, it's risky and uncertain, besides most of that money is made is privatizing formerly state properties (or it's bribes and such), so those people don't really know much about building of anything. OK, some money goes to the Western banks and off-shores to secure a landing pad in the case of revolt or something. The reminder must be kept within a country' borders but you can keep just that much under your pillow (and you don't really trust local currency or banks) so to the housing market that money goes. People (with lots of money) just buy up everything and set the astronomical (with respect to indigenous income) prices. Sooner or later peons down the food chain must pay up whatever the price is set, or proprietors just keep their housing units empty. Luckily maintenance costs are low (because of low local wages) and property taxes non existent. So housing became sorta a storage of value for the wealthy. It helps that economical activity is concentrated is a few urban centers, so if you want to join a party you must pay up a housing premium and that makes housing investments very secure. Thus housing inflation reflects all increasing concentration of wealth (and population) around the world.
So basically Economics 101 is full of BS, because people controlling a scarce resource may just wear the peons down the food chain down in the prices and wages of their choice, they just need full control and little bit of time to run up prices and run down wages. And what you gonna do about it?
Just noticed today on Trulia that in my zip code most of the new listings were REOs. So maybe the banks have started dropping them now that the prices are up a little.
- land is limited
- population is increasing (Exploding in developing countries)
- people have more money ( developing countries are "developing")
- As the cities develop, trains / transportation facilities are incorporated, specially in a third world country, land picks up in value.
I can personally vouch for a having witnessed a property rise in value from worth about $20k in 1998 to about $1.5M in 2013. Don't even calculate the percentage there.
Now this is interesting.. 20k to 1.5mill?
Where was this? Was it a property that had major improvements made to it?
A shack turned into a mansion?
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