A weekend topic starting with GM Today in Wisconsin. “While prices and competition amongst buyers are still being driven by the low-supply, high demand market, the intensity of that competition is starting to ebb just a bit, at least across Waukesha, Racine, Ozaukee, Kenosha, Walworth, and Washington counties, where Greater Milwaukee Association of Realtors Realtors work. As for those concerned that there may be a housing bubble, Mike Ruzicka, president of GMAR says those fears are unwarranted. ‘When you look at what is needed to create a bubble, it’s speculation and easy money. There is no speculation. There is inexpensive money with low rates, but to access it you have to be a good risk.’”
The International Business Times. “Home prices across the U.S. increased by roughly 25% year-over-year to an average sale price of approximately USD $386,000. Mortgage rates have also reached record lows. This is because certain protective measures introduced by the government to counteract the catastrophic effects of the deadly virus have provided a ‘blanket of economic security’ for individuals, meaning that they now feel more comfortable purchasing homes- increasing demand and propelling prices significantly.”
“Inventory numbers are also beginning to increase for the first time in several months, but this is unlikely to lead to a significant fall in house prices according to market experts- at least not for quite a while (April 2022). This is because, whilst individuals who have been in the market for a long time are beginning to lose their enthusiasm, the housing industry continues to attract a very large amount of new buyers on a regular basis.”
The Santa Barbara Independent in California. “I walked my dog past the three vacation rentals opposite my rented home. There’s a new one at the corner. I circled the block, passing the fifth and sixth, converted two years ago. What happens when your neighborhood is all vacation rentals? Major cities like London, Amsterdam, and Barcelona report the same problem.”
“In Los Angeles, 67 percent of housing is owned by investment entities. Everyone, it seems, is into profitizing homes. Even public agencies that really ought to be thinking about the constituents they serve. People in Amsterdam, being pushed out of their homes, asked, ‘Who will be here, except for investors and tourists?’”
From New Geography. “In many ways, the discussion of housing in California has devolved into a thinly-veiled propaganda war on single-family neighborhoods. So why all of this rhetoric, with loaded phrases like ‘exclusionary zoning,’ and these toxic attempts to paint single-family neighborhoods as immoral, racist, and evil? Well, for one thing, this war on single-family neighborhoods serves the larger agenda of the Urban Growth Machine: the upzoning and deregulation of single-family neighborhoods, where developers could build a lot of profitable luxury condos, offers exciting new horizons in real estate ROI.”
“What is particularly ironic about the neoliberal move to deregulate housing is that it takes urban planning away from communities and puts banks and the real estate industry in charge. And yet what the WIMBY’s conveniently forget is that the top three densest urban areas in the US are already all in CA (LA, followed by San Francisco and San Jose, in that order), and that there are 1.2 million vacant units in the state vs. a housing deficit of 820k.”
The Vancouver Sun in Canada. “Justin Trudeau has abruptly switched into the role of housing-affordability radical. All federal parties’ housing platforms require scrutiny, but here are five reasons voters are justified in feeling suspicious about the prime minister’s sudden conversion to housing activist, a persona he adopted last week to profess: ‘You shouldn’t lose a bidding war on your home to speculators. It’s time for things to change.’”
“2. The Liberals have purposely increased ‘demand’ for housing. It was more than odd when Trudeau came to Vancouver in August and said “you’ll forgive me if I don’t think about monetary policy … You’ll understand that I think about families.’ It’s impossible to believe the prime minister doesn’t comprehend that monetary policy — in the form of extremely low interest rates and his government’s rapid printing of money in response to the pandemic — have helped jack up prices.”
“3. Ottawa has done little to combat money laundering via real estate. Former Vancouver Sun reporter Sam Cooper’s book, Wilful Blindness: How A Network of Narcos, Tycoons and CCP Agent Infiltrated The West, describes how transnational multi-millionaires and criminals, rooted in China, Mexico and elsewhere, have exploited the country’s real estate, which is ‘Canada’s soft spot for economic infiltration.’ Cooper’s book describe many egregious examples of how ‘dirty’ offshore money has been transformed into ‘clean’ money through Canadian housing, especially via property flipping.”
“Housing prices across the country have jumped more than 50 per cent cent on average under Trudeau’s watch. This glaring reality was captured in a recent devastating sound bite, when a heckler at a Trudeau rally in Ontario bellowed: ‘You had six years to do something. You’ve done nothing. These houses are worth $1.5 million. Are you going to help us pay $1.5 million? Are you, buddy?’”
The South China Morning Post. “Canadas tax agency has released details of a secret investigation by its auditors linking millionaire migration and suspected tax cheating to high home prices in Vancouver, now one of the world’s most unaffordable cities, after taking five years to fulfil a freedom-of-information request to hand over the material. The response to the South China Morning Post’s request, lodged on August 30, 2016, arrived by mail this August 17, a delay that a freedom-of-information expert called a ‘tragedy’ and ‘troubling,’ given the importance of the material.”
“The documents confirm the Canada Revenue Agency (CRA) knew 25 years ago that wealth migration and foreign money were playing a vast role in Vancouver’s luxury housing market, and that government millionaire migration schemes appeared connected to systematic tax abuse, with participants declaring refugee-level incomes.”
“But the process was allowed to continue for decades before the lucrative immigration programmes behind the phenomenon were halted in recent years, for the reasons identified by auditors so long before. It is the first time the CRA has acknowledged the existence of the 1996 study, which a CRA whistle-blower said was covered up then ignored by bosses.”
“The study was marked as a confidential and a ‘protected’ document, a classification that the material is expected to ’cause injury to an individual, organisation or government’ if compromised. The research was triggered by the auditors’ concerns about tax cheating under Canada’s Immigrant Investor Programmes (IIP), the whistle-blower previously said.”
“But instead of being curtailed as a result of the auditors’ findings, the lucrative schemes would become the world’s most popular millionaire migration vehicles over the next two decades. ‘If this audit had been made available at the time, as opposed to the government keeping it secret so long … then maybe we would have had a completely different story about home prices in Vancouver than we have right now,’ said Sean Holman, Mount Royal University journalism professor.”
The Whitehorse Daily Star in Canada. “Buying a home in Whitehorse and the Yukon has become substantially more difficult to do in the last year. The latest real estate numbers show the average price of a home in the city is now just over $650,000. That marks an increase of more than $100,000 since 2020. It’s also a jump of $60,000, or 10.2 per cent, compared to the first quarter of 2021 ($590,700).”
“‘We know what the cause is. Demand is outstripping supply,’ Marc Perrault, the president of the Yukon Real Estate Board told the Star.”
A comment: ‘Oh here we go again… the story about real estate gets all the bees buzzing like they’re the only one to see honey. Real estate is up almost all over the world. All across canada this is an issue. We can blame real estate agents, but more and more there are people selling their homes through apps or privately or telling the real estate agent they want x amount so ask for that plus your commission. So it’s a bit disingenuous to say they’re the cause of the increased cost.’”
“‘Greed is at the bottom of it, the fear of missing out and the fever of wanting, nay, absolutely having a house of ones ‘dreams.’ These are fueled by foolish television playing on peoples fickle nature (you must constantly renovate and flip! To be a millionaire). They are sustained by insurance companies willing to insure homes for a market value that is based on the ‘greater fool’ syndrome. They are fed by banks who act as drug dealers with low interest financing and promises of payments for life with no debt relief in site. Real Estate agents are just the symptoms of a much bigger illness, not just in major institutions, but in every household that calculates their inheritance based off the market value of their parents hard paid for home.”
“Every household that feels they’re entitled to a $100,000 increase in value because HGTV says so. Every household that leverages itself to the extreme to get multiple homes for a chance to make a quick buck. This isn’t just a Yukon problem, it’s a world wide greed problem.’”