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.
It varies by region and country but the big underlying factor is not enough new homes are being built. It’s creating an artificial scarcity which is driving up prices. Some other factors come into play depending on where you live. For example, I’ve read in America that a lot of the homes are being bought by trust funds and big corporations that can just overbid everyone. Now there are even less viable homes to sell. Here in Canada, we have a big problem where our federal government brought in a large amount of immigrants for its Temporary Foreign Worker program and its foreign student programs which created a big spike in population, especially in the major cities. The local governments are responsible for house building and didn’t do anything about accommodating a bigger population despite them knowing it was coming.