New 15% tax on foreign buyers in Vancouver sends Chinese elsewhere.

[gzz]

https://www.bloomberg.com/news/articles/2016-12-04/vancouver-housing-tax-pushes-chinese-to-1-million-seattle-homes

I think London also has a milder version of the tax, and DeBlasio in NYC ran on helping the poor get housing so could do the same.

Reading those numbers is a reminder that while local prices have climbed, it has been much less than almost every other major market.

I speculate the reason was we had a lot more developable land and softer regulations circa 2004-2009, so when the bull market resumed a lot of those projects were completed or otherwise brought to market, and we also had a bigger overhang of new condos and houses completed and sold during the peak that went through foreclosure.

[The-Shoveler]

Call it a managed economy or what ever you want, but the Canada and Chinese housing markets never really crashed.

Only the USA is stupid enough to let their housing market crash (but that’s just my opinion).

[FlyerInHi]

I would live in Canada, but it’s so f’ing cold. Toronto is the second NYC of North America, only cleaner. And Justin Trudeau is PM.

The House and Home show out of Canada is so much better than HGTV.

[spdrun]

San Diego went up much more than NYC. NYC’s market numbers are distorted by high-end condos at the top and low inventory at the bottom (but sale prices of specific co-ops, which are the majority of attached stock, didn’t actually change all that much).

[FlyerInHi]

Gzz, i read the Bloomberg article on Johor Bahru where Chinese developers are adding so much supply that prices are dropping. I’ve been there several times across from Singapore. Kinda nice.

Want to make homes affordable in California? Allow massive Chinese style condo and apatment developments. I would gladly live in one of the towers. We could bulldoze Mission Valley mall and put in 2 dozen 50 story towers.

[gzz]

Co-ops often can’t be purchased as investments and have 50% down payment requirements so are not really comparable.

NYC’s bubble peak Case Schiller was 218 and San Diego’s was 251.

SF, Portland, and Seattle are all well above their bubble peaks while we are still about 10% below.

[gzz]

A bunch of 50 floor towers in mission valley sounds like a dystopian nightmare. It isn’t walkable, it is a heat and pollution sink, no large public parks, and traffic is already very bad. Better to just keep expanding Downtown and La Jolla.

I like the idea of a few 10 floor buildings next to every new trolley stop however.

[spdrun]

Co-ops often can’t be purchased as investments and have 50% down payment requirements so are not really comparable.

True on the investment rules (pied-a-terres are especially frowned on), but 50% down payment is pretty rare. 10%-20% are the norm.

[FlyerInHi]

[quote=gzz]A bunch of 50 floor towers in mission valley sounds like a dystopian nightmare. It isn’t walkable, it is a heat and pollution sink, no large public parks, and traffic is already very bad. Better to just keep expanding Downtown and La Jolla.

I like the idea of a few 10 floor buildings next to every new trolley stop however.[/quote]

I’m a sim city builder. Just joking because it ain’t gonna happen.

We have a kneejerk reaction against big developments; but you’d be surprised. Go to Hong Kong and take the cable car to the big Buddha and you can enjoy the view of massive development, in the suburb, no less. Back in the 70s and 80s HK was a traffic nightmare, but now they have great public transport.

We can learn from China. Many of their peasants got several free modern highrise condos for their families. Many of our people in Missisispi and apalachia live in mobile homes or shacks.

I think human ingenuity can be harnessed to commoditize housing and provide a sleek modern, low carbon footprint condo with all the comforts for everyone. We can do it, we just don’t. So… housing shortages continue. It’s a rental business opportunity for you and me, so we can’t complain.

[gzz]

I loved sim city when I was a kid. The game is set up so you have no incentive to zone low density, not too much like the real world where it would get you thrown out of office to zone everything high density.

China needs to build like crazy as it is in the process of moving a billion peasants into urban areas. Prices are also much more out of whack than any other large economy compared to either rents or income. Lots of condos sell for 50x annual rent or more.

That is another reason in addition to freedom, stability and pollution to get out of China. Urban condos are priced higher than in major west coast cities but incomes are still a fraction of US incomes.

[flyer]

We’ve continued to add multi-family units to our portfolio over the years, and they have always done well. As fewer people are able to afford sfh’s going forward, it looks like the market will continue to explode per:

“Over the next decade multi-family units could be the best investment of your lifetime. They are not building enough multi-family apartment buildings to keep up with demand. On average, 770,000 new rental households have emerged each year since 2004, according to a 2015 article in The New York Times.”

[gzz]

I think in the medium to long run that SFH will outperform multifamily in San Diego.

1. The supply of SFH only goes down outside of distant suburbs as they are slowly replaced with commercial and multifamily.

2. Income inequality continues to grow, so the people with buying power will increasingly be people who prefer SFH.

Of course I am only talking about appreciation, and MF could appreciate less and still outperform because of better cash flow.

Some counter trends favoring MF are Asian buyers are growing in importance and care less about private yards than middle America transplants that historically fueled SD housing demand, as well as the trend toward older and smaller household size. This also favors two bedroom SF targeting small households.

A point favoring SFH is that you can resell to both a future owner occupant or fellow investor, but converting a MF complex to condos is a very expensive process that sometimes may not be permitted at all, so your resale market is only going to be investors.

[gzz]

Another trend favoring SFH especially is the growing work from home share. Running a home business takes a lot of space, and on top of that, if you spend your days and nights both at home, you will care more about its size and quality.

I noticed a fair number of posters here seem to work partly or entirely from home offices.

[flyer]

Good points. We concentrated on acquiring land as well as SFH investment properties for years, then diversified as other opportunities presented themselves. As you mentioned, it will be interesting to see how socioeconomic trends affect the housing market going forward.

[poorgradstudent]

[quote=gzz]I loved sim city when I was a kid. The game is set up so you have no incentive to zone low density, not too much like the real world where it would get you thrown out of office to zone everything high density.

China needs to build like crazy as it is in the process of moving a billion peasants into urban areas. Prices are also much more out of whack than any other large economy compared to either rents or income. Lots of condos sell for 50x annual rent or more.

That is another reason in addition to freedom, stability and pollution to get out of China. Urban condos are priced higher than in major west coast cities but incomes are still a fraction of US incomes.[/quote]

I must have been playing a different version of SimCity. The one I remember you wanted to pack as much density in as possible to increase your population and hit the 1m (or whatever the target was) population goal and get the reward.

[Author]

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