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At some point you hit the cap of what people can possibly spend.

Depressed earnings in all but a tiny sector, and incredibly inflated house prices.

Perpetual growth is unsustainable in this manner, but is expected by investors.

I hope the market corrects. Not for my sake (I live in Sweden and have no US desires) but for those who hope to have a life and family near their ancestral home.

I am not preaching to the choir of HN, people on this site generally have it a lot better than the people who also live in the places that are huge tech hubs.

Pretty sure my ancestral home is somewhere on Mayfair. I demand access to an affordable London flat thereabouts!

Also if you're talking about the Bay Area, much of the real estate pricing there is driven by the anti-development tendencies of the owners of ancestral homes, either lining their own pockets or pushing some misguided political wheelbarrow (especially in SF). In that sense it's largely self inflicted. In other places even uneven economic growth tends to create bigger cities as the wealth spreads through the economy via construction and services and the like. It's when you try to fight the market that you get unintended consequences.

> Pretty sure my ancestral home is somewhere on Mayfair. I demand access to an affordable London flat thereabouts!

We’d better get around to ceding Manhattan back to the Lenape, too.

Maybe I chose poor words. Ancestral meaning “where my mother/father and grandparents, nieces, nefews etc live.

I come from a city in England called Coventry. Family ties are what keep most of the population in place- perhaps “familial” is a better word.

The idea of not being able to live close to family is distressing to many of my fellow city dwellers.

You can argue the semantics of how valuable such a thing is. You can even argue that the entire family unit should probably move somewhere cheaper, or that commuting to see your mum isn’t all that bad. But honestly; it would take a lot for me to revisit the idea that I am not able to live amongst my family. Even if I personally did not choose to.

> At some point you hit the cap of what people can possibly spend.

Local population can be priced out if external buyers (ie, foreign cash) can pick up the slack / drive up demand.

Foreign investment is likely why case-shiller is so high since mid-2000s.

Meh... even in super hot markets like Vancouver, foreign purchases were 10% of transactions. And a lot of it was in the very expensive houses. It’s locals who are driving most of the price appreciations (and flippers).

10% of the expensive houses sitting unoccupied also drives up prices. People are flipping moderately-priced houses because they have a chance of becoming the new expensive ones.

There aren't two different housing markets.

A lot of these same folks are abusing the primary residence exemption on capital gains by pretending to live in an income property. (The gains on your primary residence are not taxed at all in Canada)

They get their mail delivered there while renting it out to help bolster their residency claims.

So they are getting a nice tax shelter while pricing legit home buyers out of the market.

Nobody wants to actually do anything about it, so we pass laws that are easy to work around. Like a foreign buyers tax that is easily circumvented by using a shell corporation.

10% more overall transaction volume is huge, especially for something as illiquid as real estate.

Foreigners have been buying property in Vancouver for a long time. Problem is, the volume was never measured so we don’t know what the increase was.

I don't know how the housing market doesn't affect you - Stockholm is one of the most expensive real estate markets in the world. Much move expensive than most US cities.

Who said I live in Stockholm? I live in Malmö. The housing market is pretty dire in most of the westernised-European capitals.

Not sure why you’re being downvoted. Nothing you said is controversial.

Agree that incomes put an upper limit on housing prices...they can’t go up forever at the same rate as the past 5 years.

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