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| 1. | Brandon Donnelly | 14M |
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| 9. | William Mougayar's Blog | 28.4K |
| 10. | Empress Trash | 19.8K |
Last year was a pretty good year for people who own a home in the US (or in Canada and many other places). Current estimates peg the total value of US residential real estate at somewhere around $40 trillion.
But of course, a lot of this real estate has debt on it. The Federal Reserve considers this in their calculation of "homeowner's equity," and so the net number, as of the end of last year, was just over $26 trillion (see above chart). This is up from about $10 trillion in 2012, following the financial crisis.
Not surprisingly, a lot of these gains are accruing to a pretty specific demographic. According to City Observatory, about 67% of residential real estate in the US is owned by non-Hispanic white people. And about 44% of owners are 55 years or older.
Oddly enough, this also happens to be a demographic group with a disproportionate say over the kind of new housing that we're allowed to build in our cities. Scarcity is a very good thing when you already have and own some.
According to this RedFin data from 2019 -- which looked at normalized sale prices and Walk Scores above 50 -- it is about 23.5% or $77,668 for 16 major US metro areas. Again, this is 2019 data and so things may have changed a bit, especially with the whole COVID thing.
It also varies by metro area in this data set. The premium in Boston, for example, is almost 30%. Whereas the premium in Oakland is actually a slight discount (-1.3%). There are going to be local conditions that play a role.
But as a whole there is an economic trend here that makes intuitive sense to me. Though it's not just a question of how pricey your home is. You also need to consider your transportation costs, the value of your time, and the health benefits of living in an environment that promotes consistent and moderate activity.
When you factor all of these things, maybe "premium" isn't the right way to look at this.
The Toronto Regional Real Estate Board released its 2020 housing figures this week. And I suspect that the numbers are probably directionally similar for many city regions around the world.
2020 saw more home sales than 2019 with 95,151 homes changing hands. This represents an 8.4% increase compared to last year. December was also a record month with 7,180 sales -- a 65% year-over-year increase!
The average selling price in the Greater Toronto Area also reached a new record of $929,699. This represents a 13.5% increase compared to last year. Once again, December was a record setting month with an average selling price of $932,222.
When you look at sales and average prices by home type, the biggest drivers were low-rise homes outside of the city. No surprises here.
Last year was a pretty good year for people who own a home in the US (or in Canada and many other places). Current estimates peg the total value of US residential real estate at somewhere around $40 trillion.
But of course, a lot of this real estate has debt on it. The Federal Reserve considers this in their calculation of "homeowner's equity," and so the net number, as of the end of last year, was just over $26 trillion (see above chart). This is up from about $10 trillion in 2012, following the financial crisis.
Not surprisingly, a lot of these gains are accruing to a pretty specific demographic. According to City Observatory, about 67% of residential real estate in the US is owned by non-Hispanic white people. And about 44% of owners are 55 years or older.
Oddly enough, this also happens to be a demographic group with a disproportionate say over the kind of new housing that we're allowed to build in our cities. Scarcity is a very good thing when you already have and own some.
According to this RedFin data from 2019 -- which looked at normalized sale prices and Walk Scores above 50 -- it is about 23.5% or $77,668 for 16 major US metro areas. Again, this is 2019 data and so things may have changed a bit, especially with the whole COVID thing.
It also varies by metro area in this data set. The premium in Boston, for example, is almost 30%. Whereas the premium in Oakland is actually a slight discount (-1.3%). There are going to be local conditions that play a role.
But as a whole there is an economic trend here that makes intuitive sense to me. Though it's not just a question of how pricey your home is. You also need to consider your transportation costs, the value of your time, and the health benefits of living in an environment that promotes consistent and moderate activity.
When you factor all of these things, maybe "premium" isn't the right way to look at this.
The Toronto Regional Real Estate Board released its 2020 housing figures this week. And I suspect that the numbers are probably directionally similar for many city regions around the world.
2020 saw more home sales than 2019 with 95,151 homes changing hands. This represents an 8.4% increase compared to last year. December was also a record month with 7,180 sales -- a 65% year-over-year increase!
The average selling price in the Greater Toronto Area also reached a new record of $929,699. This represents a 13.5% increase compared to last year. Once again, December was a record setting month with an average selling price of $932,222.
When you look at sales and average prices by home type, the biggest drivers were low-rise homes outside of the city. No surprises here.
But consider the price spread that now exists between condos and detached homes. In the City of Toronto ("416"), we're talking about an average price delta of nearly $850k. That would be an expensive home in many other markets.
Of course, condos tend to be smaller than detached homes. And so different prices per pound. But total price matters a great deal and historically a widening spread has moved many buyers over to the condo market.
I suspect we will see that happen again this year.
But consider the price spread that now exists between condos and detached homes. In the City of Toronto ("416"), we're talking about an average price delta of nearly $850k. That would be an expensive home in many other markets.
Of course, condos tend to be smaller than detached homes. And so different prices per pound. But total price matters a great deal and historically a widening spread has moved many buyers over to the condo market.
I suspect we will see that happen again this year.
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