Lumber Prices

[stoveliker]

This took a lot of housing off the market and turned it into rentals. This has driven rental costs up

I'm not sure how that makes sense. Getting owned homes of the home-sale market and turned into rentals generally drives rental prices down as it increases the supply of rental homes.

The fact that rental homes became more expensive is *despite* the above, not because of the above.

 

[tlc1976]

Wow I hadn’t checked all winter. Last fall I got a pile of 2x4x8 for some shelves for 3 something each at the big orange store.

I just bought insulation for my attic yesterday, spent $450. Figured I’d get it before the snow goes away and building season starts. Don’t know how much it was previously. My area calls for R49 in attics. All I got is R19 in the rafters and some of it is torn and one piece is falling down. So I’m patching up the rafter stuff since it’s already there and 95% ok. And putting R13 in the knee walls and R38 on the floors. Neither of those has anything there right now so it should be a definite improvement.

 

[mcdougy]

If you can not find a house to buy, you rent. If real estate prices rise so does the rental prices.....At least that's what's happening here.

We have been seeing astronomical prices with multiple offers over asking price.....
example..... a run down 22 acre (floodplain land) house and horsebarn went on the market for 2.3 million. In 4 days on the market it had 14 offers. It sold for 3 million.
Also here a subdivision home was commonly getting bully offers, or if it went the full 5 days (yes that's how crazy it is here, only 5 days on market to submit your offer) a house would often get 30+ offers and averaging 110k over asking price. (Average sale price in my area has hit 715k for q detached house)
If the said house was bought by an investor, the rent would be on a 3 bed 3 bath home in the 3k range a month.
Its mind numbing.
As I stated earlier, we sold a house in 2017 and in 2022 it sold for twice as much....500k in 2017 - 1.1mil in 2022.and no work had been done to the home since our 2017 sale.
I'm timid to get our current property evaluated because it would probably make we want to move to a foreign country and retire at 46.
I don't want to do that, but I'm guessing our investment has close to quadrupled in the last 4 years.

 

[stoveliker]

If real estate prices rise so does the rental prices.....At least that's what's happening here.

That works like that if supply in both sectors remains the same. The fact that supply moves from one to the other sector convolutes this.

 

[ABMax24]

I'm not sure how that makes sense. Getting owned homes of the home-sale market and turned into rentals generally drives rental prices down as it increases the supply of rental homes.

The fact that rental homes became more expensive is *despite* the above, not because of the above.

That works like that if supply in both sectors remains the same. The fact that supply moves from one to the other sector convolutes this.

Not really, in my area rent is proportional to the mortgage paid on the rental property by the landowner. Competition in the ownership market drives up prices, landlords are unwilling to rent a property below the monthly payment they pay on the mortgage, which in turn drives up rental rates. People don't buy homes to rent out of the goodness of their heart, they buy and rent a house to make a profit.

Larger centers are different, but in smaller areas like mine people only rent because they are short term residents or because they simply can't get a mortgage. Its a system that is flawed, a person can pay $2,000/month in rent for years, but can't get approved for a mortgage at $1500/month.

 

[stoveliker]

Not really, in my area rent is proportional to the mortgage paid on the rental property by the landowner. Competition in the ownership market drives up prices, landlords are unwilling to rent a property below the monthly payment they pay on the mortgage, which in turn drives up rental rates. People don't buy homes to rent out of the goodness of their heart, they buy and rent a house to make a profit.

That (increases in rent) is thus only the case for properties that move from one segment of the market to the other - because the mortgage payments of existing rental properties do not change with whatever the market is doing unless they are sold to another landlord. And those that go from one landlord to another landlord will be a small fraction of the total rental inventory?

Unless landlords are ruthlessly increasing rents because their neighbors are doing so when they have to cover the higher (new) mortgage.

I agree about the system being flawed - see my last sentence above. And home prices are outrageous (mine went up by 50% in 5 years - hypothetically as I'm not selling).

 

[ABMax24]

That (increases in rent) is thus only the case for properties that move from one segment of the market to the other - because the mortgage payments of existing rental properties do not change with whatever the market is doing unless they are sold to another landlord. And those that go from one landlord to another landlord will be a small fraction of the total rental inventory?

Unless landlords are ruthlessly increasing rents because their neighbors are doing so when they have to cover the higher (new) mortgage.

I agree about the system being flawed - see my last sentence above. And home prices are outrageous (mine went up by 50% in 5 years - hypothetically as I'm not selling).

Landlords charge the going rate for rent, whether or not that is defined as ruthless is a matter of opinion, but if you were a landlord and you were charging $1500 for rent for your previous tenants and they move out, but now the going rate is $2000 what would you do? Most of us (myself included) would charge $2000.

Of course this all relies on a market where there are more tenants than available rentals, I'm sure rent is cheap in a place like Detroit, but who wants to live there?

 

[stoveliker]

lol, Detroit. (The same can be said about Long Island - though it's b/c it's too &(#) expensive here...)

But is the flux in the rental market (in either property or renters moving) so large that that actually makes such *average* price increases possible?

 

[mcdougy]

lol, Detroit. (The same can be said about Long Island - though it's b/c it's too &(#) expensive here...)

But is the flux in the rental market (in either property or renters moving) so large that that actually makes such *average* price increases possible?

Yes, that's what's happening here. The province has a 600k shortfall on housing. They expect Ontario to build at an unprecedented pace for the next 10 years to catch up to the shortfall. Again I don't understand how this will be achieved considering a new single detached home has a ticket price north of 1 million. The 45'x75' lot is selling for more than 250k then add in building costs, then profit and voila 1 million dollars for a code minimum home with property tax of 10k+ a year......

 

[firefighterjake]

Now I know I am old
what the f--- is Gaga Ball?

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For the record I had no idea what Gaga Ball was either . . .

 

[mcdougy]

London's Housing and Rental Prices Continue to Soar in Early 2022

Housing and Rental Prices rose dramatically in January 2022 in popular London, Ontario

www.rentalsfornewcomers.com

This article sums up what is going on, fairly well, in the housing market in this area.

 

[stoveliker]

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For the record I had no idea what Gaga Ball was either . . .

Me neither. I appreciate that this forum taught me a new thing. Again.

 

[mcdougy]

Builders can't keep up with London-area's population boom: census

The London area had the biggest drop among all metropolitan centres in Ontario in the number of homes per 1,000 people in the past five years, according to numbers …

lfpress.com

Here's a article today giving a take on what's going on in housing in the area.