Has house flipping caused inflated prices?

[Katrina]

I like watching HGTV where people flip homes and I've been watching them for many years now. I've always been disgusted by some of them who buy a house and then sell it for a HUGE profit because in my mind they've now raised the pricing of homes in that area and people who used to be able to afford those homes can't anymore. Windy City Rehab is one of those shows that have really made it unaffordable to buy a home in Chicago.

I prefer the types of home shows where they fix up a place that's really run down and keep it in the range with the rest of the neighborhood for style, etc... But many flippers get too greedy and want to boost the sale by about a hundred thousand dollars.

Do you see where I'm going with this? Do you agree?

 

[Deleted member 49125]

I agree! When we were looking for a home these past 8 years, we didn't even have a chance to get a showing. Soon as it was listed, it was Pending.
It doesn't just raise the price of the homes in that area but makes it harder for the average person to buy a house. We were looking into one house with a Realtor & they were saying one of their colleagues had an eye on it to flip it. Of course, that colleague could bid way higher than we could.
It's ridiculous!

 

[Carlos X]

I LOVE those shows.

But my answer is... no. The inflated prices are because of the owners. You can do anything with houses. I'm not saying regulate them. I'm not saying that, I'm saying politics has something to do with it. In 2018, we were minding our business, when Gavin Newsom started to raise prices somewhere.

I would know, because I've lived in the same house since 1993. I remember, because I changed schools that year.

The landlord raised the price of the rent 2 times in the same year. Someone in government raised prices somewhere. We felt inflation before Pandemic. Yup.

California was plunged into chaos in early 2018, when we left. It was exacerbated by the 2019 Pandemic.

We moved at the wrong time because we don't know how things were gonna go. But right time because we dodged a bullet. If we had stayed there, we would've experienced everything California is experiencing right now.

What caused the chaos in SF was policies. People couldn't afford rent or home ownership in San Francisco thanks to Gavin Newsom's handwriting. Signature. SF was already crowded, but when you raise prices on things like house rentals, followed by homelessness, followed by everything else? You gonna have a problem.

EDIT in progress.

 

[fantanoice]

Wait so are these people who just buy a house and sell it for more than they bought without doing anything? That's scummy. I do like the ones where they fix run-down houses before selling them, so the extra value is at least coming from the labour.

Extreme house inflation costs where I am (Australia) is from property developers buying out all the homes to lease them out. They also get tonnes of tax breaks on all the properties (negative gearing) which means the system is ripe for exploitation. It's freaking wild, the median house price where I am in Melbourne is over $1mil.

 

[Carlos X]

Wait so are these people who just buy a house and sell it for more than they bought without doing anything? That's scummy. I do like the ones where they fix run-down houses before selling them, so the extra value is at least coming from the labour.

Extreme house inflation costs where I am (Australia) is from property developers buying out all the homes to lease them out. They also get tonnes of tax breaks on all the properties (negative gearing) which means the system is ripe for exploitation. It's freaking wild, the median house price where I am in Melbourne is over $1mil.

Yes, people buy houses and sit on them for years. In that case, I agree, regulate THOSE. Because most of those owners are "squatting" the houses in order to sell the house on a premium. There are reports of people doing this, including foreign actors. I don't mean Hollywood actors, I mean, people acting in bad faith. China is currently buying these houses on the premium in California, and most likely in Australia due to Chinese influences there. Hell, there are even Cartels in California draining the water supply to do nefarious business dealing. These cartels are also buying houses in California to carry out criminal enterprises. They introduced a new law to strip owners of their title for up to 6 months. My opinion? It should be a year or two, or understanding that the owner plans to do basically "nothing." However, if you are actively home remodeling, renovating, or building onto the property, then there should be exemptions.

There are a lot of home regulation in California, so I don't know if this law is gonna go over well for Gavin Newsom's administration.

You're talking about removing ownership for 60% of the people currently homeowners in California.

 

[Jason76]

People want to make the most money; that's only natural. Nonetheless, I think a lot of people into real estate have become greedy. Well, if someone already has a semi-rich lifestyle, why do they become obsessed with money like a Monopoly game?

One reason could be the semi-rich wanting more extravagant luxuries like more vacations. In fact, some of the semi-rich could have dug themselves into a hole and are using real estate to get out - at the cost of the economy for everyone else.