Residential Real Estate in your city

[Innsertnamehere]

Detroit in the city was comically cheap for a while as it's population was rapidly shrinking and property taxes were insane. Both are stabilizing now, and investment has returned in a big way.

Basically the housing surplus in Detroit was so comically large in the 2000's that you could buy a house for basically nothing.

Prices have gone up a lot because they were so comically low before. Demolition has removed a huge amount of stock which used to be available and the number of homes more closely resembles demand now. Detroit is ultimately home to some of the largest companies on the planet and has a huge GDP so it makes sense that prices would be higher than more depressed economies like Cleveland or Buffalo, provided that housing stock matches demand, which wasn't the case for Detroit for decades.

Most housing investment in Detroit is still renovations as prices in the city still aren't really at the level to support new construction though. It's just a sign that the gap between housing demand and supply is shrinking. Eventually demand will fully catch up and new supply will start up in large numbers, and I think Detroit is getting close to that now, there is increasing amounts of new construction in the most desirable areas.

Vancouvers costs definitely have a bit to do with foreign capital, but it has more to do with development regulations. The only type of housing permitted to be built in large numbers is the most expensive per sf type of housing - large scale condominium projects. The average property sale price is about $930k USD - high, but not as insane as the $1.55 million USD average price for a detached property.

Vancouver's market has to be looked at not as how much it costs to buy detached, but how much it costs to buy an average property. It's just that Vancouver's land use regulations mean the average property is a 700sf condo, not a 1,500-2,000sf house like it is on most of the continent. And since space comes at such a huge premium, people are forced to spend more than normal to get it.

Basically Vancouver has decided that you can't build new units for less than $800/ft USD or so, which means that people have to scramble and completely max out their housing budgets to get even basic housing. The lack of more affordable housing construction methods drives up the cost of all housing types as all incomes get shoved down into more and more modest housing forms. Starting a successful company in Los Angeles may mean a beautiful mansion on a large lot, as there is enough supply of that housing type, but in Vancouver, which has very little of that, and which none more is permitted to be built, it means a relatively modest dwelling on a small lot.

The level of market distortion coming from a housing market where market demand for single-detached is probably similar to elsewhere in NA (i.e. 50-60% people want detached) but where only 25% of stock is that product type is profound.

Toronto is similar but on a less extreme scale - as detached is 39% of housing stock, and significant amounts of it is actually still getting built. It's still a restricted environment which results in inflated pricing compared to globally, but not as extreme. The $6.5 million house in Vancouver would probably be $3 million in Toronto.