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Random housing thought. The high (& rising) Kgn housing costs (& developer profits) is likely to spur more & more development, which eventually should lead to a glut at those prices…Which then leads to a price fallout. Just gwaan hol' the strain people. Our time soon come…🤜🏾🤛🏾
Less polished version of this is… Rich people eat first.
It's not nice, we don't have to like it, but humans have literally never been able to figure out a system to stop it. Best we've managed is to work on widening the paths to allow everyone a greater chance to become rich…
It's not nice, we don't have to like it, but humans have literally never been able to figure out a system to stop it. Best we've managed is to work on widening the paths to allow everyone a greater chance to become rich…
Dialing it down to the Kingston housing cost example; those "higher than median income" residences are being snapped up, which means developers are making $. Development costs have not spiked the way house prices have, so they're making more money doing the same things…
Who stops doing something that keeps making more $$? Not anyone I know, and certainly not developers. They're building to meet market demand, but no one knows exactly how big that demand is. So there WILL be an overshoot, and that's where the magic starts to happen…
Suddenly a 20 residence mixed unit complex priced an average of $35mil per unit doesn't get sold out pre construction…then the next doesn't get sold out till months after construction ends…then the next doesn't get the same level of orders pre construction…
Smart developer starts noticing the trend. $ still being made, but not as quickly. Smart Dev realizes that the class of people below the one that can afford a $40m 1br is large…she also realizes that building for that larger class can be cheaper thx to economies of scale…
She builds the first, large, private (not NHT/HAJ), apartment complex priced towards that class of people. Median 1br price, $15m. Avg profit per unit, $1.5m, 200 units. Big gamble, but big profit payoff if it works…
It would require a class of people who can afford a $80-$150k monthly mortgage…which is a crapload of people…with more joining every day...
But this is just speculation and dreams for now on my part, because this developer doesn't exist and no developer needs to take on that risk right now. Why make money a harder way when the easier way (pricing for the rich) is still working so well?
So that's why the rich eat first…& we eat after. It's also why I don't get angry when I see more & more options for people richer than myself. I know that if more is happening up top, then more happens right down the line…
…and more only happens up top, when more people reach. I can't bad mind more people getting richer. Betterment is the goal. So go through rich people. Eat first. Snap up every $100m place & 100k rental. The 50k rentals going to start looking nicer & bringing more to the table…
Just a random thought. Peace.
