The actual reason why home price going to million dollar million dollar

[Carlos Ptriawan]

Here's the actual reason why average home price going way over million easily.

# of Facebook employee from 2015 to 2022: from 15k to 85k
# of Google employee from same period: 60k to 190k
Microsoft from 115k to 200k

One employee has buying power of 250k. Perperson, that's equivalent to 1.2mil max DTI buying power.
In 2015, there were 75k people only that have 1.2mil BP from two employer, but in 2023 there're 275k people. An increase of 350 percent of new buying power.

Inventory in one zip code,  even in 2015, many times are below 20 houses. 

In other word, every tech or index investor in the world is subsidizing employee of those company to gain massive buying power that they use to acquire land and houses.

Employee growth of 300% making 300% home price appreciation as result. I was astonished too that the number is matching.

[Carlos Ptriawan]

Quote from @Theresa Harris:

I'd say the reason is you've had a decade with record low interest rates which has allowed people to buy homes more easily.  You also have population growth (at least in Canada it is insane as a result of immigration and we've added 4 million people in 5 years (for a country that now has 40 million this is not sustainable).

 That's true, but not all area is moving from 300k to 1 mil in no time . 

The actual flow was something like this :
1. Gov creates near zero interest rate
2. low interest rate is boom time for stock market
3. the stock market investor is investing primarily into tech sector (50% of S&P is moved by 8 tech companies only)
4. These tech companies increases hiring by factor of 300% between 7 years
5. Compare to 2010, there're only X number of household that could afford 1 mil house per DTI. By 2022 this count is exploded to 400%.
6. Home appreciation increases by factor of 300%-400% as a result as supply is limited and number of buyers increased by three times.

 After 5 years, the appreciation and increased money supply not just affecting one area, but the entire nation too.
Now it's just matter of time our folks in Ohio going to see their 100k house would reach to 250k by 2036. 

This problem would not stop or reduce because the note is 30 years.

In essence, the goverment is throwing money to tech guy with left hand and throwing dollar with right hand for 10 years, that makes the non-tech guy suffers in long run.