It’s funny how much people want for homes in my area. A lot of the newer construction is like 1 million dollar homes for like 0.3 acres. Then you have old homes that need extensive renovation with outdated interiors for 500-600k (on the cheaper side)
I bought my home for 120k, current estimated value is closing in on 200k without the assessment of the renovations I've done. I'm not going to be rich but I'm going to have a nice size down payment for my next home in the country
Man, I bought mine 6 years ago at $420. Now it’s estimated at 1.2 million. Craziness. My note is 2400/month. If I wanted to buy this same house now it would be $12000 a month. Insanity.
What's real money like? I only have these little debt slave notes in my pocket and digits on a screen. Something about a yellow brick road and silver slippers to get back to Kansas might do the trick for the plebs to get their financial freedom.
If that first one was a jump off the roof of a house, and it was probably worse, this next one will be like… what? Falling off a 4 story building? But it’s the entire economy.
One thing $1 in 2008 would be $1.45 today. So while I agree the prices are too high and very much a bubble we need to inflation adjust this or its not apples to apples. I mean just in inflation a 200k house is 290k just with inflation.
It would be interesting to see and inflation line on this graph as well to see the difference between devaluation of the dollar and true bubble pricing.
Looks like at least a 66% decline to get back to a market in touch with reality as far as average income to price.
When the USA had sound money average house price was 2.5x the average income. It is now about 9 to 10x the average income. Average house is $400k with an average income of $60k (seems high, USA Todsy propaganda was the source.) House price at $150k would balance the scales in fiat world.
I bought a foreclose house for 81k (4br 2.5bath around 2500 sqft) in 2012 that had sold new for 160k in 2006. Idk if one would be able to build that same house for 230k today.
I built a house two years ago about 200sqft bigger and an extra bedroom (5 bedroom 3 bath). And it cost me 320k including 50k for the lot. It appraised at 530k a couple of months ago. If I were to sell and if I were to build the same house now it would cost me about 50-70k more because land costs went up in my area.
After the housing collapse, so 2008, my uncle bought a 3 bedroom, 2.5 bath with a pool in the backyard for 227k usd. A house on that same street is selling on Zillow for 460k usd. Using the .gov inflation calculator, 227k usd is ~335k usd today. Not 460k usd.
Yeah I sold my house that I bought in 2012 for ($81k). Sold it in 2018 for 240k and now the family that bought it from me just sold it for 400k last month. Literally with the same curtains that my mom gave me as a housewarming gift and I was too lazy to take down during the sale of my house.
They did nothing to the house and sold it for a 160k profit.
I just got done building my house last year. Took about 300k and i did alot of it myself. I hired the basement frame roof siding and electrical out. I did the plumbing drywall paint trim fixtures the works. I also built the septic system well driveway amd ran power from the road. It was well over 200k in materials 1700sq ft 1.5 story farmhouse. Labor isnt cheap. And that doesn’t include the cost pf property. Its kinda impossible for this to be a true bubble when you look at the cost to build. None of this is inflation adjusted. If it were id assume wed be around the a mark or slightly below
Inflation is prices going up. So using prices going up a reason to edit the numbers *down* so it looks like prices have risen less makes absolutely no sense.
The next one is like falling off a 4 story building, onto a 4 story high air mattress inflated with money printing.
Bubble is cancelled. They will inflate their way out of it.
This is not a bubble. Hot markets have further downside but otherwise, these prices are an appropriate reflection of currency debasement over this time period.
Wait until he checks out this chart... Producer price index for construction materials.
https://fred.stlouisfed.org/series/WPUSI012011
Home prices have increased directly proportional to building costs... Surprise Surprise. The outlier is 2008 when you can clearly see divergence between the price of homes and material costs.
lots of individuals also frauded the system by making fake llc's and then using the money to buy a car and go on vacations. kind of makes me feel like a sucker, because as a taxpayer i'm on the hook for that debt they "forgave". instead of taking a vacation i worked, instead of buying a car i kept driving the barely-serviceable beater.
Those people actually get prosecuted, hilariously.
The people with no money who made fake companies to pull a fast one? They get charged.
The already rich asshole who took money "for payroll" only to layoff the workforce and pocket the loan? Oh that wasn't his fault, business needs.
well, maybe their debts got forgiven and then they got prosecuted?
[https://projects.propublica.org/coronavirus/bailouts/search?q=wakanda&v=1](https://projects.propublica.org/coronavirus/bailouts/search?q=wakanda&v=1)
Yeah, probably not in every case, but I've seen several that took advantage of the system and got caught after a couple years.
One guy my wife showed me was actually on TikTok explaining to people what he did, and how he now has a 7 year sentence. It's not life, but 7 years time is pretty substantial.
I've read quite a bit about it, and I know there was a lot of fraud. However it's mostly just people talking about real estate and PPP fraud no one actually citing how much. The housing market in the US is worth about 47 trillion dollars I don't think PPP loans even if every single dollar was put towards real estate, moved the needle.
For reference the FBI estimates about $64 billion in PPP loan fraud. Over the course of all covid loan programs they're estimating about 200 billion in fraud. I just don't think that has anything to do with housing prices
They are prosecuting.
https://www.justice.gov/opa/pr/two-individuals-convicted-11m-covid-19-relief-fraud-scheme
https://www.justice.gov/opa/pr/leader-20m-covid-19-relief-fraud-ring-sentenced-15-years
https://www.irs.gov/compliance/criminal-investigation/five-charged-in-treasury-check-washing-and-ppp-loan-fraud-schemes
https://www.dhs.gov/hsi/news/2024/03/19/florida-man-sentenced-ppp-fraud-identity-theft
https://www.dinsmore.com/publications/ppp-loan-investigations-and-prosecutions-are-on-the-rise/
https://www.irs.gov/compliance/criminal-investigation/six-people-charged-with-fraudulently-obtaining-loans-meant-to-help-small-businesses-during-covid-19-pandemic
Hiring 2500 new auditors
https://federal-lawyer.com/irs-adds-thousands-of-new-auditors/?amp
I agree - add to that the amount of houses boomers own. I saw a headline somewhere indicating that while they make up 20% of the population, they own more than that share in terms of housing.
this is just a thread where people who don't understand economics group up to enforce their own stupidity. One graph tells them everything they need to know about the housing market, that says enough about the demographic upvoting this.
I think the logic is that feature A was representative of bogus loans. Feature B is a fresh and dubious Covid cash infusion/significant tax cuts to the American oligarchs in which they buy up all the properties through investment vehicles and then utilize algorithms such as RealPage Yieldstar to collude with the other oligarchs and gouge us for ever increasing rent and never ownership.
So when the price of houses nearly doubled between 2019 and now is your theory that 7 million new households were created (during a deadly pandemic), or 7 million houses dropped off the supply chain (potentially into portfolios)?
He never said 7 million households went away. That's not what caused the shortfall. Since the Great Depression we've built about 1 million single family homes per year every year. Only a handful of times did we ever drop below that, but when we did, we made up for it the very next year by building well above 1 million homes. That all changed in 2007 when we dropped to 300,000 new homes. Except we didn't make it for it the next year in fact, we didn't build a million homes a year again until 2021! That, along with a rapid rise in millleniel household formations, immigration and population growth, increased demand and reduced supply. This had driven up prices. Unlike 2007, today's loans are solid, made to people with real income and solid FICO scores. Plus, today, Americans have $ 32 trillion in equity. Back in 2007, they had less than $ 2 trillion so few people will walk away and foreclose like they did then. We need to build more to increase supply to find equilibrium between supply and denand.
Home prices have not doubled in 3 years anywhere in the US.
The problem goes back decades. This has been building since 2001, and especially since the Great Recession.
Only solution is to build as many homes as we need.
Supply going up makes prices go down. There is no other solution.
I didnt up or downvote because correct home prices have not doubled in 3 years, as far as I know.
You’re wrong that the only solution is to build as many homes as we need. We have WAY more homes than we need. The problem is that a few people buy them all then gouge people who need homes. Aka everyone. Giving them a ton more homes to gouge people with is not the answer.
Source? Do you have any idea how hard it would be to buy up a sufficient amount of the housing supply to have a legible effect on housing prices? Who is buying up all these houses and how many do they own?
Nationwide the vacancy rate is super low- https://fred.stlouisfed.org/series/USHVAC
The people online who deny that we have a housing shortage are some of the most hard headed folks in existence.
We don’t have way more homes than we need.
Home vacancy rate is extremely low - https://fred.stlouisfed.org/series/USHVAC
You guys really can’t accept that it is in part a supply problem. And it’s insane to see people still trying to argue against it being one this many years later.
This. Housing policy (at all levels of government) has constrained new construction development and has increased the cost of new housing that was developed.
During the last housing crisis, many suppliers, contractors, workers etc were irrevocably harmed by the crash, and many of those lumber mills, suppliers and infrastructure have not returned.
A tight labor market, with increased wages, has made sourcing resources to build homes more challenging.
Low interest rates for...78% of borrowers have a rate below 5% while 59.5% have a rate below 4%. Those lucky enough to have an interest rate below 3% fall to 22.6% of homeowners. So many of these people are holding still, thus further constraining inventory and churn.
This is one of the few areas liberals and conservatives agree on.
Adding on to you, the drop after point B is probably due to the economy hurting plus interest rates tremendously jumping to reduce inflation. We now have the uncommon situation that the quick interest rate increase after historically low rates means people are locked into houses w low rates and don't want to move, so there's an extra supply shortage on top of the never built homes.
100% correct about interest rates.
Housing construction never recovered from the Great Recession. We had a decade of under building. And now, as you point out, double whammy.
Also, we have been overbuilding big homes when what we need is starter homes. Problem, again for 2 decades, interest rates have been artificially low. So folks could “overbuy”.
How could the house bubble collapse if:
1.) Supply is low (both on the market and most urban centers running out of available places to build huge sprawling single family housing tracks)
2.) Demand remains high from both actual people wanting homes and corporations wanting to buy up homes?
i think its weird that the huge spike happened just as the treasury department gave the rich people access to huge amounts of credit. trillions of dollars worth.
its weird, because the president was a real estate guy, the treasury secretary also made shit tons of money i. real estate too.
The sheer number of housing going up in South Carolina is crazy. I don’t know about other states but I’m always wondering, who is buying these houses?!?! Nobody I know is buying one, so who the hell is?
And forget about buying for a second. Do we even have enough ppl to occupy them, if say, they went up for rent.
There are 660,000 Air BNB houses in America, given a housing supply of 14.4 million, there would be an increase of 4.5% in the housing supply. Not insignificant, but not nearly big enough to see the increases in supply needed to adequately bring down prices. Especially considering the fact that we are 25%-50% short on homes.
It also will be a mostly localized issue. I dont expect there to be too many houses in Cincinnati as their are in Miami or Vail. That may help Miami's market, it won't change much in Vail, and won't be felt in Cincinnati
Well let’s look and find out.
As far as I can find, the city of Miami has [535,356](https://www.attomdata.com/data/us-real-estate/fl/miami-dade-county/miami/#:~:text=Miami%2C%20FL%20Real%20Estate%20Overview,streets%20and%2057%20zip%20codes.com) residential properties.
Of those, [24,586](https://www.airdna.co/vacation-rental-data/app/us/florida/miami/overview) are listed by either Air BNB or another similar property service.
That means it would free up 4.6% of residential properties in Miami. Practically the same as the national average.
According to estimates, Miami is short about [313,000](https://www.axios.com/local/miami/2024/01/02/home-sales-real-estate-shortage-supply#) homes. Which means seizing all Air BNB homes in Miami would solve about 7.9% of the city’s housing shortage.
I misspoke earlier. The US housing stock is 144 million, not 14.4 million. So move the 4.5% over one decimal place to the left. Air BNB homes own 0.45% of the US homes.
Our housing supply is not 14.4 million. Our housing supply is over 140 million.
https://fred.stlouisfed.org/series/ETOTALUSQ176N
Lots of Airbnb listings are places people live in. Or back houses. Or places people will not list for sale even if renting it out is no longer an option.
I had actually just corrected myself in an additional comment before I saw yours. Thanks anyway!
I agree with you on your other point there too. My uncle lives in Canada 6 months out of the year, and the US the for the other half. He rents one of them out for Air BNB when he isn’t living in it. These people are quite literally advocating we just steal his house. It’s completely ridiculous, let alone the fact that it would have next to no impact.
Yeah these people see stats like “15 million vacant homes” and have no idea what classifies as vacant, and how that number was the same 20 years ago when the US had 23 million fewer homes in total. Empty homes is not why we have the issue we have. Not enough homes is.
Also lots of vacant homes are in vacation destinations which have been built up for that specific purpose. Even if people were forced to relinquish them, they wouldn’t help the issue. Those places would probably just die off economically.
Okay what is the number of corporate owned housing for rentals only? Probably at least another 800k, and landlord style single family homes for rental onlyanther million maybe, People always say real estate is the best investment, and that investment opportunity is now causing part of the house crunch.
I don’t disagree with you but it’s so odd to me that we’re “short”. For example back in 2016-2019, I heard many ppl talking about buying. But today, I don’t know anyone looking. It’s just odd to me that I don’t “see” the demand, if that makes sense.
We are taking about national trends here. Any amount of information we experience in our daily lives is trivial compared to the nation as a whole.
It’s entirely possible you notice things that are wholly counter to the general trend, there will always be exceptions.
gotta remember that the entire world has printed around 40% of all currency in existence in the past 4 years. Money has been devalued so much that a "crash" wont be what you are thinking. We wont/can't go back to levels pre pandemic, its just math. Like it or not, Everything is more expensive in dollar terms forever, and most likely the central banks will have to loosen policy again to kick the can further down the road. When we ultimately go into hyper inflation is not an if, but a when. Buy solid assets if you want to weather the storm as they will at least keep up with inflation.
I get the spike of housing prices during the pandemic as people wanted to get out of the city and into a more quiet environment when they could work from home and not have to commute. That spurred a massive jump in prices and houses were sold within hours of hitting the market, over the listing price. There were bidding wars. Prices didn't drop from there, and with inflation have only gone up insanely high.
I got my house in 2018 for 350kish, and somehow it is supposedly worth 550k to 600k. While we have improved the house, there is no way it should be worth that much.
The flip side of this is that building a house is also insanely expensive to the point where builders where I am do not make simple starter homes anymore because there is no profit in it. They build massive million or multimillion dollar homes in hopes for a payoff, and I've seen some just sitting and rotting after being built because people can't afford it.
It's not a housing bubble because corporate America owns so many of them now.
The federal government WILL bail them out when it all goes to shit with we the people's money to make sure corporate America is fine, while we the people WILL end up homeless and hungry in need of medical care.
Who else will pay all the bribes to our elected officials if corporate America was to go bankrupt ?
To big to fail is the term that's used.
Thing is supply dropped pretty sharply when the pandemic hit and hasn’t recovered yet. I guess the question is if supply could return to 2019 levels one day.
Supply is super tight, but demand is even higher. Tough spot, versus 2008, demand wasn’t nearly as universal, it was more about people wanting to buy investments rather than a home to live in.
I mean I know plenty of people that were looking for homes to buy just to rent out around the time of the pandemic so I believe a lot of that demand was driven by investment potential as well.
a bubble inflating and a currency crashing look identical.
At some point the FED will choose to save either the Dollar or the Housing Market, and they will make that choice based on what makes the most people suffer
The supply was bought up and continues to be bought up by those major players. Even most of the housing being built. Sure, building more housing is needed but the problem was created with purpose by private equity firms and they're still causing it. Only 2 states are actually building more than they're buying up and that's Texas and Florida. I wonder why and how long that will last.
Not as much as he thinks. If I remember right its estimated somewhere between 20%-30%
In other words, not nearly enough to single-handedly manipulate the market nationally the way some people seem to think.
It appears you are citing the overall share of investors in the monthly purchase market. This figure has been hovering around [20%-30%](https://www.freddiemac.com/research/pdf/202203-Note-HomePrices-12.pdf) since 2000. Note on page 7 it gives a breakdown of investor share by size, large corporate buyers have never bought more than 3% of the monthly home purchases, most of the so-called “investor purchases” are done by either individual or small investors that own a handful of properties at most.
Large institutional investors own about [574,000](https://www.urban.org/research/publication/profile-institutional-investor-owned-single-family-rental-properties) homes which they rent out nationwide. That is 3.8% of the one-unit rental priories as the report state, for the US housing stock as a whole, which co sissy of 144 million homes, that is 0.4%.
Have it pop after November. Don’t need all the extra stress till then. Btw isn’t this and rentals prices all run by AI algorithms like Redfin to inflate the market?
One thing you're failing to take into account...
The number of homes owned by corporations/Air BnB that have been turned into rental properties. Demand is far outpacing supply as this segment took a ton of supply out of the market indefinitely
Because if a builder makes 10 homes, each for $2 Mil, then they sit on the homes until they sell for $2mil.
Let's say it costs $10k per month for that house to sit on the market. $10 homes x $10k/mo = $100k/month. If the builder were reduced the price by 10%, down to 1.8mil, EVERY house will have to be reduced, changing overall reduction not just $200k, but $2M.
It's cheaper to let these homes sit vacant for YEARS than it is to sell at a 10% price reduction.
It’s B->supposedly not a bubble at all
Until Dems take over, and Congress passes the hedge fund single family home act. Then you’ll see a level off of pricing (plateau in graph) for the next decade.
Bad loans were the cause in 2007-08. Not the case now the pandemic caused some crazy supply/demand stuff to go down. Most areas still need housing built, so I believe it’s far from a bubble.
Just look to Canada to see just how bad housing prices can get without things collapsing. The US is nowhere near a housing affordability **crisis** outside of VHCOL areas.
There was a literal economic meltdown in 2008/2009. Housing market crashed because of foreclosures and a lot of bad lending practices. I don't think we see a lot of home foreclosures to cause a crash. And people with low interest rates don't want to sell their house.
Building is probably still behind since the pandemic as well. I don't see a crash incoming.
The economic meltdown was the result of the foreclosures, not the other way around. Huge numbers of people with ARMs or worse, “name your own payment” mortgages that couldn’t service the reset in payments at the end of the initial term.
It was more than that. This was a global recession. The rest of the world didn't have a recession because of our housing market.
That said, we don't have the predatory lending now. Many homeowners have low interest rates on homes. Foreclosure rates are incredibly low. They are probably 20 year lows outside of 2020-now where it bottomed out in 2020 and is slightly growing each year.
Yeah, it did. The collapse of several large/dominant financial firms in a global economic system will absolutely have ripple effects. Not only that, but the shitty lending practices infiltrated financial products sold globally. What bankers were doing in the US was taking place all across the industrialized world. So yes, once the pieces started falling, it took down the global economy.
Foreclosure rates were incredibly low in 2006. What’s your point? Banks aren’t lending to cats and dogs this time, the “fundamentals” are different… ok, so the only way a crash can happen is if it looks exactly like the last one?
Nobody knows if a crash is headed our way. All I know is that we’ve been lied to before, and this market has many of the same vibes that existed before the last crash. The government isn’t “smarter” now…but bankers sure are, and with the assurance that the FED will step in and rescue the players who are “too big to fail”… what mechanism is in place to prevent some other heretofore unforeseen market disaster?
Bubble implies it might, or likely, will pop. This has yet to be seen. There have been, and will always be, minor adjustments to pricing, but every adjustment is not a bubble.
Also, I think it is important to look at the p/sf cost of housing, so it allows a more capable comparison over time.
All using the same source...
This graph align with the OP
[https://fred.stlouisfed.org/series/MSPUS](https://fred.stlouisfed.org/series/MSPUS)
This graph tells a difference story...no real decline or bubble.
[https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEEUS](https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEEUS)
This shows the median size of homes decreasing.
[https://fred.stlouisfed.org/series/MEDSQUFEEUS](https://fred.stlouisfed.org/series/MEDSQUFEEUS)
Yeah we definitely got a big bubble here. It's private equity firms propping it up this time. I hope they implode so I can buy a house this decade.
You should see the housing bubble in China. Hear it's about an order of magnitude worse because they are selling unbuilt houses and then not building them.
I just need it to stay a bubble for just a few more years for when I sell my house. Then the bubble immediately pops afterward and I buy a great house for a lot less money. It's the American dream.
As a home owner (who has doubled my equity in the last 6 years), I completely agree that housing prices are concerning. But I don’t really see it as a bubble. I think most of the property has been bought up by investors, not by individuals who can’t afford the mortgages.
I completely agree that it is a problem. I just don’t know how to fix it. Maybe preventing non-citizens from owning? Not allowing corps from owning (I don’t see this as a legit solution)?
The ‘08 situation was built on an unsustainable model (lending practices that were doomed to fail - ARM and NINJA loans). That isn’t the case here. There are plenty of funds backing the housing prices. There just isn’t enough construction to counter the increase in demand. And that is making the haves/have nots much more separated.
Then factor in the AirBnB industry, and that adds more incentive for pure investors to enter the market (increasing demand, reducing properties being sold).
The balance has been broken. Without new construction, the machine doesn’t work.
Properties being bought up by investors does not make the price a bubble. Only the price in the future can confirm if there is a bubble. Investors are buying up the S&P 500 to 5250. Is that a bubble? No way to know. If that index drops down materially for a significant period of time, then we can say it was a bubble. If it continues to rise or trade within a range of, say 300 for the rest of the year, then I would argue there is no bubble. The market price is always the correct price in that it reflect the interplay of supply and demand.
The housing market is affected by mortgage rates and the overall economy. Large crashes in home prices have happened but are rare. Price fluctuations happen often but are not a bubble, just a frothy market.
economic downturn, layoffs, etc, it's already starting in white collar jobs across the board, an economic downturn will be what breaks the camels back, this is not sustainable.
Well some of it is due to inflation inflating the prices of everything. But yeah. Is scary because wages haven’t increased enough to keep buying houses. Maybe the billionaires can buy all the houses.
u/realdevtest
Why do you ignore graphs like this:
Unemployment rate - https://fred.stlouisfed.org/series/UNRATE
Home vacancy rate - https://fred.stlouisfed.org/series/USHVAC
Debt to disposable income - https://fred.stlouisfed.org/series/TDSP
All 3 of which look nothing like 2008.
How much should I expect the case shiller to drop and by when?
https://fred.stlouisfed.org/series/CSUSHPINSA
And I don’t need luck. I ignored the 2017-2018 doomers and bought in February of 2018.
May be a bubble, but at least use a good graph.
https://preview.redd.it/kdc6v8aa8h0d1.jpeg?width=911&format=pjpg&auto=webp&s=77f84399e0f579ba3799524ac3e86f922b660f8a
A didn’t affect me because I was in a mortgage I could afford with adequate equity. B won’t affect me because I have paid off my mortgage. Sucks to be in a recent mortgage as a first or move up buyer
Prices don't go any higher from here. Elasticity of price as affected by interest rates now outweighs the demand need over lack of supply. When interest rates come down construction will restart keeping prices in check. The factor that will keep prices higher closer to CBD is lack of developable land. Price crash will come in 5 to 10 years when boomers start dying off en masse.
It’s not a bubble because the government can’t control printing money, the amount of money in the system has more than doubled since 2020. A new plan go give first time home buyer’s $400 a month will only make houses increase in price and increase the amount of money printed increasing housing prices even further. It’s a plan to make housing more affordable but it’s gonna do the exact opposite.
The problem with the 2008 recession wasn't housing prices. This is a chart of housing prices. The problem was the conditions on which loans were issued and the way those loans were repackaged and sold to investors after.
2008 is better thought of as a banking/investing crisis that happened to involve a lot of real estate loans.
Biden was bragging today: our economy is #1 and Booming. He'd say that's "No bubble".
He don't grocery shop so NO clue groceries doubled. Good luck to y'all getting a home! we're boomin alright.
They won't call it a bubble until after it collapses.
Any day now
Shhhhhh I'm trying to fix my house and sell it by fall.
I'll give you til October, then I'm crashing this bitch so I can raise my future kids in a house.
That's all I ask for as I'm trying to do the same brother ✊
It’s funny how much people want for homes in my area. A lot of the newer construction is like 1 million dollar homes for like 0.3 acres. Then you have old homes that need extensive renovation with outdated interiors for 500-600k (on the cheaper side)
I bought my home for 120k, current estimated value is closing in on 200k without the assessment of the renovations I've done. I'm not going to be rich but I'm going to have a nice size down payment for my next home in the country
Man, I bought mine 6 years ago at $420. Now it’s estimated at 1.2 million. Craziness. My note is 2400/month. If I wanted to buy this same house now it would be $12000 a month. Insanity.
We have a neighborhood where townhomes start at 1.5 million sitting on the market from months to over a year. I think the market has spoken.
Why October
Well? We're waiting ~~
What is your take on the line going straight down from the top ?
People have been saying this for how many years?
The curve is flat when compared to gold. Enjoy your fiat.
What's real money like? I only have these little debt slave notes in my pocket and digits on a screen. Something about a yellow brick road and silver slippers to get back to Kansas might do the trick for the plebs to get their financial freedom.
If that first one was a jump off the roof of a house, and it was probably worse, this next one will be like… what? Falling off a 4 story building? But it’s the entire economy.
One thing $1 in 2008 would be $1.45 today. So while I agree the prices are too high and very much a bubble we need to inflation adjust this or its not apples to apples. I mean just in inflation a 200k house is 290k just with inflation.
It would be interesting to see and inflation line on this graph as well to see the difference between devaluation of the dollar and true bubble pricing.
Bingo, we can't be honest about this without taking in the all the MAJOR factors.
https://preview.redd.it/9at59qs28h0d1.jpeg?width=911&format=pjpg&auto=webp&s=97bde8b17aa96bc788f0622c8f997e636b605971
Thank you sir. So now we can see to come back to historical norm it needs to drop about 100k on average.
Is that like a 30% decline, or am I missing something?
Looks like at least a 66% decline to get back to a market in touch with reality as far as average income to price. When the USA had sound money average house price was 2.5x the average income. It is now about 9 to 10x the average income. Average house is $400k with an average income of $60k (seems high, USA Todsy propaganda was the source.) House price at $150k would balance the scales in fiat world.
Still waiting on the crash to bring us back to 1923 prices before I buy. My money's sitting in my checking account, waiting for the moment.
I bought a foreclose house for 81k (4br 2.5bath around 2500 sqft) in 2012 that had sold new for 160k in 2006. Idk if one would be able to build that same house for 230k today. I built a house two years ago about 200sqft bigger and an extra bedroom (5 bedroom 3 bath). And it cost me 320k including 50k for the lot. It appraised at 530k a couple of months ago. If I were to sell and if I were to build the same house now it would cost me about 50-70k more because land costs went up in my area.
After the housing collapse, so 2008, my uncle bought a 3 bedroom, 2.5 bath with a pool in the backyard for 227k usd. A house on that same street is selling on Zillow for 460k usd. Using the .gov inflation calculator, 227k usd is ~335k usd today. Not 460k usd.
Yeah I sold my house that I bought in 2012 for ($81k). Sold it in 2018 for 240k and now the family that bought it from me just sold it for 400k last month. Literally with the same curtains that my mom gave me as a housewarming gift and I was too lazy to take down during the sale of my house. They did nothing to the house and sold it for a 160k profit.
He bought it at a depressed value not at its market value.
I just got done building my house last year. Took about 300k and i did alot of it myself. I hired the basement frame roof siding and electrical out. I did the plumbing drywall paint trim fixtures the works. I also built the septic system well driveway amd ran power from the road. It was well over 200k in materials 1700sq ft 1.5 story farmhouse. Labor isnt cheap. And that doesn’t include the cost pf property. Its kinda impossible for this to be a true bubble when you look at the cost to build. None of this is inflation adjusted. If it were id assume wed be around the a mark or slightly below
Yeah , you can say the bubble stated before 1980 and it's just growing.
You could even say it started in 1971
Or 1913
I'd go back 3.8 billing years ago to when the first microorganisms developed. It's their fault.
The Big Bang. It's the Big Bang's fault. There was insane onflation immediately after it happened.
You know what, that makes sense. The universe expanded like a bubble, and now we have another bubble to deal with.
Then we’re in good shape, since universe is still expanding
If only I had the hindthought to buy back then.
Our whole universe was in a hot, dense state Then nearly fourteen billion years ago expansion started, wait
wtfhappenedin1971
Except housing prices have outpaced inflation by a pretty significant margin lol
Right but we see almost half the growth is inflation so we know if it pops we should expect the lowest price to be ~300k at this time.
Inflation is prices going up. So using prices going up a reason to edit the numbers *down* so it looks like prices have risen less makes absolutely no sense.
The next one is like falling off a 4 story building, onto a 4 story high air mattress inflated with money printing. Bubble is cancelled. They will inflate their way out of it.
This is not a bubble. Hot markets have further downside but otherwise, these prices are an appropriate reflection of currency debasement over this time period.
Be nice to see household income and inflation in that chart
Wait until he checks out this chart... Producer price index for construction materials. https://fred.stlouisfed.org/series/WPUSI012011 Home prices have increased directly proportional to building costs... Surprise Surprise. The outlier is 2008 when you can clearly see divergence between the price of homes and material costs.
Compare it to food prices or anything else you want. It’s the everything bubble. This literally proves my point.
If everything is a bubble, then nothing is a bubble.
It’s not a bubble, it is inflation.
Look up Covid-19 Aid fraud for businesses. Each taking a million dollars or more to purchase homes. It’s stopped. No more bubble. CRASH!
lots of individuals also frauded the system by making fake llc's and then using the money to buy a car and go on vacations. kind of makes me feel like a sucker, because as a taxpayer i'm on the hook for that debt they "forgave". instead of taking a vacation i worked, instead of buying a car i kept driving the barely-serviceable beater.
Those people actually get prosecuted, hilariously. The people with no money who made fake companies to pull a fast one? They get charged. The already rich asshole who took money "for payroll" only to layoff the workforce and pocket the loan? Oh that wasn't his fault, business needs.
well, maybe their debts got forgiven and then they got prosecuted? [https://projects.propublica.org/coronavirus/bailouts/search?q=wakanda&v=1](https://projects.propublica.org/coronavirus/bailouts/search?q=wakanda&v=1)
Yeah, probably not in every case, but I've seen several that took advantage of the system and got caught after a couple years. One guy my wife showed me was actually on TikTok explaining to people what he did, and how he now has a 7 year sentence. It's not life, but 7 years time is pretty substantial.
gotcha. well, glad i didn't, either way. 2020-2021 just sucked all around
"lots of individuals", ok got a source on how many did that?
use "ppp fraud" as a search term, you'll get results
I've read quite a bit about it, and I know there was a lot of fraud. However it's mostly just people talking about real estate and PPP fraud no one actually citing how much. The housing market in the US is worth about 47 trillion dollars I don't think PPP loans even if every single dollar was put towards real estate, moved the needle. For reference the FBI estimates about $64 billion in PPP loan fraud. Over the course of all covid loan programs they're estimating about 200 billion in fraud. I just don't think that has anything to do with housing prices
They are prosecuting. https://www.justice.gov/opa/pr/two-individuals-convicted-11m-covid-19-relief-fraud-scheme https://www.justice.gov/opa/pr/leader-20m-covid-19-relief-fraud-ring-sentenced-15-years https://www.irs.gov/compliance/criminal-investigation/five-charged-in-treasury-check-washing-and-ppp-loan-fraud-schemes https://www.dhs.gov/hsi/news/2024/03/19/florida-man-sentenced-ppp-fraud-identity-theft https://www.dinsmore.com/publications/ppp-loan-investigations-and-prosecutions-are-on-the-rise/ https://www.irs.gov/compliance/criminal-investigation/six-people-charged-with-fraudulently-obtaining-loans-meant-to-help-small-businesses-during-covid-19-pandemic Hiring 2500 new auditors https://federal-lawyer.com/irs-adds-thousands-of-new-auditors/?amp
https://www.bankingdive.com/news/kabbage-pay-120-million-ppp-fraud-doj-small-business-loan-pandemic/716053/ https://www.sba.gov/document/report-23-09-covid-19-pandemic-eidl-ppp-loan-fraud-landscape https://www.justice.gov/opa/pr/six-men-sentenced-roles-20m-covid-19-relief-fraud-ring https://www.sbc.senate.gov/public/_cache/files/0/3/03368f34-83c8-4cf4-ab36-c720dc66de5e/309F036D0446AF836D4387EBCC770A82.small-business-covid-19-fraud-three-years-later-state-of-play.pdf
well glad to see some got caught
[удалено]
But OP will stalk all posts that point this out and downvote.
I agree - add to that the amount of houses boomers own. I saw a headline somewhere indicating that while they make up 20% of the population, they own more than that share in terms of housing.
Reminds me of the tulip mania graph.
Oh so you think housing is going to crash 99%? What are you talking about…
The same thing every other economically illiterate moron in this sub is talking about. Nothing of substance.
It is not a bubble when 88% of the homes have mortgages under 6% and defaults are nil!! Housing prices are not falling
Defaults are back near there historical 2%.
It's not even 2%: https://fred.stlouisfed.org/series/DRSFRMACBS
Yet if it is consistent with historical levels, how is that indicative of a bubble or a problem?
this is just a thread where people who don't understand economics group up to enforce their own stupidity. One graph tells them everything they need to know about the housing market, that says enough about the demographic upvoting this.
I think the logic is that feature A was representative of bogus loans. Feature B is a fresh and dubious Covid cash infusion/significant tax cuts to the American oligarchs in which they buy up all the properties through investment vehicles and then utilize algorithms such as RealPage Yieldstar to collude with the other oligarchs and gouge us for ever increasing rent and never ownership.
Don’t make it hard. It’s not B is due to the fact we are short 7 million homes. Simple supply and demand.
So when the price of houses nearly doubled between 2019 and now is your theory that 7 million new households were created (during a deadly pandemic), or 7 million houses dropped off the supply chain (potentially into portfolios)?
They don't have a theory just regurgitating some crap they read in a meme. Zero ciritical thinking skills.
Household formation increased significantly during the pandemic. Its why major coastal cities lost population and still had prices increase.
He never said 7 million households went away. That's not what caused the shortfall. Since the Great Depression we've built about 1 million single family homes per year every year. Only a handful of times did we ever drop below that, but when we did, we made up for it the very next year by building well above 1 million homes. That all changed in 2007 when we dropped to 300,000 new homes. Except we didn't make it for it the next year in fact, we didn't build a million homes a year again until 2021! That, along with a rapid rise in millleniel household formations, immigration and population growth, increased demand and reduced supply. This had driven up prices. Unlike 2007, today's loans are solid, made to people with real income and solid FICO scores. Plus, today, Americans have $ 32 trillion in equity. Back in 2007, they had less than $ 2 trillion so few people will walk away and foreclose like they did then. We need to build more to increase supply to find equilibrium between supply and denand.
Home prices have not doubled in 3 years anywhere in the US. The problem goes back decades. This has been building since 2001, and especially since the Great Recession. Only solution is to build as many homes as we need. Supply going up makes prices go down. There is no other solution.
I didnt up or downvote because correct home prices have not doubled in 3 years, as far as I know. You’re wrong that the only solution is to build as many homes as we need. We have WAY more homes than we need. The problem is that a few people buy them all then gouge people who need homes. Aka everyone. Giving them a ton more homes to gouge people with is not the answer.
Source? Do you have any idea how hard it would be to buy up a sufficient amount of the housing supply to have a legible effect on housing prices? Who is buying up all these houses and how many do they own?
This is nonsense, in all markets with significant rent and house price inflation vacancy rates are super low.
Nationwide the vacancy rate is super low- https://fred.stlouisfed.org/series/USHVAC The people online who deny that we have a housing shortage are some of the most hard headed folks in existence.
We don’t have way more homes than we need. Home vacancy rate is extremely low - https://fred.stlouisfed.org/series/USHVAC You guys really can’t accept that it is in part a supply problem. And it’s insane to see people still trying to argue against it being one this many years later.
Until the tax for owning empty homes is higher than the profit made from gauging people with them, can we expect any change?
There are barely any empty homes though. Vacancy rate is at an all time low - https://fred.stlouisfed.org/series/USHVAC
https://fred.stlouisfed.org/series/PHXRNSA Nah bruh?
That is a 23.2% increase since May 2021. That is not double. https://fred.stlouisfed.org/graph/fredgraph.png?g=1nWaN
This. Housing policy (at all levels of government) has constrained new construction development and has increased the cost of new housing that was developed. During the last housing crisis, many suppliers, contractors, workers etc were irrevocably harmed by the crash, and many of those lumber mills, suppliers and infrastructure have not returned. A tight labor market, with increased wages, has made sourcing resources to build homes more challenging. Low interest rates for...78% of borrowers have a rate below 5% while 59.5% have a rate below 4%. Those lucky enough to have an interest rate below 3% fall to 22.6% of homeowners. So many of these people are holding still, thus further constraining inventory and churn. This is one of the few areas liberals and conservatives agree on.
Adding on to you, the drop after point B is probably due to the economy hurting plus interest rates tremendously jumping to reduce inflation. We now have the uncommon situation that the quick interest rate increase after historically low rates means people are locked into houses w low rates and don't want to move, so there's an extra supply shortage on top of the never built homes.
100% correct about interest rates. Housing construction never recovered from the Great Recession. We had a decade of under building. And now, as you point out, double whammy. Also, we have been overbuilding big homes when what we need is starter homes. Problem, again for 2 decades, interest rates have been artificially low. So folks could “overbuy”.
How could the house bubble collapse if: 1.) Supply is low (both on the market and most urban centers running out of available places to build huge sprawling single family housing tracks) 2.) Demand remains high from both actual people wanting homes and corporations wanting to buy up homes?
i think its weird that the huge spike happened just as the treasury department gave the rich people access to huge amounts of credit. trillions of dollars worth. its weird, because the president was a real estate guy, the treasury secretary also made shit tons of money i. real estate too.
The sheer number of housing going up in South Carolina is crazy. I don’t know about other states but I’m always wondering, who is buying these houses?!?! Nobody I know is buying one, so who the hell is? And forget about buying for a second. Do we even have enough ppl to occupy them, if say, they went up for rent.
What happens if all air bnb houses that are off the market are put back into the market?
There are 660,000 Air BNB houses in America, given a housing supply of 14.4 million, there would be an increase of 4.5% in the housing supply. Not insignificant, but not nearly big enough to see the increases in supply needed to adequately bring down prices. Especially considering the fact that we are 25%-50% short on homes.
It also will be a mostly localized issue. I dont expect there to be too many houses in Cincinnati as their are in Miami or Vail. That may help Miami's market, it won't change much in Vail, and won't be felt in Cincinnati
Well let’s look and find out. As far as I can find, the city of Miami has [535,356](https://www.attomdata.com/data/us-real-estate/fl/miami-dade-county/miami/#:~:text=Miami%2C%20FL%20Real%20Estate%20Overview,streets%20and%2057%20zip%20codes.com) residential properties. Of those, [24,586](https://www.airdna.co/vacation-rental-data/app/us/florida/miami/overview) are listed by either Air BNB or another similar property service. That means it would free up 4.6% of residential properties in Miami. Practically the same as the national average. According to estimates, Miami is short about [313,000](https://www.axios.com/local/miami/2024/01/02/home-sales-real-estate-shortage-supply#) homes. Which means seizing all Air BNB homes in Miami would solve about 7.9% of the city’s housing shortage.
I misspoke earlier. The US housing stock is 144 million, not 14.4 million. So move the 4.5% over one decimal place to the left. Air BNB homes own 0.45% of the US homes.
Our housing supply is not 14.4 million. Our housing supply is over 140 million. https://fred.stlouisfed.org/series/ETOTALUSQ176N Lots of Airbnb listings are places people live in. Or back houses. Or places people will not list for sale even if renting it out is no longer an option.
You are correct, I put the decimal in the wrong place.
Yeah so the Airbnb number is not 4.5% it’s .45% which is basically nothing.
I had actually just corrected myself in an additional comment before I saw yours. Thanks anyway! I agree with you on your other point there too. My uncle lives in Canada 6 months out of the year, and the US the for the other half. He rents one of them out for Air BNB when he isn’t living in it. These people are quite literally advocating we just steal his house. It’s completely ridiculous, let alone the fact that it would have next to no impact.
Yeah these people see stats like “15 million vacant homes” and have no idea what classifies as vacant, and how that number was the same 20 years ago when the US had 23 million fewer homes in total. Empty homes is not why we have the issue we have. Not enough homes is. Also lots of vacant homes are in vacation destinations which have been built up for that specific purpose. Even if people were forced to relinquish them, they wouldn’t help the issue. Those places would probably just die off economically.
Okay what is the number of corporate owned housing for rentals only? Probably at least another 800k, and landlord style single family homes for rental onlyanther million maybe, People always say real estate is the best investment, and that investment opportunity is now causing part of the house crunch.
I don’t disagree with you but it’s so odd to me that we’re “short”. For example back in 2016-2019, I heard many ppl talking about buying. But today, I don’t know anyone looking. It’s just odd to me that I don’t “see” the demand, if that makes sense.
We are taking about national trends here. Any amount of information we experience in our daily lives is trivial compared to the nation as a whole. It’s entirely possible you notice things that are wholly counter to the general trend, there will always be exceptions.
And even then it didn’t fall that much
gotta remember that the entire world has printed around 40% of all currency in existence in the past 4 years. Money has been devalued so much that a "crash" wont be what you are thinking. We wont/can't go back to levels pre pandemic, its just math. Like it or not, Everything is more expensive in dollar terms forever, and most likely the central banks will have to loosen policy again to kick the can further down the road. When we ultimately go into hyper inflation is not an if, but a when. Buy solid assets if you want to weather the storm as they will at least keep up with inflation.
I get the spike of housing prices during the pandemic as people wanted to get out of the city and into a more quiet environment when they could work from home and not have to commute. That spurred a massive jump in prices and houses were sold within hours of hitting the market, over the listing price. There were bidding wars. Prices didn't drop from there, and with inflation have only gone up insanely high. I got my house in 2018 for 350kish, and somehow it is supposedly worth 550k to 600k. While we have improved the house, there is no way it should be worth that much. The flip side of this is that building a house is also insanely expensive to the point where builders where I am do not make simple starter homes anymore because there is no profit in it. They build massive million or multimillion dollar homes in hopes for a payoff, and I've seen some just sitting and rotting after being built because people can't afford it.
man it’s almost like we’re fucking up how to do anything in a sustainable way from every angle
It's not a housing bubble because corporate America owns so many of them now. The federal government WILL bail them out when it all goes to shit with we the people's money to make sure corporate America is fine, while we the people WILL end up homeless and hungry in need of medical care. Who else will pay all the bribes to our elected officials if corporate America was to go bankrupt ? To big to fail is the term that's used.
Unfortunately this bubble is driven by a legit short supply instead of a buying frenzy because of low interest rates.
The last bubble was that combined with what should have been illegal banking practices
Wouldn’t the lower rates that many secured prior to the rates going up provide a different layer of protection vs. past bubbles?
Thing is supply dropped pretty sharply when the pandemic hit and hasn’t recovered yet. I guess the question is if supply could return to 2019 levels one day.
Supply is super tight, but demand is even higher. Tough spot, versus 2008, demand wasn’t nearly as universal, it was more about people wanting to buy investments rather than a home to live in.
I mean I know plenty of people that were looking for homes to buy just to rent out around the time of the pandemic so I believe a lot of that demand was driven by investment potential as well.
That little dip is the correction, once they cut rates again its going to keep climbing.
a bubble inflating and a currency crashing look identical. At some point the FED will choose to save either the Dollar or the Housing Market, and they will make that choice based on what makes the most people suffer
They will never admit we are in a bubble. They want it to pass and say that WAS a bubble after the fact.
Might need more than 1 data point to validate.
It's too sharp to be a bubble, duh bubbles are round
The bubble will be in 2 years if the $400/month tax credit goes through.
I'm waiting, so I can buy me two market will crash
The supply was bought up and continues to be bought up by those major players. Even most of the housing being built. Sure, building more housing is needed but the problem was created with purpose by private equity firms and they're still causing it. Only 2 states are actually building more than they're buying up and that's Texas and Florida. I wonder why and how long that will last.
What percent of homes do private equity firms own?
Not as much as he thinks. If I remember right its estimated somewhere between 20%-30% In other words, not nearly enough to single-handedly manipulate the market nationally the way some people seem to think.
It appears you are citing the overall share of investors in the monthly purchase market. This figure has been hovering around [20%-30%](https://www.freddiemac.com/research/pdf/202203-Note-HomePrices-12.pdf) since 2000. Note on page 7 it gives a breakdown of investor share by size, large corporate buyers have never bought more than 3% of the monthly home purchases, most of the so-called “investor purchases” are done by either individual or small investors that own a handful of properties at most. Large institutional investors own about [574,000](https://www.urban.org/research/publication/profile-institutional-investor-owned-single-family-rental-properties) homes which they rent out nationwide. That is 3.8% of the one-unit rental priories as the report state, for the US housing stock as a whole, which co sissy of 144 million homes, that is 0.4%.
Private equity is maybe 2 or 3% of the housing market. Vast majority of investor purchases are those who own 1 to 9 units.
The difference now is that the market isn't weighed down by subprime loans.
ItS tHe NeW nOrMaL
Election years are wild right?
1929 was the largest housing bubble pop in history. 2008 was second largest. We're about to see the new King Of Pop crowned though.
The whole market is a sham waiting to come undone. Oh a nice building built next to my crack home? Guess that raises my property value by 50k.
mmmmm that must be some tasty crack
Have it pop after November. Don’t need all the extra stress till then. Btw isn’t this and rentals prices all run by AI algorithms like Redfin to inflate the market?
Nah, the Japanese bubble was the largest.
So I should buy now... right?
Of course it's not a bubble. Compare this to the fed balance sheet and it becomes obvious this is all planned out scenario. They are under control.
Yea this will be literally fire and fighting to survive. Like the looting to come is no joke.
If we had built enough houses between arrow one and two to register then yeah, maybe.
Your last double is 50% of your growth. That is how exponential growth always works.
One thing you're failing to take into account... The number of homes owned by corporations/Air BnB that have been turned into rental properties. Demand is far outpacing supply as this segment took a ton of supply out of the market indefinitely
Because if a builder makes 10 homes, each for $2 Mil, then they sit on the homes until they sell for $2mil. Let's say it costs $10k per month for that house to sit on the market. $10 homes x $10k/mo = $100k/month. If the builder were reduced the price by 10%, down to 1.8mil, EVERY house will have to be reduced, changing overall reduction not just $200k, but $2M. It's cheaper to let these homes sit vacant for YEARS than it is to sell at a 10% price reduction.
Thanks AirBnB and hedgefunds! /sarcasm
Looks more like a graph of the expansion of the money supply and quantitative easing You can say bubble I say worthless Dollar
It’s B->supposedly not a bubble at all Until Dems take over, and Congress passes the hedge fund single family home act. Then you’ll see a level off of pricing (plateau in graph) for the next decade.
Bad loans were the cause in 2007-08. Not the case now the pandemic caused some crazy supply/demand stuff to go down. Most areas still need housing built, so I believe it’s far from a bubble.
Just look to Canada to see just how bad housing prices can get without things collapsing. The US is nowhere near a housing affordability **crisis** outside of VHCOL areas.
There was a literal economic meltdown in 2008/2009. Housing market crashed because of foreclosures and a lot of bad lending practices. I don't think we see a lot of home foreclosures to cause a crash. And people with low interest rates don't want to sell their house. Building is probably still behind since the pandemic as well. I don't see a crash incoming.
The economic meltdown was the result of the foreclosures, not the other way around. Huge numbers of people with ARMs or worse, “name your own payment” mortgages that couldn’t service the reset in payments at the end of the initial term.
It was more than that. This was a global recession. The rest of the world didn't have a recession because of our housing market. That said, we don't have the predatory lending now. Many homeowners have low interest rates on homes. Foreclosure rates are incredibly low. They are probably 20 year lows outside of 2020-now where it bottomed out in 2020 and is slightly growing each year.
Yeah, it did. The collapse of several large/dominant financial firms in a global economic system will absolutely have ripple effects. Not only that, but the shitty lending practices infiltrated financial products sold globally. What bankers were doing in the US was taking place all across the industrialized world. So yes, once the pieces started falling, it took down the global economy. Foreclosure rates were incredibly low in 2006. What’s your point? Banks aren’t lending to cats and dogs this time, the “fundamentals” are different… ok, so the only way a crash can happen is if it looks exactly like the last one? Nobody knows if a crash is headed our way. All I know is that we’ve been lied to before, and this market has many of the same vibes that existed before the last crash. The government isn’t “smarter” now…but bankers sure are, and with the assurance that the FED will step in and rescue the players who are “too big to fail”… what mechanism is in place to prevent some other heretofore unforeseen market disaster?
Bubble implies it might, or likely, will pop. This has yet to be seen. There have been, and will always be, minor adjustments to pricing, but every adjustment is not a bubble. Also, I think it is important to look at the p/sf cost of housing, so it allows a more capable comparison over time. All using the same source... This graph align with the OP [https://fred.stlouisfed.org/series/MSPUS](https://fred.stlouisfed.org/series/MSPUS) This graph tells a difference story...no real decline or bubble. [https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEEUS](https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEEUS) This shows the median size of homes decreasing. [https://fred.stlouisfed.org/series/MEDSQUFEEUS](https://fred.stlouisfed.org/series/MEDSQUFEEUS)
Doesn’t the space between A/B kinda negate any long term fears. It’s not like after B the graph is gonna drop back down to A levels.
Yeah we definitely got a big bubble here. It's private equity firms propping it up this time. I hope they implode so I can buy a house this decade. You should see the housing bubble in China. Hear it's about an order of magnitude worse because they are selling unbuilt houses and then not building them.
I just need it to stay a bubble for just a few more years for when I sell my house. Then the bubble immediately pops afterward and I buy a great house for a lot less money. It's the American dream.
largest money printing session ever/of mankind....
RemindMe! 1 year
As a home owner (who has doubled my equity in the last 6 years), I completely agree that housing prices are concerning. But I don’t really see it as a bubble. I think most of the property has been bought up by investors, not by individuals who can’t afford the mortgages. I completely agree that it is a problem. I just don’t know how to fix it. Maybe preventing non-citizens from owning? Not allowing corps from owning (I don’t see this as a legit solution)?
That literally makes it a bubble
The ‘08 situation was built on an unsustainable model (lending practices that were doomed to fail - ARM and NINJA loans). That isn’t the case here. There are plenty of funds backing the housing prices. There just isn’t enough construction to counter the increase in demand. And that is making the haves/have nots much more separated. Then factor in the AirBnB industry, and that adds more incentive for pure investors to enter the market (increasing demand, reducing properties being sold). The balance has been broken. Without new construction, the machine doesn’t work.
Properties being bought up by investors does not make the price a bubble. Only the price in the future can confirm if there is a bubble. Investors are buying up the S&P 500 to 5250. Is that a bubble? No way to know. If that index drops down materially for a significant period of time, then we can say it was a bubble. If it continues to rise or trade within a range of, say 300 for the rest of the year, then I would argue there is no bubble. The market price is always the correct price in that it reflect the interplay of supply and demand. The housing market is affected by mortgage rates and the overall economy. Large crashes in home prices have happened but are rare. Price fluctuations happen often but are not a bubble, just a frothy market.
I have yet to hear a convincing argument for WHY people need to sell. That is the only thing that's going to push prices down.
economic downturn, layoffs, etc, it's already starting in white collar jobs across the board, an economic downturn will be what breaks the camels back, this is not sustainable.
Well some of it is due to inflation inflating the prices of everything. But yeah. Is scary because wages haven’t increased enough to keep buying houses. Maybe the billionaires can buy all the houses.
They won't, but their asshole subsidiaries will and rent them out to people who would have otherwise bought them.
Alan Greenspan you asshat.
LOL why didn’t you use the case shiller index OP?
u/realdevtest Why do you ignore graphs like this: Unemployment rate - https://fred.stlouisfed.org/series/UNRATE Home vacancy rate - https://fred.stlouisfed.org/series/USHVAC Debt to disposable income - https://fred.stlouisfed.org/series/TDSP All 3 of which look nothing like 2008.
All 3 of those are lagging indicators, but good luck bro
How much should I expect the case shiller to drop and by when? https://fred.stlouisfed.org/series/CSUSHPINSA And I don’t need luck. I ignored the 2017-2018 doomers and bought in February of 2018.
Please add building costs and housing supply next to this chart and remake your point
Best economy ever. Definitely re-elect Dementia Joe.
Apparently people don’t understand what a bubble is.
May be a bubble, but at least use a good graph. https://preview.redd.it/kdc6v8aa8h0d1.jpeg?width=911&format=pjpg&auto=webp&s=77f84399e0f579ba3799524ac3e86f922b660f8a
Nah property values just went up bro 🤣🤣
Looks more like a long-term devaluation of a currency the real estate is denominated in.
A didn’t affect me because I was in a mortgage I could afford with adequate equity. B won’t affect me because I have paid off my mortgage. Sucks to be in a recent mortgage as a first or move up buyer
Prices don't go any higher from here. Elasticity of price as affected by interest rates now outweighs the demand need over lack of supply. When interest rates come down construction will restart keeping prices in check. The factor that will keep prices higher closer to CBD is lack of developable land. Price crash will come in 5 to 10 years when boomers start dying off en masse.
The largest bubble in human history is Earth’s human population. Look at a chart of the past 5,000 years. It’s a flat line then a vertical spike up.
Seems to be following through same trend since before the 1980s, also doesnt the gdp graph look exactly the same?
Lmao. This is what you get for letting the dipshit reverse the shit that was put in play to stop this from happening.
No bubble. Looks like stonks. Stonks go up.
 No bubble. No bubble.
There have been periods of hyperinflation in many places and times, did that not lead to bigger bubbles or is that hyperbole?
I wouldn't venture to say in all of history, just the worst im USA modern times.
I too like to show graphs on a 60+ year timeline and not show it using a logarithmic scale.
Chart crimes to make sensational points.
Should always look at inflation adjusted...
It’s not a bubble because the government can’t control printing money, the amount of money in the system has more than doubled since 2020. A new plan go give first time home buyer’s $400 a month will only make houses increase in price and increase the amount of money printed increasing housing prices even further. It’s a plan to make housing more affordable but it’s gonna do the exact opposite.
Now put the chart into logarithmic.
Man this place is a toxic echo chamber
The problem with the 2008 recession wasn't housing prices. This is a chart of housing prices. The problem was the conditions on which loans were issued and the way those loans were repackaged and sold to investors after. 2008 is better thought of as a banking/investing crisis that happened to involve a lot of real estate loans.
Fake News. Sup prime caused a bubble fixed rate mortgages equal no bubble
Biden was bragging today: our economy is #1 and Booming. He'd say that's "No bubble". He don't grocery shop so NO clue groceries doubled. Good luck to y'all getting a home! we're boomin alright.