10 replies to this topic

[CLK]

I looked at historical inflation adjusted home prices back to 1953.

The lows during that period was around 159k, the average price stayed at 175k,

until after the mid 80's, the housing bubble topped in 2006 around 275k median

home price. We are now at around 300k, the problem is that wages have only gone up

for the top 5% since the peak in 2006, that's why there is a lot of demand for high end

expensive homes now. Wages have been flat for the rest since 2006 but we are way above

2006 bubble levels, mortgage rates are lower from 6.14% to 3.15%, but this is as low as

they will ever be unless the Fed goes to negative rates, not likely, and they will probably go

up in 2023. So, interest rates, not wages are what is keeping the housing market going,

with 50 years of stagnant wage growth for most, is that likely to change? Probably not.

What if the housing market tops soon and returns to the 175-200k level for decades?

I guess homebuilders can always start building 150-175k homes again, there is just not

much profit in those for them now.

 

 

[CLK]

https://dqydj.com/hi...al-home-prices/

 

https://www.advisorp...ear-perspective

 

 

The top 10% are up some and the top 20% a small amount, still nothing like the top 5%, anyone making less than 111k is flat since 2006.

Edited by CLK, 27 September 2020 - 09:34 AM.

[traderx]

studios- no bedroom-one room

https://www.zillow.c...-apartment_att/

average buidings --not luxury

[traderx]

no bubble but not cheap

https://www.zillow.c...-apartment_att/

[pedro]

If there's a bond bubble (= debt bubble) by definition there must be a housing bubble.

[pedro]

"

What if the housing market tops soon and returns to the 175-200k level for decades?

I guess homebuilders can always start building 150-175k homes again, there is just not

much profit in those for them now."

 

I'm not a builder ...  so perhaps someone can clue me in.

But I've had a theory that builders acquire land, wait for it to appreciate, then build and sell.

Their profit is in the appreciated land.

And when I see prices for raw land ....  that's where I see the bubble most clearly.

Whatever they build today can be built at 1/3 lower, if land costs deflate.

[CLK]

This moratorium on evictions and mortgage forbearance can't last much longer,

6 months probably, 1 yr max. 

 

But how can landlords be forced to leave people in homes, maybe they need the rent

money to survive themselves?

[CLK]

"

What if the housing market tops soon and returns to the 175-200k level for decades?

I guess homebuilders can always start building 150-175k homes again, there is just not

much profit in those for them now."

 

I'm not a builder ...  so perhaps someone can clue me in.

But I've had a theory that builders acquire land, wait for it to appreciate, then build and sell.

Their profit is in the appreciated land.

And when I see prices for raw land ....  that's where I see the bubble most clearly.

Whatever they build today can be built at 1/3 lower, if land costs deflate.

 

"

What if the housing market tops soon and returns to the 175-200k level for decades?

I guess homebuilders can always start building 150-175k homes again, there is just not

much profit in those for them now."

 

I'm not a builder ...  so perhaps someone can clue me in.

But I've had a theory that builders acquire land, wait for it to appreciate, then build and sell.

Their profit is in the appreciated land.

And when I see prices for raw land ....  that's where I see the bubble most clearly.

Whatever they build today can be built at 1/3 lower, if land costs deflate.

 

 

There are lots in gated communities going for $5,000, but you have to build a nice 400K home 

there minimum.

 

Depends on where you are at, but land is in a buyer's market, the inventory is high,

no one can just live on raw land, existing homes are the exact opposite. Very low inventory, seller's market.

[pdx5]

My 27 year old daughter and her 27 year old husband just bought a 2000 SF refurbished home in Seattle for 3/4 of a million.

I think that is definitely a bubble. 

[12SPX]

My question though is can they afford it or is it because of the interest rates, if they were 2 points higher for example??