patrick.net

thanks

tatupu70 says

Seriously–it takes longer to write your long winded evasion than it would to simply answer the question. Here is a link to the average new home price in 1945.

http://www.thepeoplehistory.com/1945.html

$4600.

So, can we put that debate to rest now? Do you acknowledge that $6000 is probably on the high side for average home price in 1945 now?

Or,

http://www.census.gov/hhes/www/housing/census/historic/values.html

Median home value in 1940 = 2430
Median home value in 1950 = 3670

not inflation adjusted

MarkInSF says

I still think some or most of the effect just has to do with the differing appreciation rates of raw land (exceeds inflation where the economy is growing), and structures (which even when maintained usually undershoot inflation).

Land price inflation is one big reason why sf metro index (1987-2010) is so different from the national index.

And it is INCREDIBLY WRONG to try and apply the national index to a specific metro area such as metro sf and expect to get close matches.

How many times do I have say this? It is not that the national index is "wrong", it is that people misapply it to specific metro areas and then expect it to produce close matches.

justme says

How many times do I have say this? It is not that the national index is “wrong”, it is that people misapply it to specific metro areas and then expect it to produce close matches

I think everyone understands this. The point is that the index doesn't work ANYWHERE. Further, if you think about it, large metro areas obviously have the largest concentration of housing. And they also have the highest prices. So, there is no way for it to average out to what Case Shiller predicts.

Prices in prime markets in Orange county have hardly budged. The reasons for it is the existing home owners and realtors scare talk of prices will never go down in OC and buyers are still ready to pay big chunk of their income toward mortgage payment. Prices are still way high and I now see good properties moving fast very close to the peak prices. This market movement is getting very complex. I am sticking to the area where I am interested in and will probably jump after 2 years of year over year increase in prices(not median).

>> I think everyone understands this

Glad you do, but judging from this thread, there were several persons who did NOT understand.

justme says

>> I think everyone understands this
Glad you do, but judging from this thread, there were several persons who did NOT understand.

No, I understand that, but as tatupu70 says, most homes in the US are in large metro areas.

And as I said, I think you would be hard pressed to find a home ANYWHERE in the country that was bought for the national median value of $3670 in 1950, is still in roughly the same state, and now goes for $40K, which is what Case-Shiller long term chart predicts. (Inflation makes price 9.2X, and C/S chart shows roughly 1.2X since 1950) Care to try?

MarkInSF says

justme says

>> I think everyone understands this
Glad you do, but judging from this thread, there were several persons who did NOT understand.

No, I understand that, but as tatupu70 says, most homes in the US are in large metro areas.
And as I said, I think you would be hard pressed to find a home ANYWHERE in the country that was bought for the national median value of $3670 in 1950, is still in roughly the same state, and now goes for $40K, which is what Case-Shiller long term chart predicts. (Inflation makes price 9.2X, and C/S chart shows roughly 1.2X since 1950) Care to try?

Further up, you (MarkInSF) also said

>http://www.census.gov/hhes/www/housing/census/historic/values.html

>Median home value in 1940 = 2430
>Median home value in 1950 = 3670

>not inflation adjusted.

I followed the census link and the number 3670 (or 3,670) occurs nowhere on the page you refer to.

I do see the following, including a number of 7354 for 1950, which is ~twice as high as the 3670.

Median Home Values: Unadjusted

2000 1990 1980 1970 1960 1950 1940

United States $119,600 $79,100 $47,200 $17,000 $11,900 $7,354 $2,938

On top of this data problem, there is the problem that year 2000 is 10 years ago, and that this is not Case-Shiller data, so hiw does ot prove that Case-Shiller is "wrong"? I suppose we can start a whole other argument about whether the census data is "wrong", but please don't ;-).

mthom says: "I agree that just because people are doing something or believe something, doesn’t make it true, particularly if they are all like-minded (maybe that’s what the polish guy was trying to say with Christians)."

I was not only "trying" to say that, but also sarcastically demonstrating how corrupted science has become by politics on the global warming or "climate change" issue. It's the biggest scandal since Galileo (with the Catholic Church not entirely in the wrong, BTW.)

Science is supposed to welcome healthy skepticism, but it's limited by the fact that it's practitioners are human beings like anyone else subject to ego and a desire to keep their status in institutions such as government funded universities. One particular case I find amusing is where a (later) nobel prize winning doctor hypothesized that ulcers were caused by bacteria rather than stress and stomach acid. He couldn't get the 'consensus' to believe him. So he swallowed a sample of bacteria and gave himself an ulcer, then cured it, to prove his point.

"They called me mad!!! Mad I say!!!!"

I hear defenders of the scientific status quo defend this behavior by claiming: "Look! Eventually the guy proved his point and then the consensus came around" but that can largely be said of anything. Even the Catholic church has come around on heliocentricism. So what? Science is supposed to be better than that.

Anyways, back to the real estate bubble. I remember the crowd telling me I was mad for not buying right away since "real estate has gone up for the past 10 years so it has to go up forever. In addition, the consensus on that issue also tended to work for government (which had an interest in seeing RE prices go up along with the property tax base), the construction industry, and even most homeowners who were advising me to buy precisely because if I, and enough like me stopped, that would be the end of their free ride.

I had to look at the issue, decide what my own personal interests were (balance the risk of "being priced out forever" versus buying at top dollar) and the fundamentals. Even now, I still am no worse off renting than buying even in this slight upturn. Hence, this is why I see so many renters willing to pay an additional 30% to wait the market out and it appears investors are following suit: They don't want to jump in that pool either.

PolishKnight says

I was not only “trying” to say that, but also sarcastically demonstrating how corrupted science has become by politics on the global warming or “climate change” issue. It’s the biggest scandal since Galileo (with the Catholic Church not entirely in the wrong, BTW.)

You almost had a valid point.

If you think being a "Heretic" is a valid charge in any society, then you lost me.

justme says

Median Home Values: Unadjusted

2000 1990 1980 1970 1960 1950 1940

United States $119,600 $79,100 $47,200 $17,000 $11,900 $7,354 $2,938

Sorry, didn't notice they had they unadjusted numbers. I made a mistake in my unadjusting for inflation.

Still, take a median home in 1950: $44,600 in 2000 dollars. According to Shiller, that home which was a median home in 1950, in similar condition w/o significant improvements, went for roughly that amount in 2000, maybe 10% more. Do you really think think that is correct?

gameisrigged says

I already answered your question, and I can’t fathom how I can ask you the same questions 4 or 5 times without you being aware of it.
Let me know when you want to be serious about this.

Your credibility is now at about zero. You're obviously playing games because you know that you've been proven wrong...

tatupu70 says

gameisrigged says

I already answered your question, and I can’t fathom how I can ask you the same questions 4 or 5 times without you being aware of it.

Let me know when you want to be serious about this.

Your credibility is now at about zero. You’re obviously playing games because you know that you’ve been proven wrong…

That's hilarious coming from you. Read the fucking thread, because you have no idea what you're talking about.

gameisrigged says

That’s hilarious coming from you. Read the fucking thread, because you have no idea what you’re talking about.

Oh no. You've broken out the bad language. Pretty textbook behavior.

If you've got a point, why not just make it instead of all these games...

I can't believe you guys are still going back and forth about this.

Still, take a median home in 1950: $44,600 in 2000 dollars. According to Shiller, that home which was a median home in 1950, in similar condition w/o significant improvements, went for roughly that amount in 2000, maybe 10% more. Do you really think think that is correct?
Conceivably. Look at it this way.
California population 1940: 10.5 million
California population 2000: 33.9 million

or this way:
In 1950, the average new house was 983 square feet and cost $11,000. In 2000, the average new house was 2,265 feet and cost $205,000. In 1950, there were 3.37 people per household, and now there is but 2.6. In 1950, only 6% of homes had a two-car garage. In 2000, 65% had two-car garages and 17% had three (or more) garage spaces.

In 1950, the average cost per square foot was $11. Today it is $91. Much of that is inflation, as inflation alone would increase prices to $76. The actual value of a square foot today is far more however. I grew up in one of those 1950 homes. No air-conditioning, one bathroom, rudimentary appliances, heating was a space heater in the main room.

I'll take my housing index comparing like-to-like (with it's inherent flaws) thank you very much.

well .. dude .... Chip and Skyler need their space to meditate away from mumsie and her "best friend", aunt susie.

EBGuy says

or this way:
In 1950, the average new house was 983 square feet....In 2000, the average new house was 2,265 feet ....

I’ll take my housing index comparing like-to-like (with it’s inherent flaws) thank you very much.

I was already talking like-to-like. Not a new house of 1950 compared to a new house today. I'm talking about houses that are STILL 983 square feet, just as they were in the 1950. They are the same house as they were in 1950. Why is this so hard to understand?

Of course I'm not going to compare median price from 1950 to median price today. Newer homes are much different. That would be comparing apples an oranges.

There are plenty of homes that are just about the same as they were in 1950. In the East Bay, EBGuy! Almost none of them are worth as little what Shiller's index says they are worth. Not even close.

Tenouncetrout says: "You almost had a valid point.
If you think being a “Heretic” is a valid charge in any society, then you lost me."

Skeptics of climate change/global warming are referred to by the faithful as "deniers". Since the term "denier" doesn't, by itself, carry sufficient weight they often go further and then compare them to _holocaust_ deniers.

In other words, they refer to their opponents as nazis. That's a pretty strong word compared to "heretic."

Different times, different dogma...

You cannot use a *median* house from a median index (census) as a starting point to impugn an index that is based on *averages* (case-shiller NATIONAL).

Another flaw in the whole argument, among the many others that have been pointed out.

Many analysts believe the number of homes for sale or headed for foreclosure is so high that prices will slip this fall and hit the bottom by early next year.

This propaganda about prices bottoming in 2011 makes me believe it will not be true now. I'll buy when housing stops becoming news every day. Or if they accept a low ball offer. Of course then I'd raise my offer when housing does not make the news almost every day. Which ever comes first.

ARMS recasts don't even peak until 2012.

A ways to go.

It's pretty simple. Wall Street is a parasite to the real economy and they've tripled their take on the economy's profit since the 70s. They are sucking us dry for all we have. Even when they lost everything they had, we were forced to make them winners.

Those areas like Victorville, Hesperia, etc., that are out in the middle of nowhere have always been, shall we say in a polite way......... less than desirable. For folks not familiar with this area, it's in the middle of the desert (SW portion of Mojave Desert) and about 30 miles from Barstow, which is about 1/2 way between L.A. and Las Vegas on I-15. I have no idea what people were thinking when they bought houses out in the middle of nowhere, but I had many conversations with friends over the past 6 or 7 years when those new homes where being built (you could see them going up by the 100s from the freeway on the way to Vegas) and my feelings then were that these subdivisions in the far-flung exburbs would be the slums of tomorrow. I was right, it just happened a lot faster than I thought it would. There isn't even a train or public transportation to get to the metro L.A. area so I am not sure where people went to work at a decent job unless they commuted the 80 miles each direction to Los Angeles. There are only so many hospital and San Bernardino County government jobs out there.

Prices are still dropping in my area - exurbs of Minneapolis-St.Paul metro area. Every single RE publication I pick up has more and more ads that scream REDUCED PRICE, PRICE REDUCED AGAIN, etc. I keep a very keen eye on my exurb and local area - prices have gone down continuously.

Yet the Case-Schiller index states that the Mini-Apple is up 11%.

I've spoken with RE people from all over the region - nobody knows how that figure was derived. Everything they see screams the opposite. It may be that bidding wars for some inner-city hellhole shortsale dump did increase 11% from 100K to 111K or something ridiculous like that, but average homes in the suburbs have gone down in value and price in general. In fact, in my particular exurb the price declines seem to be increasing, not decreasing.

Keep in mind Forbes IIRC had an article detailing how Minneapolis has fared the best of any major US city in terms of employment losses since the Great Recession began in 2007.

about all I can say is... I am sure glad I do not live in CA... not that this is confined only to California,,, but CA is the world's capital of it.

The state, in reality, may not recover. It may only eventually consist of slave workers who work to pay rent on homes owned by the state and local government workers' pension funds (CALPERS) so those fine folks can live the life of Riley, retire at 50 on fuil pay, on the backs of the slaves.

Very sad. Have to blame the government 90% for this (as it advertised spiking house values and the GSE's gave away mortgage money to fund the spikes) and 10% to dumb, greedy home buyers

If you guys are interested in a specific area, property shark tells you how many homes have been sold in that area this current year, and gives you numbers for the previous years up to 1986. The area I am interested in, if it keeps its pace, will be the lowest since 1986. In 1986, prices were averaging around $200k. Now, it's averaging around $550k; with the investors picking up properties for under $500k, and the suckers picking up the flipped properties for $600k++

schmitz_kris says

Prices are still dropping in my area - exurbs of Minneapolis-St.Paul metro area. Every single RE publication I pick up has more and more ads that scream REDUCED PRICE, PRICE REDUCED AGAIN, etc. I keep a very keen eye on my exurb and local area - prices have gone down continuously.
Yet the Case-Schiller index states that the Mini-Apple is up 11%.
I’ve spoken with RE people from all over the region - nobody knows how that figure was derived. Everything they see screams the opposite. .

This is common throughout the US... I saw that San Fran shjowed an 18% price increase and there's not a soul in San Fran who believes that figure. the only way it seems C-S could be right is if they are taking the very tiny number of actual sales and calculating the overall local market based on those few sales

Anybody from the midwest here? CBOT trader still here? Any opinions about Chicago real Estate?
East Village Buck ...Town ect...Thanks

goatkick says

Anybody from the midwest here? CBOT trader still here? Any opinions about Chicago real Estate?

East Village Buck …Town ect…Thanks

I live in the west suburbs of Chicago (Carol Stream currently). I don't pay much attention to downtown since I have no intention of living downtown so I don't know there but I think the western suburbs still have a little way to fall. In the last couple of months there have been 4 foreclosures go on the market within about a 3-5 block radius of me and as I'm walking my dog I'm pretty sure there are a couple more that the banks haven't done anything with (nobody clearly living there, no for sale sign, grass not being mowed, mailbox missing, garage door beat in etc.)

The price to median family income is still a little high I think...

Nothing more than a sales pitch from NAR. We have hit the bottom. Buy now BS again.

So it sold for 62k...you need to rehab the whole house maybe what 30,000?
then how do you rent it? there's 6 of them for sale on the same street...the
three dogs next door are barking all day and maybe night... how do you rent it?
Sad story up in the high desert.

Vain says

If you guys are interested in a specific area, property shark tells you how many homes have been sold in that area this current year, and gives you numbers for the previous years up to 1986.

Thanks man but doesn't seem to cover Western Mass, only Boston (so what else is new, lol).

dhopp says

goatkick says

Anybody from the midwest here? CBOT trader still here? Any opinions about Chicago real Estate?
East Village Buck …Town ect…Thanks

I live in the west suburbs of Chicago (Carol Stream currently). I don’t pay much attention to downtown since I have no intention of living downtown so I don’t know there but I think the western suburbs still have a little way to fall. In the last couple of months there have been 4 foreclosures go on the market within about a 3-5 block radius of me and as I’m walking my dog I’m pretty sure there are a couple more that the banks haven’t done anything with (nobody clearly living there, no for sale sign, grass not being mowed, mailbox missing, garage door beat in etc.)
The price to median family income is still a little high I think…

Thanks dhop ! I'm just down the road in Clarendon Hills. Shit's been hitting the fan a bit here under the radar. I'm looking to buy a place downtown preferably East Village aka Ukrainian Village for my kid. Tons of stuff for sale was just wondering if anyone had any feel at this time...Thanks for your reply

Has Zillow ever made a profit? I heard they have not yet made one.

Craigslist is my favorite site to avoid the excessive 10% state sales tax. Patrick.net is my favorite site to avoid home purchasing urges.