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BayArea
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2016 Aug 1, 4:20pm
rs may get badly burned if prices turn around. The real estate pushers never care, since they make their money on the turnover, but it won't be a pretty picture for the families affected.
True.
Here in the Bay Area, there's a much much smaller gap between real estate uptick and rental uptick over the last three years compared to what you are showing for Chicago and Miami.
BayArea
@
2016 Aug 2, 9:00am
I notice that housing bears often make their reference point the 2009-2011 post crash housing market. Then they pitch these huge % increase numbers relative to the post-crash bottom. Ya, we had the worst real estate crash in housing history just before that! So if your denominator is the post crash housing market, sure, the run-up over the last several years will look insanely high. But that's not a realistic denominator to be comparing against, is it?
I think Patrick.net biggest failure, is allowing the Orwellian definition of "bubble" to propagate. Everyone on this site should fully understand what a bubble is, after a decade + of existence.
We. Never. Had. A. Housing. Bubble.
This is a very important first step, in order to understand yesterday, and plan for tomorrow.
Ceffer
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2017 Jan 13, 10:48am
If I can use a home equity loan to buy a monster truck, times are good.
RC2006
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2017 Jan 13, 11:13am
Kill section 8 and any other subsidized housing, if you can't afford to live here on your own move the fuck out that will free up almost 400k units for the fee market to decide and at the same time lower taxes. If you disagree let people move into your house.
Shaman
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2017 Jan 13, 11:22am
We don't have a housing bubble. We have high prices in some areas made popular by recent influx of people with money, and/or places where it's hard/expensive to build more units.
Most areas that see the largest increases are areas where no new housing can be built or is expected to be built. What's there is there and you'll pay a premium to break into those markets.
Signs of an actual bubble would include shady or excessively loose financing, gardners buying big homes, and lots of homes bought for little to no money down. None of that is in evidence.
I just bought a bigger home and the financing was thorough. We could easily afford it with our combined incomes but they still had to crawl up our butts to check out any and all irregularities.
AdamCarollaFan
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2017 Jan 13, 11:27am
We don't have a housing bubble. We have high prices in some areas
hmmm, thank you quigley
In my area median sale price > $1,000,000.
New townhouses > $750,000 + HOA fees
Median household income for families with earners between ages 40 and 65 less than $150,000 per year
RealEstateIsBetterThanStocks
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2017 Jan 13, 5:19pm
why not define what is your definition of a bubble is before using it.
also it seems nobody cares about inflation. like it's still 2006.
Bellingham Bill
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2017 Jan 13, 7:36pm
^ Atlanta home price index
blue is nominal index, 1975 = 100
red is blue in 2016 dollars
in real terms the bubble price level has mostly been returned to, and nominal prices have exceeded the bubble of 10+ years past.
but . . . low interest rates support today's higher home prices, along with the cost savings we've gotten from the Bush tax cuts and cheaper imports from cheap-labor countries.
biggest price inflator of real estate is two-income households, tho. When everybody has two incomes, home prices just double, since we all have to bid against each other for housing.
Bellingham Bill
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2017 Jan 13, 7:45pm
We. Never. Had. A. Housing. Bubble.
can you explain this, please?
This is utterly wrong of course.
There was a housing boom of 2003-2004 as lower interest rates and the abandonment of regulatory oversight of the housing sector allowed all aspects of the "REIC" to go apeshit with fraud, both for immediate personal gain and in the larger picture of "control fraud", risking 'other people's money' for personal gain.
Flippers and specuvestors were the drivers of the 2005-2006 bubble market, and when appreciation stopped, so did the music.
(and the housing appreciation wasn't just benefitting the REIC, millions of homeowners were cashing out their newfound equity, which goosed the "Jobless Recovery" economy of 2003-2004 into the 2005-2007 good times.)
If the Fed hadn't intervened with $1.7T each of new treasury buys and mortgage bond buys
our economy would still be fucked like 1H09.
The Fed essentially made everyone (who was TBTF) whole again so the game could go on.
And on we go . . .
RealEstateIsBetterThanStocks
@
2017 Jan 13, 8:00pm
^ Atlanta home price index
blue is nominal index, 1975 = 100
red is blue in 2016 dollars
in real terms the bubble price level has mostly been returned to, and nominal prices have exceeded the bubble of 10+ years past.
but . . . low interest rates support today's higher home prices, along with the cost savings we've gotten from the Bush tax cuts and cheaper imports from cheap-labor countries.
biggest price inflator of real estate is two-income households, tho. When everybody has two incomes, home prices just double, since we all have to bid against each other for housing.
that is a better graph but the baseline shouldn't be as far back as 1975. lands in big cities are limited. while they can always expand the cities and build more homes, the lands around the city centers are limited. as population increases, land value must go up.
2000 is a much better year to compare today's home prices against and by that standards home prices in Atlanta are still very attractive. It's is exactly at pre-bubble level.
Comments 1 - 15 of 21 Next » Last » Search these comments
A new column by economist Dean Baker:
July 27, 2016
The Return of the Housing Bubble???????
Okay, it's not like the good old days of 2002–2007, but there are some grounds for concern in certain markets. In particular, the Case-Shiller tiered price indexes are showing extraordinary increases in the bottom tier (lowest third of house sale prices) in several markets.
For example, the index shows that in Denver prices in the bottom tier have risen by 16.7 percent over the last year and by 49.8 percent over the last three years. The comparable figures for the top tier are 6.4 percent and 21.4 percent. The CPI owner equivalent rent (OER) index has risen by 19.6 percent over the last three years.
In Portland, the one years increase for the bottom tier has been 16.2 percent and the three year 44.4 percent. For the top tier, the increases have been 9.9 percent and 26.3 percent. Rents have risen 16.3 percent over the last three years. In Los Angeles, prices in the bottom teir have risen 8.9 percent in the last year and 37.8 percent over the last three years. That compares to 7.0 percent and 21.1 percent for the top tier. Rents have risen by 9.9 percent over the last three years.
In Chicago, prices in the bottom tier have risen by 40.7 percent over the last three years and in Miami by 55.6 percent. Rents over this period rose in the two cities by 6.9 percent and 10.4 percent, respectively.
These numbers should provide serious grounds for caution. This is not a story of a bubble whose collapse will sink the economy and cause a financial crisis, but there is a real possibility that a lot of moderate-income homebuyers may get badly burned if prices turn around. The real estate pushers never care, since they make their money on the turnover, but it won't be a pretty picture for the families affected.