patrick.net

I don't think it is real-estate itself. This looks like general world economic trends to me ...
http://finance.yahoo.com/news/one-key-forces-behind-bubbles-100000303.html
... and the debtor nations are getting majorly protective already. That makes an economic/political climate that is very difficult for the central banks to unwind the low interest rate monetary policy in.

There are some signs that are encouraging ...
https://www.yahoo.com/news/u-import-prices-post-first-decline-six-months-124241709--business.html
... but I will be amazed if the Fed did raise rates at all this year. I don't think they can strengthen the dollar in the face of things right now.

There are some unhealthy things in the housing market, to be sure, but to me it is more because it is being turned into a luxury good, not because it is itself a bubble. The sad fact is there is just really low inventory, lots of demand, and cheap money out there for those that can borrow. Some local markets are for sure overheated **cough** San Francisco **cough**, and maybe what is being said about Florida markets too (third video), but I don't really keep tabs on that state/locale.

If you want to see what a housing bubble looks like, look no further than here:

http://www.zillow.com/homes/for_sale/Outer-Richmond-San-Francisco-CA/pmf,pf_pt/15116336_zpid/268383_rid/globalrelevanceex_sort/37.753917,-122.496513,37.746341,-122.50766_rect/16_zm/

You have to actually sign a waiver just to take a look at the place in case the floor underneath you gives in or you get hit by a collapsing roof or any other hazard at this dump injures you. The lot is also pretty small. Now, at current levels a seasoned and smart flipper may be able to turn it around quickly enough while the bubble lasts but it's a more than risky bet. Fair value for the lot I'd say incl. the bay area premium maybe half ($300K) of the asking price ($600K), and that's already stretching it considering you could by a really nice place with some land in other areas for that. But as AF mentioned

DieBankOfAmericaPhukkingDie says

Housing never goes down.

This time is different! ;)

Rew says

I don't think it is real-estate itself. This looks like general world economic trends to me ...

http://finance.yahoo.com/news/one-key-forces-behind-bubbles-100000303.html

... and the debtor nations are getting majorly protective already. That makes an economic/political climate that is very difficult for the central banks to unwind the low interest rate monetary policy in.

Ya think?

Rew says

... but I will be amazed if the Fed did raise rates at all this year. I don't think they can strengthen the dollar in the face of things right now.

They never have an never will do anything but an insignificant token raise, and even that may spook the markets so much that they may "have" to reverse course soon. Global Zirp is already mostly a reality and global Nirp a possibility. This will not end well and it doesn't matter what the inventory is now or if housing is turned into a luxury good, when the dislocations happen the market forces will decide which sectors' turn it is and the unwind will be brutal, possibly dragging other sectors with them. I can hear the screams for the next bailouts already. The past couple of administrations in cahoots with the Fed have made a mockery about the fiat central banking system. The irony is that European banks are likely worse off and less capitalized, including countries once beacons of financial responsibility. Welcome to globalism.

Dan8267 says

What do you think? Will housing tank in 2017?

Maybe

http://www.businessinsider.com/home-flipping-in-the-us-rises-to-financial-crisis-levels-attom-2016-9

https://twitter.com/clusterstock/status/777576590700142592/photo/1?ref_src=twsrc%5Etfw

Dan8267 says

What do you think? Will housing tank in 2017?

i dunno, guys like me and @strategist are just a couple of poor uneducated unemployed conservatives, right you fucking homo?

zillow has my shack valued at $1.6M - not bad for a poor guy with no college degree and no job (literally none of that is true). what's your house worth, dan?

No bubble. Money will be cheap forever. One day they might even pay you to borrow money. They may even pay you enough to buy outright. Yes, that's right, free housing to the highest bidder!

I only wish I was joking. $10,000 per square foot is coming and will only keep going up.

dumb question: what is the best source to track the federal interest rate (rate that fed gives to banks)? And what is that interest rate today?

Dumb question: Can anyone confirm a source where I can track the federal interest rate (i.e. the rate that the fed gives to the banks to borrow money)?

The rates that the banks give to borrowers, of course, is heavily advertised everywhere.

Notices of default are up a little bit in my area.

turtledove is deplorable says

Notices of default are up a little bit in my area.

Excellent contributing data :-)

It's the FOMC "overnight" loan and currently sits at 1/2 percent, or 50 basis points (each basis point one one-hundredth of a % point).

landtof says

zillow has my shack valued at $1.6M

How much do you owe?

BayArea says

dumb question: what is the best source to track the federal interest rate (rate that fed gives to banks)? And what is that interest rate today?

A simple question, but certainly not a dumb one.

The Fed Funds Rate is what you're looking for. Here's a good link for that.
http://www.moneycafe.com/personal-finance/fed-funds-rate/

For the Prime Rate, the lowest rate commercially available, here's a good link.
http://www.moneycafe.com/personal-finance/prime-rate/

The graphs are particularly good.

0% interest in a depreciating currency. The fed is paying banks to take out loans whereas the rest of us have to pay for money. And people wonder why the rich get richer and the poor get poorer and the middle class is squeezed.

Dan, excellent, thank you.

I have it bookmarked now.

Dan8267 says

What do you think? Will housing tank in 2017?

Yes and no.
Estate agents love to use the phrase "imperfect market" when deflecting questions from inexperienced buyers. Their claim is that the housing market is always inherently imperfect. There are differing opinions about the voracity of that statement.

However moving forward I believe the market will become even MORE imperfect. That is to say until 2020 or even 2025, it's going to be a bumpy ride. Area's in high demand will overheat quicker and to higher degrees. Conversely, areas in low demand will stagnate worse and in come cases... cease to exist.

If you're curious... Here's something interesting I found.
2 towns... 1hour drive away from one another. Both in New York state.
One town is the 2 best property market in Q2 nationwide
The other town is the 2 worst property market nationwide Q2.

So this begs the question. Why is the hottest Q2 market one hours drive away from the worst market (nationwide)?

I haven't dug deeper so I don't know the circumstances, but I don't think that's as important and the stark contrast...
1hr drive = best and worst nationwide?

Now some will jump on me and say something like "San Francisco's property market was almost the strongest in the nation and in Oakland you wouldn't venture after dark" (Back in the day) I'd say you're right, but if San Francisco was the most expensive market, Oakland was never the lowest in the nation, the west, California or even central California.

I could add more theories, but I'll save my time and see the feedback on this.

junkmail says

Why is the hottest Q2 market one hours drive away from the worst market (nationwide)?

My guess -- and this is only a guess -- is the jobs market in each area. Most people won't commute an hour to work. Almost no one will commute more than that. So these two areas are largely disjoint. One hour, ten hours, a hundred hours, it doesn't make a difference once you past a certain threshold. If the two markets were less than 30 minutes away then jobs could not explain the difference.

Dan8267 says

an hour to work. Almost no one will commute more than that.

Oh boy, have you heard of a place called the Bay Area?

junkmail says

If you're curious...Why is the hottest Q2 market one hours drive away from the worst market (nationwide)?

I'm always curious but the most likely answer to your question can be found in Daniel Kahneman's Thinking, Fast and Slow. If you compare all the many towns and cities in the USA, the extremes up and down will probably be smaller places because of the small sample sizes.

Binghamton has 50k people, Elmira 30k. If you figure household size between 3 and 5, that's around 10k housing units in each, and they sell probably once a decade, so 1k sales per year, mostly in summer due to weather and school calendars, so maybe 300 in April-June. If a significant employer closed or opened in either place, or maybe moved from one to the other, that could do it.

Two samples of 100 transactions each don't tell you much about the larger picture, but the presentation of them can tell you a lot about the presenters.

Elmira vs Binghamtom. Markets in New York state that are very localized, with no real relationship to the NYC greater metro area, and have lower sales volume and lower median pricing, and populations below 45,000. Looks like statistical noise to me.

curious2 says

I'm always curious

Oops. Simultaneous post.

HEY YOU says

How much do you owe?

2.6M

HEY YOU says

How much do you owe?

just under $1M

dan the pussy mullet man has me on ignore so i can't respond

Dan8267 says

0% interest in a depreciating currency. The fed is paying banks to take out loans whereas the rest of us have to pay for money. And people wonder why the rich get richer and the poor get poorer and the middle class is squeezed.

Not to punch a hole in such a popular and simple narrative, but it's hogwash. Data on Discount Window usage is freely available (https://www.federalreserve.gov/newsevents/reform_discount_window.htm) and it's well known why banks prefer not to use the discount window.

www.richmondfed.org/-/media/richmondfedorg/publications/research/region_focus/2011/q1/pdf/federal_reserve.pdf

The real reason the middle class is struggling is obvious. No wage growth. That's it.

I think you misinterpret Dan's brevity as him trying to illuminate primary grand cause, versus showing one example of the imbalance. Are you not both talking about the same thing, in the end? Wages are stagnant, why?

Pointed back toward the original question: housing not a bubble, but going to take it on the chin (like everything else, especially stocks) when the imbalance starts to right itself.

I love the Fed's recent comments about having more room for inflation and the economy not becoming overheated. This is the obvious stated as if it were critical analysis.

#LogansSwan

Rew says

I think you misinterpret Dan's brevity

Ooooh, careful... When you say things like this... Dan starts posting 10,000 word essays.

False alarm, Dan. It's all good.

Another thing that might be worth noting is the fact that numbers of vacant, foreclosed/bank owned properties have been going down. They've gone down by 30% since last year. So, why the sell off? The banks have been holding onto these for a long while now. The fact that they are selling these properties makes me think it's possible that they know that -- right now -- is the most money they can expect to unload them for. If they thought they could double their money by holding off another year, history would suggest that they would continue to hold the properties.

http://www.realtytrac.com/news/foreclosure-trends/q2-2016-u-s-residential-property-and-zombie-foreclosure-report/

658b says

dan the pussy mullet man has me on ignore so i can't respond

I put you on ignore for being a troll. I've run out of patience for idiots like you.

However, if you want a response, here it is.

landtof says

zillow has my shack valued at $1.6M - not bad for a poor guy with no college degree and no job (literally none of that is true). what's your house worth, dan?

1. It does not matter how much Zillow values your house. Market prices fluctuate greatly with bubbles and busts and do not reflect true value, only what the greatest fool is willing to pay.

2. It does not matter what the market price of your house is unless and until you actually sell it. Unrealized market gains are not gains at all and do not affect your wealth. Your house's market price only benefits you at the moment you sell your house. As long as you are living in your house it doesn't make a damn bit of different if your house's market prices is ten trillion dollars.

3. Unless you have fully paid off your mortgage, it's not even your house. It's the bank's.

4. How much wealth you have in a particular asset class, real estate vs stocks vs bonds vs cash, does not determine your overall wealth. I'd say it's highly probably that I have more wealth in wealth-producing assets like stocks than you have in wealth-consuming assets like your house.

5. Wealth is not indication of intelligence or moral character, especially not in our society.

6. A college degree means nothing. I don't think you are an idiot because you lack a college degree. I think you are an idiot because you say idiotic things and have the values of a moron.

Oh, and it doesn't matter how many alts you create. Every time you act like an ass, I'm going to ban you.

I have no problem with people who challenge my ideas like an adult. Hell, that's the main reason I come to PatNet, for intellectually stimulating discussions and debates about various subjects. I like a challenge. However, I am not going to tolerate trolling anymore. You're wasting my time and everyone else's. And if you don't like that, tough shit.