« prev   random   next »

4
0

Prices 'not sustainable,' Realtors' chief economist claims

By Patrick following x   2018 May 31, 9:59pm 622 views   12 comments   watch   sfw   quote     share    


https://amp.usatoday.com/amp/654015002

"The continuing run-up in home prices above the pace of income growth is simply not sustainable," wrote Lawrence Yun, chief economist for the National Association of Realtors, in response to the latest price reading from the much-watched S&P CoreLogic Case Shiller Home Price Indices. "From the cyclical low point in home prices six years ago, a typical home price has increased by 48% while the average wage rate has grown by only 14%." ...

And demand may in fact be weakening. A monthly survey from Redfin found fewer potential buyers requesting home tours or making offers.

"April was the first time in 27 months that we saw a year-over-year decline in the number of customers touring homes," said Redfin's chief economist, Nela Richardson. "We believe this was driven by the low levels of new listings in March."
1   Malcolm   ignore (1)   2018 Jun 1, 8:24am   ↑ like (1)   ↓ dislike (0)   quote        

People like to debate me, but the math is as simple as that.
2   mell   ignore (2)   2018 Jun 1, 8:45am   ↑ like (0)   ↓ dislike (0)   quote        

Malcolm says
People like to debate me, but the math is as simple as that.


Yeah they're due for a decent correction.
3   justme   ignore (0)   2018 Jun 1, 8:48am   ↑ like (1)   ↓ dislike (0)   quote        

Lawrence Yun (the guy that replaced David Lereah as chief economist for the National Association of Realtors) thinks housing prices are too high? Impossible!
4   Quigley   ignore (0)   2018 Jun 1, 8:58am   ↑ like (1)   ↓ dislike (0)   quote        

What I’ve seen is that the lower end homes are rising dramatically in price, with the ones in less desirable zip codes rising the fastest. To illustrate this, my zip rose 3% last year while a zip only 5 miles away in the same city rose 39%!!!

To me, that means that people in search of affordable housing have given up on being picky and will take anything available. This is both good and bad. It’s good because new buyers with their optimism and family values will “bring up” the value of less desirable neighborhoods with a sort of gentrification. It’s bad because it indicates that prices in the good neighborhoods are so unyielding that the first time buyers have given up all hope of buying into them.

To me this indicates the tightest housing market imaginable! Even with rising interest rates, prices in the good areas are staying firm or even rising a bit. It’s all about limited supply. The only way this changes is to dramatically increase supply of housing. In areas that are already built to the max, this means converting mall space to condos, or failing commercial space to townhomes. But mostly high density housing is being built. Unfortunately it’s not being built fast enough to release any of the pressure on demand.
5   curious2   ignore (1)   2018 Jun 1, 9:04am   ↑ like (2)   ↓ dislike (0)   quote        

Quigley says
dramatically increase supply of housing. In areas that are already built to the max, this means converting mall space to condos, or failing commercial space to townhomes.


Malls should have at least one supermarket and many condominiums, especially in difficult climates. That way, the elderly who no longer drive can live at the mall and buy everything they need, and see the grandchildren aka mall rats, who would be on best behavior if the grandparents were likely to show up at any moment.

In optimistic moments, I hope smart materials and improved utility of new development will soon make much of the current housing stock obsolete, and thus cheap. In realistic moments, I expect inertia to continue. Even the most icy cities have hardly any housing connected indoors to supermarkets and restaurants and shopping, despite the obvious need.
6   justme   ignore (0)   2018 Jun 1, 9:15am   ↑ like (2)   ↓ dislike (0)   quote        

Quigley says
What I’ve seen is that the lower end homes are rising dramatically in price, with the ones in less desirable zip codes rising the fastest. To illustrate this, my zip rose 3% last year while a zip only 5 miles away in the same city rose 39%!!!


This is always what happens in a housing bubble. The bubble spreads from the epicenter (say, Palo Alto, CA for a famous example) to outlying areas as price pressure causes rabid shoppers to expand their search. When the peak and the crash arrives, the poor and outlying areas drop like a rock because there is hardly ANYBODY that can afford the houses there, and the few that can would rather live in the next concentric circle inward toward the epicenter. Even the epicenter drops a lot, but will eventually recover. The outlying areas will barely recover until the end of the NEXT bubble. And so it goes.

And we all get to suffer the consequences of the greed of banksters, realtors, sellers and buyers alike. And throw in some FOMO (fear of missing out), too.
7   TrumpingTits   ignore (0)   2018 Jun 1, 8:55pm   ↑ like (1)   ↓ dislike (0)   quote        

justme says
Lawrence Yun (the guy that replaced David Lereah as chief economist for the National Association of Realtors) thinks housing prices are too high? Impossible!

Yeah. Doesn't he know that his first and only job is to constantly say, "Now is a good time to buy!"
8   Strategist   ignore (1)   2018 Jun 1, 9:04pm   ↑ like (0)   ↓ dislike (0)   quote        

TrumpingTits says

Yeah. Doesn't he know that his first and only job is to constantly say, "Now is a good time to buy!"


And it's his job to say now is the time to sell too. His real estate agents need sellers right now.
9   just_passing_through   ignore (0)   2018 Jun 1, 10:10pm   ↑ like (1)   ↓ dislike (0)   quote        

Quigley says
Unfortunately it’s not being built fast enough to release any of the pressure on demand.


This.
10   mell   ignore (2)   2018 Jun 2, 3:28pm   ↑ like (1)   ↓ dislike (0)   quote        

@Patrick if you check Zillow in SF you can see quite a rise in inventory up to May so far, and many homes staying on the market 1-4 months which was previously not possible. I see quite a few trying to time the top by selling now. It is spring season of course, but some hoods had their inventory increased by 2x or more. We've hit peak (non-)affordability and barring any new foreign cash buyers or domestic stock multi-millionaires many of these homes will stay on the market much longer.
11   APOCALYPSEFUCKisShostikovitch   ignore (32)   2018 Jun 2, 4:53pm   ↑ like (0)   ↓ dislike (0)   quote        

There is no reason housing prices shouldn't double every month forever.
12   everything   ignore (1)   2018 Jun 3, 9:24am   ↑ like (0)   ↓ dislike (0)   quote        

About once every six months one of two realtors involved in my purchase from about 4 years ago contact me asking me if I will sell and sometimes they say they have a buyer all lined up. I just checked out zillow for my area, available condo's are pretty thin, homes a little thin.

If the prices are not sustainable then we won't see price growth, some data I just looked at on mortgage news daily says existing prices are stalled with builder confidence up, interest rates are going up as well (maybe), if you can call it that, I don't see quarter points to really count for much. Except that I see the 30 year is at 4.6 and the fed rate is 1.75, where's that 3% going? Last time they had to raise rates to over 5% just to cool the housing market which then crashed it. They could have stepped in to help regulate things but nope, lets crash it insead.

I think we are going to see record home construction coming up, who knows, maybe the dynamic towards more affordable and smaller places would catch on one day. I definitely bought off more than I can chew when I purchased a place 4 years ago, but I have no income increases going forward.

Housing could be affordable, but it's like everything in the U.S., to many middle men/women taking a cut and think it's something you make money off of, it's a weird way of creating money if you ask me. Housing and insurance costs are why I'll never get to (really) retire in the U.S.




The Housing Trap
You're being set up to spend your life paying off a debt you don't need to take on, for a house that costs far more than it should. The conspirators are all around you, smiling to lure you in, carefully choosing their words and watching your reactions as they push your buttons, anxiously waiting for the moment when you sign the papers that will trap you and guarantee their payoff. Don't be just another victim of the housing market. Use this book to defend your freedom and defeat their schemes. You can win the game, but first you have to learn how to play it.
115 pages, $12.50

Kindle version available


about   best comments   contact   one year ago   suggestions