patrick.net

Events are repeated over the time with high dose of similarity. I would expect next frenzy time will be not sooner than 50-60 years from now.

REpro says

Events are repeated over the time with high dose of similarity. I would expect next frenzy time will be not sooner than 50-60 years from now.

So few people are moving. People locked in good rates. Boomers already downsized or have paid off houses or again locked in low rates and it doesn't make sense for them to move. Millennials now the largest generation with purchasing power are in family formation and that means buying houses. If people aren't moving, it's hard for prices to drop as that demo buys up homes when they first hit the market because they're desperate.

Having 3 kids I could never rent. My oldest son has a friend that their parents divorced and he move out of state for two years. The one parent wants to get back to my town and school district. They cannot find ANYTHING, including rentals. 4 new homes were built in 25 years in my town. We're a 30-35 minute easy commute from major suburban employers. I swear unemployment here is basically zero. Every business within 20 miles roughly has help wanted signs up. No one built houses so now there's nothing.

Interest rates would have to get to the 15-20% range and even then I think it would just stall price increases. The floor on the housing market is high and severe events are generally once in a lifetime. We're nearing a ceiling though too where I see price increases slowing. The housing crash was simply legalized mortgage fraud at the end of the day. Good luck getting 30-40% of the loans they were dishing out in the early 2000's now. It's not possible.

We need lots of job losses, super high interest rates, people all a sudden selling, massive building or all of those combined to see a crash again. I'm not seeing any of that in my region besides historically average rates and owners in the past 10 years sitting on 2.5-5% interest rates with no motivation to move. So I tend to agree with Repro. We're looking at decades likely before a significant event outside of war or some government shut down.

Oh and this isn't a generation dig, but Millennials saw their parents, boomers lose their homes. Had to move out of their town, lose their friends. That's not easy when you're 7-18 years old. So I think younger generations are more cautious with housing. Between lenders being better regulated and a lower risk profile on the buyer end, I just don't see problems for now. But I hate predictions. And the fact is you can't stop the train that is inflation. I'm young and I remember 90¢ gas being expensive in high school around '96. Can't time markets, but in 10 years, a house you bought now will 99% be worth more than today. I'd prefer to control my future and not a landlord that could sell at any time, so I choose to own. No issue with renters though. Everyone has different needs and lifestyles.

One reason that today is not like 2008 is that the largest demographic in the USA is retiring, and escaping the hellhole cities and states like NY, NJ, CT, MA, IL, MI. Some are also even departing CA.
Where they move to is not going to experience a significant drop in prices; they keep coming.
My observation is from Palm Beach and Martin Counties in Florida.
I don't know the housing situation in places like Missouri, Misssissippi, Alabama, Georgia, etc.
My older brother is nuts and is hanging on to living in NYC; it's because of his chubby wife who doesn't want to leave her goofy relatives behind.

clambo says

My older brother is nuts and is hanging on to living in NYC; it's because of his chubby wife who doesn't want to leave her goofy relatives behind.

This happens A LOT!!!

clambo says

One reason that today is not like 2008 is that the largest demographic in the USA is retiring, and escaping the hellhole cities and states like NY, NJ, CT, MA, IL, MI. Some are also even departing CA.
Where they move to is not going to experience a significant drop in prices; they keep coming.
My observation is from Palm Beach and Martin Counties in Florida.

True, but places like Florida and Arizona (and probably a few other places) that are already full of elderly people to begin with literally NEED a steady influx of people just to keep the local population numbers from dropping. Pinellas County Florida comes to mind as ground zero for this (I might be a bit biased on this last one since some of my grandparents lived there).

WookieMan says

Boomers already downsized or have paid off houses or again locked in low rates and it doesn't make sense for them to move.

I bet this is keeping people from relocating to popular retirement destinations as well.

REpro says

Events are repeated over the time with high dose of similarity. I would expect next frenzy time will be not sooner than 50-60 years from now.

There was good buys in 2001 and 2008…it will come back so I am sure I won’t be sitting on the sidelines 50 years. Your comment doesn’t help those of us who are serious about Capitalism.

clambo says

One reason that today is not like 2008 is that the largest demographic in the USA is retiring, and escaping the hellhole cities and states like NY, NJ, CT, MA, IL, MI. Some are also even departing CA.
Where they move to is not going to experience a significant drop in prices; they keep coming.
My observation is from Palm Beach and Martin Counties in Florida.
I don't know the housing situation in places like Missouri, Misssissippi, Alabama, Georgia, etc.
My older brother is nuts and is hanging on to living in NYC; it's because of his chubby wife who doesn't want to leave her goofy relatives behind.

So basically middle America is up for grabs but the coasts won’t reset if I am reading through your response correctly.

zzyzzx says

clambo says

One reason that today is not like 2008 is that the largest demographic in the USA is retiring, and escaping the hellhole cities and states like NY, NJ, CT, MA, IL, MI. Some are also even departing CA.
Where they move to is not going to experience a significant drop in prices; they keep coming.
My observation is from Palm Beach and Martin Counties in Florida.

True, but places like Florida and Arizona (and probably a few other places) that are already full of elderly people to begin with literally NEED a steady influx of people just to keep the local population numbers from dropping. Pinellas County Florida comes to mind as ground zero for this (I might be a bit biased on this last one since some of my grandparents lived there).

Florida is overpriced right now with 600k homes at 8%

Broadway_Sam says

Your comment doesn’t help those of us who are serious about Capitalism.

Or the free market. Hahaha. I laugh because it exists in name only.

Broadway_Sam says

So basically middle America is up for grabs but the coasts won’t reset if I am reading through your response correctly.

I think the coasts are going to have it the worst to be honest. Not crash style, but I've referenced floor and ceiling with market prices. Coastal areas are at their ceilings and the floor is much lower than flyover country. I could see parts of CA and the East Coast losing 10%. I don't see much in the midwest losing even close to 5% if at all. Might be biased on my end, but I'm not seeing it here in IL and WI which are the markets I still have some knowledge of. They generally mirror the rest of flyover country if not determine it.

Broadway_Sam says

Florida is overpriced right now with 600k homes at 8%

I'm loving watching the 1961 Space Program 3-bed ranches, only 3 beds because they covered the one car garage, go for $25k less than the brand new Lanar and DR Horton 3-bedroom, 2.5 baths with 400 more sq ft under air and 2 car garages. Now granted the 1961s are on a fifth or quarter of an acre and the news are less than that... but the 2 car garage, dedicated laundry room, USB ports in the wall in every room, new roof, new HVAC, properly sized vents for every room, builder covers closing costs and offers 5.5-6% builder financing the first 2 years, etc. vs. parking in driveway during a Florida Thunderstorm kinda offsets that.

Those homeloaners are stubbornly holding out! Though a few pull-off-the-markets and relisted 5% cheaper a few weeks later.

We'll see when snowbird season begins again if reality sets in.

The country might vary but ~15 year boom/bust cycle is pure Florida and has been for decade after decade.

WookieMan says

Broadway_Sam says

So basically middle America is up for grabs but the coasts won’t reset if I am reading through your response correctly.

I think the coasts are going to have it the worst to be honest. Not crash style, but I've referenced floor and ceiling with market prices. Coastal areas are at their ceilings and the floor is much lower than flyover country. I could see parts of CA and the East Coast losing 10%. I don't see much in the midwest losing even close to 5% if at all. Might be biased on my end, but I'm not seeing it here in IL and WI which are the markets I still have some knowledge of. They generally mirror the rest of flyover country if not determine it.

10% is the equivalent of a 800k home dropping to 720k…with 8% interest most families will have to downsize to a 2 bedroom at 500k.

I am loading up on cashing for the next bubble burst, may be another 7-10 years but I am no fool.

800k homes need to drop to 650k before I jump in.

Florida is too popular with the demographic with the money to buy for the desirable areas to drop significantly.

The Alan Greenspan housing bubble is still with us...

Look into future of housing in wide, wide-open eyes.
According to worldometers.info worldwide population is growing at 6 million per month netto (new large city every month), about 72 million per year. The highest growth is in middle east and Africa. Now think for a moment, those areas are not so promising land for young people. Sooner or later, they will find the way how to reach European and American land, so we actually see every day. Those people at some point will need housing, rental or own with emphasize on owning. Most cities will look like Hong Kong. Where would you like to be?