patrick.net

Could the current increase in prices be rather simply explained by the influx of cash from investors and now large financial firms looking for rental income by buying SFHs?

Nationally, the bubble is mostly deflated:

http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/

debyne says

What ever happened to "survival of the fittest"? If people are inherently sick, let them fend for themselves and only the strongest and most disciplined will survive thereby making the human race more superior. Why try to spend so much of this nation's resources saving the weak?

Yes!!! CANNIBAL ANARCHY!!!1!!1!!

I Drink your Milkshake and eat your brains for the protein. NOM, NOM, NOM!!!!

humanity says

Not sure that money needing to be invested means that the price that money
pays for the assets must be a good price (that is, that the asset must go up
from there).

I have no doubt that without QE the stock market would not be where it is. Without that liquidity, DOW is lucky to be past 11K at this point. Look at all the "corrections" that have occured every time that it appeared that QE was gonna get turned off only to turn right back around as soon as it was "obvious" that QE was back.

Heraclitusstudent says

But assets themselves are linked to the real economy

Yes and companies will continue to do what they can to increase profitability and big part of it will be continued ahem "cost control" which is music to the ears of stock investors who now have control of this liquidity.

Looking at historical inflation-adjusted values of homes alone is not the correct methodology. You must also consider rental rates. Rental rates, IMO, is the real way to value a home.

Much of the housing "recovery" is because house prices were a relative "steal" for investors to rent out. Ex: Buy a home/condo for $30,000 and net $500/month AFTER expenses and taxes. So at $6,000/year return on a $30,000 investment, they were pulling in 20% annually which is great. A whole bunch of investors jump into real estate, it becomes a feeding frenzy, and pretty soon that home which was $30,000 in 2010 is now $120,000 in 2013 and only yielding 5% annually. The frenzy cools off.

Because much of the "recovery" was investor-driven (rather than buyers drinking realtor koolaid), I think prices will level off and track rent, at least for the short-term. If rents increase, home prices will increase. If rents decrease, home prices will decrease.

There are some areas with manias that are sellers' markets (ex: California) and other areas where there are still relative deals for buyers (parts of Midwest/Rustbelt) but the norm for most of the country right now is buyer-seller equilibrium.

Good point matee. Where people are finding work and or a good place to retire rents are probably going to keep housing prices stable. But in areas that are not so desirable or are suffering serous job loss it certainly is not a good time to buy, unless you can buy for less than cost of renting.

debyne says

What ever happened to "survival of the fittest"? If people are inherently sick, let them fend for themselves and only the strongest and most disciplined will survive thereby making the human race more superior. Why try to spend so much of this nation's resources saving the weak?

I know huh, frederich talked about that in his critique of christianity.

Counterpoint: Japan.

They've been printing money like mad for the last 25+ years, and yet, real estate has been in slow decline.

Deleveraging is a powerful force. Inflation is non-uniform and doesn't have easily predictable consequences short term. Good luck betting on either outcome, since all it amounts to is a guess.

The long term shiller chart from irrational exuberance is inflation adjusted.
http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html

Did you assume that the house was $50,000 in 1950's dollars in 1950, or did you already adjust the cost to today's dollars?

A 1200 SF house that sold for $50,000 in 1950's dollars would be worth approximately 1.03^65*50,000 = $220,000 assuming 3% annual inflation. Assuming 4%, it would be worth $525,000.

Money is going out of RE and back into stocks. Don't believe me? Look at the numbers. As some of the steadfast RE-investors themselves say, they've stopped buying RE because the mad rush for crappy foreclosures is over. The easy money is gone.

Say hey! This was in the Wall Street Journal on March 30, 1999. Note "... how much it will buy."

Holy cow/interesting/compelling ...!

And where is it up to date??? Right here ... see the first chart shown in this thread.
Recent Dow day is Thursday, October 31, 2013 __ Level is 99.2

WOW! It is hideous that this is hidden! Is there any such "Homes, Inflation Adjusted"? Yes indeed, IT IS AT LEAST AS HIDEOUS, go here:
http://patrick.net/?p=1219038&c=999083#comment-999083

Dan8267 says

You certainly did not prove to me that the CSI is bullshit.

OK--I found a source that explains the methodology for the 1890 graph. It is NOT same house sales. It is a compilation of other sources and an index for the years that he couldn't find other data on.

So, it's nothing like the true CSI.

http://bubblemeter.blogspot.com/2009/02/how-robert-shiller-measured-housing.html

egads101 says

So, it takes a very different price to induce me to sell a rented property, than it would to buy it. Depending on such factors, a home that i would buy to rent out for $120K... I might need $150K to consider selling it.

If investors slow or stop buying RE as much as they were ( many indicators are starting to show this) then even if they simply sit on the property the market will eventually normalize, the amount of homes on the market will increase, and hence the market overall will cool. Investors basically "in-filled" the market for the past 2 years.

The stock market is basically doing gangbusters, which is going to attract a lot of investment away from RE-aka- it will suck away a lot of the RE buying on behalf of investment groups.

Dan8267 says

As such, I do not expect the same appreciation rates to happen now.

Yeah, but...

I gave to examples of how it happened recently. Maybe nothing to that degree on a large scale, but locally (as in neighborhood by neighborhood basis) it surely happens.

You originally asked how a particular run down house could have double (or quadrupled) in value in a very short period of time....and I'm saying it could happen if something big happens in the area. A new light rail stop? A new sports stadium (à la Colorado Rockies), oil and NG boom (see North Dakota) etc..

It can and does happen...usually not overnight, but quite quickly compared to inflation based increases.

So that house that you had a picture of -- where is it?

Wow, this is getting insane again... While I think housing could easily stall out over the next few years and/or retrace back to 2011 lows. Breaking below what the those charts are calling for sounds downright nuts.

First of all.. You need sellers to come out in HUGE numbers for prices to fall. You can't have falling prices without lots of transactions. I just don't see anything occurring that will create massive amount of transactions that will allow a freefall in the housing market. If anything we'll have short term panics... and the everything will freeze up again once you hit the point of rental parity.

Prices found a bottom in 2011 because we reached rental parity.... meaning you could walk away from your underwater mortgage and go rent for half the cost. Those that bought in 2009-2012... and locked in or refinanced to 3% interest rates... and probably refinanced away any mortgage insurance too if they are smart. Have very little incentive to sell anytime soon.

Selling would just mean renting at a higher PITI. Sure, you'd have some cash... But i don't know too many people that buy a house and then sell it and rent. That's definitely the minority.

bob2356 says

debyne says

Now that Obamacare is creating a bigger marketplace for insurance companies to compete, you're going to see more and more innovative healthcare payer models that will drive costs down; it was lack of competition that stifled the creativity of the free market to solve it.

For the last 75 years there have been 100's of health insurance companies that have been writing polices. What lack of competition was that?

It's the fact that those insurance companies don't compete in the same spaces. Providers are regional, and insurers have been regional as well without letting themselves compete across state lines. That's why you have Blue Cross of CA or of MD.

ThreeBays says

Medicare is not a classic example of that. Medicare is better bang for buck than private insurance according to these stats:

http://healthaffairs.org/blog/2011/09/20/medicare-is-more-efficient-than-private-insurance/

The way they measured the data is skewed to spin the result. See this link:
http://healthblog.ncpa.org/private-insurance-is-more-efficient-than-medicare%E2%80%93by-far/

Here are a couple of my own thoughts given I work in the industry:

- Comparing administrative costs of Medicare vs private insurers is apples and oranges. I work for a major national health insurer, and we're the ones processing all of the Medicare claims, handling Medicare-related incidents, performing utilization reviews, etc. I love that the government tries to say they're more efficient when it's the private sector that's doing all the work for them. So spun.
- One of the reasons private insurance is more expensive than Medicare is because providers have to offset Medicare's ridiculously low reimbursement amounts for claims by charging private insurance higher premiums. This is why you see providers bail on taking Medicare/Medicaid patients. Going to a single payer and forcing super cheap reimbursements to providers will have major effects on rationing of care, quality of providers, etc, so don't think there won't be HUGE consequences by just "forcing lower costs". We need to be more innovative than just acting like a union and forcing things that have negative consequences for all of us.

Also, look in the comments of the article you provided and you'll see a post by Devon Herrick that touches on even more reasons why the article is being disingenuous.

Believe me, I won't be close-minded just because of ideology like so many in this country do...I'm willing to consider and accept new ideas to try and solve this very complicated issue. But that's what it is...uber complicated, and I wish it were just as simple as "single payer".

BoomAndBustCycle says

In your opinion... What will cause transactions of homes to increase dramatically enough to create enough low-selling comps to lower home prices?

Don't waste your time asking RFHTC to give you any kind of reasoned argument.

bgamall4 says

Duh you don't need pancaking because there wasn't any, Dufus. Or is it Rufus?

Is reading comprehension a problem of yours?

bgamall4 says

They are squibs, but you don't get the most important argument you cannot deny. There was no way all the supports of a building the size of a football field could give way all at once without demolition.

Of course they aren't squibs, and of course I can deny you need them. It's patently obvious that building didn't collapse from a CD. There is a progressive internal collapse of that building from one side to the other. You can clearly see what is happening on videos. And yet you say there was an an unseen and unheard CD, the wiring of which survived a prolonged uncontrolled fire. How stupid can you be? Apparently, very.

bgamall4 says

The example of that fire in the Netherlands building showed pancaking. Even the idiots like you aren't saying that there was fire near every support in the WTC7. But only idiots would then say there was no demolition.

Logic and coherent argument really aren't your strong points, are they?

Have you read the pdf I linked to yet? Which parts do you think best sum you up?

bgamall4 says

Bigsby says

There is a progressive internal collapse of that building from one side to the other.

That means nothing. A progressive collapse would have meant that the spacing of the floors would not have been constant. You use words you don't even understand. Pull your head out of your ass Bugsy.

What are you talking about? The INTERNAL structure of part of the building progressively gave way. That is why the penthouse collapsed and why you see other structures running across the top of the building collapse without the outer structure initially giving way. And I understand the words just fine. It's your utter gibberish that I have trouble wrapping my head around.

How's the reading of the pdf going by the way, or do you only read short paragraphs from conspiracy websites?

bgamall4 says

Bigsby says

The INTERNAL structure of part of the building progressively gave way

You have no proof of that. That is absurd.

What do you think the video I posted up shows? The penthouse collapsed. Then the rest of the roof structures disappeared and the building bowed and then collapsed. This is what you flat out say isn't proof. You say it's absurd, and yet in its place, you argue that there were multiple silent CDs that survived a 7 hour uncontrolled fire, were then detonated in a way never before seen without any sound, causing the penthouse to drop first (without the facade of the building collapsing) followed by a ripple of internal collapse across the length of the building...

No, what is patently absurd are your claims of multiple silent CDs in each building.

Your mother didn't drop you on your head. She apparently repeatedly bounced you off the concrete.

bgamall4 says

Here is the problem with your looney explanation. You are saying that the internal structure pancaked and fell on itself. But if you look carefully, the entire building collapsed at once. Your version is impossible. It is impossible because it would have been uneven and would have distorted the fall of the external floors. That didn't happen, loon boy.

Ha, ha, ha. What a joke. I posted up a video that demonstrably shows that the building didn't collapse at once. Clearly major internal parts of the building collapsed first and that led directly to the collapse of the building as a whole.

bgamall4 says

Bigsby says

I posted up a video that demonstrably shows that the building didn't collapse at once. Clearly major internal parts of the building collapsed first and that led directly to the collapse of the building as a whole.

You are crazy. The major internal parts of WTC7 did not collapse prior to the entire outer wall all around the entire building.

You can put the video up again but you are wasting your time.

I don't need to put the video up again. It's a few posts above us... unless you are planning to delete that as well. I said there was obviously substantial internal collapse. Are you seriously saying there wasn't? How do you explain the collapse of the penthouse and the other roof structures and the obvious bowing of the building? Please feel free to actually address these questions for a change.

Clearly, you haven't read the pdf. It does a good job of explaining your willingness to deny the contents of that video.

bgamall4 says

So Bigs, pancaking from the collapsed penthouse could not have put this building into free fall.

I am surprised you don't understand that.

Duh. Who said it did?

office fire cannot collapse a building.

many experts have repeatedly stated that no building has ever gone down due to office fire.

bgamall4 says

The penthouse did collapse. But it did not cover the entire building. Yet every external support collapsed at the same time, Bigs. So the penthouse collapse had nothing to do with that.

I never said it covered the entire building, but if you watch the video I posted up, what do you see? And come on now, don't lie.

Mark D says

office fire cannot collapse a building.

A blatantly obvious falsehood.

i think that crazy imbecile is trying to say something. i have him on ignore but the site has a bug and it lets me know he responded.

I agree with bga on this point and on his overall hypothisis.
bgamall4 says

So Bigs, pancaking from the collapsed penthouse could not have put this building into free fall.

I am surprised you don't understand that.

freak80 says

They'll just die off. Like my aging Christian Fundamentalist, Fox News addicted father.

keep doing the Ganja boy... your pappy might out live you yet.

Read and weep!

http://tvbythenumbers.zap2it.com/2013/10/31/cable-news-ratings-for-wednesday-october-30-2013/212648/

Net 8PM
FOXN THE OREILLY FACTOR....... 2,962
CNN Anderson Cooper 360...........323
MSNB ALL IN W/ CHRIS HAYES......560
HLN Nancy Grace ...........................374

..
.
Net 9PM
FOXN KELLY FILE, THE.........2,350
CNN PIERS MORGAN LIVE.............340
MSNB Rachel Maddow Show...........810
.
.

Net 10PM
FOXN Hannity ........................................1,590
CNN AC360 LATER................................193
MSNB Last Word W/ L. ODONNELL.............679
HLN HLN AFTER DARK..............................211

sbh says

Ignorance is popular. Fear is profitable. Hate wins primaries. All this and you're still losing the demographics of America and you're still just looking at these numbers?

LOL! we are far more diverse than you can believe.... but we do share one
common trait.. age with wisdom... far better than young naive wiper-snapper.
We are White, Black, Asian and Latino.. I grew with up with all them and they are all very much Conservative in their views.. God Family and Country...

if there is any cult running around these days.. its the naive College Aged ...Obamatrons !
This too will pass ! You should look forward to being 30 one day.... if you make it YOU WILL CHANGE

YesYNot says

A 1200 SF house that sold for $50,000 in 1950's dollars would be worth approximately 1.03^65*50,000 = $220,000 assuming 3% annual inflation. Assuming 4%, it would be worth $525,000

not all that surprising this was a reality... it was not that long ago.. before the bubble.

http://www.nytimes.com/1997/04/27/realestate/live-work-law-for-artists-roils-san-franciscans.html

A report released this month by the National Association of Home Builders put San Francisco's median residential price for 1996 at $285,000. With prices beginning at $175,000 to $200,000, lofts are the cheapest nonsubsidized units on the market, according to David Becker, a broker with Ritchie Commercial Real Estate. They are, nonetheless, still too expensive for the artists for whom they were intended, Ms. Hestor said.

sbh says

You have no diversity, fool, otherwise why is the central plan to suppress voting?

good governance is not suppressing the votes.. as is issuing Citizenship cards..be it for voting or Medical ID ... its all common sense. that is why you have other cards to use in your everyday life. By not implementing good governance, invites fraud and misrepresentations.. And there is plenty of evidence on that front from the GAO.

sbh says

Conservatives are the least diverse of all voting groups and do you really want to know why you're doomed?

There is no stopping Voter ID systems. that will be the future very fast.

sbh says

For you, anything derived from non-Christian, non-white, non-patriarchal, non-traditional family is cancer. If you weren't losing, and knowing it, you wouldn't have to be such sleazy cheating cowards.

LOL! God Family and Country translates well in all languages and cultures.

Dan8267 says

was worth $40k in 1980, $41k in 1985, $41k in 1990, $42k in 1995, $43k in 2000, $100k in 2004, $200k in 2006, $300k in 2007, $250k in 2010, and back to $270k in 2013.

WAG, monies after dot com bust went into RE. Hi-tech guys have too much monies, could also explain current RE rally which began in SFBA.

sbh says

thomaswong.1986 says

fraud and misrepresentations.. And there is plenty of evidence on that front from the GAO.

Bullshit, prove it. Last I heard a number put on voter fraud it had five or six zeros in front of it.

‘We Don’t Have Any’ Problem of Illegal Immigrants Voting in U.S., Dem Congressmen Say -

At a discussion panel on voter identification (ID) laws held at the U.S. Capitol on Feb. 17, CNSNews.com asked Rep. John Lewis (D-Ga.): “What should be done in regards to illegal immigrants voting?”

Lewis replied, “I don’t know of any. I don’t know of any case in any -- in Georgia, in Alabama, in North Carolina, Mississippi or any parts of America -- that some illegal person, some person who’s not a citizen had cast a vote and I just think that’s a lot of say-and-do about nothing. That’s not happening.

- See more at: http://cnsnews.com/news/article/we-don-t-have-any-problem-illegal-immigrants-voting-us-dem-congressmen-say#sthash.Z4AMGvSc.dpuf

While tracking illegal immigrant voting is difficult, according to a report issued by the Commission on Federal Election Reform in 2005, the Justice Department has conducted more than 180 investigations into election fraud since October of 2002. Federal prosecutors have charged 89 individuals and convicted 52 for election-fraud offenses, including giving false voter-registration information.

adding...

"Recent events also suggest at least the strong possibility of non-citizens voting.

In 2011, Colorado’s secretary of state found by comparing drivers’ licenses that Colorado had potentially as many as 16,270 non-citizens on its voting rolls.

In 2007, the Dallas Morning News ran a piece titled “Non-citizens likely voted in Bexar County” which explained how 330 non-citizens were discovered on voting rolls after they were summoned for jury duty.

The 2004 Washington State gubernatorial election was decided by 133 votes while 1,678 illegal votes, mostly by felons, were cast. The election was upheld because there was no accurate way to determine which candidate was the recipient of the illegal votes.

According to the National Conference of State Legislatures, currently 31 states require some form of identification to vote, with eight having strict photo ID requirements. Another 29 states have no ID requirement to vote.

sbh says

thomaswong.1986 says

God Family and Country translates well in all languages

But conservatives only recognize English don't they? Any other language proves someone is an illegal or a terrorist from Kenya or is a faggot.

You've gone so far down the hate hole you can't recognize that you are defiling the principles you think define you. You don't deserve to be an American if you deny freedom to ALL AMERICANS.

what else but English.. how else do you expect immigrant be they from Kenya, Mexico, Germany Japan or Russia to converse, get jobs, and carry out a business and ordinary life even among themselves.. Or do you want these people to live in their own Ethnic Ghetto a new form of Apartheid separate from all other different groups with Liberal imposed Jim Crow laws where each one cannot communicate and cannot grow economically ... you really want to marginalize them into a corner never able to grow depended on government .. the new slavery..

You Liberals never have realized how racists you can actually be .. especially with immigrants..

Knowing English empowers immigrants.. something you know nothing of because your afraid of them.

sbh says

You don't deserve to be an American if you deny freedom to ALL AMERICANS.

If you only knew who I was..... you would be ashamed of your self.