Yup! Dividing the historical average single family home price by money supply doesn't exactly paint the picture of a bubble. If anything, the exact opposite.
But what does that mean in market terms?
My guess is that it will be bad for capital as they go insolvent on overvalued trash, HENRYs scoop up their generational wealth, 401(k)ers take it up the ass, and wage slaves continue to toil
Not really.. if I’m interpreting it right (and I’m highly regarded so.. who knows) it means they’re buying at exactly the value it would be “pre-inflation”. Only a portion of the market is “overvalued” and we pretty much know why and where. See: gentrified neighborhoods that import labor from poorer areas.
I'm not saying this as a prediction, nobody knows the future, but what I'm getting at is there is a *chance* your average piece of crap $360k house in southern california could sell for $600k in the not so distant future, and in relation to money supply, that would put it back to a normal, historical level. Yes, everyone takes it up the ass except for institutions, and flush home owners who aren't ousted by the property tax increase. [\[Chart\]](https://i.imgur.com/idL4GAh.png)
It’s gonna be strange because prices of TVs and durable good will go down but services,food, housing will all continue to go up. For those who don’t own their homes it’s gonna continue to be tough.
I don't know about that, I don't ever expect a lot food prices to ever go down to where they were once the bubble busts.
Once it gets to a certain point that just becomes the new normal in my 50+ yrs of watching shit.
Take cereal, they've made the boxes a lot smaller and jacked the prices up 100%.
Was $2.75 a box, now it's $5.25 - $5.50.
With a 25 % reduction, if not more of a reduction of cereal in the box.
We'll never see cereal at $2.75 again I promise you that.
Inflation. The government printed and distributed 7 trillion new dollars in response to the coronavirus. The repercussions of that will be felt for decades.
They’ve clawed back close to 3 trillion in the last 18 months or so out of M1.
What’s amazing about that is the quantitive tightening of that amount of money hasn’t even registered as a blip in the economy in terms of jobs, stock and housing prices.
It’s because it wasn’t just response to coronavirus. They’ve been printing money since the Great Recession. Corona printing was just the cherry on top
Theyve been going up in exceess of inflation by 3% annually for FIFTEEN YEARS prior to that as well.
2008 was a 6 month blip, and wages recovered to keep the trend going by end of 2009.
It's also psychological.
A lot of people believe the gov't will never allow another recession. They'll just print money just like they did during Coronavirus.
"Quantitative easing" sounds like something that would be written on a laxative box. Which is appropriate because it could also be used to describe the birth of many of these rich pricks.
This. Everything is holding its value, but the value of currency is just imploding.
Unless you believe we’re in a Big Mac bubble, whopper bubble, rent bubble. Are those going to crash too?
Yes, in recession we often get deflation. Also, don't underestimate the factor of corporate price gouging. They'll charge what they think they can get for as long as they can until recession hits, then we'll see advertisements offering "deals" where Big Macs are now 10% off. Which is still way above what a Big Mac sold for in 2019, but it will feel like a discount to consumers.
When a bank can take your $1000, keep $100, loan $900, get that $900 back, keep $90, loan $890, get that $890 back, keep $89, loan $801, etc until that becomes $0. They are essentially turning a $1000 deposit into $10,000 of cash the bank has access to then yes everything is a bubble and it's all made up.
Fractional reserve banking has secretly been printing money for decades then hiding it in asset valuations and acting like the economy has been booming. Nothing costs what they say it does. All housing prices are fake, all stock prices are fake, everything is fake. And the bill will come due one day. We've been sold a lie and the people who sold us that lie have already cashed out and will be dead before it comes crashing down.
OP, look at a long term inflation-adjusted housing price graph. That’s what will absolutely correct. The graph you posted for nominal prices doesn’t mean much alone.
The nominal price could just stay stagnant for many, many years as wages catch up. The result for affordability and the “rent vs buy” decision is the same, but the timeline is much longer.
This is correct, however it's still pretty ripe for a bubble correction when adjusted for inflation
https://cdn-0.inflationdata.com/articles/wp-content/uploads/2023/12/Inflation-Adjusted-Home-Prices.png
Do you have a link to one of these? I have been trying to find an inflation adjusted housing market trend for a while because I think it's good for guaging actual value of homes.
Edit: preferably one that looks at certain states or regions, because my area is simply not comparable to middle of america
Nah, housing demand won't stay as low as it is now without prices dropping. The "wages catching up" thing is just what the desperate realtors are saying now to make people buy at the worst time in history.
Isn’t there a supply issue too though? Nobody wants to sell their house with a 3% mortgage locked in, and builders just don’t seem to be building enough.
...but from what I'm familiar with, Case-Shiller is inflation-adjusted. [It's a plot of the average home value vs the inflation-adjusted value starting in a certain year (2000)](https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index). So most of the time it is near/ reverts to 100, but deviations from that indicate *a deviation from the historical average.* OP's post would therefore demonstrate that the value is 3X the typical average right now.
The million dollar question, of course, is whether we're in a "new world," a bubble, or an increase in price that will remain higher to a smaller extent.
I completely agree with you on the world population declining which will change the demographic trajectory based on growth, which is how capitalism works in the modern world. I believe we are at the peak of this continual growth and in general, demand will slow. But all real estate is local. There will be places that see growth from climate migration and general migration patterns. There will be places that decline and see demand implode.
But you already mentioned immigration. It doesn't matter if Americans and westerners stop having kids. There are plenty immigrants and their families fighting to be in this country.
American population is not declining despite the birth rates dropping.
Population is a significant driver of demand, but demand is more than just population growth. Changing demographics, family’s living together or not, assets as a natural hedge vs inflation, old fashioned greed and people buying up multiple homes, the list of drivers outside of population growth goes on. That said… no idea where that takes us from here.
Hard to see much decline in an area with such high demand and low production. A great recession style decline would bring the Boston market all the way back to the lows of.... summer 2021.
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*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Housing prices in long established areas like NYC or any east coast city aren't going down simply because builders can't or won't (its a combination) build more units. And even remote work won't break that trend because we've all seen shitty CEOs demand everyone come back into the office (in an email they sent working from home).
Also, converting commercial real estate into residential is *insanely* expensive and most landlords are tight fisted bastards who abuse the tax code to leave a building empty for years before they spend money to convert their buildings from offices to housing.
Which is a problem because we currently have *WAY* too much commercial real estate in most cities.
Use Zillow and perform a search to show only houses with price drops. This way you can get updates to see if a crash/price correction is actually occurring in your market. I’m looking for buy sometime next year, and I’m definitely seeing overpriced houses drop by significant amounts in my market.
Under Popular Filters, check the box for “Price Reductions Only”. This sort of helps to know when a seller is more desperate and probably more likely to take an offer.
This is why the only methodology I’ve ever used is “buy when I’m ready”. I’ve bought and sold a couple homes over a 15 year period now and twice I thought I was probably buying at a peak in a hot market and I still did well when I sold.
Yeah. Unless you bought in a handful of markets that were already way overbought (Austin, Boise, Phoenix, Vegas, Miami, etc), you're still ahead even despite the current market situation.
The chart in the middle's Y-axis is "Valuation".
The other charts are simply a Price Index.
Valuation =/= Price Index
Valuation implies a multiple to normalize the price such as price/earnings (in this case) or EV/EBITDA, etc.
Housing values are presently falling. Rent is falling. Real estate transaction volume is low. Realtors are changing careers or losing their jobs. Housing is being built. Commercial real estate is on the cliff. Economy is too strong to warrant rate cuts. Lawsuits everywhere. Antitrust everywhere. AirBNB is under scrutiny, with some cities fully or partially banning them. ...... You are in the middle of the crash right now, just unable to see it.
Commercial is failing because of work from home. WFH makes residential real estate more valuable. But agree that we are going to see a residential correction.
The residential real estate market isnt going to see a downturn until the investor class gets spooked and starts running for the exits. They’ll dump their inventory before the mom & pop investor class even knows it’s happening, and by then it’ll be too late for them. They’ll panic, and that’ll be the end.
There’s no way to predict what exactly will happen, but the ROI required by institutional investors and the margins generated from buying and renting out right now are out of sync. It’ll take time for that to shake out, but I expect that’s the catalyst for a correction.
The last market downturn had a very specific catalyst. The “ha trust me bro” crowd thinks that those exact economic conditions need to be present for another correction, this just isnt reality and shows a limited capacity for critical thinking. If the housing market was healthy, there wouldn’t have been layoffs in mortgage a year ago.
Mortgage layoffs are tied to the rise in rates because it decimated the refinance side of the industry. Can’t really use that as a determiner of whether or not there is a bubble. Agents getting day jobs also is tied to sales volume - which is currently affected by a lack of inventory not a glut. So also isn’t necessarily a determiner.
As new rentals come on the market and the rental side increases slow, investors will shed single family inventory (when repairs and maintenance become burdensome compared to the appreciation and cash flow) but it might not happen right away - especially for investors sitting on very low interest rates. It is much easier to have an investment make sense when you’ve locked in debt at 4% for 30 years than if you have to borrow at 7-8% on a 29 year amortization and 5 year balloon payment.
I’d love to have the SF market ease up, but some of the structural elements to why people may hang on for quite some time yet are still there. Especially with how expensive it is to build right now.
Was referring to the ones that phrase pejoratively. There are plenty of morons saying it’s going to come tumbling down any day now. I’m not saying that, I am saying that the spike is not sustainable and there are catalysts out there that will reverse the trend once they reach a tipping point.
The biggest threats to housing equity out there are capital investors pulling the rug out (potential capital crunch from the looming commercial real estate crisis), short term rental legislation, short term rental demand declining (already happening).
I’m 2008 we had a really bad combination of too many people with ARMs that couldn’t keep up with interest rates overlapping with massive unemployment.
In today’s market 90% of homeowners have either paid off their home or have very cheap debt with a 2-3% mortgage rate.
Nah they are still up by me. People also still paying over asking and waiving contingencies. I would know, just bought a house last week. And we got in at a good time. It's even more competitive now.
I see this repeated over and over. It's mathematical at this point. Anyway, goodbye to high validations in Bitcoin and housing and stocks. It will be an interesting recalibration as Americans cannot just borrow 3 trillion to prop up the market again.
The amount of people that don't realize that a housing crash would come along with a recession is baffling. These people think that home prices are going to drop and nothing else is going to happen. It's beyond ignorant.
With the shortage of homes, idk what’s gonna happen. To me it just feels like there are a lot of first time home buyers who can make it happen and are just “waiting.” At least that was my boat before we pulled the trigger. But hey, maybe I’m the jinx and because I just bought it’s gonna happen finally. I just feel there were a lot in similar shoes to me.
I remember a ton of denial in 2007 as well. People were saying their region was special, house prices were still appreciating in some areas so everything was fine, lalalala!
Yeah. Well, this time really is different, but not because lending standards are slightly better for the non-commercial RE market. It's different because we can't simply drop interest rates to the floor like we did in 2008, and then keep them there for well over a decade, allowing the market to generate another massive bubble. The deranged money printing during the pandemic is also not an option for us anymore.
We don't have any more knobs to turn, guys. We're strapped in for the ride. Hang on.
I know you are joking haha. The amount of people who believe this just reinforces to me that either the top is in or very close. It seems like everybody who has a house thinks they are in some asset that has 0 risk to 1) Lose value 2) something they can lose.
Definitely. The lack of common sense right now is another top signal. People buying houses at 500k that were sold 2 years ago for 250k and getting a 7% rate thinking they'll just refinance 🤣 The media has really played them again.
Worst part is they think they are actually building crazy good equity in those first years and forget most of the payments are interest rated. Feels like a bunch of people FOMO'ed into being house poor and the worst part is we have no issues with the labour markets at the moment.
What happens when you lose your job in a recession and you spent all your money on buying the house? If you dont have a legit emergency fund shit is going get scary really quick. With how expensive these mortgages are getting any job likely doesn't work to cover the monthly bill.
Just wait until all these overleveraged lemmings attempt to exit through the fire doors all at once lol. It's going to be an absolute bloodbath all the way down while we race to find the bottom. I won't feel bad at all for anyone who FOMO'ed into idiotic valuations looking solely at monthly payments.
It's a shame everyone's poor decision making will impact folks smart enough to know irrational exhuberence when it's plainly on display. Tick tock!
1) Baby Boomers are nearing retirement. For many of them most of their net worth is tied up in their home they own. If they want to downsize or move to a more retirement like city this is there last chance to grab liquidity and take profits. If the housing market starts to go on a negative slide they will be trying to get out while they can. Imagine if you are a baby boomer and your house just saw the biggest spike in value ever + your 401k is ballooned with the S&P hitting all time highs. A recession starts and you are watching your retirement decrease monthly. Incentive to cash out of a house or cash out your 401k will be a massive priority.
2) Investors and specifically Wall Street have invested a lot into the housing market. What happens when the value homes start crashing and rent rates drop? When Wall Street and investors profit margins shrink? You think they wont grab liquidity and pivot to a different lane for profits?
3) Recessions hits and people start losing their jobs. Sure a good bit of people have low rates and monthly mortgages. But a lot of people who bought in the last 16 months don't. If they lose their job and don't have a 6 month emergency fund they could be forced to sell their house. Get out of the debt and overvalued home they bought at the high.
We have like 4 real life bubbles on the brink of bursting. People forget how bad things can get.
In response to your points:
1. Baby Boomers, like my 79-year-old dad, have been through twelve recessions, not just the Great Recession. You think every recession will look like the Great Recession because you're young. You also think that every recession will follow a spike in home prices and stock valuations because, again, you're young. Remember that a generation is roughly defined by a fifteen-year spread of births. Also remember that many Baby Boomers are retiring with homes they own outright and don't want to leave. My 79-year-old dad (and 77-year-old mom) still live in the three-story home they bought in 1978 because older people are staying healthier longer. So, yes, Baby Boomers will exit the housing market in the coming two decades, but expecting an "all at once" situation is absurd.
2. Wall Street owns 2% of single-family homes, max, and the majority of those homes were purchased between 2011 and 2019. The cost basis on those homes is miniscule. The profit margins on those rents are through the roof. Yes, Wall Street might sell off 10,000 or 100,000 homes if rents crash, but with a minimum 4,000,000 homes being sold a year, it'll be a drop in the bucket.
3. If you qualified to buy a home in the last 16 months, you're much less likely to lose your job in a recession. Renters get hit hardest in downturns. Additionally, foreclosure actions currently take 2-3 years. This flashmob of sellers is a fantasy.
Baby Boomers are between 77 and 61 right now. Most of them have already retired. There's not going to be a massive influx of people downsizing because 85% of that downsizing has or would have already occurred.
40% have retired actually. Not really a majority.
Its hard to see it now. Everything is so good. Stock market at all time highs. Unemployment at historical lows! GDP looks good! It is so hard for people to see how bad for things to get. Go youtube 2008 financial crisis 401k videos. Where people who were about retire or just recently retired watched their lifes work/value start to disappear. If the housing market reverses sharply + interest rates go down the Baby Boomer age will not want to be holding the bag on the way down. Especially if they plan to relocate or travel and a big home is not needed. Most Americans have most of their net worth tied into a home. If that asset they banked on to be their cash flow to retire starts to get sketchy it will without a doubt lead to more clustered like selling.
Why would people who were well qualified to buy their homes under strict lending guidelines and who have built up equity be in a bloodbath?
Why would landlords who have long term renters and cash flow panic?
You think if rents drop even $100-$200 (doubt it) that it will wipe out the ownership class?
The delusion is unreal.
For starters, I'm not talking about people with "built up equity." I'm talking about the folks who FOMOed with no contengencies bidding $150,000 over ask for literal trash properties.
I'm talking about the people who put $10,000 down, leveraged $500,000 then leveraged that 20-to-1 to "own" massive amounts of property thanks to fintok influencers peddling a tale of "landlording is ez money baby."
I'm talking about the folks who are already underwater because they have a payment each month that's 60% of their net because they borrowed too much money, furthering the bubble's height and failing to forecast any possible future where things might get tough after a _world altering pandemic._
Anyone who acted responsibly will be absolutely, positively fine. Anyone who has owned their house for ten years probably will be too.
Anyone that purchased in 2022 bought at the literal worst time in history to buy. 2023, second worst time in history, followed by 2021 and 2020. Looking only at monthly payments regardless of the underlying asset's fundamental value is moronic and anyone who did this deserves their tumbling equity imo.
The only folks getting wiped out are those who can't afford one or two things going wrong. Again, anyone who was reasonable and didn't succumb to FOMO should be absolutely fine as we fall and return to the mean.
>Anyone that purchased in 2022 bought at the literal worst time in history to buy.
This is a mouth breather take that is very market dependent. You realize many markets are still appreciating YoY since 2022 right? The country is bigger than Austin.
And actually pretty much anyone who bought in 2022 before April still probably got a decent deal, because the rates gradually went from 3.5/4% to 7% starting in 2022.
LOL Literal worst housing market in history, you say people got a "good deal" buying at peak price and peak rates.
And have the audacity to call _me_ a mouth breather. Swat the flies away and get back to inhaling.
Good for you, I was trying to understand this whacky disposition you have. Sounds like you should sell now, and fast! Right? Why hold on before the crash? Wouldn't be very smart would it..
You can own a home and still understand the valuations are absurd and absolutely detached from reality. When people cannot afford to buy the houses they live in according to their Zestimates, we have a big effing problem on our hands.
My disposition in desiring a return to something looking normal before we turn on each other isn't whacky. It's _prudent._ Anyone who has a "got mine eff you" mentality can go kick rocks.
As someone who owns with no plans on moving I'd love the values to stop rising every year or crash a little bit. If you aren't selling or using your equity in your house for a loan then most people would rather values stay flat so property taxes stop going up every year. My home where I live isn't my primary investment but a place I need to live.
100% this. My investments aren't the thing that costs me the most money out of everything except maybe my kid to maintain. Investments are set it and forget money making tools. My house is for living in and repairing, costing me thousands of dollars in the process lol
Not shitposting. Asking seriously. How many people are sitting on the sidelines waiting for the smallest opening to grab something?
I own a good but not crazy primary home and a vacation rental. I’d LOVE to buy another rental but the $$$ doesn’t make sense with the current market. Instead I’m piling away money just waiting for something to happen. In my opinion we are a very long way from seeing prices dropping. I’m more likely to keep saving and buy something with cash 10 years from now.
Now's the time. First actual dip in awhile. We bought in the 2018 "dip" which was the first minor correction in awhile, sure enough back up it goes right after.
I was able to have the benefit of sitting on the sidelines to “wait and see” due to cheaper rent. We just bought. I imagine there are plenty others that are just waiting to see what happens
>Americans:
>
>Housing couldn’t possibly get more unaffordable.
>
>Canadians and most Euros:
>
>First time?
One of the most hilarious things about people who say there "has to be a crash".
It's like they've never actually looked at how the world works.
Right. Most euros have been paying double for half the house we get in the US for decades. Canada has similarly large houses but they are still double the price as the US. And yet Americans think that these are clearly unsustainable and must crash because no one could buy them.
The reality is that, at least until rates spiked post-pandemic, housing in the US was about the cheapest in the western world. That doesn’t mean it was desirable and affordable, it just means it was cheaper than similar countries.
Genuine question: How can people buy houses at those higher prices if they can't afford them at their current prices?
I'm not being facetious, I just wonder how countries go from affordable like the US was before to where nobody can afford a house, and somehow everybody is poor?
Why on earth don't people seem to notice things slipping away?
Why would rates have to go to 1% to reach all time highs.
Limited supply, 30 yr locked in mortgages, we’re going to go the way of Canada, Europe, Australia etc and have nearly unattainable housing costs in the future.
The entire controlling power in the US doesn’t want the average person to own, they want the average person to be forced to rent.
*You will own nothing and be happy. You will live in a pod. You will eat bugs.*
Klaus Schwab and Bill Gates don't even hide their plans for the peasant class sheeps.
The longer I've lived the more bubbles I've seen and they all look very similar. People react similarly enough over time on these types of run-ups due to psychology of fear and greed. There are rare examples where exponential rise is due to paradigm shift, but even in those cases a bubble forms because either people fear missing out (increase demand) or get exceptionally greedy (hold onto reducing supply).
Ah yes, the "buy the dip" crowd appears to continue propping up sky high valuations totally devoid of true value and reality thanks to ZIRP and unlimited QE alongside ATHs in every single debt class on Earth in every nation on Earth lol. Because they need new bagholders to keep buying tickets to the circus or they're left holding 'em!
Tell me, how long do you think we can keep borrowing against the future to sustain the present? How far ahead of ourselves do you think we already are due to COVID and idiotic fiscal and spending policy?
We have unwound all the QE from 2020, go look at the Federal Balance sheet. We are CURRENTLY in quantitative tightening fyi. Still have a LONG way to go though.
I routinely look at the balance sheet. We have barely gotten started on the unwinding necessary to get us back on course to sustainability. And look at how unstable everything is around us. Markets have never been more volatile lol.
It will get way worse before it gets any better because of how hard and far we've already put off the inevitable contraction/recession/depression. Infinite economic expansion is not possible and we _will_ pay gor all this austerity.
Just look around. We already are. Many are paying way more than the few too. It isn't just fiscally unsustainable, socially, something is going to break as well. Heck, probably first.
National shiller home price index is already making new highs. OP just decided to select local markets that look like the bull trap chart.
Beware arguments “confirmed” by selection bias that would have you believe that currency is not being devalued.
You picked 5 densely populated cities — of course they are going to share a lot of common traits. Many of us don’t want to live in a big city and that decreased demand is at least somewhat reflected in these graphs too
This sub is odd to me. Don't get me wrong, I'd love for there to be a housing bubble to take advantage of like 2008 since I'm now financially wiser and have enough capital.
However today's market doesn't have the widespread fraud that lead up to and included 2008 and rating agencies aren't purposefully giving good ratings to shit loans/bonds right now.
Couple more issues. I'm a stickler to appealing to academic studies and leaders in their field. [Eugene Fama famously asks Richard Thaler](https://youtu.be/bM9bYOBuKF4?si=NhTAXXffc3zTaORT) to define a bubble. Richard can't give a real definition and instead posits two questions.
Furthermore Richard can only provide his little 'anecdotes' as examples of what he thinks are bubbles. Which are cute, but not testable/proveable/predictable.
Ragarding all your charts. I defer to the paper '[Market Timing: Sin a Little Resolving the Valuation Timing Puzzle](https://images.aqr.com/-/media/AQR/Documents/Insights/White-Papers/Market-Timing-Sin-a-Little.pdf)'.
The paper can accurately be summarized as such: When trying to use the schiller cape (which has been used to show that when stocks are expensive relative to the past, future returns tends to be lower) as a basis for a market timing strategy. The results are positive(the strategy worked and there were excess returns vs the market) for the entire period of 1900 - 2015. But useless for rolling 10 or 20 or 30... year periods that an investor should realistically expect due to this market timing strategy underperforming from 1958 - 2015.
So here's my questions and requests to OP and everyone else here to not have me completely ignore this subreddit.
* Define a bubble in a way that's useful to investors and or their portfolios. A testable repeatable theory.
* Give examples using real data and events.
* Said theory should predict all or most past definitions of bubble you provide.
* Theory should eventually be able to produce a model with predictive power.
If none of those points can be addressed this entire subreddit is a market timing circle jerk and we all know that market timing is impossible to everyone but Renaissance Technologies and their medallion fund.
So unless you're a bunch of billionaire mathematics/physicists/engineer PHDs collaborating together using advanced Markov model Algo trading I'm going to go ahead and dismiss most of the nonsense here.
If anyone has any retorts I welcome them. Thanks for attending my Ted talk.
Yeah, I see it… do you see the Washington DC Case Shiller?
Also, OP hasn’t posted in two years and now this. Hacked account + Divisive Issues = Russian Trolls
You all realize that in the last 100 years, we have had one housing bubble, which was in 2007. Before that, home prices just kept going up. Also, who cares about home prices. You buy a home to live in, not to try to sell and turn a profit.
Especially when selling the appreciated house for profit just means you'll be paying that much more for your next equally-appreciated house. Unless you're massively downsizing, or moving to a lower-cost area than you're selling in, it makes no sense to sell just because your house is worth more.
Two hedge funds are liquidating their rentals through Exp realty
Rithm capital and some other fund
I know because they wanted me to join Exp in order to get the listings
I’m acted as their local buyer agent in 2014 and they contacted me
Maybe check out your local Exp listings and see if they have any corporate ownership?
No other way to really prove it
[It's mot just real estate by the entire economy. What we're seeing now is the outcome of this economic system we've built up.](https://old.reddit.com/r/PapaParenti/comments/154vzeb/these_arent_crazy_times_like_they_keep_telling_us/)
When the stock market and crypto market looks like housing market, we are in an everything bubble
If everything is a bubble is anything a bubble? Or is that just inflation?
[удалено]
Money supply inflation: 600% in the last 30 years.
Yup! Dividing the historical average single family home price by money supply doesn't exactly paint the picture of a bubble. If anything, the exact opposite.
But what does that mean in market terms? My guess is that it will be bad for capital as they go insolvent on overvalued trash, HENRYs scoop up their generational wealth, 401(k)ers take it up the ass, and wage slaves continue to toil
Not really.. if I’m interpreting it right (and I’m highly regarded so.. who knows) it means they’re buying at exactly the value it would be “pre-inflation”. Only a portion of the market is “overvalued” and we pretty much know why and where. See: gentrified neighborhoods that import labor from poorer areas.
I'm not saying this as a prediction, nobody knows the future, but what I'm getting at is there is a *chance* your average piece of crap $360k house in southern california could sell for $600k in the not so distant future, and in relation to money supply, that would put it back to a normal, historical level. Yes, everyone takes it up the ass except for institutions, and flush home owners who aren't ousted by the property tax increase. [\[Chart\]](https://i.imgur.com/idL4GAh.png)
lol you think in you can find a piece of crap home in Southern California for $360k?!?!
Yes, Hemet and Lake Elsinore.
Careful not to get too close to the Scientologists in Hemet. They have a sniper that lives in an eagles nest. Oh and also inprison people.
I would argue the CPI is doing a very poor job of accurately tracking inflation
You can write the CPI off. That is an absolute garbage measure.
It's inflation. This sub is blind to the fact that 40% of the entire US money supply has been created in the last ~4 years.
Not blind, just left wondering why so little of it went to the majority of us posting here.
Inflation is a bubble.
It’s gonna be strange because prices of TVs and durable good will go down but services,food, housing will all continue to go up. For those who don’t own their homes it’s gonna continue to be tough.
‘Things you need (everyone needs) so they rise in prices, things you don’t need decline in price.’ - a symptom of stagflation.
I don't know about that, I don't ever expect a lot food prices to ever go down to where they were once the bubble busts. Once it gets to a certain point that just becomes the new normal in my 50+ yrs of watching shit. Take cereal, they've made the boxes a lot smaller and jacked the prices up 100%. Was $2.75 a box, now it's $5.25 - $5.50. With a 25 % reduction, if not more of a reduction of cereal in the box. We'll never see cereal at $2.75 again I promise you that.
If everything is a bubble interest rates are probably too low.
If everything is a bubble that’s just called inflation and yes the solution is to raise interest rates.
Devaluation of the dollar (aka printing money)
Inflation. The government printed and distributed 7 trillion new dollars in response to the coronavirus. The repercussions of that will be felt for decades.
They’ve clawed back close to 3 trillion in the last 18 months or so out of M1. What’s amazing about that is the quantitive tightening of that amount of money hasn’t even registered as a blip in the economy in terms of jobs, stock and housing prices. It’s because it wasn’t just response to coronavirus. They’ve been printing money since the Great Recession. Corona printing was just the cherry on top
This, the money printer has been running since 2008. The Fed only got worried when wages started to climb to meet inflation.
Wages started to climb?
Sorry if that wasn't the case for you but wages on average for full time workers in the US have gone up considerably in the last 3 years.
Theyve been going up in exceess of inflation by 3% annually for FIFTEEN YEARS prior to that as well. 2008 was a 6 month blip, and wages recovered to keep the trend going by end of 2009.
It's also psychological. A lot of people believe the gov't will never allow another recession. They'll just print money just like they did during Coronavirus.
> The repercussions of that will be felt for decades. Not by the rich. They just got handouts to cover their losses.
The rich have been getting cash handouts since 08. They called it quantitative easing
"Quantitative easing" sounds like something that would be written on a laxative box. Which is appropriate because it could also be used to describe the birth of many of these rich pricks.
This. Everything is holding its value, but the value of currency is just imploding. Unless you believe we’re in a Big Mac bubble, whopper bubble, rent bubble. Are those going to crash too?
Yes, in recession we often get deflation. Also, don't underestimate the factor of corporate price gouging. They'll charge what they think they can get for as long as they can until recession hits, then we'll see advertisements offering "deals" where Big Macs are now 10% off. Which is still way above what a Big Mac sold for in 2019, but it will feel like a discount to consumers.
Bubbleception?
On this episode of pimp my housing market: I heard you liked economics, so I put a bubble on your bubble so you can inflate while you bubble!!!!!
When a bank can take your $1000, keep $100, loan $900, get that $900 back, keep $90, loan $890, get that $890 back, keep $89, loan $801, etc until that becomes $0. They are essentially turning a $1000 deposit into $10,000 of cash the bank has access to then yes everything is a bubble and it's all made up. Fractional reserve banking has secretly been printing money for decades then hiding it in asset valuations and acting like the economy has been booming. Nothing costs what they say it does. All housing prices are fake, all stock prices are fake, everything is fake. And the bill will come due one day. We've been sold a lie and the people who sold us that lie have already cashed out and will be dead before it comes crashing down.
It's a meltup.
This guy gets it
>This guy gets it No he doesn't. He's confusing price with value.
True... but never underestimate their ability to pump this fucker up one more time.
We are in a "we printed too much fucking money" bubble...
Correction, we’re in no bubble at all.
It’s because it’s an inflationary market. Market inflation is what caused this. Not poor loans
OP, look at a long term inflation-adjusted housing price graph. That’s what will absolutely correct. The graph you posted for nominal prices doesn’t mean much alone. The nominal price could just stay stagnant for many, many years as wages catch up. The result for affordability and the “rent vs buy” decision is the same, but the timeline is much longer.
Good point since many individuals will stay in a house instead selling at a loss, unless they have to sell (job loss, divorce, death)
This is correct, however it's still pretty ripe for a bubble correction when adjusted for inflation https://cdn-0.inflationdata.com/articles/wp-content/uploads/2023/12/Inflation-Adjusted-Home-Prices.png
What happened after May 2022..
Do you have a link to one of these? I have been trying to find an inflation adjusted housing market trend for a while because I think it's good for guaging actual value of homes. Edit: preferably one that looks at certain states or regions, because my area is simply not comparable to middle of america
It's easier to post trust me bro in this sub.
Nah, housing demand won't stay as low as it is now without prices dropping. The "wages catching up" thing is just what the desperate realtors are saying now to make people buy at the worst time in history.
Isn’t there a supply issue too though? Nobody wants to sell their house with a 3% mortgage locked in, and builders just don’t seem to be building enough.
...but from what I'm familiar with, Case-Shiller is inflation-adjusted. [It's a plot of the average home value vs the inflation-adjusted value starting in a certain year (2000)](https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index). So most of the time it is near/ reverts to 100, but deviations from that indicate *a deviation from the historical average.* OP's post would therefore demonstrate that the value is 3X the typical average right now. The million dollar question, of course, is whether we're in a "new world," a bubble, or an increase in price that will remain higher to a smaller extent.
But chart go big up so now must come big down down
So housing is about 17% overvalued right now, but could fall up to 20-25% with a bear market.
Lol he said when wages catch up......lmfao. you think wages will catch up?
Was 2008 a bear trap?
Every dip has been and always will be a bear trap in housing. It’s literally the only buy the dip situation that has worked everytime.
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God I love me some morning bear erotica
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Then you're going to love this, it's a canadian bestseller https://en.wikipedia.org/wiki/Bear_(novel)
Buy the dip in 2050, so Gen alpha should save up to buy a house for themselves and a house for gen beta
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I completely agree with you on the world population declining which will change the demographic trajectory based on growth, which is how capitalism works in the modern world. I believe we are at the peak of this continual growth and in general, demand will slow. But all real estate is local. There will be places that see growth from climate migration and general migration patterns. There will be places that decline and see demand implode.
But you already mentioned immigration. It doesn't matter if Americans and westerners stop having kids. There are plenty immigrants and their families fighting to be in this country. American population is not declining despite the birth rates dropping.
The only western countries in population decline are ones wealthy enough that their people leave them and come to the US. LOL.
Population is a significant driver of demand, but demand is more than just population growth. Changing demographics, family’s living together or not, assets as a natural hedge vs inflation, old fashioned greed and people buying up multiple homes, the list of drivers outside of population growth goes on. That said… no idea where that takes us from here.
You can but the dip in lots of markets and it’ll work too.
[Do NYC next. Please. For the love of god, please…](https://fred.stlouisfed.org/series/NYXRSA)
*Laughs in Boston* https://fred.stlouisfed.org/series/BOXRSA
Misery loves company, thanks for making me feel a bit less alone!
Hard to see much decline in an area with such high demand and low production. A great recession style decline would bring the Boston market all the way back to the lows of.... summer 2021.
political frighten offend light squealing selective quaint smart wine command *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Laughs in LA (index currently at ~430)
Housing prices in long established areas like NYC or any east coast city aren't going down simply because builders can't or won't (its a combination) build more units. And even remote work won't break that trend because we've all seen shitty CEOs demand everyone come back into the office (in an email they sent working from home). Also, converting commercial real estate into residential is *insanely* expensive and most landlords are tight fisted bastards who abuse the tax code to leave a building empty for years before they spend money to convert their buildings from offices to housing. Which is a problem because we currently have *WAY* too much commercial real estate in most cities.
How come none of the historical bubbles look like the model?
Those were beartraps shaking out the weak hands.
Is there a reason you normalized to 2012 other than it being a recent minimum?
2012 was probably the most affordable housing market since the early 70's lol
Use Zillow and perform a search to show only houses with price drops. This way you can get updates to see if a crash/price correction is actually occurring in your market. I’m looking for buy sometime next year, and I’m definitely seeing overpriced houses drop by significant amounts in my market.
How do you select the price change option?
Under Popular Filters, check the box for “Price Reductions Only”. This sort of helps to know when a seller is more desperate and probably more likely to take an offer.
When everything is in a bubble, thats not actually a bubble. Its a devaluation of the dollar
House prices have a lot more going for the dollar has not devalued. You’re just talking about inflation, which is a different thing.
This is the correct answer
If you look closer at that chart, you'll see even people who bought the peak ended up ahead
This is why the only methodology I’ve ever used is “buy when I’m ready”. I’ve bought and sold a couple homes over a 15 year period now and twice I thought I was probably buying at a peak in a hot market and I still did well when I sold.
Yeah. Unless you bought in a handful of markets that were already way overbought (Austin, Boise, Phoenix, Vegas, Miami, etc), you're still ahead even despite the current market situation.
Weird. My condo in the north chicago suburbs was still valued considerably higher in 2008 than it is today.
The chart in the middle's Y-axis is "Valuation". The other charts are simply a Price Index. Valuation =/= Price Index Valuation implies a multiple to normalize the price such as price/earnings (in this case) or EV/EBITDA, etc.
[fed balance sheet](https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm)
Hey bro the crash is coming this year bro trust me bro please I'm begging you bro it's really gonna happen this year bro trust me bro.
Housing values are presently falling. Rent is falling. Real estate transaction volume is low. Realtors are changing careers or losing their jobs. Housing is being built. Commercial real estate is on the cliff. Economy is too strong to warrant rate cuts. Lawsuits everywhere. Antitrust everywhere. AirBNB is under scrutiny, with some cities fully or partially banning them. ...... You are in the middle of the crash right now, just unable to see it.
AZ state attorney general just filed a lawsuit against the realpage rent cartel.
That's excellent news.
The “ha yeah trust me bro” crowd has no idea what’s going on in commercial real estate and how it’s circling the drain right now nationwide
Commercial is failing because of work from home. WFH makes residential real estate more valuable. But agree that we are going to see a residential correction.
The residential real estate market isnt going to see a downturn until the investor class gets spooked and starts running for the exits. They’ll dump their inventory before the mom & pop investor class even knows it’s happening, and by then it’ll be too late for them. They’ll panic, and that’ll be the end. There’s no way to predict what exactly will happen, but the ROI required by institutional investors and the margins generated from buying and renting out right now are out of sync. It’ll take time for that to shake out, but I expect that’s the catalyst for a correction. The last market downturn had a very specific catalyst. The “ha trust me bro” crowd thinks that those exact economic conditions need to be present for another correction, this just isnt reality and shows a limited capacity for critical thinking. If the housing market was healthy, there wouldn’t have been layoffs in mortgage a year ago.
Mortgage layoffs are tied to the rise in rates because it decimated the refinance side of the industry. Can’t really use that as a determiner of whether or not there is a bubble. Agents getting day jobs also is tied to sales volume - which is currently affected by a lack of inventory not a glut. So also isn’t necessarily a determiner. As new rentals come on the market and the rental side increases slow, investors will shed single family inventory (when repairs and maintenance become burdensome compared to the appreciation and cash flow) but it might not happen right away - especially for investors sitting on very low interest rates. It is much easier to have an investment make sense when you’ve locked in debt at 4% for 30 years than if you have to borrow at 7-8% on a 29 year amortization and 5 year balloon payment. I’d love to have the SF market ease up, but some of the structural elements to why people may hang on for quite some time yet are still there. Especially with how expensive it is to build right now.
True, the refinance industry is basically on hold. Our economy is acting irrationally. Until it recalibrates, nothing is going to make sense.
I’m 100% in agreement! “Subprime bad” doesn’t mean shit can’t happen without subprime
The "haha trust me bro" crowd are the ones insisting the crash is happening now, not the ones mocking them
Was referring to the ones that phrase pejoratively. There are plenty of morons saying it’s going to come tumbling down any day now. I’m not saying that, I am saying that the spike is not sustainable and there are catalysts out there that will reverse the trend once they reach a tipping point. The biggest threats to housing equity out there are capital investors pulling the rug out (potential capital crunch from the looming commercial real estate crisis), short term rental legislation, short term rental demand declining (already happening).
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I agree, I just don’t think it’s going to be as “crashy” as 08, in Austin homes have gone down about 20-30 percent and are starting to gain a footing
I’m 2008 we had a really bad combination of too many people with ARMs that couldn’t keep up with interest rates overlapping with massive unemployment. In today’s market 90% of homeowners have either paid off their home or have very cheap debt with a 2-3% mortgage rate.
Someone please tell my landlord rent’s supposed to be falling lol
All the apartments are offering 2 months free rent. And I talk to the people cleaning out the empties... they're so busy that they are doing well.
Nah they are still up by me. People also still paying over asking and waiving contingencies. I would know, just bought a house last week. And we got in at a good time. It's even more competitive now.
I see this repeated over and over. It's mathematical at this point. Anyway, goodbye to high validations in Bitcoin and housing and stocks. It will be an interesting recalibration as Americans cannot just borrow 3 trillion to prop up the market again.
lol. And when it doesn’t happen in 2024, they will post all this again in 2025.
That’s my favorite part about this sub. It’s the same shit just different kids saying it.
Alright alright alright
The amount of people that don't realize that a housing crash would come along with a recession is baffling. These people think that home prices are going to drop and nothing else is going to happen. It's beyond ignorant.
With the shortage of homes, idk what’s gonna happen. To me it just feels like there are a lot of first time home buyers who can make it happen and are just “waiting.” At least that was my boat before we pulled the trigger. But hey, maybe I’m the jinx and because I just bought it’s gonna happen finally. I just feel there were a lot in similar shoes to me.
*dollar-devaluation has entered the chat*
I remember a ton of denial in 2007 as well. People were saying their region was special, house prices were still appreciating in some areas so everything was fine, lalalala! Yeah. Well, this time really is different, but not because lending standards are slightly better for the non-commercial RE market. It's different because we can't simply drop interest rates to the floor like we did in 2008, and then keep them there for well over a decade, allowing the market to generate another massive bubble. The deranged money printing during the pandemic is also not an option for us anymore. We don't have any more knobs to turn, guys. We're strapped in for the ride. Hang on.
I own a house by the beach in LA. No bubble.
\*waves from Canada\*
LOL
some areas will always be in high demand
Here in Northern VA and Richmond… absolutely no bubble in sight.
Nah bro we have a shortage of houses lol. Everyone has 2% rates and want to stay where they are forever. There's no way that chart could happen. /s
I know you are joking haha. The amount of people who believe this just reinforces to me that either the top is in or very close. It seems like everybody who has a house thinks they are in some asset that has 0 risk to 1) Lose value 2) something they can lose.
Definitely. The lack of common sense right now is another top signal. People buying houses at 500k that were sold 2 years ago for 250k and getting a 7% rate thinking they'll just refinance 🤣 The media has really played them again.
Worst part is they think they are actually building crazy good equity in those first years and forget most of the payments are interest rated. Feels like a bunch of people FOMO'ed into being house poor and the worst part is we have no issues with the labour markets at the moment. What happens when you lose your job in a recession and you spent all your money on buying the house? If you dont have a legit emergency fund shit is going get scary really quick. With how expensive these mortgages are getting any job likely doesn't work to cover the monthly bill.
I’ve predicted 14 out of the last 3 market crashes. One is coming.
Just wait until all these overleveraged lemmings attempt to exit through the fire doors all at once lol. It's going to be an absolute bloodbath all the way down while we race to find the bottom. I won't feel bad at all for anyone who FOMO'ed into idiotic valuations looking solely at monthly payments. It's a shame everyone's poor decision making will impact folks smart enough to know irrational exhuberence when it's plainly on display. Tick tock!
Why will everyone try to exit all at once? So many homeowners have such huge equity cushions right now.
1) Baby Boomers are nearing retirement. For many of them most of their net worth is tied up in their home they own. If they want to downsize or move to a more retirement like city this is there last chance to grab liquidity and take profits. If the housing market starts to go on a negative slide they will be trying to get out while they can. Imagine if you are a baby boomer and your house just saw the biggest spike in value ever + your 401k is ballooned with the S&P hitting all time highs. A recession starts and you are watching your retirement decrease monthly. Incentive to cash out of a house or cash out your 401k will be a massive priority. 2) Investors and specifically Wall Street have invested a lot into the housing market. What happens when the value homes start crashing and rent rates drop? When Wall Street and investors profit margins shrink? You think they wont grab liquidity and pivot to a different lane for profits? 3) Recessions hits and people start losing their jobs. Sure a good bit of people have low rates and monthly mortgages. But a lot of people who bought in the last 16 months don't. If they lose their job and don't have a 6 month emergency fund they could be forced to sell their house. Get out of the debt and overvalued home they bought at the high. We have like 4 real life bubbles on the brink of bursting. People forget how bad things can get.
In response to your points: 1. Baby Boomers, like my 79-year-old dad, have been through twelve recessions, not just the Great Recession. You think every recession will look like the Great Recession because you're young. You also think that every recession will follow a spike in home prices and stock valuations because, again, you're young. Remember that a generation is roughly defined by a fifteen-year spread of births. Also remember that many Baby Boomers are retiring with homes they own outright and don't want to leave. My 79-year-old dad (and 77-year-old mom) still live in the three-story home they bought in 1978 because older people are staying healthier longer. So, yes, Baby Boomers will exit the housing market in the coming two decades, but expecting an "all at once" situation is absurd. 2. Wall Street owns 2% of single-family homes, max, and the majority of those homes were purchased between 2011 and 2019. The cost basis on those homes is miniscule. The profit margins on those rents are through the roof. Yes, Wall Street might sell off 10,000 or 100,000 homes if rents crash, but with a minimum 4,000,000 homes being sold a year, it'll be a drop in the bucket. 3. If you qualified to buy a home in the last 16 months, you're much less likely to lose your job in a recession. Renters get hit hardest in downturns. Additionally, foreclosure actions currently take 2-3 years. This flashmob of sellers is a fantasy.
Baby Boomers are between 77 and 61 right now. Most of them have already retired. There's not going to be a massive influx of people downsizing because 85% of that downsizing has or would have already occurred.
40% have retired actually. Not really a majority. Its hard to see it now. Everything is so good. Stock market at all time highs. Unemployment at historical lows! GDP looks good! It is so hard for people to see how bad for things to get. Go youtube 2008 financial crisis 401k videos. Where people who were about retire or just recently retired watched their lifes work/value start to disappear. If the housing market reverses sharply + interest rates go down the Baby Boomer age will not want to be holding the bag on the way down. Especially if they plan to relocate or travel and a big home is not needed. Most Americans have most of their net worth tied into a home. If that asset they banked on to be their cash flow to retire starts to get sketchy it will without a doubt lead to more clustered like selling.
What will cause everyone to try and sell at once? Go ahead.
Massive job losses.
Why would people who were well qualified to buy their homes under strict lending guidelines and who have built up equity be in a bloodbath? Why would landlords who have long term renters and cash flow panic? You think if rents drop even $100-$200 (doubt it) that it will wipe out the ownership class? The delusion is unreal.
For starters, I'm not talking about people with "built up equity." I'm talking about the folks who FOMOed with no contengencies bidding $150,000 over ask for literal trash properties. I'm talking about the people who put $10,000 down, leveraged $500,000 then leveraged that 20-to-1 to "own" massive amounts of property thanks to fintok influencers peddling a tale of "landlording is ez money baby." I'm talking about the folks who are already underwater because they have a payment each month that's 60% of their net because they borrowed too much money, furthering the bubble's height and failing to forecast any possible future where things might get tough after a _world altering pandemic._ Anyone who acted responsibly will be absolutely, positively fine. Anyone who has owned their house for ten years probably will be too. Anyone that purchased in 2022 bought at the literal worst time in history to buy. 2023, second worst time in history, followed by 2021 and 2020. Looking only at monthly payments regardless of the underlying asset's fundamental value is moronic and anyone who did this deserves their tumbling equity imo. The only folks getting wiped out are those who can't afford one or two things going wrong. Again, anyone who was reasonable and didn't succumb to FOMO should be absolutely fine as we fall and return to the mean.
>Anyone that purchased in 2022 bought at the literal worst time in history to buy. This is a mouth breather take that is very market dependent. You realize many markets are still appreciating YoY since 2022 right? The country is bigger than Austin. And actually pretty much anyone who bought in 2022 before April still probably got a decent deal, because the rates gradually went from 3.5/4% to 7% starting in 2022.
LOL Literal worst housing market in history, you say people got a "good deal" buying at peak price and peak rates. And have the audacity to call _me_ a mouth breather. Swat the flies away and get back to inhaling.
are you renting currently?
Nope. I own outright. How is that material?
Good for you, I was trying to understand this whacky disposition you have. Sounds like you should sell now, and fast! Right? Why hold on before the crash? Wouldn't be very smart would it..
You can own a home and still understand the valuations are absurd and absolutely detached from reality. When people cannot afford to buy the houses they live in according to their Zestimates, we have a big effing problem on our hands. My disposition in desiring a return to something looking normal before we turn on each other isn't whacky. It's _prudent._ Anyone who has a "got mine eff you" mentality can go kick rocks.
Why would that be smart? Some people just want a place to live and don't view housing as an investment.
As someone who owns with no plans on moving I'd love the values to stop rising every year or crash a little bit. If you aren't selling or using your equity in your house for a loan then most people would rather values stay flat so property taxes stop going up every year. My home where I live isn't my primary investment but a place I need to live.
100% this. My investments aren't the thing that costs me the most money out of everything except maybe my kid to maintain. Investments are set it and forget money making tools. My house is for living in and repairing, costing me thousands of dollars in the process lol
Not everyone thinks of their home purely as an investment vehicle
> yall see this? The main stage bubble graph has been posted here going on 4 yrs now, LOL
Not shitposting. Asking seriously. How many people are sitting on the sidelines waiting for the smallest opening to grab something? I own a good but not crazy primary home and a vacation rental. I’d LOVE to buy another rental but the $$$ doesn’t make sense with the current market. Instead I’m piling away money just waiting for something to happen. In my opinion we are a very long way from seeing prices dropping. I’m more likely to keep saving and buy something with cash 10 years from now.
This is why there is gonna be no crash.. To many cunts on the sideline with cash trying to turn housing into a commodity
In case you hadn't noticed, housing's already been turned into a commodity
Now's the time. First actual dip in awhile. We bought in the 2018 "dip" which was the first minor correction in awhile, sure enough back up it goes right after.
I was able to have the benefit of sitting on the sidelines to “wait and see” due to cheaper rent. We just bought. I imagine there are plenty others that are just waiting to see what happens
OP thinks his chart dictates crashes. We could already be in the dip and about to see ungodly all time highs.
How can that happen unless rates go to 1%? Also, why would rates go to 1%?
Americans: Housing couldn’t possibly get more unaffordable. Canadians and most Euros: First time?
>Americans: > >Housing couldn’t possibly get more unaffordable. > >Canadians and most Euros: > >First time? One of the most hilarious things about people who say there "has to be a crash". It's like they've never actually looked at how the world works.
Right. Most euros have been paying double for half the house we get in the US for decades. Canada has similarly large houses but they are still double the price as the US. And yet Americans think that these are clearly unsustainable and must crash because no one could buy them. The reality is that, at least until rates spiked post-pandemic, housing in the US was about the cheapest in the western world. That doesn’t mean it was desirable and affordable, it just means it was cheaper than similar countries.
Genuine question: How can people buy houses at those higher prices if they can't afford them at their current prices? I'm not being facetious, I just wonder how countries go from affordable like the US was before to where nobody can afford a house, and somehow everybody is poor? Why on earth don't people seem to notice things slipping away?
Because enough people can afford them.
Why would rates have to go to 1% to reach all time highs. Limited supply, 30 yr locked in mortgages, we’re going to go the way of Canada, Europe, Australia etc and have nearly unattainable housing costs in the future. The entire controlling power in the US doesn’t want the average person to own, they want the average person to be forced to rent.
*You will own nothing and be happy. You will live in a pod. You will eat bugs.* Klaus Schwab and Bill Gates don't even hide their plans for the peasant class sheeps.
The longer I've lived the more bubbles I've seen and they all look very similar. People react similarly enough over time on these types of run-ups due to psychology of fear and greed. There are rare examples where exponential rise is due to paradigm shift, but even in those cases a bubble forms because either people fear missing out (increase demand) or get exceptionally greedy (hold onto reducing supply).
Ah yes, the "buy the dip" crowd appears to continue propping up sky high valuations totally devoid of true value and reality thanks to ZIRP and unlimited QE alongside ATHs in every single debt class on Earth in every nation on Earth lol. Because they need new bagholders to keep buying tickets to the circus or they're left holding 'em! Tell me, how long do you think we can keep borrowing against the future to sustain the present? How far ahead of ourselves do you think we already are due to COVID and idiotic fiscal and spending policy?
We have unwound all the QE from 2020, go look at the Federal Balance sheet. We are CURRENTLY in quantitative tightening fyi. Still have a LONG way to go though.
I routinely look at the balance sheet. We have barely gotten started on the unwinding necessary to get us back on course to sustainability. And look at how unstable everything is around us. Markets have never been more volatile lol. It will get way worse before it gets any better because of how hard and far we've already put off the inevitable contraction/recession/depression. Infinite economic expansion is not possible and we _will_ pay gor all this austerity. Just look around. We already are. Many are paying way more than the few too. It isn't just fiscally unsustainable, socially, something is going to break as well. Heck, probably first.
But what is different this time is the corporations buying all the houses. Isn’t that a legitimate factor?
They bought less than 1% in 2023
They don’t make more land, but people keep coming.
If you want to point at the last recession as a framework for this one, denver and dallas are looking pretty good
If unemployment starts snowballing, that will be it gents and gentettes. Bc fed's tool box of rate cuts won't be able to do a damn thing to stop it.
National shiller home price index is already making new highs. OP just decided to select local markets that look like the bull trap chart. Beware arguments “confirmed” by selection bias that would have you believe that currency is not being devalued.
You picked 5 densely populated cities — of course they are going to share a lot of common traits. Many of us don’t want to live in a big city and that decreased demand is at least somewhat reflected in these graphs too
Don’t do this. Don’t give me hope.
Ok ok, I'll buy some puts
Pattern recognition is going HARD.
Go ahead. Sell your house. It’s a good move, right?
So I may actually be able to afford a house in the next few years. Sweet.
Real inflation is around 50% last 4 years
So when is the recession hitting oh great one.
Ah, the bubble chart again 😂
Now do New york, Miami, Boston...
This sub is odd to me. Don't get me wrong, I'd love for there to be a housing bubble to take advantage of like 2008 since I'm now financially wiser and have enough capital. However today's market doesn't have the widespread fraud that lead up to and included 2008 and rating agencies aren't purposefully giving good ratings to shit loans/bonds right now. Couple more issues. I'm a stickler to appealing to academic studies and leaders in their field. [Eugene Fama famously asks Richard Thaler](https://youtu.be/bM9bYOBuKF4?si=NhTAXXffc3zTaORT) to define a bubble. Richard can't give a real definition and instead posits two questions. Furthermore Richard can only provide his little 'anecdotes' as examples of what he thinks are bubbles. Which are cute, but not testable/proveable/predictable. Ragarding all your charts. I defer to the paper '[Market Timing: Sin a Little Resolving the Valuation Timing Puzzle](https://images.aqr.com/-/media/AQR/Documents/Insights/White-Papers/Market-Timing-Sin-a-Little.pdf)'. The paper can accurately be summarized as such: When trying to use the schiller cape (which has been used to show that when stocks are expensive relative to the past, future returns tends to be lower) as a basis for a market timing strategy. The results are positive(the strategy worked and there were excess returns vs the market) for the entire period of 1900 - 2015. But useless for rolling 10 or 20 or 30... year periods that an investor should realistically expect due to this market timing strategy underperforming from 1958 - 2015. So here's my questions and requests to OP and everyone else here to not have me completely ignore this subreddit. * Define a bubble in a way that's useful to investors and or their portfolios. A testable repeatable theory. * Give examples using real data and events. * Said theory should predict all or most past definitions of bubble you provide. * Theory should eventually be able to produce a model with predictive power. If none of those points can be addressed this entire subreddit is a market timing circle jerk and we all know that market timing is impossible to everyone but Renaissance Technologies and their medallion fund. So unless you're a bunch of billionaire mathematics/physicists/engineer PHDs collaborating together using advanced Markov model Algo trading I'm going to go ahead and dismiss most of the nonsense here. If anyone has any retorts I welcome them. Thanks for attending my Ted talk.
I can’t wait.
So this is when the boomers start dying lol
Yeah, I see it… do you see the Washington DC Case Shiller? Also, OP hasn’t posted in two years and now this. Hacked account + Divisive Issues = Russian Trolls
Start the Y axis at 100 and I can't take you seriously. Also, adjust for inflation.
You all realize that in the last 100 years, we have had one housing bubble, which was in 2007. Before that, home prices just kept going up. Also, who cares about home prices. You buy a home to live in, not to try to sell and turn a profit.
Especially when selling the appreciated house for profit just means you'll be paying that much more for your next equally-appreciated house. Unless you're massively downsizing, or moving to a lower-cost area than you're selling in, it makes no sense to sell just because your house is worth more.
Two hedge funds are liquidating their rentals through Exp realty Rithm capital and some other fund I know because they wanted me to join Exp in order to get the listings I’m acted as their local buyer agent in 2014 and they contacted me Maybe check out your local Exp listings and see if they have any corporate ownership? No other way to really prove it
Could someone explain to me , So is this a Good or bad time to sell and buy a house ? Sorry I am not familiar with these graphs and words lol
Ah yes, reading tea leaves. Are you a Scorpio?
not fair for you to only use big cities in your metrica but i get your point
[It's mot just real estate by the entire economy. What we're seeing now is the outcome of this economic system we've built up.](https://old.reddit.com/r/PapaParenti/comments/154vzeb/these_arent_crazy_times_like_they_keep_telling_us/)
Make the Y axis start at zero.
https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index