US Home Prices Set Record New High

So you think Obama was responsible for the bursting of the housing bubble in 2008 the consequences of which followed for several more years?

 

It is a bubble, not simply a supply issue. We have had this conversation many times. Supply and demand is a two-sided equation, and you have to treat them equally in the discussion.

Yes, housing inventory is rising to normal levels because the money is no longer cheap to borrow and prices are too high. Low rates is what caused the bubble, not supply… though they are related. The ZIRP policy led to borrowers being able to obtain large mortgages for cheap monthly payments. This led to higher and higher home sale prices, which led to higher and higher appraisals and comps, which led to even higher prices. The cheap money caused a buying frenzy which, yes, caused increased demand, which in turn decreased supply.

We are no longer in a low rate, moderate price, low inventory situation that causes high demand. We are in a high rate, high price, moderate inventory position that causes low demand.

Technically, a crash or major correction should have happened already. It almost started with the bank runs on Silicon Valley Bank and others, but the government intervened. We likely would have seen a major economic recession had the financial industry toppled again. Regardless, I have stopped trying to understand the housing market, because it no longer moves according to the fundamentals.

One thing I would caution you about is to not take the housing equity victory lap until you actually sell. I sold (had to for relocation), and I personally think the sellers overpaid me. But… they got a great house and I’m sure they are happy. I don’t celebrate my stock market gains until I sell. I would caveat, however, that if prices start to decline, it’s far easier to sell off liquid investments than real estate.

 

Yawn. Still no response on the data. Your schtick is tired. Get beat up and start nonsensical posting. You are as predictable as afternoon rain in the summer.

 

That’s not how supply and demand work. You are confused about points on a demand curve and what a shift in the curve does. I think if you looked it up we wouldn’t be talking Greek to each other.

Rates have been low for 2 decades so I don’t think you can point to a 2 year run up in prices due to housing shortages as related to low rates.

Most borrowers are credit worthy, have fixed mortgages and are equity rich. Not the makings of a bubble. Even if prices contract from greedy sellers wanting to offload inventory prices will be way up to 2019.

I can only listen to dire warnings for so long. People have been calling for a recession or claiming we are in one for 3+ years. The housing warnings have been going on for 2+ years. Will the economy slow at some point and affect everything including housing? Sure. But there really aren’t signs as of yet.

 

Even if you didn't actually say it you sure as hell implied that Obama was responsible for the continuing decline in home ownership following the bursting of the bubble failing to note that foreclosures continued years after the bubble burst and at the same time lenders significantly raised standards making it much more difficult for prospective purchasers to obtain home mortgages.

 

I don’t see how my post conflicts with the supply/demand curve.

If you read my post, I did not call for a recession. I stated that I believe we narrowly avoided a recession by bailing out Silicon Valley and other banks. I don’t see how you can deny the potential impact of all those bank failures had they been allowed to happen without a government-assisted parachute landing. The dominoes would have fallen.

I also clearly stated that the housing market makes no sense to me, which is an admission that it is not going according to what I would have expected. Prices are staying higher for longer than I anticipated. They very well might not come down appreciably.

But… there is a cost to this. Home equity and stock gains are largely meaningless, because the money is worth far less. Being a $1M millionaire today really means nothing. You need $3M or more to actually be rich. Having an extra $300-500k in home equity is equivalent to $100-200k equity back in 2019. Looking at my gains over the past few years, I should be ecstatic, but when I judge it in context of inflation, it’s not as impressive.

 

Looks really good. The Realtor.com median listing price is up only 0.2% from a year ago. And if you look at the link on rents, rents are lower now than they were a year ago.

 

Sounds good to me, I'm ready for my home values to start growing again. They peaked in mid 2022 and have been down and sideways since then, so I'm ready to start building that paper wealth again.

 

Man... don't you know our country is booming economically. LMFAO! This economy is Carter-esque bad.

 

Are we looking at the same housing market? I don't see this down and sideways price activity that you are referencing. Sellers have somewhat backed down from aspirational listing prices and are doing price reductions, but those prices were largely so inflated that trimming off 10, 25, or 20 percent from the asking price still would leave sellers with a hefty profit.

 

I just picked a random nearby home for sale on Zillow ...pattern is the same for me ... It looks like a reversion to the mean to me, but still 2 years of down and sideways price movement, for the most part

 

They supply an accuracy table. There is generally an 80% chance they are within $25k on a $500K house. Seems decent but not perfect.