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Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

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Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#221

Post by imtringued »

mediaman wrote: post #127
dudul wrote: post #70

Earlier quoted context omitted.

Do you think the same about selling food for profit? or clothing? or medical care?

They don't normally think through the consequences of this type of policy. What happens when you're barred from selling it for more than you paid? The seller will have a price cap but will have hundreds of people who want to buy it. How do they choose? Maybe lavish off-the-book gifts, or maybe they choose based on how the person looks, or perhaps they arrange consulting contracts to make up payment afterward. Would y…

That's why any sane person only wants to tax the land because taxing land reduces the value of land and increases the importance of the building on top of the land.

When you tax land people don't suddenly stop producing more land.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#222

Post by betwixthewires »

skystarman wrote: post #90
AdmiralAsshat wrote: post #34

Awesome. I've been trying to buy a home since 2015 or so and noting that housing prices continue to rise, without fail, regardless of economic or political climate. Economy is doing well? Price increase! Economy is doing terribly because of global pandemic? Price increase! I have been patiently waiting for the next "bubble" to pop, even as my realtor insists that oh no, we're not really in a bubble, this is just the…

If you live in a place like the Bay Area/NYC where cities/local zoning boards are preventing almost and and all new construction then in all likelihood your home price will continue to appreciate throughout your lifetime. Supply and demand. There are way more people that want to live in these places than houses available. And we keep making new people every year.

> There are way more people that want to live in these places than houses available.

That's like the saying "government bonds are 0 risk." It's usually true, til it isn't.

These problems with housing costs in these cities absolutely will make the cities less desirable, I think we will see a large deurbanization period in north america very soon and you'll see most of these cities that are constricting supply of housing crumble like Detroit.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#223

Post by plorkyeran »

ffggvv wrote: post #129
kjkjadksj wrote: post #101

Earlier quoted context omitted.

A lot of people still buy with like 5% down and pay pmi even in hot markets. There are also first time homeowner benefits. My city offers a down payment loan where you can pay 1% down up to like a 750k home if you are lower income. I think that not a lot of people are well educated on homeownership and think that you need to have a huge down payment or an all cash offer, when thats just not true, and often don’t know…

if you have a jumbo loan you need a much larger downpayment. which is basically required in any state on the coasts.

The threshold for loan size which requires a jumbo loan is set per county and is much higher in the expensive coastal states. In California it's $548,250 in the rural counties where homes are around $250/square foot, so the vast majority of homes will qualify for conforming loans. In the sf bay area it's $822,375, which is well below the average price in some but not all cities.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#224

Post by betwixthewires »

minikites wrote: post #72
AdmiralAsshat wrote: post #34

Awesome. I've been trying to buy a home since 2015 or so and noting that housing prices continue to rise, without fail, regardless of economic or political climate. Economy is doing well? Price increase! Economy is doing terribly because of global pandemic? Price increase! I have been patiently waiting for the next "bubble" to pop, even as my realtor insists that oh no, we're not really in a bubble, this is just the…

Capitalism is predicated on the idea of perpetual and infinite growth. Those assumptions are reflected in many ways and we're going to need to rethink our economy and political systems with entirely different assumptions soon enough because we're already running into their limits.

You do not understand what a capitalist means by "infinite growth." We do not need to completely re-think our economy because people are about to feel the consequences of their bad financial decisions.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#225

Post by imtringued »

acchow wrote: post #95
DisjointedHunt wrote: post #65

Lots of people miss the fact that the Fed has intervened in unprecedented ways in the past year, that we may not understand fully for decades.

Since 2008 really. I guess you could say quantitative easing was not unprecedented in human history, but it was unprecedented in the USA.

When banks grant credit, they create a bond on the asset side and credit (bank money) on their liability side. The debt is your liability, the credit is your asset. You can spend that credit on anything you want, it can even be used to repay a different debt than the one you agreed to. Banks took a contract (debt = promise to sell goods and services) and essentially turned it liquid. Each bank dollar is basically a micro bond with no terms written on it.

QE basically buys the bond off the bank and gives the bank central bank reserves. It increases liquidity and that is about it. The bank doesn't own the bond it sold, it owns a claim to a small portion of the bonds the central bank has on its balance sheet. It doesn't have to buy the same bond back. (the same way you can use your borrowed money to repay a different debt). It helps banks get bad debt off their balance sheet but in no way does it encourage people to borrow more money.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#226

Post by SevenSigs »

xenadu02 wrote: post #169
AdmiralAsshat wrote: post #34

Awesome. I've been trying to buy a home since 2015 or so and noting that housing prices continue to rise, without fail, regardless of economic or political climate. Economy is doing well? Price increase! Economy is doing terribly because of global pandemic? Price increase! I have been patiently waiting for the next "bubble" to pop, even as my realtor insists that oh no, we're not really in a bubble, this is just the…

You can end up worse off for waiting, even if there is a "bubble pop". Even people who correctly identify market bubbles and have good timing can lose in the long run because the gains during the run up of the market compound so much it ends up being smarter to ride out the dips. Unlike any other investment a home has direct utility for the buyer as shelter. You should buy what home you can afford and don't try to ti…

> Even people who correctly identify market bubbles and have good timing can lose in the long run because the gains during the run up of the market compound so much it ends up being smarter to ride out the dips.

I tripled my investment when I sold last year, but I would probably have done 3.5x now... lets see what happens next year. The wood prices went back down a lot, at least: https://ns.reddit.com/r/HomeImprovement/comments/p7rfsq/ever....

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#227

Post by betwixthewires »

nicoffeine wrote: post #188
nicoffeine wrote: post #157

Earlier quoted context omitted.

Modern capitalism depends on fiat currency and investment from those with capital. Currency loses value over time to inflation, so investors are always trying to get better returns against a baseline. Even at 3% per year, consumption has to double every 16 years if investors only want to break even. So, it's not "nice" if the economy grows, it's an absolute requirement to keep investors interested.

For the downvoters: "The single most important question in investing this year is whether the rampant inflation of the moment is temporary, as the Federal Reserve believes, or marks a historic shift. I argued last week that we are on the cusp of a major change and long-run inflation is now more likely." https://www.wsj.com/articles/if-inflation-is-coming-here-is-...

Why have I been seeing so much attention given to voting in threads on HN these days? Is there an influx from Reddit or something by a bunch of people who didn't take the time to learn the etiquette here? We speak only when there's something to be said, vote only based on the quality of the comment and move on. You don't need to address downvoters. If you had something to address them with it should've been in your original comment, then maybe they wouldn't have downvoted.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#228

Post by alkonaut »

A huge chunk of all the offices in the developed world moved into people’s homes and a not-insignificant fraction of those offices will remain in people’s homes indefinitely. This isn’t just going to work by having the office in bed. People actually need more home space per person.

Unlike many past peaks this time it actually feels like there is a fundamental change that supports the increasing prices.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#229

Post by dudul »

imtringued wrote: post #219
dudul wrote: post #70

Earlier quoted context omitted.

Do you think the same about selling food for profit? or clothing? or medical care?

Those are reproducible. You can make more food. You can't produce land.

You can build upward. You can actually "make" land like in Monaco for example. The land is there, its just the way its used. And making it so you can't sell for profit would decincitive new construction projects even more.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#230

Post by betwixthewires »

strangattractor wrote: post #32

I keep hearing about a housing shortage. How we are not building fast enough. I personally know several people that own more than one home and AirBnB it when not in use. Also hedge funds are now targeting real estate. I can't help but wonder if this is partially an AirBnB and hedge fund created situation. Of course these are the same people that have access to all this free money. The average Joe still has to pay int…

It absolutely is a speculation driven market, and has been for a long time, and that is the key driver for housing prices, which is why housing price increases coincided with a massive increase in money supply.

People talk about adjustable rate mortgages and such from the last bubble, and these sorts of thing played a role and helped nail in the people at the bottom, but they aren't what caused that crisis. Turning a market for an inelastic utilitarian asset into a speculative market is the fundamental cause, everything else is just an instrument of that perverted market.

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