Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

npr.org

Post reply on HN
Print view View original

241–250 of 286 posts

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

#241

Post by nly »

PragmaticPulp wrote: post #20

They cite the numbers in "real terms", which would mean inflation adjusted: > The average price of American homes, in real terms, is now the highest it's ever been Of course, you really need to be looking at mortgage rates to understand housing affordability: http://www.freddiemac.com/pmms/pmms30.html July 2021 average 30-year mortgage rate: 2.87% (with 0.7 points) 2008 12-month average 30-year mortgage rate: 6.03% (…

None of that matters if house prices inflate outside of the income multiple that a bank will lend and you can't get a mortgage to begin with.

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

#242

Post by [deleted] »

100-xyz wrote: post #189
rrrrrrrrrrrryan wrote: post #151

Earlier quoted context omitted.

This logic doesn't hold in all housing markets. In California, people generally buy the absolute most house they can possibly afford. Houses are extremely expensive and people don't want to live in shacks, so they stretch their budget as far as they can. Home prices in these markets are extremely sensitive to changes in interest rates, as you've described. However in other markets, interest rates can wiggle up and do…

Sincere question - can you point me to such markets where interest rates can wiggle up and down without having as dramatic an effect on prices?

[deleted]

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

#243

Post by gruez »

jfengel wrote: post #236
bluGill wrote: post #197

Earlier quoted context omitted.

I'd invest in something more efficient. If I can find a better way to turn the natural resources into something else can make a profit. Or I'd invest in games/movies/art. People are always interested in something new even if the plot 3000 years old.

In your first paragraph, that's the point that the OP was making: you're assuming that we won't reach a point of diminishing returns. That's not guaranteed. We might be able to guarantee infinite creativity... but will you be able to invest in it? If you're not the one writing the game/movie/novel, why would the artist permit you to invest and reap the benefit of their creativity? Until recently, you could gain that…

>If you're not the one writing the game/movie/novel, why would the artist permit you to invest and reap the benefit of their creativity?

AAA games are expensive to make, so are blockbuster movies. Even for non AAA/blockbuster movies, you'd still need some sort of financing. If UBI isn't a thing you'd need to finance your living somehow, which limits you to working part-time or requiring a substantial savings fund. novels might be fine, but you'd still might want a publisher for an advance or PR.

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

#244

Post by InitialLastName »

badrchoubai wrote: post #124

Stupid question: Do increases in things like Home prices, wages, etc. correlate to inflation?

Stupid answer: Sometimes!

Inflation is really an indirect measurement of the rate of change in a currency's value. It usually is approximated by sampling the price of a "basket of goods", including labor, real estate, and other commodities. If the prices of those goods are going up, overall, we have inflation.

Sometimes, though, the prices of some things are going up and the prices of other things are going down. In that case, it can be hard to discern between "the value of this good is increasing" and "the value of the money spent on this thing is decreasing".

In the current situation, we have both inflation (by some measures at a ~5% annual rate) and shenanigans in the real estate market (to some extent related to very low interest rates for mortgages) that are causing prices to rocket.

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

#245

Post by latchkey »

Armisael16 wrote: post #88
latchkey wrote: post #68

Earlier quoted context omitted.

How do you compare prices?

You compare like-to-like. You compare the same kinds of bread, not cheap white bread to artisanal. You compare a 27" 1080 TV to another 27" 1080p TV, not an 8k TV.

But like-to-like isn't just "resolution" and "size". I'd never buy a tv with a comparison like that.

My comparison would be as if I took a "low/mid/top end tv" in 2000 and compared it with a "low/mid/top end tv" in 2021. In that case, it is still about the same price, especially adjusted for inflation.

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

#246

Post by someguydave »

hpoe wrote: post #53
robotresearcher wrote: post #23

Earlier quoted context omitted.

Almost everything. Important exceptions are housing, health care and education, which have large impacts on COL. But most else is cheaper.

Incidentally also the three areas where the government is most directly pouring money into, via FHA/USDA loans, Medicare/Meidcade, and Pell Grants and Loans respectively.

Those sectors (except construction) are also very well defended by interest groups against foreign workers in the usa.

It’s okay to hire an Indian fresh off the boat (with a visa) to code at Facebook (probably after an older or more expensive domestic worker is unhired) without a license but it is unthinkable that say public school teachers face the same competition.

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

#248

Post by rrrrrrrrrrrryan »

100-xyz wrote: post #189
rrrrrrrrrrrryan wrote: post #151

Earlier quoted context omitted.

This logic doesn't hold in all housing markets. In California, people generally buy the absolute most house they can possibly afford. Houses are extremely expensive and people don't want to live in shacks, so they stretch their budget as far as they can. Home prices in these markets are extremely sensitive to changes in interest rates, as you've described. However in other markets, interest rates can wiggle up and do…

Sincere question - can you point me to such markets where interest rates can wiggle up and down without having as dramatic an effect on prices?

I worked in the mortgage industry for a couple years, and it was common knowledge there that California home prices were the most tightly coupled with interest rate changes.

I'm not sure which markets are at the opposite end of the spectrum, but you could probably get a good idea by looking at the ratios between median household income vs. median mortgage payment in any given market. Households (currently) spending a smaller fraction of their paycheck to pay their mortgage should be able to better absorb some price increases.

According to this visualisation on Zillow[1], California is indeed the worst. The median household in San Jose would have to allocate 53% of their income to pay a median mortgage, compared to the national average of 17.5%:

[1] https://www.zillow.com/research/q2-2018-affordability-21286/

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

#249

Post by Armisael16 »

latchkey wrote: post #245
Armisael16 wrote: post #88

Earlier quoted context omitted.

You compare like-to-like. You compare the same kinds of bread, not cheap white bread to artisanal. You compare a 27" 1080 TV to another 27" 1080p TV, not an 8k TV.

But like-to-like isn't just "resolution" and "size". I'd never buy a tv with a comparison like that. My comparison would be as if I took a "low/mid/top end tv" in 2000 and compared it with a "low/mid/top end tv" in 2021. In that case, it is still about the same price, especially adjusted for inflation.

In that case the way you compare things is not the way most people do. Most people care more about what they’re getting then where it falls in the product stack.
Post reply on HN