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‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

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Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#11

Post by LinAGKar »

Andaith wrote: post #9
sien wrote: post #3

Paul Krugman described the effect memorably in 2005. https://www.nytimes.com/2005/08/08/opinion/that-hissing-soun... "Then there are the numbers. Many bubble deniers point to average prices for the country as a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United States is really two countries, Flatland and the Zoned Zone. In Flatland, which occupies the middle of the count…

Which is crazy, because you would think that Australia was mostly Flatland! It's the size of the continental US, with a population lower than Texas. Everyone here lives in the capital cities, and last I looked there were almost no tech jobs at all further up the coast between Sydney and Brisbane. I wonder if pandemic working from home is going to change this, some of our devs have already moved up the coast...

Probably because it's mostly desert

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#12

Post by refurb »

sien wrote: post #3

Paul Krugman described the effect memorably in 2005. https://www.nytimes.com/2005/08/08/opinion/that-hissing-soun... "Then there are the numbers. Many bubble deniers point to average prices for the country as a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United States is really two countries, Flatland and the Zoned Zone. In Flatland, which occupies the middle of the count…

This theory doesn’t work for one of the biggest bubbles of 2007, which was Las Vegas. It has nothing but surrounding land to build on.

They built like crazy and still had massive price inflation followed by a bubble popping, prices dropped almost 50% and vast swathes of empty houses remained for years and prices only recovered to the peak in the last year or two.

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#13

Post by rozenmd »

LinAGKar wrote: post #11
Andaith wrote: post #9

Earlier quoted context omitted.

Which is crazy, because you would think that Australia was mostly Flatland! It's the size of the continental US, with a population lower than Texas. Everyone here lives in the capital cities, and last I looked there were almost no tech jobs at all further up the coast between Sydney and Brisbane. I wonder if pandemic working from home is going to change this, some of our devs have already moved up the coast...

Probably because it's mostly desert

It is, and yet we still only really live in three cities (150km in length along a 26000km long coastline)

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#14

Post by greatpostman »

A Wall Street insider high up at a major USA bank once told me that 2008 was a media created phenomenon. There was no mortgage crises, leverage for sure, but nobody went to jail. Why did no one go to jail? Nothing was done wrong. It was a panic sparked by the media.

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#15

Post by eurasiantiger »

refurb wrote: post #12
sien wrote: post #3

Paul Krugman described the effect memorably in 2005. https://www.nytimes.com/2005/08/08/opinion/that-hissing-soun... "Then there are the numbers. Many bubble deniers point to average prices for the country as a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United States is really two countries, Flatland and the Zoned Zone. In Flatland, which occupies the middle of the count…

This theory doesn’t work for one of the biggest bubbles of 2007, which was Las Vegas. It has nothing but surrounding land to build on. They built like crazy and still had massive price inflation followed by a bubble popping, prices dropped almost 50% and vast swathes of empty houses remained for years and prices only recovered to the peak in the last year or two.

Money laundering explains Vegas and New York.

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#16

Post by greatpostman »

sien wrote: post #3

Paul Krugman described the effect memorably in 2005. https://www.nytimes.com/2005/08/08/opinion/that-hissing-soun... "Then there are the numbers. Many bubble deniers point to average prices for the country as a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United States is really two countries, Flatland and the Zoned Zone. In Flatland, which occupies the middle of the count…

Paul krugman has been wrong on almost everything

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#17

Post by grapeskin »

cocoa19 wrote: post #7
andrewmcwatters wrote: post #2

Yeah, and people still keep moving to the Phoenix metro area. The housing market is now closed for median income families as a result of the constant growth and the housing inventory here being dried up. I want to emphasize that: if you're a median household income, middle class family moving to Phoenix, you can no longer afford homes here. There's zero inventory. ARMLS listings will produce nothing . That's not an e…

Zillow shows ~650 houses (sfh+town home) in Phoenix in the last 30 days. It seems the median list price is 1/5th of bay area prices.

Phoenix also doesn’t have many people making 500k at 25, unlike the Bay Area. Prices can be lower but equally unaffordable for locals.

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#18

Post by sien »

refurb wrote: post #12
sien wrote: post #3

Paul Krugman described the effect memorably in 2005. https://www.nytimes.com/2005/08/08/opinion/that-hissing-soun... "Then there are the numbers. Many bubble deniers point to average prices for the country as a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United States is really two countries, Flatland and the Zoned Zone. In Flatland, which occupies the middle of the count…

This theory doesn’t work for one of the biggest bubbles of 2007, which was Las Vegas. It has nothing but surrounding land to build on. They built like crazy and still had massive price inflation followed by a bubble popping, prices dropped almost 50% and vast swathes of empty houses remained for years and prices only recovered to the peak in the last year or two.

Erdmann adds to the thesis in a very valuable way by pointing out that people move out Zoned zone to Phoenix and other US metros.

Sorry, I missed out some more of this.

Erdmann divides US cities into Closed Access Cities (CACs), contagion cities (CCs) and Open Access Cities (OACs). The CACs were New York, Boston, the Bay Area and Los Angeles where building housing has become very difficult and where the prices are shooting up. The contagian cities were places that people who moved out of the closed access cities went to. These include Phoenix and Florida. The Open Access Cities were places like Houston, Atlanta and Dallas where sufficient housing for population increases was being built. Erdmann describes the CACs as having a chronic undersupply that has caused many people to move into the CCs. The OACs saw some ride and an increase in homebuilding but didn’t see nearly the drop in prices as the other types of cities.

Shut Out suggests that a reaction to the rise in housing prices that was occuring in CACs led to policy that brought up interest rates and caused prices in the CCs to drop which then led to a loss in confidence and a drop in housing prices across the board. Erdmann says that excess credit wasn’t the primary driver and points to the fact that the increase in US house prices was well underway before the bad loans came in.

From a review on Goodreads of Erdmann's book:

https://www.goodreads.com/book/show/43062766-shut-out

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#19

Post by vl »

eurasiantiger wrote: post #15
refurb wrote: post #12

Earlier quoted context omitted.

This theory doesn’t work for one of the biggest bubbles of 2007, which was Las Vegas. It has nothing but surrounding land to build on. They built like crazy and still had massive price inflation followed by a bubble popping, prices dropped almost 50% and vast swathes of empty houses remained for years and prices only recovered to the peak in the last year or two.

Money laundering explains Vegas and New York.

But how exactly can you launder money through buying a house? If you buy, essentially you declare you have the money, thus question can be asked where you got it from.

Re: ‘Housing in ‘07 wasn’t a bubble” is a true statement that almost no one believes

#20

Post by csee »

LinAGKar wrote: post #11
Andaith wrote: post #9

Earlier quoted context omitted.

Which is crazy, because you would think that Australia was mostly Flatland! It's the size of the continental US, with a population lower than Texas. Everyone here lives in the capital cities, and last I looked there were almost no tech jobs at all further up the coast between Sydney and Brisbane. I wonder if pandemic working from home is going to change this, some of our devs have already moved up the coast...

Probably because it's mostly desert

No. The non-desert land per capita in Australia is more than twice that in the US.
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