51–60 of 130 posts
The reason I’m able to actually buy one now is because my salary rose faster than the housing prices, but the prices in that location have still risen by about 800% in the past 30 years.
Earlier quoted context omitted.
When you win a nobel prize in economics, I will listen to you more.
There is no such prize. There's a Sveriges Riksbank Prize in Memory of Alfred Nobel.
> And yet not very many people think we’re in the middle of a second housing bubble. Really? It seems pretty obvious to me that we're in the middle of a huge bubble. The problem is the bubble may not pop for decades because propping up the bubble is government policy at every level from federal to state to local. And if they ever stop, tons of people will be totally screwed. Never mind that even more people are getti…
Earlier quoted context omitted.
There is no such prize. There's a Sveriges Riksbank Prize in Memory of Alfred Nobel.
To be fair, it's still a yearly prize, for economics, awarded by the same Nobel Foundation that awards the other prizes, under the same rules as the other prizes. The laureates are announced at the same time as the other laureates, the awards are presented in the same manner as the others and everyone shows up to the same Nobel Prize Awards Ceremony. And if we really want to go full pedant, the award isn't called any…
Anyway, even the Nobel Foundation explicitly says it isn't a Nobel Prize:
> Not a Nobel Prize
> The prize in economic sciences is not a Nobel Prize.
Earlier quoted context omitted.
There is no such prize. There's a Sveriges Riksbank Prize in Memory of Alfred Nobel.
Don't be a Dick[1]. Or even xkcd hat guy[2]. [1] https://dilbert.com/strip/2015-04-02 [2] https://xkcd.com/1475
> Not a Nobel Prize
> The prize in economic sciences is not a Nobel Prize.
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...
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
Only study that attempted to quantify pundit accuracy (I know about) found out that Krugman was the most accurate public pundit.
source: Hefferman, S., Klondar, E., & Tummarello, K. 2011. Are talking heads blowing hot air? An analysis of the accuracy of forecasts in the political media.
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…
The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke (2004) https://en.wikipedia.org/wiki/The_Two-Income_Trap
There is no doubt that the entire housing market was exploited to float the US economy and covered up a recession dating from 2000-2001 until the housing market could no longer be sustained resulting in a complete collapse of the financial markets and banking. The housing market didn’t “snap back” rather two unprecedented tax payer stimulus packages totaling just shy of $2T were given to the banks to finance millions…
This analysis seems to be attacking a strawman "the economic recession caused housing to drop, not the other way around". I mean there were multiple, interconnected factors including lax lending standards, anticipation of ever increasing housing prices, overbuilding in some locations. It's pretty clear none of them were responsible on their own . And the fact that they use Canada as an example of a country "that neve…
Canada's housing market is inflated but not a bubble - the fundamentals of supply and demand are still firmly in place in Canada's largest cities (ie population growth is FAR exceeding infrastructure). Canada's housing market will see a roll back in pricing (lets say at an extreeme 20-30%) however that really is only pushing pricing back 1-2 years max (possibly not even that).
Prior to the 2008 crash, the US' "fundamentals of supply and demand" were still firmly in place as well. It's just that demand was massively juiced by easy money and an expectation that "housing only goes up" (speculation).
Clearly not all of Canada is in a bubble (Toronto, but even more, Vancouver, has always been expensive), but when a house in Brampton, Ontario (50 km from downtown Toronto, 45 to 75 minute commute with traffic) goes from $890,000 to $2.2M in 20 months, that's speculation.
When in Barrie, Ontario (2hr commute, 120 km away) you'd be hard pressed to find a home for under $1M, that makes zero sense.
And when small town BC (Those numbers are more inflated than the peak 2007 bubble in the US, despite lower incomes in Canada. Houses in Las Vegas were bubblicious when they hit $500-$600k, let alone $2M.
I agree that major urban cores like Toronto and Vancouver might only see a 20-30% correction (just like San Francisco and New York in 2008), but other places are in for a world of hurt (similar to Las Vegas (-66%, https://fred.stlouisfed.org/series/LVXRNSA) or Miami (-55%, https://fred.stlouisfed.org/graph/?g=8hD)).
And unlike the US, many mortgages are recourse mortgages - you don't just walk away, you're on the hook for the full mortgage if after selling, the proceeds doesn't cover the debt. Plus Canadians can't lock in interest rates (and monthly payments as well) for 30 years like Americans - so less ability to just "ride it out until prices come back".
Canadians have much more risk exposure when home prices drop than Americans.