Homes in 97% of U.S. cities are overvalued, Moody's says • Hacker News Board

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#141

Post by rufus_foreman » Fri, May 06, 2022, 2:38 AM UTC

Rury wrote: post #128

Curious, are people suddenly paying higher property taxes now that houses are worth much more in a short time span?

Maybe some people are. Property taxes are state by state. But that's not the way they do property taxes where I live.

Where I live, they have an amount of taxes they need to collect, and then they divide that up based on property values. If the value of everyone's property doubles, they still need to collect the same amount of property taxes, so everyone's property taxes stay the same.

I guess in some places, they just do it based on property value, and when house prices skyrocket, the government just says, "Score!".

Wouldn't want to live in one of those states.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#142

Post by mistrial9 » Fri, May 06, 2022, 2:40 AM UTC

AlchemistCamp wrote: post #134

oceanplexian wrote: post #111

Earlier quoted context omitted.

There’s no rule that you should be able to afford a house on a middle class income. In fact in many countries, particularly in Western Europe, it’s unimaginable that you would be able to afford a detached, single family home on a middle class income. Lots of people in that situation will live in apartments, row houses, or condos for the rest of their lives.

Western Europe is both considerably more crowded and poorer than the US.

Dutch to you, to!

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#143

Post by brewdad » Fri, May 06, 2022, 2:40 AM UTC

maximus-decimus wrote: post #88

bezospen15 wrote: post #48

Earlier quoted context omitted.

Newsflash, they aren't losing money

They probably mean losing money compared to investing in something else.

Well the stock market is down double digit percent this year, so maybe not?

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#144

Post by nwiswell » Fri, May 06, 2022, 2:41 AM UTC

oceanplexian wrote: post #127

majormajor wrote: post #100

Earlier quoted context omitted.

I doubt the 10%+ year over year increases will be sustained with increased mortagage rates. That's a long way away from predicting a crash or even a significant decline in prices, though. That would require a lot more inventory, and all those folks with 3% mortgages are going to be in no hurry to sell, and the stats on their mortgage amounts vs incomes looks WAY better than it did in 2007.

The problem is that supposedly, since 2020, the Fed has printed somewhere between 40-80% of all dollars in existence (The M1). So my question is, if there is twice as much money in the system, but the same number of assets, why would it be shocking that housing continues to inflate?

M1 is a useful tool to understand why the prices of consumer goods have increased but not at all useful to understand home buying power.

People regularly sell stocks, bonds, and other homes in order to produce the down payment for a mortgage and have done so since long before 2020. M1 does not measure any of these.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#145

Post by djbusby » Fri, May 06, 2022, 2:42 AM UTC

pjmorris wrote: post #91

melissalobos wrote: post #4

Isn't this one of those "If everyone is crazy, you're crazy" situations? If every house is overvalued by some metric, then maybe the metric is wrong. People's perceptions of value are a large part of the actual value(meaning what someone would really pay) for things like housing that should depreciate over time.

I think there's a more concrete measure of value: house prices related to income. Historically (Robert Shiller has a chart for the US going back to 1890) house prices (and mortgages and rents) have maintained a stable relationship with income. Occasionally that relationship is strained but it has usually fallen back in line. One exception to this was the extraordinary, ongoing, support to the financial system post-20…

your comment is screaming for a link...is it this one?

https://fred.stlouisfed.org/series/CSUSHPINSA

Case-Shiller Index?

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#146

Post by 10amxn10 » Fri, May 06, 2022, 2:42 AM UTC

CPLX wrote: post #28

mogadsheu wrote: post #9

Earlier quoted context omitted.

No because houses as an asset class could still be overvalued relative to other assets.

They could be overvalued relative to rent which is a much more compelling case, since renting a property is a near exact (not perfect, but close) substitute for owning one, on a practical utility level.

Where I live (not USA), monthly rent is about 0.1% - 0.2% of the price value of an apartment. For example, I pay about 350 USD/month and the owner is (trying) to sell the apartment for 180,000 USD.

It doesn't make sense to me, but whatever.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#147

Post by whoopdeepoo » Fri, May 06, 2022, 2:42 AM UTC

Rury wrote: post #128

Curious, are people suddenly paying higher property taxes now that houses are worth much more in a short time span?

Went up 10%

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#148

Post by refurb » Fri, May 06, 2022, 2:42 AM UTC

lumost wrote: post #90

Yet another asset crash would annihilate whatever assets millennials have happened to acquire. This would leave the millennial generation largely asset free as they enter their 40s except for inheritance.

Not sure about the US, but in Canada (where the median house is 2x the US), home ownership rates among under 40's is a couple percent lower than in 1989 (mostly due to longer period of education before entering the workforce).

That doesn't stop social media from flagging a "millennial crisis".

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#149

Post by mistrial9 » Fri, May 06, 2022, 2:42 AM UTC

s5300 wrote: post #24

melissalobos wrote: post #4

Isn't this one of those "If everyone is crazy, you're crazy" situations? If every house is overvalued by some metric, then maybe the metric is wrong. People's perceptions of value are a large part of the actual value(meaning what someone would really pay) for things like housing that should depreciate over time.

Not when you have a populace that is by definition average & in need of a place to live/start a family, but have an external investor class of the foreign ultra rich or Wall street douche canoes buying everything up because fuck you & they can. Crazy if you believe most of our nation should be essentially indentured servants for basic housing. Something like that, I think.

some economic theorists take this seriously -- BlackRock is Buying Houses made a large headline in daily news here.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#150

Post by 01100011 » Fri, May 06, 2022, 2:43 AM UTC

elephanteeee wrote: post #56

nemo44x wrote: post #43

Where I live, in an affluent town on the east coast, homes have been going for 50%+ over ask. And the asks were high. Something is broken. Homes that wound have been listed at $1,000,000 in 2019 are going for $1.750,000 today. Interest rates going up should cool it off but I fear it will break much of the rest of the economy. There was a massive mismatch in executive policy and fed policy and here we are.

What’s the mismatch? Biden got a trillion or two in handouts and Powell bought up all the bonds. Now Biden is taking a step back (not completely but not another trillion) and Powell said he’ll start selling.

Pretty sure the covid stimulus passed while trump:Biden was/is president is like 2:1.

Not giving either one a pass though because Biden reappointed Powell and failed to give Powell the political direction to raise rates late last year when it was obvious inflation was anything but transitory.