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

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

#251

Post by lotsofpulp »

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.

More and more Americans have been finding out how poor they are or are getting (relatively) in recent decades.

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

#252

Post by fortran77 »

nitrogen wrote: post #212
bradleyjg wrote: post #163

Earlier quoted context omitted.

A majority of consistent voters own homes and want house prices to increase. That means most politicians want house prices to increase. The government dominates all aspects of residential lending. What’s the smart bet on what will happen?

This comes up a lot. But it's wrong, or at least incomplete. People who want to live in their house don't want the value of that house to go up, because then their taxes go up.

Exactly right. I would be much happier if the prices of the houses and properties around me didn't go up so much out of proportion to everything else.

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

#253

Post by throw123123123 »

asta123 wrote: post #160

They may be overvalued but don't see how they could fall without forced sales. At start of pandemic borrowers got mortgage repayment holidays in Australia - so didn't have to sell if you got into financial trouble. Yesterday one of major bank bosses telling borrowers to call the bank if rising interest rates and cost of living getting people into difficulty. Somehow they will work it out whatever that means.

Housing definitely is sticker than stocks - but that is a sleigh of hand. Buyers unwilling to lower prices are taking themselves off the market, not sustaining the market price.

Volume would go down, and whatever is sold will be done at a much lower market price.

Argentina had a RE bubble in 2017, and property prices dropped 40% since. It has happened, it is happening, and it will happen again.

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

#254

Post by nr2x »

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.

Eventually, housing costs begin to outstrip income. Starts at the bottom and goes up. In South Bay a quarter million of household income can’t get you a modest family home. Simple single family homes go for $3M.

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

#255

Post by vkou »

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?

The fed doesn't generally produce most of the dollars in existence, private lenders do by issuing mortgages (which creates money).

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

#256

Post by scarface74 »

xeromal wrote: post #217
seanmcdirmid wrote: post #55

Earlier quoted context omitted.

We lack space in the few urban areas people want to live in. If people were flexible about where they wanted to live, you’d think that the cheap land/lightly zoned places would prosper, but they don’t.

For sure. I grew up in the deep south outside ATL and houses there are still "cheap". They're certainly outpacing the poor folks who were born and raised there, but you can still snag a house with an acre or so of land in the 100,000s. Beautiful land too. Forests, creeks, and wildlife.

What part of metro Atlanta are you referring to?

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

#257

Post by vkou »

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.

Asking prices are just advertising to get your foot in the door. If an asking price of $1 were to start a bigger bidding frenzy than one that's 30% underpriced, sellers would list homes for a buck.

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

#258

Post by scarface74 »

Patrol8394 wrote: post #38
hammock wrote: post #20

Earlier quoted context omitted.

The bigger reason is you can buy a house with 20% down (or less) in the US, where that is nearly impossible just about anywhere else in the world Edit: I should say anyone can buy a house for 20% down or less. In much of the world some can do this, but credit is not extended to nearly as many of the population as it is in the US

> that is nearly impossible just about anywhere else in the world I don't know about "anywhere else in the world" but I can guarantee you that you can buy a property everywhere in EU with a 20%. Also, property taxes in EU are generally lower than US. I keep saying that americans, pay lots of taxes, they are simply not aware of it.

By “less”, you can easily buy a house with 3.5% (FHA). The requirements aren’t that strict.

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

#259

Post by gnopgnip »

asdff wrote: post #249
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.

OTOH not everyone is crazy and not everyone is participating in this market. The only people playing are those who can afford to pay at these prices. Huge numbers of people are sidelined and can't afford to even put in an offer. IMO either those people on the sidelines manage to save or generate enough to jump into play or prices fall to meet the buyers when there are simply no more high income people who can pay tho…

You are participating in the housing market by both owning and renting

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

#260

Post by tmnvix »

DoubleDerper wrote: post #31
mogadsheu wrote: post #9

Earlier quoted context omitted.

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

Relative to which assets? Stocks? Cars? Forex? IP? Crypto? Genuinely curious because everything is more expensive than it was before. If everything is overvalued, then nothing is overvalued [relatively]

A lot of things are overvalued relative to the income they can generate. Credit has been cheap and easy so speculation has been rife. That will end.
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