Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble • Hacker News Board

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

#91

Post by acchow » Fri, Aug 20, 2021, 5:48 PM UTC

minikites wrote: post #72

AdmiralAsshat wrote: post #34

Awesome. I've been trying to buy a home since 2015 or so and noting that housing prices continue to rise, without fail, regardless of economic or political climate. Economy is doing well? Price increase! Economy is doing terribly because of global pandemic? Price increase! I have been patiently waiting for the next "bubble" to pop, even as my realtor insists that oh no, we're not really in a bubble, this is just the…

Capitalism is predicated on the idea of perpetual and infinite growth. Those assumptions are reflected in many ways and we're going to need to rethink our economy and political systems with entirely different assumptions soon enough because we're already running into their limits.

> Capitalism is predicated on the idea of perpetual and infinite growth

See Japan? They're doing fine without growth.

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

#92

Post by mdorazio » Fri, Aug 20, 2021, 5:49 PM UTC

fridif wrote: post #69

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% (…

No, I disagree. Law of big numbers. Houses in Seattle area are mortgaging for 1.2M. Property taxes are low. Houses in NY are mortgaging for $500,000. Property taxes and interest rates are higher. You shouldn't apply 8% interest rate from 2000 and think that it somehow is the correct rate when prices are 5x higher.

I don’t think you understood the parent post’s point. Most people don’t buy a house based on the sale price, they buy based on what their monthly payment will be. Historically low interest rates mean that people can afford a lot higher price house than they could in 2008. That’s obviously not the whole story, but it is a big factor in what’s going on.

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

#93

Post by PragmaticPulp » Fri, Aug 20, 2021, 5:50 PM UTC

chasebank wrote: post #78

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% (…

Look up Case-Shiller home price index. In most markets, home values are much higher than they were in mid 2000's. [1] https://wolfstreet.com/2021/07/27/most-splendid-housing-bubb...

Right, but most buyers finance with a mortgage.

The affordability is determined by monthly payments, which are a function of home price and interest rates. If home prices are up but interest rates are way, way down (which is currently the case) it can be possible that houses are still more affordable.

You have to consider home costs as down payment + monthly mortgage payment (+ taxes if you're getting specific) to understand affordability.

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

#94

Post by AnIdiotOnTheNet » Fri, Aug 20, 2021, 5:50 PM UTC

larrik wrote: post #25

gnur wrote: post #7

Earlier quoted context omitted.

Anything related to storage or compute? I couldn’t image having a 2tb drive 20 years ago, but having a 2tb ssd in my laptop is kind of amazing

compute? GPUs used to basically top out at $400, now the cheap ones go for more than that.

On-die GPUs you get for free with the proc are more powerful than 2000s GPUs. Hell, CPUs are so much faster now you can do the same effects as a 2000s GPU in software.

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

#95

Post by acchow » Fri, Aug 20, 2021, 5:50 PM UTC

DisjointedHunt wrote: post #65

Lots of people miss the fact that the Fed has intervened in unprecedented ways in the past year, that we may not understand fully for decades.

Since 2008 really.

I guess you could say quantitative easing was not unprecedented in human history, but it was unprecedented in the USA.

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

#96

Post by Armisael16 » Fri, Aug 20, 2021, 5:51 PM UTC

chasebank wrote: post #78

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% (…

Look up Case-Shiller home price index. In most markets, home values are much higher than they were in mid 2000's. [1] https://wolfstreet.com/2021/07/27/most-splendid-housing-bubb...

Did you mean to respond to a different post? Yours doesn't seem to address what the post you responded to was saying.

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

#97

Post by chasebank » Fri, Aug 20, 2021, 5:52 PM UTC

PragmaticPulp wrote: post #93

chasebank wrote: post #78

Earlier quoted context omitted.

Look up Case-Shiller home price index. In most markets, home values are much higher than they were in mid 2000's. [1] https://wolfstreet.com/2021/07/27/most-splendid-housing-bubb...

Right, but most buyers finance with a mortgage. The affordability is determined by monthly payments, which are a function of home price and interest rates. If home prices are up but interest rates are way, way down (which is currently the case) it can be possible that houses are still more affordable. You have to consider home costs as down payment + monthly mortgage payment (+ taxes if you're getting specific) to un…

Yes, I understand. I'm saying a $500k house in 2007 is now $1M in many markets.

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

#98

Post by geebee » Fri, Aug 20, 2021, 5:52 PM UTC

Armisael16 wrote: post #56

AdmiralAsshat wrote: post #34

Awesome. I've been trying to buy a home since 2015 or so and noting that housing prices continue to rise, without fail, regardless of economic or political climate. Economy is doing well? Price increase! Economy is doing terribly because of global pandemic? Price increase! I have been patiently waiting for the next "bubble" to pop, even as my realtor insists that oh no, we're not really in a bubble, this is just the…

Price can't rise literally forever, no, but there really isn't much evidence that we're in a bubble right now. There isn't any reason price need to drop either.

they probably can rise "forever" as long as the rate of increase keeps pace with general wealth and economic growth. now, a bubble can't last forever, but moderate price increases (inflation) are pretty normal.

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

#99

Post by beej71 » Fri, Aug 20, 2021, 5:53 PM UTC

AdmiralAsshat wrote: post #34

Awesome. I've been trying to buy a home since 2015 or so and noting that housing prices continue to rise, without fail, regardless of economic or political climate. Economy is doing well? Price increase! Economy is doing terribly because of global pandemic? Price increase! I have been patiently waiting for the next "bubble" to pop, even as my realtor insists that oh no, we're not really in a bubble, this is just the…

In a lot of places (where I luckily own a home included), prices hockey sticked hard. It's not natural. I don't see it staying this way. And if it does, my house--which I bought for $285 8 years ago--will be worth a couple million bucks in a couple years and I can sell out and retire on the road.

Not banking on that.

And if it does, we've entered some kind of new era for the haves and have-nots. :(

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

#100

Post by fridif » Fri, Aug 20, 2021, 5:53 PM UTC

mdorazio wrote: post #92

fridif wrote: post #69

Earlier quoted context omitted.

No, I disagree. Law of big numbers. Houses in Seattle area are mortgaging for 1.2M. Property taxes are low. Houses in NY are mortgaging for $500,000. Property taxes and interest rates are higher. You shouldn't apply 8% interest rate from 2000 and think that it somehow is the correct rate when prices are 5x higher.

I don’t think you understood the parent post’s point. Most people don’t buy a house based on the sale price, they buy based on what their monthly payment will be. Historically low interest rates mean that people can afford a lot higher price house than they could in 2008. That’s obviously not the whole story, but it is a big factor in what’s going on.

But also salaries have risen and additionally so has the value proposition of owning a home compared to living in an apartment. Why? Because they've stopped building homes for the most part in desirable areas close to big tech companies.