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
#2It doesn't help that corporations buy all these houses up at full price and well above listing just so they can use it as rental income.
Re: Homes in 97% of U.S. cities are overvalued, Moody's says
#3This goes against everything I learned in ECON101.
Re: Homes in 97% of U.S. cities are overvalued, Moody's says
#4Isn'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.
Re: Homes in 97% of U.S. cities are overvalued, Moody's says
#5A 10% drop is nothing for anyone that has owned for more than 3 years, at least in my area.
Re: Homes in 97% of U.S. cities are overvalued, Moody's says
#6This goes against everything I learned in ECON101.
That's why there's an ECON102.
;)
Re: Homes in 97% of U.S. cities are overvalued, Moody's says
#7I can’t help but think of that saying “the market can stay irrational longer than you can stay solvent.” Yes, prices in many markets are very high and appreciating at a rapid clip, but if there are buyers, competition, and houses are continuing to move quickly, then it’s a bold statement to say they are overvalued and that we should predict a significant decline.
Re: Homes in 97% of U.S. cities are overvalued, Moody's says
#8The criteria here is apparently:
> The economist said a given housing market is considered overvalued if property costs in the area are "well above" the historical relationship between home prices and incomes, rents and construction costs.
Which, no surprise there, prices are up in a lot of places!
Whether or not that is "overvalued" or suggests a crash coming seems a lot more complicated. Would historical trends hold if historical conditions have changed? Mortgage rates rising are one of those things you'd expect to certainly arrest some of that price acceleration. If everyone who moved to Boise decides to move out of Boise, that's another one. (Though if a bunch of folks moved back from Boise to SF, that's not gonna cool down the also-seen-as-somewhat-overvalued SF market!)
Maybe a bunch of folks are just spending a bunch of crypto winnings, naturally causing inflation but not necessarily leading to a crash. ;)
Re: Homes in 97% of U.S. cities are overvalued, Moody's says
#9Isn'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.
No because houses as an asset class could still be overvalued relative to other assets.
Re: Homes in 97% of U.S. cities are overvalued, Moody's says
#10It doesn't help that corporations buy all these houses up at full price and well above listing just so they can use it as rental income.
Listing price is a red herring. Nobody selling a home actually expects to only get listing price for it.