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(CNN)   The first rule of the housing bubble burst is that you don't talk about the housing bubble burst   (cnn.com) divider line
    More: Obvious, Real estate, United States housing bubble, Alan Greenspan, home markets, housing market, Mark Zandi, housing prices, early years of this century  
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953 clicks; posted to Business » on 27 Oct 2021 at 6:07 PM (5 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2021-10-27 4:36:26 PM  
Former Federal Reserve Chairman Alan Greenspan famously insisted in 2005 that there was no bubble.

Remember when he was supposed to be the most knowledgeable person when it came to the Great Depression?
 
2021-10-27 6:17:24 PM  
When homes in bumfark Idaho are going up 50% year over year, there's a bubble. Houses on half an acre of property, 45 minutes away from a resort town, no local economy, nothing to do. $1.5M. WTF?
 
2021-10-27 6:23:28 PM  

Nadie_AZ: Former Federal Reserve Chairman Alan Greenspan famously insisted in 2005 that there was no bubble.

Remember when he was supposed to be the most knowledgeable person when it came to the Great Depression?



I remember Trickle-Down Economics.

Been working out sooooo well.
 
2021-10-27 6:37:38 PM  

Kuroshin: Nadie_AZ: Former Federal Reserve Chairman Alan Greenspan famously insisted in 2005 that there was no bubble.

Remember when he was supposed to be the most knowledgeable person when it came to the Great Depression?


I remember Trickle-Down Economics.

Been working out sooooo well.


yeah, when you're an old white rich man, the only thing that trickles down, trickles down your leg.
/Onto us.
//Why they call us 'piss ants'.
 
2021-10-27 7:08:53 PM  
My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".
 
2021-10-27 7:41:12 PM  
Nope. Not a bubble. An artificial scarcity that has been engineered to be permanent.
The workers are going to pay through the nose for their miserable scrap of space from here on out.
The ownership class are going to get even richer.
Look out kid - they keep it all hid.
 
2021-10-27 7:41:27 PM  
Of course nobody is worried about it. We have a communal memory shorter than that of a gnat. All we do is look at the "value" of housing go up, and those of us fortunate enough to own a house say "haha money masheen go brrr" while ignoring the fact that when the housing bubble implodes this time, there's no backstop; The fed's tools are all in use, and we still haven't recovered from the last implosion.

But this time I have a good job and some disposable cash, so maybe I'll finally get a place to live that won't raise rent every year. The people who have homes to live in will be fine, the people that will get hosed have real estate as an 'investment', and are just trying to flip houses like they did in 2007. And I'd laugh if their bubble wasn't going to take the whole rest of the economy with it.
 
2021-10-27 8:06:12 PM  

Nadie_AZ: Former Federal Reserve Chairman Alan Greenspan famously insisted in 2005 that there was no bubble.

Remember when he was supposed to be the most knowledgeable person when it came to the Great Depression?


He also ran the fed like a dictatorship, which thankfully our current folks do not.

Supposedly.
 
2021-10-27 8:14:45 PM  

Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".


I've considered swapping titles between houses with my parents. Their property taxes have been frozen for quite some time due to their age. My house is "worth" about 5 times what theirs is. I wonder if that's legal?
 
2021-10-27 8:20:41 PM  

majestic: Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".

I've considered swapping titles between houses with my parents. Their property taxes have been frozen for quite some time due to their age. My house is "worth" about 5 times what theirs is. I wonder if that's legal?


Since when has legal gotten in the way of a good tax dodge?

I mean, all of the wealthy people I know pull shiat like that all the time. Only one of them is busting rocks for tax evasion. But after the fines and tax auctions, he's not rich. So that doesn't count...
 
2021-10-27 8:29:10 PM  

majestic: Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".

I've considered swapping titles between houses with my parents. Their property taxes have been frozen for quite some time due to their age. My house is "worth" about 5 times what theirs is. I wonder if that's legal?


I bet it's not. The senior property tax discounts I've seen are pretty clear that they require occupancy. Even totally swapping residences might not work immediately - I've seen ones only available to seniors who have lived in a home for X years. But they are state-level programs, so yours might be different.
 
2021-10-27 8:39:23 PM  

Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".


I bet your payments have gone down thanks to the drop in interest rates.

The only things I see dropping prices are:

- A massive demand drop, maybe because of revised expectations:  late Millennials and early Gen-Zers finally tell themselves that it's better to rent and that owning a home isn't actually desirable.  They give up and settle on being tenants for life.  Or maybe eventually the declining birthrates knock out demand eventually.  Or maybe everyone telecommutes exclusively and doesn't need to live near the metropoles, but that seems unlikely.

- A massive supply increase:  We either start razing blocks of buglar-barred slums and build more dense highrises, or a massive transportation investment (highways, commuter rail, whatever) and we open more virgin greenfield space to building houses.  If the former, that still keeps real houses expensive because they're an even smaller proportion of the housing stock.

Honestly, I'd put money on a housing glut somewhere around 2035.  Baby Boomers would be ages 70-90, in prime dying/"going to live in a home" age, freeing up a lot of housing.  The late millennial "bulge" will have long passed through the early 30's peak home-buying years.  The increasing move toward telework combined with electrification in the car industry and the ability to install solar panels, cisterns, and grow gardens keeps the appeal of real houses up.   

Meanwhile, the very slow-to-react, turning-around-the-Titanic home-buildi​ng industry should have itself cranked into gear by then, cranking out too many homes just in the time oversupply the market as it tries to respond to the current temporary shortage.
 
2021-10-27 9:10:40 PM  
Except for the complete lack of subprime loans, ninja docs, mortgage-backed derivatives, 5/1 ARMs, interest-only loans, and people jumping into houses they can't afford. We're also not coming off the biggest booms in construction in recent memory, and in fact have been falling short of demand for over a decade.

It's there going to be a correction? Probably. We might see prices drop a bit - actually already seeing small drops on some of the dumbest prices around me. But are we doing to see a massive free-fall followed by a recession like last time? Fark, no. Not even close. It's an entirely different situation, and the only similarity is that you can't afford a house. Which is like saying that a Ferrari is the same thing as an industrial generator just because both are too expensive for you.
 
2021-10-27 9:26:59 PM  

Lusiphur: Except for the complete lack of subprime loans, ninja docs, mortgage-backed derivatives, 5/1 ARMs, interest-only loans, and people jumping into houses they can't afford. We're also not coming off the biggest booms in construction in recent memory, and in fact have been falling short of demand for over a decade.

It's there going to be a correction? Probably. We might see prices drop a bit - actually already seeing small drops on some of the dumbest prices around me. But are we doing to see a massive free-fall followed by a recession like last time? Fark, no. Not even close. It's an entirely different situation, and the only similarity is that you can't afford a house. Which is like saying that a Ferrari is the same thing as an industrial generator just because both are too expensive for you.


In the past 70 years, housing has dropped in nominal prices... once.

Yes, it goes up and down in inflation adjusted terms.  Seeing housing stall out while inflation catches up wouldn't be unprecedented at all.  Another 2008?  Unlikely.

biggerpockets.comView Full Size
 
2021-10-27 9:28:44 PM  

Izunbacol: Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".

I bet your payments have gone down thanks to the drop in interest rates.

The only things I see dropping prices are:

- A massive demand drop, maybe because of revised expectations:  late Millennials and early Gen-Zers finally tell themselves that it's better to rent and that owning a home isn't actually desirable.  They give up and settle on being tenants for life.  Or maybe eventually the declining birthrates knock out demand eventually.  Or maybe everyone telecommutes exclusively and doesn't need to live near the metropoles, but that seems unlikely.

- A massive supply increase:  We either start razing blocks of buglar-barred slums and build more dense highrises, or a massive transportation investment (highways, commuter rail, whatever) and we open more virgin greenfield space to building houses.  If the former, that still keeps real houses expensive because they're an even smaller proportion of the housing stock.

Honestly, I'd put money on a housing glut somewhere around 2035.  Baby Boomers would be ages 70-90, in prime dying/"going to live in a home" age, freeing up a lot of housing.  The late millennial "bulge" will have long passed through the early 30's peak home-buying years.  The increasing move toward telework combined with electrification in the car industry and the ability to install solar panels, cisterns, and grow gardens keeps the appeal of real houses up.   

Meanwhile, the very slow-to-react, turning-around-the-Titanic home-buildi​ng industry should have itself cranked into gear by then, cranking out too many homes just in the time oversupply the market as it tries to respond to the current temporary shortage.


It's not likely his payments went down unless he had an ARM (adjustable rate mortgage) and that's even less liikely given the year he purchased. ARM fell out of favor after ~2006.

Everything else you said though is very plausible.

/Broker
 
2021-10-27 9:48:53 PM  

jjwars1: Izunbacol: Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".

I bet your payments have gone down thanks to the drop in interest rates.

The only things I see dropping prices are:

- A massive demand drop, maybe because of revised expectations:  late Millennials and early Gen-Zers finally tell themselves that it's better to rent and that owning a home isn't actually desirable.  They give up and settle on being tenants for life.  Or maybe eventually the declining birthrates knock out demand eventually.  Or maybe everyone telecommutes exclusively and doesn't need to live near the metropoles, but that seems unlikely.

- A massive supply increase:  We either start razing blocks of buglar-barred slums and build more dense highrises, or a massive transportation investment (highways, commuter rail, whatever) and we open more virgin greenfield space to building houses.  If the former, that still keeps real houses expensive because they're an even smaller proportion of the housing stock.

Honestly, I'd put money on a housing glut somewhere around 2035.  Baby Boomers would be ages 70-90, in prime dying/"going to live in a home" age, freeing up a lot of housing.  The late millennial "bulge" will have long passed through the early 30's peak home-buying years.  The increasing move toward telework combined with electrification in the car industry and the ability to install solar panels, cisterns, and grow gardens keeps the appeal of real houses up.

Meanwhile, the very slow-to-react, turning-around-the-Titanic home-buildi​ng industry should have itself cranked into gear by then, cranking out too many homes just in the time oversupply the market as it tries to respond to the current temporary shortage.

It's not likely his payments went down unless he ...


Mine have gone down, refinancing a FRM from 3.75% to 2.63%.  I'd certainly expect him to have taken advantage of the refinance opportunities, with an even bigger spread between the rates.

/not a broker, just a guy who is happy to pay 4 years ago prices at this year's interest rates.

Fark user imageView Full Size
 
2021-10-27 9:57:39 PM  

Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".


You don't like paying taxes on unrealized gains?
 
2021-10-27 10:07:03 PM  

Izunbacol: Lusiphur: Except for the complete lack of subprime loans, ninja docs, mortgage-backed derivatives, 5/1 ARMs, interest-only loans, and people jumping into houses they can't afford. We're also not coming off the biggest booms in construction in recent memory, and in fact have been falling short of demand for over a decade.

It's there going to be a correction? Probably. We might see prices drop a bit - actually already seeing small drops on some of the dumbest prices around me. But are we doing to see a massive free-fall followed by a recession like last time? Fark, no. Not even close. It's an entirely different situation, and the only similarity is that you can't afford a house. Which is like saying that a Ferrari is the same thing as an industrial generator just because both are too expensive for you.

In the past 70 years, housing has dropped in nominal prices... once.

Yes, it goes up and down in inflation adjusted terms.  Seeing housing stall out while inflation catches up wouldn't be unprecedented at all.  Another 2008?  Unlikely.

[biggerpockets.com image 850x656]


I see at least three drops over whatever timeline that chart tracks (I'm assuming years? But mobile, so hard to see.)
 
2021-10-27 10:08:10 PM  

Izunbacol: jjwars1: Izunbacol: Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".

I bet your payments have gone down thanks to the drop in interest rates.

The only things I see dropping prices are:

- A massive demand drop, maybe because of revised expectations:  late Millennials and early Gen-Zers finally tell themselves that it's better to rent and that owning a home isn't actually desirable.  They give up and settle on being tenants for life.  Or maybe eventually the declining birthrates knock out demand eventually.  Or maybe everyone telecommutes exclusively and doesn't need to live near the metropoles, but that seems unlikely.

- A massive supply increase:  We either start razing blocks of buglar-barred slums and build more dense highrises, or a massive transportation investment (highways, commuter rail, whatever) and we open more virgin greenfield space to building houses.  If the former, that still keeps real houses expensive because they're an even smaller proportion of the housing stock.

Honestly, I'd put money on a housing glut somewhere around 2035.  Baby Boomers would be ages 70-90, in prime dying/"going to live in a home" age, freeing up a lot of housing.  The late millennial "bulge" will have long passed through the early 30's peak home-buying years.  The increasing move toward telework combined with electrification in the car industry and the ability to install solar panels, cisterns, and grow gardens keeps the appeal of real houses up.

Meanwhile, the very slow-to-react, turning-around-the-Titanic home-buildi​ng industry should have itself cranked into gear by then, cranking out too many homes just in the time oversupply the market as it tries to respond to the current temporary shortage.

It's not likely his payments went down unless he ...

Mine have gone down, refinancing a FRM from 3.75% to 2.63%.  I'd certainly expect him to have taken advantage of the refinance opportunities, with an even bigger spread between the rates.

/not a broker, just a guy who is happy to pay 4 years ago prices at this year's interest rates.

[Fark user image image 850x314]


Ah, ok. Yeah, if Evil was in a position to refi into more favorable terms I understand what you mean.

I'd like to see prices drop like Evil said though. I'm seeing way too many well qualified first time home buyers priced out of the market because of cash investors.
 
2021-10-27 11:31:32 PM  

Izunbacol: Evil Twin Skippy: My house has increased in "value" 170% since I bought it in 2014. No, renovations. I haven't so much as put a fresh coat of paint on the place. (Hey, it's aluminum siding.) I can't wait for the bubble to burst, personally. I have to pay TAXES on all that "value".

I bet your payments have gone down thanks to the drop in interest rates.

The only things I see dropping prices are:

- A massive demand drop, maybe because of revised expectations:  late Millennials and early Gen-Zers finally tell themselves that it's better to rent and that owning a home isn't actually desirable.  They give up and settle on being tenants for life.  Or maybe eventually the declining birthrates knock out demand eventually.  Or maybe everyone telecommutes exclusively and doesn't need to live near the metropoles, but that seems unlikely.

- A massive supply increase:  We either start razing blocks of buglar-barred slums and build more dense highrises, or a massive transportation investment (highways, commuter rail, whatever) and we open more virgin greenfield space to building houses.  If the former, that still keeps real houses expensive because they're an even smaller proportion of the housing stock.

Honestly, I'd put money on a housing glut somewhere around 2035.  Baby Boomers would be ages 70-90, in prime dying/"going to live in a home" age, freeing up a lot of housing.  The late millennial "bulge" will have long passed through the early 30's peak home-buying years.  The increasing move toward telework combined with electrification in the car industry and the ability to install solar panels, cisterns, and grow gardens keeps the appeal of real houses up.   

Meanwhile, the very slow-to-react, turning-around-the-Titanic home-buildi​ng industry should have itself cranked into gear by then, cranking out too many homes just in the time oversupply the market as it tries to respond to the current temporary shortage.


Boomers are already selling their homes and moving to retirement places or assisted living.   Home ownership hasn't changed in 50 years, it's been 65%.
The crisis is less economic stability and high economic rents. For example, higher Ed and health care costs, low wages, and under-performing retirement system.  We also have absurdly high cost of having children including childcare and pre-school.
If only Congress had some sort of proposal or bill to help with those problems.
 
2021-10-28 7:54:48 AM  
It probably won't be as bad today as back in 2008 because most people today have fixed-rate mortgages. So, as long as you can still afford the mortgage, even though the property value may decline, you won't lose your house.  However, should you experience an event that will reduce your ability to pay the mortgage, or any reason you may need to sell, you could be in trouble.
 
2021-10-28 6:42:15 PM  

Izunbacol: - A massive demand drop, maybe because of revised expectations:  late Millennials and early Gen-Zers finally tell themselves that it's better to rent and that owning a home isn't actually desirable.  They give up and settle on being tenants for life.  Or maybe eventually the declining birthrates knock out demand eventually.  Or maybe everyone telecommutes exclusively and doesn't need to live near the metropoles, but that seems unlikely.


In no universe is it better to rent.  Unless you're a lazy ass who refuses to do any sort of maintenance.

It is absolute freaking misery living in an apartment.  It's cramped.  It's expensive.  There's an indoor pool I can never use because the morons never open it. My money is being pissed away.  I would literally be SAVING money to buy a house (depending where I got one) and in the end, I'D HAVE A FREAKING HOUSE.  I've spent nearly $80000 on my apartment over the last decade.  What do I have to show for it?  Nothing.  I literally pissed it away.

I also have an asswipe of an upstairs neighbor that blares their tv full blast until 4am right above my bedroom so I'm literally destroying my back sleeping on the couch every night.

And that's just a couple of the probably dozen different reasons I want a house.

/Granted, I can always end up in a house with an asshole neighbor with a dog who barks 24/7 or something, but that's why I'm refusing to get a house without a finished basement.  If I have an asshole neighbor, I'll sleep in the basement.
 
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