Posted on 08/31/2021 6:17:39 AM PDT by zeestephen
Home prices rose 18.6% annually in June, up from the 16.8% increase in May, according to the S&P CoreLogic Case-Shiller national home price index. That is the largest annual gain in the history of the index dating back to 1987. Prices nationally are now 41% higher than their last peak during the housing boom in 2006.
(Excerpt) Read more at cnbc.com ...
What I worry about is the stock market. At some point this has to end and many of us will be bust. It stresses me.
Irrational exuberance!
That’s June, the market is now turning back towards sanity. Of course it will overshoot.
We know how this ends. TARP 2! We all get to pay off those soon to be upside down mortgages.
Eventually, we will build enough - in spite of local Leftist building codes. But prices won't stabilize until the government stops borrowing money into existence.
yup, millenial here who is kicking himself *hard* for not buying in 2019. Why? I *thought* we were in a housing bubble then! So I decided to be extremely frugal and managed to save a hefty down payment, but now everything is way out of sight in price.
I’m just hoping for more inventory or even a small correction in housing prices. I can’t look at Zillow right now without wanting to throw my phone across the room.
The young in my family are complaining bitterly that starter homes in our area are now in the $1 million dollar range.
If the Communists in control of California have their way, single family home lots will be allowed to be divided up for four homes - so the cash-flush developers will snatch up those properties to build more home on them - local zoning laws will be superseded by state laws. We are already seeing some of this as large condo/apartment complexes are going up - overriding local control.
It is the developers who will get rich - very rich - from this.
This is bad for two reasons. For those areas that base property tax on value, taxes will go up. For those people who borrow on their equity they will lose their home when the bubble burst.
One good thing about California is Prop 13 which limits property tax.
I was talking to my wife this morning about this very subject.
Jimmy Carter inherited a problem with inflation and appointed Paul Volker as chairman of the Fed. Volker raised interest and mortgage interest went to 25%. It curbed inflation. But it tanked the economy.
Millions of jobs lost. Construction collapsed. Manufacturing of durable goods collapsed. Sales jobs vanished. The cure was worse than the ailment.
Fast forward to today. Last week the Fed announced it would be implementing more traditional (and historic) means to control the economy and inflation.
That can only mean one thing. Raising interest. They've kept interest low to make their boss look good. Low interest encourages corporate America to borrow and expand which raises their stock value.
High interest does the opposite. Business withdraws and stocks decline.
The only question is when.
And when that happens, house prices will come back down. Higher interest = fewer buyers.
My daughter tried to purchase another property Saturday a week ago. The home was put on the market on Friday. The seller took bids until 8 pm Saturday. Her bid was a little over $20k from the list price. The seller announced their decision on Monday. She didn’t get the property.
There is a lot of pressure out there driven my inflation and the very real threat of interest rate increases to stomp out inflation.
Everyone is living somewhere now. Is the current problem a shortage of purchasable homes or potential sellers setting a high price?
I suppose the selling price of an existing home is partly based on the cost to build a similar new home. Has the cost of materials and labor for home-building gone up dramatically?
Also, thinking of another post, if someone can’t afford the million dollar home they want, should they possibly consider a lower cost home or moving, especially from California?
I recall reading here a report that Blackrock was buying up properties.
It’s also weird that home prices would shoot up while the government supposedly has to impose a rent moratorium to keep people off the streets. (No relief small landlords though)
You would expect to see more rental properties up for sale.
Final thought: anybody notice dense clusters of rental properties appearing at the suburban fringes of the cities? I’m seeing it here in New Jersey. Within 10 years they’ll be government assisted, crime ridden ghettos.
You can’t have a proletariat of property owners.
Everything is right on schedule.
At least Housing isn’t included in the CPI, otherwise Inflation would be really bad.
Home sellers will need that extra home-sale money to pay for gas and food.
Home buyers will be extra broke and living off of Spam and pork’n beans.
I am sure incomes are also up 40% since 2006. /sarc
Also, everybody agrees that 2006 prices were heavily inflated due to a bubble, and today we are 40% above THAT.
What housing bubble?
You should look into a 2-Family house in a good neighborhood with good schools and a good location - this way you can collect rent while you live there to help pay your mortgage.
In 5 years or so, you can either convert the house to a single family or keep it as an investment, then buy a single family for yourself.
“...Eventually, we will build enough...”
Allowing millions of illegals to stream over the border does not help lower housing prices or rental costs and this invasion will not let us catch up for the foreseeable future.
What would the housing market look like if the 20-30 million illegals suddenly disappeared? Our children might be able to afford starter homes.
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