2004 all over again. I have seen this movie before.
Well, lumber prices are insane, that’s for sure. Boards I paid $8 for one year ago are now $39. A single treated 2x6 is $27.
Houses are expensive. I have 25 acres of woods. I’m considering selling some trees.
woodbutcher1963 wrote:
“2004 all over again. I have seen this movie before.”
Bubble market, then the bust a few months later?
“2004 all over again. I have seen this movie before.”
Not the same at all. Sure prices are skyrocketing but not all all for the same reasons. Mortgage qualifications were much, much more liberal back in the early 2000’s.
The two drivers of this housing market are ultra low rates and people wanting to escape the urban areas. The previous bubble was caused by massive buyer speculation. Many bought homes in order to flip them and the ease of getting a mortgage made it easy.
“2004 all over again. I have seen this movie before.”
Coincidentally I’m reading “the Greatest Trade Ever” by Gregory Zuckerman. It’s about the 2007 financial crisis and John Paulson’s successful contrarian strategy that made him a lot of money during the crisis. It talks about a lot of the financial people and financial strategies at that time. An information-filled book.
A few key differences from 2004. Credit quality is way higher, down payments are way, way higher and the mortgages are conforming (which had little issues even in 2007-2009) rather than liar loans (NINA loans) and negative amortization loans. Building costs are also way higher, limiting replacement stock, and the government and federal reserve has increased the money supply massively the last year, which encourages inflation.
Couldn't agree more. I cancelled looking for a new home and selling my townhome because I just don't want to pay these inflated prices to get back into a single family (stand-alone) home.
Can I afford to? Yes. Will I? No. I'm just not willing to pay these prices only to have the bubble pop later and have my home be worth less than I paid for it. Just not going to do it. It's not financially responsible.
Hello inflation. Time to dust off the old WIN buttons.