Author Topic: CR: Is there a new housing bubble?  (Read 2616 times)

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Offline zovall

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Offline USCTrojanCPA

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Re: CR: Is there a new housing bubble?
« Reply #1 on: April 09, 2021, 11:56:12 PM »
Good article and I agree with it.  We aren't seeing wild speculation in the market (people buying multiple homes thinking they'll become rich), the vast majority of buyers are people who are looking to live in the home and not flip it for a higher price.  And because there is still significantly more demand than supply prices will continue to price this year.
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Offline daedalus

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Re: CR: Is there a new housing bubble?
« Reply #2 on: April 10, 2021, 09:09:37 PM »
This thread and the other "coming soon" thread got me curious so I looked at what has sold recently around me.  The first house I clicked on was a small 2/1 100 year old bungalow, on an average sized lot.  I remember seeing the listing with my wife behind my shoulder when it first went up, and we giggled at the asking price, which was near double what we paid for our much-bigger-everything house less than 10 years ago.   It closed this past week for $150k over asking. 

Maybe this isn't a housing bubble.  But this is absolutely an asset price bubble.  And while most of us on this board are probably beneficiaries of it, I fear it's not a good thing overall.  It's not yet widely accepted but everywhere I look I see inflation.  We have asterisked unfavorable economic measures with a COVID caveat, but I think the inflation will remain long after COVID is no longer a front page news item, and income disparity will get worse.  Not the stuff of healthy and stable societies.

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Offline USCTrojanCPA

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Re: CR: Is there a new housing bubble?
« Reply #3 on: April 11, 2021, 09:36:59 AM »
This thread and the other "coming soon" thread got me curious so I looked at what has sold recently around me.  The first house I clicked on was a small 2/1 100 year old bungalow, on an average sized lot.  I remember seeing the listing with my wife behind my shoulder when it first went up, and we giggled at the asking price, which was near double what we paid for our much-bigger-everything house less than 10 years ago.   It closed this past week for $150k over asking. 

Maybe this isn't a housing bubble.  But this is absolutely an asset price bubble.  And while most of us on this board are probably beneficiaries of it, I fear it's not a good thing overall.  It's not yet widely accepted but everywhere I look I see inflation.  We have asterisked unfavorable economic measures with a COVID caveat, but I think the inflation will remain long after COVID is no longer a front page news item, and income disparity will get worse.  Not the stuff of healthy and stable societies.

Yes, I think what we are seeing is price inflation and not a bubble or wild speculation since to what we saw in 2003-2007.  This price run-up reminds me of what we saw back in 2012-2013 when prices went up 20%.  I think at some point this year with higher price we'll see the market come back to balance between supply and demand, the only question is how much higher prices have to go.
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Offline zovall

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Re: CR: Is there a new housing bubble?
« Reply #4 on: April 11, 2021, 06:41:47 PM »
Maybe this isn't a housing bubble.  But this is absolutely an asset price bubble.  And while most of us on this board are probably beneficiaries of it, I fear it's not a good thing overall.  It's not yet widely accepted but everywhere I look I see inflation.  We have asterisked unfavorable economic measures with a COVID caveat, but I think the inflation will remain long after COVID is no longer a front page news item, and income disparity will get worse.  Not the stuff of healthy and stable societies.

The K-shaped recovery is benefitting most people here but there is a whole segment that is much worse off. I agree regarding inflation and it making this disparity even worse and what that will do to society. I've seen some discussion against the possibility of inflation due to increased productivity but I'm not sure if I'm buying it.

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Offline freedomcm

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Re: CR: Is there a new housing bubble?
« Reply #5 on: April 12, 2021, 06:45:23 AM »
Not much productivity increase for hotel maids, gardeners, or waitresses and cooks (the lower leg of the "K")

more bifurcation coming.

Offline Compressed-Village

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Re: CR: Is there a new housing bubble?
« Reply #6 on: April 12, 2021, 12:27:33 PM »
I agree there is NOT a housing bubbles and in Irvine speculative buying is at an all time low. The investor mentality of buying to flip is almost zero. The people that I know buy today in this market primarily as an anchor to stay put in a balance lifestyles and long term hold.

The cost of buying to invest and rental for single family home in Irvine is just too high to make cashflow meaningful.

Therefore, it drive the speculative market else where. In land Empire, Eastvale and San Bernardino is full of them.

Offline Kenkoko

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Re: CR: Is there a new housing bubble?
« Reply #7 on: April 12, 2021, 11:45:31 PM »
Not a housing bubble.

The run up in home prices had been relatively mild, compared to other asset classes.

S&P is up over 40% since April 2020, Nasdaq is up over 60%.

Bitcoin jumped over 800% since last April.

There's also institutional buying into RE

https://www.wsj.com/articles/if-you-sell-a-house-these-days-the-buyer-might-be-a-pension-fund-11617544801

Offline Cornflakes

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Re: CR: Is there a new housing bubble?
« Reply #8 on: April 13, 2021, 12:05:13 PM »

$27.2 trillion dollars
Size of U.S. residential real estate market is $27 trillion in 2019. It's Monday and we know you're not working, so let's wrap our heads around just how big the U.S. housing market is. The total value of the U.S. real estate market is $27.2 trillion dollars.Apr 29, 2019

U.S. Housing Market's Combined Value Hits $33.6 Trillion in ...https://www.worldpropertyjournal.com › united-states
Jan 20, 2020 — According to new research by Zillow, the total value of every home in the U.S. is $33.6 trillion, nearly as much as the GDP of the two largest ...

Housing Market Gains More Value In 2020 Than In Any Year ...https://www.forbes.com › brendarichardson › 2021/01/26
Jan 26, 2021 — The full stock of U.S. housing is now worth $36.2 trillion. Strong demand drove intense competition among buyers, causing homes to fly off the ...

Date               U.S. Equity Market Value (USD, Million)               Top 500 U.S. Companies Market Value (USD, Million)
03/31/2021               49,107,685.7                                             35,385,262.3
12/31/2020               45,310,009.1                                             33,388,390.9
12/31/2019               37,689,255.8                                             28,125,589.1

$12T here, $10T there...great velocity of $4T pump by feds...

The wheel turned several reds in a row. Time to take chips off the table and slow down a bit....

Offline Liar Loan

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Re: CR: Is there a new housing bubble?
« Reply #9 on: April 13, 2021, 01:53:18 PM »
2007 ~ "There is no housing bubble." -Everybody
2021 ~ "There is no housing bubble." -Everybody

tic, tic, tic....

Offline Cornflakes

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Re: CR: Is there a new housing bubble?
« Reply #10 on: April 13, 2021, 03:02:34 PM »
2007 ~ "There is no housing bubble." -Everybody
2021 ~ "There is no housing bubble." -Everybody

tic, tic, tic....

2007 ~ my gardener was flipping houses with income $20/hour that I and others were paying him
2021 ~ banks are still giving me runaround for 60+ days to fund a refi loan (not new debt) with my perfect credit, w2 income, the steady corporate job for years

2005ish - interest rates were 6-7% and people were still bidding up as there was speculation
2021 - Rates are sub 3s yet minimal speculative flips happening

Offline Mety

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Re: CR: Is there a new housing bubble?
« Reply #11 on: April 13, 2021, 03:12:35 PM »
Home prices and offers are pretty crazy these days, but if what Kenkoko says is true of all other things he said above, shouldn’t we be more worried about the bubbles for those other things before speculating the housing one?

Offline morekaos

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Re: CR: Is there a new housing bubble?
« Reply #12 on: April 13, 2021, 03:16:43 PM »
This was bad when it happened in 2007...
;D :D

More Real Estate Agents Than Homes for Sale

Right now, there are more real estate agents in the U.S. than homes available for sale. The combination of consumer demand for single-family housing, limited supply, and folks being forced to find new work opportunities have all been contributing factors.

https://www.fool.com/millionacres/real-estate-market/articles/more-real-estate-agents-than-homes-for-sale-what-it-means-to-investors/

Offline USCTrojanCPA

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Re: CR: Is there a new housing bubble?
« Reply #13 on: April 13, 2021, 03:26:24 PM »
2007 ~ "There is no housing bubble." -Everybody
2021 ~ "There is no housing bubble." -Everybody

tic, tic, tic....

No bubble and I've provided you reasons as to why there isn't.  If rates don't increase materially, if the virus comes back strong, if we don't get significantly more homes listed, and/or we get an economic setback where people lose their jobs prices will continue to increase for the rest of this year.
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Offline Mety

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Re: CR: Is there a new housing bubble?
« Reply #14 on: April 13, 2021, 04:16:29 PM »
2007 ~ "There is no housing bubble." -Everybody
2021 ~ "There is no housing bubble." -Everybody

tic, tic, tic....

No bubble and I've provided you reasons as to why there isn't.  If rates don't increase materially, if the virus comes back strong, if we don't get significantly more homes listed, and/or we get an economic setback where people lose their jobs prices will continue to increase for the rest of this year.

LL meant to say only the Irvine housing market is about to crash. ;D

I'm kidding, eyephone in case you take it seriously.

 

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