Bubble, pandemic, or other?

Why are house prices so high?

  • We are in another bubble.

    Votes: 9 60.0%

  • Pandemic forces everyone to stay at home so owning is more desirable.

    Votes: 5 33.3%

  • Other

    Votes: 2 13.3%
  • Total voters
    15
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irvinehomeowner

irvinehomeowner

Well-known member
So what happened?

I'm not shy to admit that I thought housing prices would start going down because of Covid but instead we are at all time highs.

And not just housing... collectibles like sports cards, comics... well maybe not Beanie Babies... used cars (but that's probably more microchip shortages)... stocks and sometimes toilet paper.

I don't think anyone predicted all these higher prices (and stock indexes) and rock bottom low interest rates.

I think quite a bit of it is redirected spending... can't blow money on entertainment (movies/concerts/sports), travel, lavish events... so people spend it on some sandwiched condo in Eastwood.

It's too bad because that means LiarLoan won't be around for a while because prices are sky high in Irvine.

What is your take on all this? We can't even downsize because it would cost more. :(
 
Interest rates are low because of the pandemic, or more accurately the Fed's response to the pandemic

The rest is just a supply and demand story. Supply of homes especially SFR has been low for a long time and new construction limited by regulations and more recently materials and labor costs spiking. And of course prop 13 in CA. Demand is up for many reasons: low interest rates, large generation of millennials finally entering the home market, strong stock market, increased work from home resulting in demand for more space. Low interest rates also affects supply as people refinance at very low rates.
 
The bills will comes dues some days, just like it always does. We can run but we can't hide. We are on stimulus sterioids. I notice now the spending bills, stimulus bills, bail out bills, HERO Acts, American Rescues Acts, whatever you call it and recall some of the names, is bigger and bigger. That's because as the herroine drugs of cheap plenty money wear off, so the dosage infuse has to be larger to revive the patients. The last dose of the injection or infuse will be so large that it will actually kill the patients. In this case the American people. Right now, the killing is slow through the form of higher taxes and higher inflation. Inflation will get so huge that a condwich is can not even affordable anymore even for two well to do couple high paying job without a huge help from, you got it,,, baby boomers parents. If they are lucky enough to have wealthy parents.

The longer the FED hold out on doing the right thing, the much deeper holes they are digging for all hardworking American. Forget about saving for a home. That is long gone, at least in California. It still a good practice to save but to save for buying a home is not even fair for working class families, unreachable under this policies of ZERO rate. Sure, its great for investor and homeowners, I admit it. But there is problem there too, because homeowners a locked in place. Afraid to sell because they then buy the next one with less options and much, much higher taxes. It is not here yet, but stagflation comes to mind as we travel down this path. It isn't good.

No pain no gain. We have to get some pain,,,,a lot of it before it gets better I am afraid to say so.

I don't always have this view, but at this point the ship have had to steer way to the right. The helms must turn. I am fine with my homes falling, because I still need a place to live. But it gives opportunities for other to join, Right now a condwich is too much.
 
Am I hearing JEALOUSY? You guys can't take a $1m condwich Delano at East Wood Village? ;D

Jokes aside, I definitely see crazy spendings these days. I've said this before, but ever since stay-home-order, people spend more $$$ on their homes. Getting new furnitures, upgrading/remodeling, and even buying homes are some of things people do more than ever. I've heard you have to wait almost 6 months to get a new Tesla Model Y now.

Is this a bubble? There are couple areas I can kind of see bursting/crashing, but I'll hold on to say further for now since I could be very wrong. I'll say this. IF the interest rate goes up (not just mortgage but every other thing also), then we might have a big problem from $$$ shift in global level.
 
Jealous? No buddy, far from it.

What I know is as wealth gap grows further apart, what was safe is not anymore. I can be rich, fat, and happy. As long as I don?t leave my house, my neighborhood, might I dare to say, leave Irvine without feeling jeopardize. What away to live with all these wealth on paper.

If riot and city burn when result of inequalities surface not too long ago, the coming wealth gap result of the FED is 10x worst.
 
What happened is the gov saved the housing market by allowing people to not pay their mortgages for up to 18 months. To make matters worse, the government decided to not demand a lump sum payment for all the mortgage missed during forbearance.

If it wasn?t for the government, millions of homes will be in the market and there would have been a healthy correction in the housing market.
 
sleepy5136 said:
What happened is the gov saved the housing market by allowing people to not pay their mortgages for up to 18 months. To make matters worse, the government decided to not demand a lump sum payment for all the mortgage missed during forbearance.

If it wasn?t for the government, millions of homes will be in the market and there would have been a healthy correction in the housing market.
Click to expand...

The government saved some people, the other people that got screwed are the landlord to those rental that did not get pay. I know of a landlord that was homeless because she can not evict her tenant to move into her owned rental house because of this eviction moratorium. Crazy right? How about the people went on forbearance and taking lavish vacation and not having to pay house payments. These are true story. Completely backward. Because the FED as well as the government allow it, in the name of pandemics. Once the sugar spoon fed, it is hard to take the candy away.
 
I mean, the government owns or insures like 2/3 of home mortgages. Doesn't really make sense to be foreclosing on homes during a pandemic. Of course some people take advantage who don't need it, but that's inevitable.
 
The laws of unintended consequences have already started to happen.  You are starting to see more rental properties being sold and bought by buyers who want to occupy those homes so there is less rental inventory on the market and that has pushed up rental prices as there's only about a 1/3 of rental listings in Irvine now as there used to be before covid.  There is a shortage of housing supply in Southern California in general and that is why prices will continue to go higher.  Think about the kind of madness in pricing we would have seen in Irvine if there were no new homes for sale soaking up buyer demand, I'd venture to say that prices would be 5-10% higher than they are now.
 
nosuchreality said:
TIL that there is a neighborhood in Artesia consisting of 338 properties called Petroleum Garden.
Click to expand...
adam carolla used to say on loveline that the nicer sounding the neighborhood name in LA (e.g. Panorama City, Hawaiian Gardens, etc) the worse the neighborhood actually is.  so by that logic Petroleum Garden is probably paradise.
 
nosuchreality said:
TIL that there is a neighborhood in Artesia consisting of 338 properties called Petroleum Garden.
Click to expand...

That area east of Pioneer & North of 91 FWY around 166th to 169th was a slum and drug den back in late 80s to early 90s.  Donno about now.

I used to live near Pioneer & Artesia at a cheap motel rental for few months back in 1983 while we were looking for a place in Lakewood.  The motel was torn down and rebuilt as Day's Inn Suites.

Artesia is an interesting city, it's only 1.62 sq miles but has tiny homes on tiny lots in slums and million dollar homes on big lots by 183rd & Summer toward the mall.
https://www.redfin.com/CA/Artesia/18311-Summer-Ave-90701/home/7474647

 
fatduck said:
momopi said:
Bubble?  Bubble?
1 bed 1 bath 396 sq ft home in Artesia:https://www.redfin.com/CA/Artesia/11960-169th-St-90701/home/7462392
Click to expand...
bigger lot than my property in LA and commute isn't even that bad.  maybe i should upgrade...
Click to expand...

If you go look at the property, bring a chair and sit by the window to discreetly observe the street for a while.  If you see people pulling up in their cars and some suspicious looking dude come out of a house to talk to the car's occupants, be aware that they might be dealing.

When I was attending Artesia High (actually in Lakewood) some of us were able to take classes at Cerritos College (they bus us from HS to Jr College).  Back then that was where Cerritos College kids went to get dope.
 
momopi said:
fatduck said:
momopi said:
Bubble?  Bubble?
1 bed 1 bath 396 sq ft home in Artesia:https://www.redfin.com/CA/Artesia/11960-169th-St-90701/home/7462392
Click to expand...
bigger lot than my property in LA and commute isn't even that bad.  maybe i should upgrade...
Click to expand...

If you go look at the property, bring a chair and sit by the window to discreetly observe the street for a while.  If you see people pulling up in their cars and some suspicious looking dude come out of a house to talk to the car's occupants, be aware that they might be dealing.

When I was attending Artesia High (actually in Lakewood) some of us were able to take classes at Cerritos College (they bus us from HS to Jr College).  Back then that was where Cerritos College kids went to get dope.
Click to expand...
1/3 the price of my current house and comes with a built-in secondary income stream?  this is looking like a hidden gem.
 
momopi said:
nosuchreality said:
TIL that there is a neighborhood in Artesia consisting of 338 properties called Petroleum Garden.
Click to expand...

That area east of Pioneer & North of 91 FWY around 166th to 169th was a slum and drug den back in late 80s to early 90s.  Donno about now.

I used to live near Pioneer & Artesia at a cheap motel rental for few months back in 1983 while we were looking for a place in Lakewood.  The motel was torn down and rebuilt as Day's Inn Suites.

Artesia is an interesting city, it's only 1.62 sq miles but has tiny homes on tiny lots in slums and million dollar homes on big lots by 183rd & Summer toward the mall.
https://www.redfin.com/CA/Artesia/18311-Summer-Ave-90701/home/7474647
Click to expand...
..
 
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