5 ms·
Calling things a "bubble" correctly is also a bit of "a broken clock is still right twice a day" kind of chance. People have been saying Real Estate is a bubble
by ilikehurdles 7y ago
Calling things a "bubble" correctly is also a bit of "a broken clock is still right twice a day" kind of chance. People have been saying Real Estate is a bubble about to burst for almost 10 years now. When I attended a home-buying seminar in 2014, folks in attendance were stating how housing is a bubble and it's best to wait for prices to drop before getting into ownership; yet by all measures just about any property in the US would have appreciated a ton in the last five years, and anyone who heeded that advice has lost out on a hefty return. The previous owners of my home sold it for double what they purchased it for. In five years of inaction, the wealth transferred in the form of rent can pay for a down-payment. That's a lot of market value to bet on a burst wiping out.
Maybe the folks who paralyze their decision-making out of fear of a bubble burst will eventually get to shout "I told you so" from the rooftops. Or maybe they won't. But every day that they're wrong is a day they're losing out on the opportunities others are taking advantage of.
- larrik 7y agoThe real estate bubble did burst 11 years ago, and a lot (most?) of the country still hasn't reached those values. My condo is still worth barely 60% of what I paid for it in 2008. California (SV especially) is another matter, though.
- NotSammyHagar 7y agoThe sv increase in home prices probably matches most thriving city's home price change. At least the tech cities like Seattle and Austin and ...
- ilikehurdles 7y agoI don’t see the evidence that most of the country hasn’t recovered in real estate prices. It seems like the median price is well above what it was at its peak before 2008.
- refurb 7y agoLook at the Case-Shiller city indexes. Cities like Chicago, Las Vegas, others, are close to their 2008 peak, but haven't yet surpassed it.
- jefftk 7y agoNational looks up to me: https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA
- refurb 7y agoThat’s because places like the Bay Area are skewing it up.
- mktmkr 7y agoA return to 2007 housing prices would be something that would cause the next recession, rather than an indicator that it's not coming. Housing _construction_ drives the economy, while housing _appreciation_ kills it.
- duderific 7y agoOnce there is not enough demand to meet the supply at the asked for prices, the prices will come down. Until that time though, the prices of housing in SV will continue to at least stay where they are, if not keep increasing. SV is where the big money jobs are, and apparently, there are more than enough people willing to pay 1.5 to 2 million for a 1500 sq ft home.