5 ms·

I'd suggest making lowball offers yourself, people may be delusionally hanging on to what prices were a few months ago.

api 6y ago
Careful. It could go a lot lower. Millions and millions of boomers will be unloading homes too over the next few years. RE has been in a bull market since around 2000. That bull run may be ending. It's even possible that the true bubble ended in 2008-2010 and what we have seen since then is a large bear rally a.k.a. "double top." RE is a very slow market where things that could happen in days or months in stocks take years.
- lotsofpulp 6y ago
  RE in certain metro regions offering high incomes and multiple employers and popular vacation areas has been in a bull run market. Large swaths of the US has stagnated, and I predict the popular areas will continue to stay popular.
  - api 6y ago
    I don't expect those popular areas to get cheap, but I'm speaking of the historic RE bull run that began in 2000 that saw the rate of increase vastly outstripping core inflation and wages. That was clearly a bubble, and RE is still ridiculously high as a multiple of median wages in many "hot" markets. LA, SF, Seattle, etc. are almost totally unaffordable to anyone below 1-2 standard deviations above the median income, which is crazy. SF Bay is by far the craziest at least among major cities, though I suspect there may be crazier small "boutique" markets around. Bubbles are basically naturally occurring Ponzi schemes. They are not driven by fundamentals.
- epistasis 6y ago
  A lot of that run is from systematic under building, especially where markets are hottest. Construction starts will be hit super hard again. Even the boomers exiting may not be enough to meet demand now. There are systemic issues with regulatory capture in real estate, those who benefit from limited supply (landowners) have blocked land from being used more efficiently, dramatically driving up its prices.
  - amluto 6y ago
    I’m not convinced by your assertion that land owners are to blame. Land is land, and you can’t just make more. Replace “land” with “dwelling unit” and I might agree with you.
    - epistasis 6y ago
      The regulatory capture happens from landowners restricting both the number of dwelling units that are allowed under zoning, and by landowners using political planning process to stop even those dwelling units that fit the zoning. Massive chunks of our cities are restricted to a single or two dwelling unit per parcel, which creates a huge bubble in land prices. So in summary, landowners use law to inflate land values by restricting the number of dwelling units that are allowed. (And ironically, by unfairly capping the population density, they force overcrowding of people into existing units, which is what studies are finding to be the true factor the geographic distribution of COVID19 cases in places like NYC, rather than density... but I digress)
      - api 6y ago
        I've come to the view that local zoning should be abolished. We should have standardized zoning at at least the state level patterned after Japan. Local zoning is nothing more than a property owners' cartel that restricts supply to extract rent. Critics will see this as un-democratic when in reality it's much more democratic. Most local zoning is controlled by tiny opaque cabals of land owners who use all kinds of tactics to prevent participation by anyone beyond other sympathetic land owners with a vested interest in raising prices. These cartels have sat around while an entire generation has been ruined by their practices. It's time to take their little fiefdoms away.
        epistasis 6y ago
        Three books that dive into the problems of our "local control" system, including how it can be anti-democratic: Neighborhood Defenders by Katherine Einstein et al Segregation By Design by Jessica Trounstine (recently won a planning book of the year award) And though it's not about loca control, as much, The Color of Law by Richard Rothstein is an essential for looking at the federal policies that forced segregation in housing.
- mturmon 6y ago
  > ...boomers will be unloading homes too over the next few years... This might be true in some markets. In the LA market, my friends who were using the "wait a few years" strategy have been very, very disappointed.
  - tormeh 6y ago
    The market can stay irrational longer than you can stay solvent, as the saying goes. Looking at fundamentals is not enough. Short and medium term price prediction is fundamentally an exercise in psychology.

api 6y ago

Careful. It could go a lot lower. Millions and millions of boomers will be unloading homes too over the next few years. RE has been in a bull market since around 2000. That bull run may be ending. It's even possible that the true bubble ended in 2008-2010 and what we have seen since then is a large bear rally a.k.a. "double top." RE is a very slow market where things that could happen in days or months in stocks take years.

lotsofpulp 6y ago
RE in certain metro regions offering high incomes and multiple employers and popular vacation areas has been in a bull run market. Large swaths of the US has stagnated, and I predict the popular areas will continue to stay popular.
- api 6y ago
  I don't expect those popular areas to get cheap, but I'm speaking of the historic RE bull run that began in 2000 that saw the rate of increase vastly outstripping core inflation and wages. That was clearly a bubble, and RE is still ridiculously high as a multiple of median wages in many "hot" markets. LA, SF, Seattle, etc. are almost totally unaffordable to anyone below 1-2 standard deviations above the median income, which is crazy. SF Bay is by far the craziest at least among major cities, though I suspect there may be crazier small "boutique" markets around. Bubbles are basically naturally occurring Ponzi schemes. They are not driven by fundamentals.
epistasis 6y ago
A lot of that run is from systematic under building, especially where markets are hottest. Construction starts will be hit super hard again. Even the boomers exiting may not be enough to meet demand now. There are systemic issues with regulatory capture in real estate, those who benefit from limited supply (landowners) have blocked land from being used more efficiently, dramatically driving up its prices.
- amluto 6y ago
  I’m not convinced by your assertion that land owners are to blame. Land is land, and you can’t just make more. Replace “land” with “dwelling unit” and I might agree with you.
  - epistasis 6y ago
    The regulatory capture happens from landowners restricting both the number of dwelling units that are allowed under zoning, and by landowners using political planning process to stop even those dwelling units that fit the zoning. Massive chunks of our cities are restricted to a single or two dwelling unit per parcel, which creates a huge bubble in land prices. So in summary, landowners use law to inflate land values by restricting the number of dwelling units that are allowed. (And ironically, by unfairly capping the population density, they force overcrowding of people into existing units, which is what studies are finding to be the true factor the geographic distribution of COVID19 cases in places like NYC, rather than density... but I digress)
    - api 6y ago
      I've come to the view that local zoning should be abolished. We should have standardized zoning at at least the state level patterned after Japan. Local zoning is nothing more than a property owners' cartel that restricts supply to extract rent. Critics will see this as un-democratic when in reality it's much more democratic. Most local zoning is controlled by tiny opaque cabals of land owners who use all kinds of tactics to prevent participation by anyone beyond other sympathetic land owners with a vested interest in raising prices. These cartels have sat around while an entire generation has been ruined by their practices. It's time to take their little fiefdoms away.
      - epistasis 6y ago
        Three books that dive into the problems of our "local control" system, including how it can be anti-democratic: Neighborhood Defenders by Katherine Einstein et al Segregation By Design by Jessica Trounstine (recently won a planning book of the year award) And though it's not about loca control, as much, The Color of Law by Richard Rothstein is an essential for looking at the federal policies that forced segregation in housing.
mturmon 6y ago
> ...boomers will be unloading homes too over the next few years... This might be true in some markets. In the LA market, my friends who were using the "wait a few years" strategy have been very, very disappointed.
- tormeh 6y ago
  The market can stay irrational longer than you can stay solvent, as the saying goes. Looking at fundamentals is not enough. Short and medium term price prediction is fundamentally an exercise in psychology.