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What are analysts saying about where this will end? Housing prices can't go up forever like this. And when the demand drops will the prices crash? I guess what

What are analysts saying about where this will end? Housing prices can't go up forever like this. And when the demand drops will the prices crash? I guess what I'm asking is, is it a bubble? EDIT: just a month ago there were all the stories about how San Francisco's property prices were plummeting. It seems like a wild ride.

SavantIdiot 6y ago
Agreed. This growth cannot continue. But I feel like I've said that before over the last 30+ years. Houses are so expensive, and rising so quickly for shite buildings, that it is unnerving. I recently looked up my first house I bought in 1991 for $100K in Emeryville and it is going for $900K now. There's no effing way I could afford to live in my old house, my salary/net-work didn't increase 10x in 30 years. This is scary as hell.
dlp211 6y ago
To address your edit, it is possible and perfectly reasonable for prices to be dropping in San Francisco, while still having a massive shortfall of housing units and prices to be skyrocketing elsewhere. Prices will continue to go up significantly in places that are deemed desirable to live in until the prices are so high as to deter enough demand, then price growth should stabilize somewhat or recede if the market overshot. When will this end? When there are enough houses to house people in the places they want to be housed.
- StavrosK 6y ago
  The problem is that the people that make those places desirable to live in can no longer live in them.
tartoran 6y ago
What if the dollar is about to take a dip that it's never been seen before and people are locking out wealth into these homes, would that be a bad thing? I'm not talking about very expensive homes in very desired places, recently the mid covid trend to buy homes outside large cities due to not having to be in close proximity to offices made prices go up significantly. It may sound like a bad deal but if one takes a mortgage now for x amount (which seems high), that amount would mean a lot less in the not so distant future so even if prices come down a bit it might still be a potential good achievement.
- burlesona 6y ago
  This is my guess. We’re busy monetizing our national debt, and real estate is the first sector that is calibrating to the new (much lower) value of the dollar. I would love to be wrong about that, btw. I think it’s going to be brutally painful for anyone who rents, and will effectively be like giving the entire country a pay cut and lowering the minimum wage.
- AnimalMuppet 6y ago
  It depends on your situation. When inflation hits, is your income also going to go up? Is it going to go up as the inflation hits, or after the inflation hits? Do you have enough financial slack to survive until inflation makes the mortgage cheap? And in fact, one could argue that the inflation is already here, it's just not evenly distributed. It's in financial assets - stocks and real estate, and maybe Bitcoin, but not so much in everything else.
- zeckalpha 6y ago
  The rising prices could be a sign of a dip already happened (assuming other prices are climbing)
- throw0101a 6y ago
  > What if the dollar is about to take a dip that it's never been seen before and people are locking out wealth into these homes, would that be a bad thing? The US dollar will still be worth a dollar in the US (hello tautology). It's "value" relative to other currencies and most other goods doesn't matter if you make US wages and buy a US house.
0_____0 6y ago
ask prices never went down. rental took a dump. sale prices just increased because of the supply shock, way too many buyers and nobody was selling.
BeetleB 6y ago
> And when the demand drops will the prices crash? Unlikely. More likely it will just flatten out for a while.
filoleg 6y ago
>I guess what I'm asking is, is it a bubble? Yes, but there is a catch. You have no way of knowing when it will pop. Could be in a few years, could be in 5, could be in 10, could be in 15, could be in 20-30. With this in mind, at some point, it just starts making sense to join the bubble on the ride up, instead of just sitting with no property and be proud of how "right" I was in my belief that it was a bubble all along.
- comeonseriously 6y ago
  It's not a bubble, though. After the last bubble, wall street swooped in and started buying foreclosed properties. Corporations are _still_ outbidding individuals for properties. This isn't a bubble and it will continue and eventually, even us who make really good money will not have enough and we'll just be renters.
throw0101a 6y ago
> I guess what I'm asking is, is it a bubble? In most places it is not a bubble: * https://awealthofcommonsense.com/2021/04/why-this-is-not-another-housing-bubble/ https://awealthofcommonsense.com/2021/04/why-this-is-not-ano... Millennials are now the largest demographic and are in the start-family / buy-house phase of life: the oldest ones are 40. Low interest rates (to help with economic recovery) make borrowing cheap so there's extra money sloshing around on the demand side of things. Inflation-adjusted monthly mortgage payments are lowest they've ever been since 1989: * https://awealthofcommonsense.com/2021/03/what-if-housing-prices-arent-as-high-as-they-appear/ https://awealthofcommonsense.com/2021/03/what-if-housing-pri... The pandemic has more people scrambling for more square footage. Perfect storm. Rising prices are mostly a detriment when saving for a downpayment.

SavantIdiot 6y ago

Agreed. This growth cannot continue. But I feel like I've said that before over the last 30+ years. Houses are so expensive, and rising so quickly for shite buildings, that it is unnerving. I recently looked up my first house I bought in 1991 for $100K in Emeryville and it is going for $900K now. There's no effing way I could afford to live in my old house, my salary/net-work didn't increase 10x in 30 years. This is scary as hell.

dlp211 6y ago

To address your edit, it is possible and perfectly reasonable for prices to be dropping in San Francisco, while still having a massive shortfall of housing units and prices to be skyrocketing elsewhere. Prices will continue to go up significantly in places that are deemed desirable to live in until the prices are so high as to deter enough demand, then price growth should stabilize somewhat or recede if the market overshot. When will this end? When there are enough houses to house people in the places they want to be housed.

StavrosK 6y ago
The problem is that the people that make those places desirable to live in can no longer live in them.

tartoran 6y ago

What if the dollar is about to take a dip that it's never been seen before and people are locking out wealth into these homes, would that be a bad thing? I'm not talking about very expensive homes in very desired places, recently the mid covid trend to buy homes outside large cities due to not having to be in close proximity to offices made prices go up significantly. It may sound like a bad deal but if one takes a mortgage now for x amount (which seems high), that amount would mean a lot less in the not so distant future so even if prices come down a bit it might still be a potential good achievement.

burlesona 6y ago
This is my guess. We’re busy monetizing our national debt, and real estate is the first sector that is calibrating to the new (much lower) value of the dollar. I would love to be wrong about that, btw. I think it’s going to be brutally painful for anyone who rents, and will effectively be like giving the entire country a pay cut and lowering the minimum wage.
AnimalMuppet 6y ago
It depends on your situation. When inflation hits, is your income also going to go up? Is it going to go up as the inflation hits, or after the inflation hits? Do you have enough financial slack to survive until inflation makes the mortgage cheap? And in fact, one could argue that the inflation is already here, it's just not evenly distributed. It's in financial assets - stocks and real estate, and maybe Bitcoin, but not so much in everything else.
zeckalpha 6y ago
The rising prices could be a sign of a dip already happened (assuming other prices are climbing)
throw0101a 6y ago
> What if the dollar is about to take a dip that it's never been seen before and people are locking out wealth into these homes, would that be a bad thing? The US dollar will still be worth a dollar in the US (hello tautology). It's "value" relative to other currencies and most other goods doesn't matter if you make US wages and buy a US house.

0_____0 6y ago

ask prices never went down. rental took a dump. sale prices just increased because of the supply shock, way too many buyers and nobody was selling.

BeetleB 6y ago

> And when the demand drops will the prices crash? Unlikely. More likely it will just flatten out for a while.

filoleg 6y ago

>I guess what I'm asking is, is it a bubble? Yes, but there is a catch. You have no way of knowing when it will pop. Could be in a few years, could be in 5, could be in 10, could be in 15, could be in 20-30. With this in mind, at some point, it just starts making sense to join the bubble on the ride up, instead of just sitting with no property and be proud of how "right" I was in my belief that it was a bubble all along.

comeonseriously 6y ago
It's not a bubble, though. After the last bubble, wall street swooped in and started buying foreclosed properties. Corporations are _still_ outbidding individuals for properties. This isn't a bubble and it will continue and eventually, even us who make really good money will not have enough and we'll just be renters.

throw0101a 6y ago

> I guess what I'm asking is, is it a bubble? In most places it is not a bubble: * https://awealthofcommonsense.com/2021/04/why-this-is-not-another-housing-bubble/ https://awealthofcommonsense.com/2021/04/why-this-is-not-ano... Millennials are now the largest demographic and are in the start-family / buy-house phase of life: the oldest ones are 40. Low interest rates (to help with economic recovery) make borrowing cheap so there's extra money sloshing around on the demand side of things. Inflation-adjusted monthly mortgage payments are lowest they've ever been since 1989: * https://awealthofcommonsense.com/2021/03/what-if-housing-prices-arent-as-high-as-they-appear/ https://awealthofcommonsense.com/2021/03/what-if-housing-pri... The pandemic has more people scrambling for more square footage. Perfect storm. Rising prices are mostly a detriment when saving for a downpayment.