5 ms·

Probably not much. The only time the US had a major home price adjustment was 2008 and that was because the housing market was the problem. Currently the housin

Probably not much. The only time the US had a major home price adjustment was 2008 and that was because the housing market was the problem. Currently the housing market is up but not a problem. There aren't crazy foreclosures and there aren't any expected. Tho that can change if we have a big recession absolutely. Also home prices did not take a very long time to recover all things considered.

listenallyall 5y ago
It's always different this time, until it's not. Foreclosure rates aren't high today, but the people who bought extremely expensive houses did so just this year and last. Demand for homes is very high, in large part because hedge funds are buying lots of them... if rates rise, or if prices stabilize, they will pull out, decreasing demand significantly. And will migration to smaller cities/towns continue unabated, (if you haven't moved to Austin/Vegas/Idaho/Montana yet, when do you plan to??) or will that reverse as companies want a physical presence again? I will agree that last time, the recovery was speedier than anticipated, which only shows that irresponsible economic policy to avoid "economy will crash!!!" is overblown.
- jcadam 5y ago
  > And will migration to smaller cities/towns continue unabated, (if you haven't moved to Austin/Vegas/Idaho/Montana yet, when do you plan to??) or will that reverse as companies want a physical presence again? Moved to Alaska last year. Not going back to city life - remote forever :)
  - listenallyall 5y ago
    That's my point... you already moved. Will the same number of people migrate to Alaska in 2023 as moved in 2021?
    - jcadam 5y ago
      No. In fact, Alaska doesn't have much net migration, not even the last 2 years. There's quite a lot of churn - people move up here, go through their first Alaskan winter, then move back to the lower 48.
refurb 5y ago
The recency bias is amazing. No, if interest rates go up, buyers can afford less, housing prices go down.
- ac29 5y ago
  Not necessarily true: Interest rates and home prices both roses during the most recent period of rising rates (2016-2019): https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/USSTHPI https://fred.stlouisfed.org/series/USSTHPI
  - refurb 5y ago
    It's not guaranteed and in fact, what you'll likely see is continued home price growth as people pile in the "now or never" mentality as rates increase and mortgages are harder and harder to get a the historic low rates (see Canada). But in the long run, when mortgage rates go from 3% to 6% affordability goes down - people buy based on monthly payments, not the size of the loan. Of course if wages drastically increase, the affordability issue could be blunted. So yes, it's not a perfect correlation.
    - odonnellryan 5y ago
      Obviously it is not guaranteed bro. We only have history to base these assumptions on. The history backs the fact that housing prices will not go down - unless there is another major issue like the fraud during 2008, which seems unlikely but not impossible. Nothing is a guarantee. Silly to base your argument on that. Nothing is for certain.
      - refurb 5y ago
        Huh? Housing prices crashed several times before 2008. This is the same mentality of 2008. Wave your hands around and say "it's different this time". No, it's not. Housing is cyclical. It goes up, it goes down. It will go down, but but amazingly many will claim "I never saw it coming".

listenallyall 5y ago

It's always different this time, until it's not. Foreclosure rates aren't high today, but the people who bought extremely expensive houses did so just this year and last. Demand for homes is very high, in large part because hedge funds are buying lots of them... if rates rise, or if prices stabilize, they will pull out, decreasing demand significantly. And will migration to smaller cities/towns continue unabated, (if you haven't moved to Austin/Vegas/Idaho/Montana yet, when do you plan to??) or will that reverse as companies want a physical presence again? I will agree that last time, the recovery was speedier than anticipated, which only shows that irresponsible economic policy to avoid "economy will crash!!!" is overblown.

jcadam 5y ago
> And will migration to smaller cities/towns continue unabated, (if you haven't moved to Austin/Vegas/Idaho/Montana yet, when do you plan to??) or will that reverse as companies want a physical presence again? Moved to Alaska last year. Not going back to city life - remote forever :)
- listenallyall 5y ago
  That's my point... you already moved. Will the same number of people migrate to Alaska in 2023 as moved in 2021?
  - jcadam 5y ago
    No. In fact, Alaska doesn't have much net migration, not even the last 2 years. There's quite a lot of churn - people move up here, go through their first Alaskan winter, then move back to the lower 48.

refurb 5y ago

The recency bias is amazing. No, if interest rates go up, buyers can afford less, housing prices go down.

ac29 5y ago
Not necessarily true: Interest rates and home prices both roses during the most recent period of rising rates (2016-2019): https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/USSTHPI https://fred.stlouisfed.org/series/USSTHPI
- refurb 5y ago
  It's not guaranteed and in fact, what you'll likely see is continued home price growth as people pile in the "now or never" mentality as rates increase and mortgages are harder and harder to get a the historic low rates (see Canada). But in the long run, when mortgage rates go from 3% to 6% affordability goes down - people buy based on monthly payments, not the size of the loan. Of course if wages drastically increase, the affordability issue could be blunted. So yes, it's not a perfect correlation.
  - odonnellryan 5y ago
    Obviously it is not guaranteed bro. We only have history to base these assumptions on. The history backs the fact that housing prices will not go down - unless there is another major issue like the fraud during 2008, which seems unlikely but not impossible. Nothing is a guarantee. Silly to base your argument on that. Nothing is for certain.
    - refurb 5y ago
      Huh? Housing prices crashed several times before 2008. This is the same mentality of 2008. Wave your hands around and say "it's different this time". No, it's not. Housing is cyclical. It goes up, it goes down. It will go down, but but amazingly many will claim "I never saw it coming".