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Its funny reading this, because the housing market has never not looked like a bubble in my life. I guess it wasn't a bubble in the 70s-80s? Its hard to concept

Its funny reading this, because the housing market has never not looked like a bubble in my life. I guess it wasn't a bubble in the 70s-80s? Its hard to conceptulise what a housing market that isn't looks like.

lispisok 3y ago
Agree. I dont see the government letting another 2008 happen either. They will do whatever it takes to keep housing prices from declining significantly on a large scale
- onlyrealcuzzo 3y ago
  There could be some weird world in which it's popular for house prices to go down. If that becomes the case, then populist politicians will eventually get elected and let them fall. I don't see this happening soon, but stranger things have happened.
  - coffeebeqn 3y ago
    Weird? That’s literally what millennials and gen z and any other generation who can’t afford the bubble houses want
    - yakubin 3y ago
      But there’s too few of us. The elderly are always going to outvote us.
      - randomdata 3y ago
        The millennials are the largest generational demographic. Add in the adult segment of Generation Z and the elderly are greatly outnumbered. But Generation X holds the balance of power. They are the wildcard.
        GrumpySloth 3y ago
        > Add in the adult segment of Generation Z That would be about half of them. Baby Boomers + Gen X = 134 million Millenials + half of Gen Z = 107 million Young people are outnumbered, and it’s going to get worse. Numbers from <https://www.statista.com/statistics/797321/us-population-by-generation/ https://www.statista.com/statistics/797321/us-population-by-...>
        randomdata 3y ago
        > Young people are vastly outnumbered Not by the elderly, though. Just like I said, and by your own numbers, Generation X holds the balance of power. They are not yet elderly. Even the oldest ones are still in their 50s – the youngest are still in their early 40s.
        yakubin 3y ago
        Fair enough.
        onlyrealcuzzo 3y ago
        Yeah, but ~51.5% of millennials own a house: https://www.bloomberg.com/news/articles/2023-04-19/half-of-millennials-own-homes-the-rest-fear-they-ll-never-buy-one https://www.bloomberg.com/news/articles/2023-04-19/half-of-m... Good luck hoping for them to vote on tanking house prices.
  - striped_hash 3y ago
    A majority of American households a homeowners. So it’s unlikely. https://www.statista.com/statistics/184902/homeownership-rate-in-the-us-since-2003/ https://www.statista.com/statistics/184902/homeownership-rat...
    - Jcowell 3y ago
      Can’t read this right now, but is this saying that of the majority of the adult population, most are homeowners and not renters? No way that’s true
      - onlyrealcuzzo 3y ago
        It's absolutely true. The ratio has been >60% since 1970: https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N
  - CapstanRoller 3y ago
    House prices do go down! Take Japan as an example: houses are considered a depreciating asset, like cars. It makes total sense: wood rots, metal rusts, etc. The land value is another matter, though. For many people, the primary goal isn't lower house prices overall, but a change in approach to how we approach housing (especially zoning) in order to make shelter affordable. It's not that everyone wants McMansions for cheap, but rather they want to see things built that are reasonable in size and affordable for normal workers. This could be anything from large concrete block apartments (they can be made cozy and nice!) to tiny house villages. There are many great ways to live which are literally illegal to build in the USA due to archaic and regressive zoning laws, minimum parking requirements, etc. https://www.youtube.com/watch?v=CCOdQsZa15o https://www.youtube.com/watch?v=CCOdQsZa15o https://www.youtube.com/watch?v=SfsCniN7Nsc https://www.youtube.com/watch?v=SfsCniN7Nsc https://www.youtube.com/watch?v=0Flsg_mzG-M https://www.youtube.com/watch?v=0Flsg_mzG-M
    - deleted 3y ago
      [deleted]
    - randomdata 3y ago
      > Take Japan as an example: houses are considered a depreciating asset, like cars. Is there anywhere that doesn't consider a house a depreciating asset? Housing differs from cars as it is much more common to see people rebuild houses back to new condition, to upgrade them to use modern technology, etc. That effort can retain the outward value of a house as you basically have a new house again, but the deprecation cost is paid during those updates and modifications. You haven't escaped it.
      - CapstanRoller 3y ago
        >Is there anywhere that doesn't consider a house a depreciating asset? The USA
        onlyrealcuzzo 3y ago
        Yes, but technically - houses deprecate 1/27th of their value according to the tax code. So, although no one expects house prices to go down - there is an implicit understanding that the actual house depreciates - even if inflation is offsetting that and the land underneath it is pumping the total value up. Lets imagine the cost to build a house goes up 3% per year - if your house deprecates 3.7% per year - it would only go down .7% in nominal terms (3.7% in real terms). If the value of the land is 50% of the "home" value, and that appreciates by 6% - then your "home value" goes up in nominal terms & real terms - but not as much as it would have if the house didn't need maintenance (depreciation).
- appleiigs 3y ago
  The gov't isn't really in control of housing prices. First, they (congress + Fed) have some tools but they can be limited in effectiveness. Second, gov't doesn't seem to be functioning effectively themselves right now.
ryl00 3y ago
Conversely, I'm 52 years old and I've never experienced living in a housing bubble until this most recent ten-year stretch (the runup in property values prior to the 2008 GFC mostly missed my area (DFW), though we were still adversely affected by the aftermath).
AnimalMuppet 3y ago
Depends on your definition of "bubble". Here's financial asset X. There are changes in the fundamentals. X becomes a more attractive asset. People notice, and buy, and so the price goes up. That's not a bubble. People see the price of X going up, and decide that it's a good investment because the price is going up, so more people buy, so the price goes up more. That's starting to become a bubble. 2008 was definitely a bubble. People were buying because the price was going up, not because of fundamentals. A lot of people got burned when the bubble popped. This? I'm not so sure. If there's an imbalance between supply and demand, is that because of fundamentals (not enough houses)? Or because people are buying because the price is going up?
- deadfece 3y ago
  I know I bought more house than I initially considered, partly because I knew that rates at the time were going nowhere but up, and the home prices too. (Though I wasn't buying simply with a rising price in mind.) Even with that, I generally play it safe (20% DTI), so I can only imagine how extended some people are and how that affects the pricing.

lispisok 3y ago

Agree. I dont see the government letting another 2008 happen either. They will do whatever it takes to keep housing prices from declining significantly on a large scale

onlyrealcuzzo 3y ago
There could be some weird world in which it's popular for house prices to go down. If that becomes the case, then populist politicians will eventually get elected and let them fall. I don't see this happening soon, but stranger things have happened.
- coffeebeqn 3y ago
  Weird? That’s literally what millennials and gen z and any other generation who can’t afford the bubble houses want
  - yakubin 3y ago
    But there’s too few of us. The elderly are always going to outvote us.
    - randomdata 3y ago
      The millennials are the largest generational demographic. Add in the adult segment of Generation Z and the elderly are greatly outnumbered. But Generation X holds the balance of power. They are the wildcard.
      - GrumpySloth 3y ago
        > Add in the adult segment of Generation Z That would be about half of them. Baby Boomers + Gen X = 134 million Millenials + half of Gen Z = 107 million Young people are outnumbered, and it’s going to get worse. Numbers from <https://www.statista.com/statistics/797321/us-population-by-generation/ https://www.statista.com/statistics/797321/us-population-by-...>
        randomdata 3y ago
        > Young people are vastly outnumbered Not by the elderly, though. Just like I said, and by your own numbers, Generation X holds the balance of power. They are not yet elderly. Even the oldest ones are still in their 50s – the youngest are still in their early 40s.
        yakubin 3y ago
        Fair enough.
      - onlyrealcuzzo 3y ago
        Yeah, but ~51.5% of millennials own a house: https://www.bloomberg.com/news/articles/2023-04-19/half-of-millennials-own-homes-the-rest-fear-they-ll-never-buy-one https://www.bloomberg.com/news/articles/2023-04-19/half-of-m... Good luck hoping for them to vote on tanking house prices.
- striped_hash 3y ago
  A majority of American households a homeowners. So it’s unlikely. https://www.statista.com/statistics/184902/homeownership-rate-in-the-us-since-2003/ https://www.statista.com/statistics/184902/homeownership-rat...
  - Jcowell 3y ago
    Can’t read this right now, but is this saying that of the majority of the adult population, most are homeowners and not renters? No way that’s true
    - onlyrealcuzzo 3y ago
      It's absolutely true. The ratio has been >60% since 1970: https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N
- CapstanRoller 3y ago
  House prices do go down! Take Japan as an example: houses are considered a depreciating asset, like cars. It makes total sense: wood rots, metal rusts, etc. The land value is another matter, though. For many people, the primary goal isn't lower house prices overall, but a change in approach to how we approach housing (especially zoning) in order to make shelter affordable. It's not that everyone wants McMansions for cheap, but rather they want to see things built that are reasonable in size and affordable for normal workers. This could be anything from large concrete block apartments (they can be made cozy and nice!) to tiny house villages. There are many great ways to live which are literally illegal to build in the USA due to archaic and regressive zoning laws, minimum parking requirements, etc. https://www.youtube.com/watch?v=CCOdQsZa15o https://www.youtube.com/watch?v=CCOdQsZa15o https://www.youtube.com/watch?v=SfsCniN7Nsc https://www.youtube.com/watch?v=SfsCniN7Nsc https://www.youtube.com/watch?v=0Flsg_mzG-M https://www.youtube.com/watch?v=0Flsg_mzG-M
  - deleted 3y ago
    [deleted]
  - randomdata 3y ago
    > Take Japan as an example: houses are considered a depreciating asset, like cars. Is there anywhere that doesn't consider a house a depreciating asset? Housing differs from cars as it is much more common to see people rebuild houses back to new condition, to upgrade them to use modern technology, etc. That effort can retain the outward value of a house as you basically have a new house again, but the deprecation cost is paid during those updates and modifications. You haven't escaped it.
    - CapstanRoller 3y ago
      >Is there anywhere that doesn't consider a house a depreciating asset? The USA
      - onlyrealcuzzo 3y ago
        Yes, but technically - houses deprecate 1/27th of their value according to the tax code. So, although no one expects house prices to go down - there is an implicit understanding that the actual house depreciates - even if inflation is offsetting that and the land underneath it is pumping the total value up. Lets imagine the cost to build a house goes up 3% per year - if your house deprecates 3.7% per year - it would only go down .7% in nominal terms (3.7% in real terms). If the value of the land is 50% of the "home" value, and that appreciates by 6% - then your "home value" goes up in nominal terms & real terms - but not as much as it would have if the house didn't need maintenance (depreciation).
appleiigs 3y ago
The gov't isn't really in control of housing prices. First, they (congress + Fed) have some tools but they can be limited in effectiveness. Second, gov't doesn't seem to be functioning effectively themselves right now.

ryl00 3y ago

Conversely, I'm 52 years old and I've never experienced living in a housing bubble until this most recent ten-year stretch (the runup in property values prior to the 2008 GFC mostly missed my area (DFW), though we were still adversely affected by the aftermath).

AnimalMuppet 3y ago

Depends on your definition of "bubble". Here's financial asset X. There are changes in the fundamentals. X becomes a more attractive asset. People notice, and buy, and so the price goes up. That's not a bubble. People see the price of X going up, and decide that it's a good investment because the price is going up, so more people buy, so the price goes up more. That's starting to become a bubble. 2008 was definitely a bubble. People were buying because the price was going up, not because of fundamentals. A lot of people got burned when the bubble popped. This? I'm not so sure. If there's an imbalance between supply and demand, is that because of fundamentals (not enough houses)? Or because people are buying because the price is going up?

deadfece 3y ago
I know I bought more house than I initially considered, partly because I knew that rates at the time were going nowhere but up, and the home prices too. (Though I wasn't buying simply with a rising price in mind.) Even with that, I generally play it safe (20% DTI), so I can only imagine how extended some people are and how that affects the pricing.