I'm a-thinking that was the obviously conclusion that Lemurly is rejecting..
Personally, while I acknowledge that there is a market shift coming, I think that this sort of thing is very much oversimplified.. There are factors happening now that the country has never experienced before: rampant illegal immigration to the big cities resulting in a lack of a 'check' on home prices since they'll often live 10-15 to a house, 9-11 causing a massive shift in govt spending and thus making DC real estate escalate in price.. And then just the fundamental 'we're running out of room'..
Even in the 40s, even in DC/SF/NY there was still plenty of room to build a house.. Now we're finally reaching the point where in a lot of cities there is simply no where to put down another house.. The supply curve is getting truncated..
That's definitely the case where we are. A lot of the newer houses are being built on land that is definitely sub-par, just because that's all that's left.
I don't think there's going to be a crash -- I do think that eventually a correction to a new stable set of price-points will happen, and that folks who have gotten into this with the 90s attitude expressed so well by one of my acquaintances at the time, "what do you mean, stocks go down," are going to be in trouble.
I think you're right, but I don't think you're so right that the fundamentals no longer apply, and in the past couple years, I think the same folks like my acquaintance have been involved in RE wishful thinking.
Part of the rub is that this's a chart of the prices of existing home sales -- it says nothing of the price of new homes and their relation to the prices of existing homes. You simply can't draw a market-wide conclusion from one sliver of it.
But here's the real rub: this chart shows the normed "value" of houses, aka their selling prices. This is completely different than the cost of said houses. Due to the dot-com crash, we've had historically low interest rates which, if locked in, mean that the actual cost to purchase the house over the lifetime of the mortgage may not be much in excess of previous run-ups. Such a chart should not only have corrected for inflation, but it also should correct for, or at least indicate, the relative cost of said inflation-adjusted money.
Right.. otherwise you're not talkinga bout the total overall cost..
I think they also should include the availability of new housing and its cost in the graph as well.. In DC they keep talking about how sales of new housing is dropping, yet at the same time it seems the SUPPLY of new housing is dropping.. Again, out of room..
Now, granted, when interest rates are back up, prices will plummet, but this doesn't necessarily forbode mass bankruptcy and evictions if the payments are still being swung and the debt-to-equity ratios stay sane.
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Yep. The same people who always lose their shirts in RE are about to do it again.
I'm a-thinking that was the obviously conclusion that Lemurly is rejecting..
Personally, while I acknowledge that there is a market shift coming, I think that this sort of thing is very much oversimplified.. There are factors happening now that the country has never experienced before: rampant illegal immigration to the big cities resulting in a lack of a 'check' on home prices since they'll often live 10-15 to a house, 9-11 causing a massive shift in govt spending and thus making DC real estate escalate in price.. And then just the fundamental 'we're running out of room'..
Even in the 40s, even in DC/SF/NY there was still plenty of room to build a house.. Now we're finally reaching the point where in a lot of cities there is simply no where to put down another house.. The supply curve is getting truncated..
That's definitely the case where we are. A lot of the newer houses are being built on land that is definitely sub-par, just because that's all that's left.
I don't think there's going to be a crash -- I do think that eventually a correction to a new stable set of price-points will happen, and that folks who have gotten into this with the 90s attitude expressed so well by one of my acquaintances at the time, "what do you mean, stocks go down," are going to be in trouble.
I think you're right, but I don't think you're so right that the fundamentals no longer apply, and in the past couple years, I think the same folks like my acquaintance have been involved in RE wishful thinking.
Part of the rub is that this's a chart of the prices of existing home sales -- it says nothing of the price of new homes and their relation to the prices of existing homes. You simply can't draw a market-wide conclusion from one sliver of it.
But here's the real rub: this chart shows the normed "value" of houses, aka their selling prices. This is completely different than the cost of said houses. Due to the dot-com crash, we've had historically low interest rates which, if locked in, mean that the actual cost to purchase the house over the lifetime of the mortgage may not be much in excess of previous run-ups. Such a chart should not only have corrected for inflation, but it also should correct for, or at least indicate, the relative cost of said inflation-adjusted money.
Right.. otherwise you're not talkinga bout the total overall cost..
I think they also should include the availability of new housing and its cost in the graph as well.. In DC they keep talking about how sales of new housing is dropping, yet at the same time it seems the SUPPLY of new housing is dropping.. Again, out of room..
We'll see in a year or so I guess..
Now, granted, when interest rates are back up, prices will plummet, but this doesn't necessarily forbode mass bankruptcy and evictions if the payments are still being swung and the debt-to-equity ratios stay sane.
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