Home buying thread
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Cad
scientia potentia est
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I have questions for anybody who wants to discuss... what happened between 1915-1940 or so (and duh the depression and WW2 but those don't really explain where the house prices took off or dropped - WW1 caused house prices to drop? Why?) and why did the housing prices absolutely launch into retardation in 1999-2000?
With some blips and starts had housing prices really been relatively stable since the 1950's until 2000-ish?
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Sanrith Descartes
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Some perspective for geography. Sold my house on Long Island (100 years old) for just over $500/ sq ft in 2023. Bought my house in rural Fl for $150/ sq ft (and this includes .5 acre in the calculation) 3 months later as a new construction build. Pre-covid the house I just built would have been closer to $100/ sq ft.
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Big Phoenix
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Gravel
Mr. Poopybutthole
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I was going to guess Federal Reserve in 1913, and loosened lending requirements during Clinton (remember, the Great Recession started back in the 90s with that).
Also, we bought in 2021, at just under $200/sqft.
Think our house in 2015 was closer to $110.
Also, we bought in 2021, at just under $200/sqft.
Think our house in 2015 was closer to $110.
ToeMissile
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Bought in 2010 @ $268, sitting around $520 now. But like Sanrith said, it’s largely location/geography.
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TJT
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I think it can just be summed up as houses being primarily investment vehicles rather than a basic commodity around the turn of the century. Causing lots more money to be pumped into the market to further drive the securities rather than anything to do with actual housing.
Along with the simple fact that pressure drives the market. Not anything logical.
Cad
scientia potentia est
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Could be, but demand for housing was going up as well, the illegal immigrants thing makes sense but also the tech market exploding around that time driving more people to move for those jobs maybe? You can't be a tech worker in BFE so you move to a local city driving those prices up.
Your theory is as good as mine, but as
Deathwing
points out above, glass-steagall was also repealed in 1999, which can't really be discounted as a factor. I know for a fact though that most of the subprime mortgages were originated by non-bank originators though, so I don't know how much glass-steagall had to do with subprime and how much was just too much free money flying around. This current bubble feels different than the previous one though, and I'm not sure I'm being logical here. In 2005-2007, it seemed to me like everyone had the attitude of "buy now, buy anything, everything is doubling, doesn't matter" and you had these bidding wars on properties that were nothing special at all. The current bubble feels more like people are just embracing the prices as the new normal. Might just be my perception but this seems different.
General Antony
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WW1 fall is probably just a post-war recession in the pre-Keynesian period. You ramp up production of a lot of stuff spending money you wouldn't in peacetime and when the war ends all of that goes away and it leaves people feeling poorer. Whereas by WW2 they had confiscated the people's gold and learned how to debase the currency without paying for it politically.
Szeth
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Captain Suave
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Yeah, the housing market isn't going to "pop" until we build more units than people who want to live in them. As of now we're 5-7 million homes undersupplied. Houses are unique in that everyone has to live somewhere and so it's not physically possible for sellers to eat a huge equity loss without also moving substantially downmarket. Most people would simply rather not move and wait it out in place, which puts a floor on prices. The '08 bubble burst was due to involuntary sales from mass foreclosures, which is not what's happening now.
When everything went to shit in '08 a significant chunk of the construction workforce left the industry because it was totally dead for several years. That turnover resulted in capacity bottleneck and permanent skill loss, which is part of why everyone is incompetent and builds are so shitty now. We've only just recovered the employment and starts baselines and aren't close to working through the productivity debt.
CA, to buy my current house would be $800+ /sqft.
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Sanrith Descartes
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The only thing is that there is a segment of the population so out of touch with how life works that they couldn't buy a house without a RE agent holding their hand every single step. And I mean every step.
ToeMissile
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