I Was Wrong! There is NO Real Estate Bubble!

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[eriksrigley]

Now compare against the growth of income for a worker. That will put this in context of how much this growth is out pacing income growth.

[Turnitupluber]

I’ve been looking in N.C. And I see prices slowly coming back down

[anniealexander]

I couldn't afford to buy my home at today's prices. I spent $800 this weekend on utilities, groceries, 2 phone cards, gas for the car, and a few school clothes/shoes. It doesn't include any jeans and next weekend will be expensive. I think everything is in a bubble. After shopping, I made bacon cheeseburgers at home for the family to save money. The people I know who just bought homes, are living a higher standard of living that I am but make less money.

[mattmartinez]

1990 was about the time of the savings and loan crisis.

[extrof]

What about price to income, if you use this metric you might find a different result, we aren't in a bubble but affordability will definitely slow growth in the future

[tomsettles]

Where I live (Gig Harbor, WA) average starter home is $650k with payment of $2600 per month + property tax and insurance = $3200 all in. 5-10 years ago the same house is $300k with payment of $1500 per month + tax and insurance = $2000 per month. Food and Gas are 50 - 100% increased what they were 5-10 years ago. Wages have only gone up 8-10% since then. Over 8% of renters nationwide are delinquent. Over 5% of homeowners nationwide are delinquent. BUBBLE BABY. When boosted unemployment and stimulus totally stops, look out below. Especially with all the illegals flooding in and getting work visas. Older home prices will drop first, then new home prices will follow. 20-25% price drop for the coastal cities by February 2022 is my prediction. If interest rates tick back up, it'll happen sooner.

[stuartclubb]

While the gooberment continues to pay <2% on bonds, the pension companies are going to be very happy making an easy 3% to 4% return on capital, buying houses in cash and renting them. Never mind the price appreciation as an added bonus over time.

Say a SFH will rent for $3K a month. That's $36K a year. Lop off $2K for insurance, $6K for taxes, and maybe $2K run-rate for maintenance?
Cashflow is $26K. Multiply by 25 for 4% or 33 for 3% and the floor price on the home is $650K to as high as $850K.

You will own nothing (because government and the oligarchs own it all)
You will be happy (or else)

[juniorcrandall]

Josh run the numbers from 1980 til 2020. House payment as a percentage of family Income. House payment 29% of family Income in 1980. House payment 14% of family Income in 2020.... ALSO The houses in forbearance that will need to be sold is a small number. Maybe 65, 000

[kellyfj]

With more jobs going remote - location arbitrage will be critical to wealth building going forward.

[chuck]

Great info but when you got your calculator out 2:18 you didn’t say “using my trusty calculator” and that threw everything off

[JK-rvtp]

I keep telling people that the latest "bubble" is nothing compared to the 80s. We bought our first house in '83 for $64000 outside of Toronto. In '89/90 it had almost TRIPLED in market value before that bubble deflated, worth about 175k, in only seven years. I sold it a year after the bubble popped, getting 145k. What drove that bubble was mortgage rates going from 12 to 6%, whereas the current bubble is rates going from 5 to 3%

[peasanthill]

I am telling you, man. It has taken a long time to work out the easy money bubble of '04-'08. Now it is much harder to get through the loan process because all lenders are using Freddie/Fannie guidelines. Low chances of default. Add to that not enough new housing. Wages have gone up for serious people, who live real lives. Another thing to consider is the percentage of ownership without mortgages. A 1million dollar house with 25% down has a payment of under $3200 p+I. Rent in higher paying states and cities is more for comparable.

[faithdimmer]

That's the "Great and Free State of Missouruh", Yankee!

[johnc]

No, not a bubble, but I think prices moving upward will have to cool down over time so that younger buyers can enter the market at some point. Will housing prices turn down again at some point? That could happen (happened before), or they could flatline for some years. In a way, this shows the power of compounding as it works in real estate and how inflation -- dollar creation -- affects prices. (Watched an oldie movie from 1954 yesterday, "Suddenly, " starring Frank Sinatra as a wanna-be Presidential assassin. Filmed in Saugus, CA, a town I knew well when it was just far enough from L.A. to be really nice, bad-guy Sinatra was gonna do the job for $500, 000 and retire -- "set for life!" -- in Mexico! More "proof" that the dollar has lost so much of its value! 🥕)

[aggibson]

Check out the old videos from Mr. Alan Kendall. He has explanations on these charts. Wish he would produce a current video though.

[larryhawes]

It's not a bubble until it bursts. Not sayin we're in one now, but most bubbles are not recognized until after the fact.

[mcarthurspark]

But here's the problem, in the 80s I bought a house right out of college making $20k and paid $60k after saving up for the required down payment, at 10.5% interest and it was affordable for me. Now that houses are 6 times the price, are kids able to buy a house right out of college even with lower interest rates?

[daisymailhot]

Hi Nice finding you tubing... In Penobscot County our neighborhood sale price is $102, 000- $110, 00 average. WITHIN the past two years it's gone up. TWO neighbors SOLD. 2018. $69, 000
2020 $89, 000
& out back sales price on the market main road.
2020 $110, 000
2021 $105, 000

[redsoxwinagain]

My home value is pushing 2x from 2019.

[MerryHampton]

Can’t wait to look into this data for Connecticut! Where did you find this? Never thought there was a housing bubble