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What do you think?? While "what I think" is sometimes interesting, the DATA is more important...
Judging from prices I say it's on the bubble side.Data on JUST PRICES is insufficent to say there is a bubble. When it comes to housing the value of information about SPECIFIC local conditions is KEY. Among that most valuable part of that DATA is percentage of household income needed to purchase home and HOW MUCH OF THE POPULATION in locations is ABOVE critical thresholds...
So what on earth happened and after 7 years there's a bubble again?? There is insufficient space to really detail every action over the past 7+ years, but it is quite clear that LOADS of bad housing debt has been backstopped by implicit consent of Fannie & Freddie, as well as explicit decisions of the Federal Reserve to manage for low rates...
Market seems beyond reason.See above, local data is what matters
And why chinese would buy houses in US??Investors that are rational evaluate alternatives. If there is foreign investment in houses (and that is big if...) it would suggest likely returns (and other benefits...) exceed alternatives
Here is the data that shows what sorts income is necessary in various markets to afford a median priced home -- http://www.realtor.org/sites/default...2015-05-11.pdf No arguements that in some areas it is very high. That said, the data about household incomes in those same areas is similarly pretty solid -- Median household income
The specific circumstance that occurred in the the implosion of 2008 are not likely to be repeated -- there is widespread agreement that it is no longer possible for the government to avoid the choices between widespread home ownership for high risk borrowers AND financial stability -- Deconstruction delays | The Economist
There hasn't been a housing bubble or crash in recent memory. The Great Recession was born and raised from a credit crisis that was knowingly and deliberately produced by cowboy capitalists on Wall Street.
Housing markets meanwhile did nothing but behave exactly as they should have. Recall that between mid-2000 and mid-2003, home mortgage rates declined by 335 basis points. Given that asset prices and interest rates are inversely related, what would you have expected to see happen as the result? How about when interest rates rose again between mid-2004 and mid-2006?
There hasn't been a housing bubble or crash in recent memory. The Great Recession was born and raised from a credit crisis that was knowingly and deliberately produced by cowboy capitalists on Wall Street.
Housing markets meanwhile did nothing but behave exactly as they should have. Recall that between mid-2000 and mid-2003, home mortgage rates declined by 335 basis points. Given that asset prices and interest rates are inversely related, what would you have expected to see happen as the result? How about when interest rates rose again between mid-2004 and mid-2006?
If rates go up then a normalisation could be expected.
But to be honest I don't imagine rates going up drastically where supply and demand meets.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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As long as demand exceeds supply, as in our area, prices will continue to rise, currently over 10%/year. The problem in 2008 was the many bad loans that were given to people who couldn't afford them, especially the "interest only for 5 years"
and the many people that refinanced and took out cash for vacations, cars or other things they couldn't afford. While large layoffs by the one major employer (Boeing) could have a dramatic effect on housing prices here, the economy is much more diverse now with so many other big employers such as Microsoft, Amazon, and Costco. Yes, it could happen, but the circumstances that caused the housing crisis in 2008 do not exist now or in the near future. The Chinese who have money are investing. Where else can you get 10% a year on your money? In the case of Vancouver, B.C., it's as much as 12.2% on the east side.
As long as demand exceeds supply, as in our area, prices will continue to rise, currently over 10%/year. The problem in 2008 was the many bad loans that were given to people who couldn't afford them, especially the "interest only for 5 years"
and the many people that refinanced and took out cash for vacations, cars or other things they couldn't afford. While large layoffs by the one major employer (Boeing) could have a dramatic effect on housing prices here, the economy is much more diverse now with so many other big employers such as Microsoft, Amazon, and Costco. Yes, it could happen, but the circumstances that caused the housing crisis in 2008 do not exist now or in the near future. The Chinese who have money are investing. Where else can you get 10% a year on your money? In the case of Vancouver, B.C., it's as much as 12.2% on the east side.
IO Arms weren't really an issue. People misunderstand the crisis and blame them but it was more exotic arms and pick a payment loans combined with ALt-a/no docs that were the issue.
No. The bubble was caused by ARM mortgage and packaging abuse. People who couldnt afford the mortgages were being approved then sold off as junk loans on Wallstreet. Borrowers relied upon ARM rates to remain low so that they could refinance out of the loans, however the Fed raised the interest rates too high and the borrowers could no longer afford the loans. This was done in very high numbers. Thats a bubble, too many bad loans driving up housing prices via demand. What we have now is simply housing prices going up due to legitimate demand like cash investors and borrowers under stricter borrowing standards, its not a bubble.
Borrowing has been really difficult for a number of years. A repeat of 2008 is very unlikely. Remember that housing construction has been way down since 2008. That will have an effect. Supply is down. As more people recover from 2008, demand will go up. Prices will go up and will eventually stimulate a construction boom. When that happens, then you can start to worry.
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Well first you need to be a little clearer...
