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In many cities that are posters for the bubble, (LA, SF, Seattle, Vancouver, etc) the majority rent, and more single families are being demolished for multifamily, pushing single family prices up even more.
I don't know how SF would be defined as a poster child for the bubble. SF is a city where the bubble barely happened, relative to other cities. The median sales price topped out around 800k in 2007, and hit bottom just above 600k in 2011-2012 - a 25% drop.
The median sales price topped out around 800k in 2007, and hit bottom just above 600k in 2011-2012 - a 25% drop.
You are right, but many people, when speaking of the housing bubble, only mean that houses cost a lot more than they think they should, and SF is definitely the poster child for that. How often do you hear something like "OMG, a shack in the SF area costs $800k for 1200 sq feet? Those people are suckers, and where I live that same place could be bought for pocket lint and a slightly chilled Coke. The US is definitely still in a housing bubble!"
And SF is still bubbling because of tech bubble/foreign investor bubble/easy interest rate bubble/etc, and will pop any year now. And then houses in SF will cost how much they think they should.
It's a mixed bag........home prices in SOME areas are well-past the peak of the last housing bubble. Other areas, probably the less-desirable areas, are not yet bubbling-up, again.
There may be some places without good jobs fitting that. In Detroit the current median home price is $40k, and was over $50k in 2000. At the bottom it was $31k, but that was not until 2012. It's actually coming up but still thrown off by the $500 house that they can't give away.
We are now above the bubble peak, but have good high tech salaries, making the median household income above $130k, and the demand for more homes very high as more people are hired.
I think Detroit is kind of a poor example. While the city proper is in the crapper, the surrounding suburbs remain attractive. You don't see such a sharp contrast in virtually any other area I can think of.
Detroit suburbs were up 15% year-over-year in May. In the city proper, the year-to-date median sales price through April was $1,125 in zip code 48211, and under $5,000 in 48210 and 48213. The city is obviously a special case.
I read a Wall Street Journal article yesterday that talked about how 54% of the houses in this one working class community in Ga were upside down.
This one person's story was told where at the peak of the last bubble their house was valued at $350k or about that. They owed $172k and the house was recently appraised at $50k it was originally bought at $80k before the bubble.
The article said that wages hadn't come up and that house prices weren't going to recover any time soon each foreclosure put more downwards pressure on house prices the poor working class people weren't good credit risks and the wages weren't there to pay for the houses.
If you want to push the values of houses above the peak of the last bubble and have them stay there then you need the wages to pay for them. A $30 an hr minimum wage would do that. There are a lot of houses that are in bad shape out there. A big jump in the minimum wage even spread out over time would be disruptive to the economy but the alternative would be worse.
Just something to think about.
"One working class community" is the key phrase here. A single working-class community does not a widespread problem make!
I think there have always been, and will always be, isolated areas where this sort of thing happens. Industries do come and go, and buying an expensive home in an area that is entirely supported by a single factory or industry is, as a general matter, a big gamble.
Can you post a link to the house with a 350k house in08 and now appraising for 50k I'd be interested to see what damage the house has sustained over the last 7 years
Pay wall. It was in the wall street journal the day before I posted.
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