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The bolded part was what I was responding to. Subprime minorities (read between the lines: black) made the news getting large no doc mortgages with interest only balloons but the data shows they were in fact the least likely to default during that time period.
Fair enough... my ultimate point was that we are very unlikely to see a repeat of the "bailout level collapse" like in 2008 again (i.e. congressional drama, TARP, etc) because the same factors should not exist. My use of "predatory" probably threw that off message and seemed like I might be focused on the minority borrowers, but I really wasn't. Strategic defaults played a major role and I believe that's your point. I should have been more specific.
I don't think that anyone is arguing that a bubble exists regardless.
Housing demand is still very strong, and housing supply is muted. The number of new homes built per new household is at recession-era levels nationally. Prices are not insane multiples of rents (which track market fundamentals more closely).
Also, bubbles don't strike twice in a row in the exact same sectors. Lots of regulatory changes have been made to the mortgage industry since 2008 to prevent a reprise of that particular crisis. There are definitely elevated asset prices, but IMO not in the broader housing market.
I'm not so sure... I mean, I definitely agree about the bailout level of crash being highly unlikely at this point. But, I'm not following how you make a distinction with regard to "bubbles don't strike twice in a row in the exact same sectors". Is housing a sector for your reference here? Because I don't see how you admit there are "elevated asset prices", yet it's not a bubble. I'd also question using rent vs. prices as the primary indicator - it is an extremely complex discussion to boil down to one numeric factor.
It's challenging to find a way to "maintain asset appreciation" with the propped stock market and foreign relations drama causing unstable global markets. It's not conspiracy to believe that we are in for a correction... sooner than later. Yes, inventory is low, but one could argue that is masking the demand side - is demand "still very strong" in spite of low inventory or because of low inventory? Especially when you look at the higher luxury price points - those guys from the Millionaire RE reality shows don't have all the foreign investors they once had to dump properties on - it's become more difficult to launder foreign money through RE.
When inventory returns to more normal levels in the Spring, will demand keep pace? I wouldn't take that bet right now.... ultimately why I joined this discussion because I'm genuinely curious.
If I was a finance geek I wouldn't want to learn how to "predict next housing bubble", I'd want to "predict when the next housing bubble POPS"... Is that course available?
If I was a finance geek I wouldn't want to learn how to "predict next housing bubble", I'd want to "predict when the next housing bubble POPS"... Is that course available?
I have a friend of friend here who used to live in the same subdivision we do. Sold his place here and moved to Boston (including buying a house there) only to realize how expensive it was and came back less than a year later.
From what I have heard, he upgraded from "400K McMansions" to a buying a lot ITB, razing the home that was there and building new for something close to a million.
Assuming I have have those details roughly accurate, it expresses something I personally would never do.
I mean to each their own; its your money.
But (and I say this as someone who has grown fond of this area in my time here) I would never pay a million bucks to live in Raleigh. If I am playing with a million dollar budget I'm looking a different metropolitan area; Denver, San Jose, hell even Nashville.
a million bucks ain't what it used to be. but there have also been million dollar homes ITB for more than 20 years. and not necessarily 6,000+ sqft homes ... just in the right places.
If I was a finance geek I wouldn't want to learn how to "predict next housing bubble", I'd want to "predict when the next housing bubble POPS"... Is that course available?
Mikey,
Ain't you a Hahvahd alumnus with full access to course catalogs due to your robust ongoing support of the Endowment?
Methinks there is merit to the basic proposition of the article, that housing runs in cycles.
Folks who fell for (or still do) "Real Estate Always Appreciates" blather either ignored that fact, were in denial, or just weren't diligent.
I know it’s Harvard, but shouldn’t that be wary?
Quote:
Originally Posted by RedZin
Maybe the author was just tired of the topic?
I like "leery."
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