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Old 12-04-2017, 10:30 AM
 
4,106 posts, read 10,878,303 times
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Quote:
Originally Posted by NOLA2SGF View Post
Yes, you are 100% right! We are having a housing price bubble in my neighborhood.

YMMV for your neighborhood, and my guess is that it does.
Prices in my neighborhood have gone up considerably since 2015 as well, but I don't consider it a bubble. I consider it sustainable. That is to say, I don't expect values to necessarily continue climbing at the rate they have in the last two years, but I certainly don't see any retraction in prices in the future. For it to be a "bubble", you must think that prices are going to go back down substantially in the near future. Do you think the values in your neighborhood will retreat in the couple of years? If so, what would cause it? Do you expect incomes in your area to decline? Do you expect unemployment to increase?

I only ask as I think many people believe that a faster than 'normal' increase in values followed by value increases that taper way off (even to 0% increase) must be a bubble. The media adds to this all the time. "Sales drop off" "Sales slowing way down" .....just because sales slow and/or prices stop appreciating does not necessarily mean "bubble". IMO-the term gets used WAY too often after the 2008 debacle. It is quite likely we won't see anything like that again in our lifetimes.

Certain places do seem like they could have "bubble" problems, but i don't have intimate knowledge of these areas (Seattle, parts of CA, maybe Denver ??). Only time will tell. What is the average sales price of your New Orleans neighborhood?
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Old 12-04-2017, 10:49 AM
 
Location: Raleigh NC
5,593 posts, read 4,682,274 times
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how does the average or median price in your area relate to the median income in your area?

That is as good of an indication of affordability as I can think of, and would be the indication whether prices have outstripped folks' ability to make the mortgage payment.

Of course, average mortgage cost vs average rent for same size house would also be an indication.
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Old 12-04-2017, 11:29 PM
 
2,073 posts, read 617,922 times
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Quote:
Originally Posted by davebarnes View Post
This chart tells you everything you need to know
Yep, this explains why rents and housing prices are going up...low supply forcing prices up. Good for me with 5 houses.
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Old 12-04-2017, 11:33 PM
 
2,073 posts, read 617,922 times
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Quote:
Originally Posted by BoBromhal View Post
how does the average or median price in your area relate to the median income in your area?

That is as good of an indication of affordability as I can think of, and would be the indication whether prices have outstripped folks' ability to make the mortgage payment.

Of course, average mortgage cost vs average rent for same size house would also be an indication.
I agree but keep in mind that many places on the West Coast (and NYC also) have increased prices due to foreign demand and just the desirability factor that push the prices pas the point of affordability for the average income.
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Old Yesterday, 02:05 PM
 
Location: Raleigh NC
5,593 posts, read 4,682,274 times
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after a while "desirability" goes out the door and it's only about affordability.

the effects in CA, probably NYC, and perhaps parts of FL are certainly defined by my comment "in your area".

not that Zillow is who I turn to for any data, but this comment speaks volumes:

Quote:
In more than half of the country's largest metros, homes are worth more today than before the recession,
I didn't see a specific #, but certainly we're not talking about 80% of the largest metros. And the largest metros are what drive prices. It's certainly possible that smaller locales didn't see significant price deflation, but they also haven't seen much appreciation.
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Old Yesterday, 09:51 PM
 
2,073 posts, read 617,922 times
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Quote:
Originally Posted by BoBromhal View Post
after a while "desirability" goes out the door and it's only about affordability.

the effects in CA, probably NYC, and perhaps parts of FL are certainly defined by my comment "in your area".

not that Zillow is who I turn to for any data, but this comment speaks volumes:



I didn't see a specific #, but certainly we're not talking about 80% of the largest metros. And the largest metros are what drive prices. It's certainly possible that smaller locales didn't see significant price deflation, but they also haven't seen much appreciation.
It's both, people will do what they can to live in the most desirable locations and will agree to pay a higher proportion of their income to live in those locations.
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Old Today, 03:27 PM
 
Location: California
824 posts, read 697,942 times
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the new tax bill will likely make the supply of housing even lower.
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Old Today, 03:42 PM
 
Location: Raleigh NC
5,593 posts, read 4,682,274 times
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Quote:
Originally Posted by American Expat View Post
It's both, people will do what they can to live in the most desirable locations and will agree to pay a higher proportion of their income to live in those locations.
if they can't get a loan because the cost exceeds debt-to-income allowances, then max desirability goes out the door. Or if what they can afford doesn't even exist (smaller house or worse condition) where they desire, then they have to look elsewhere.

I desire to live in a NC ocean-front 4 Br cottage. I can't afford it though.
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Old Today, 03:49 PM
 
Location: Raleigh NC
5,593 posts, read 4,682,274 times
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Quote:
Originally Posted by HappyinCali View Post
the new tax bill will likely make the supply of housing even lower.
how many (% of homes sold) folks do you think would have sold from years 2.1-4.9 that won't?
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Old Today, 06:18 PM
 
Location: California
824 posts, read 697,942 times
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Quote:
Originally Posted by BoBromhal View Post
how many (% of homes sold) folks do you think would have sold from years 2.1-4.9 that won't?
According to the NAR, 26 percent of sellers live in their homes less than five years. Source: Bloomberg
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