Are We In a bubble? Will It Correct or Just Continue To Always Rise (Musical Chairs?)

Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes

Oh? It's different this time? Lol

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Major repairs can now cost what previous generations paid for an entire house, and no, this isn't just inflation; it's the result of the decline of quality across the board and the gutting of labor skills to cut costs.

Here's the Case-Shiller Index of national housing prices. Housing Bubble #2 far exceeds the extremes of unaffordability reached in Housing Bubble #1:

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Greg ScottPro Member

Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes

One could argue "Yes" to both of the questions in your title.

Near-term, prices do appear higher than normal and affordability is low. Prices may come down.

Long-term, the US government keeps debasing its currency, so it isn't difficult to forecast that 10 years from now, home prices will almost certainly be much higher than they are today. The chart below is useful for discussing both points.

How the near-term and long-term issues play out is less clear.

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Greg ScottPro Member
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
1y
One could argue "Yes" to both of the questions in your title.
Near-term, prices do appear higher than normal and affordability is low. Prices may come down.
Long-term, the US government keeps debasing its currency, so it isn't difficult to forecast that 10 years from now, home prices will almost certainly be much higher than they are today. The chart below is useful for discussing both points.
How the near-term and long-term issues play out is less clear.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
Ken your way to smart and experienced to know this answer LOL..
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- Ken M.
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  Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
  1y
  Quote from @Jay Hinrichs:
  Ken your way to smart and experienced to know this answer LOL..
  Just trying to get people to think, rather than just be wishful, maybe I'm on the wrong site? ;-)
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Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
1y
Theres more people who can afford homes then homes for sale (atleast here in Chicago) and those looking can afford to go well over ask. Just did one $150k over and $15k over in last 2 months. If theres only enough houses for X% of the population all that really matters is if that X% can afford it, not the general population. Construction costs are so high, it's not possible to add affordable inventory and with 30 year fixed non-callable and well underwritten mortgages I don't see many being forced to sell. 08 was unique in that the mortgages were not well underwritten and people were forced to sell.
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