Why are people confident there is not a housing bubble?

New
cGdz16

New

cGdz16
Apr 8 22 Comments

The FED issued a bubble warning, yet everyone keeps saying prices will just keep perpetually going up?

Looking back a year ago, I could have afforded a nice 4 bedroom house in my area, now the same down payment is a 2 bedroom condo.

This does not seem sustainable, and it’s likely many people are over-leveraging with the assumption the property value will continue to shoot up to make up for it.

I understand it’s nothing like 2008, but surely other bubbles are possible that don’t involve a crash as significant as 2008, so why isn’t it a realistic possibility?

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  • PayPal
    aaaaabbbbb

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    aaaaabbbbb
    People are people. It’s a lot like 2008.
    Apr 8 2
  • I think people are confident that, whatever our situation is, it's different than 2008.

    Meaning we're not seeing a housing bubble due to predatory lending.

    That doesn't mean it will continue to rise at the current rate and it doesn't guarantee the price won't go down. It just means that whatever it happening is different than what we saw last time.
    Apr 8 1
    • It's going to be driven by fed policy mistake this time. This drastic increase in 10 year treasury and mortgage rate was never seen before in history. The rate in which we are seeing a slowdown is faster than anything before. Housing inventory that disappeared is back to pre pandemic level just in two months, most likely people realizing music stopped. Mortgage forbearance is gone now as well. When people locked in with 3% rates FOMO into buying and buyers are left with 5-8% rate, that's when we will have a better picture of where this is going.
      Apr 8
  • Google
    hip-chic

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    hip-chic
    Because the people who bought recently don't wanna see the prices drop in the short term
    Apr 8 1
    • Amazon
      kxc7rcj

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      kxc7rcj
      But their opinion doesn’t matter anymore. They’re out of the market for at least a couple of years unless they want to sell at a loss.

      What matters is the long line of speculators who want prices to go down so they can pounce on Real estate.
      Apr 8
  • Amazon
    EXmq65

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    EXmq65
    The only factor that can drive the house going up permanently is that US government will print more and more money because the government can not solve any issue other than this. I believe the tech party is coming to an end soon. China growth is also coming to an end. So I did not see a clear growth point in the near future.
    Apr 8 1
    • New
      jenny.doc

      New

      jenny.doc
      Illogical? Everyone just becomes cash rich. Capitalize here.
      Apr 9
  • Meta
    owPv62

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    owPv62
    Because it's driven by low supply, both in terms of selling and building. Material price sky rocketed in the last 2 years, and because of the labor shortage, not many new houses are getting built. Price will "correct" itself when supply picks up, but it won't be like a bubble burst. Bubble burst usually means suddenly everyone start selling but no one wants to buy, which is unlikely unless the economy collapses people have to sell house, which is way more scary than housing bubble. Either way, housing bubble will not be your top concern.
    Apr 8 3
    • Meta
      owPv62

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      owPv62
      The price will go flat and down for sure when supply picks up, but it won't be like a steep drop. It's not like many people or builders have bunch of houses and have to sell immediately. Sellers are usually buyers too, so you will see demand also go up with supply
      Apr 8
    • Yea agree it will be flat/slowdown. Too many demand destruction with rates and ipo drought to keep going up short term. The factor that might not be priced in is the R word that no one wants to talk about. If corporate earnings guidance look bad, could see people talk about it more.
      Apr 8