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  • October 25, 2008 at 12:31 AM #14289
    jmpman
    Participant

    Analyzing historical Case-Shiller pricing for various housing prices, I’d noticed that Case-Shiller index for low price housing diverged from Mid Range and High Priced around the Mid-2001 time frame. I now attribute that to the subprime bubble impacting low priced housing greater than the others.

    However, just recently, the divergence is no longer seen. Low priced, Mid priced, and High priced housing all have approximately the same Case-Shiller index.

    Does this imply that the Low Priced housing bubble DUE to the subprime bubble is now deflated? Notice that I’m not implying that all causes of the housing bubble are gone, just the subprime aspect.

    Any other theories on the Case Shiller divergence over the last 7 years?

    Chart comes from the papereconomy.com Case-Shiller tool.

    October 25, 2008 at 2:35 PM #292783
    nostradamus
    Participant

    I can’t really read the numbers on your chart but I can see the lines and the divergence then re-convergence of the three tiers. A lot of discussion has gone into this and there are many reasons for buying a home other than size. Here on piggs people go on an on about the school district, proximity to jobs, community, crime stats, and so on. Carmel Valley is a prime example: people pay a premium to live there because they see it as having superior schools and community (even though IMO they pay too much for HOA’s and mello-roos). I’m sure in the bubble a lot of people moved up from low-end housing into mid or upper tier housing, using the money from the sale of their bubbly low-end house.

    So to summarize my answer is: location location location.

    October 25, 2008 at 2:35 PM #293106
    nostradamus
    Participant

    I can’t really read the numbers on your chart but I can see the lines and the divergence then re-convergence of the three tiers. A lot of discussion has gone into this and there are many reasons for buying a home other than size. Here on piggs people go on an on about the school district, proximity to jobs, community, crime stats, and so on. Carmel Valley is a prime example: people pay a premium to live there because they see it as having superior schools and community (even though IMO they pay too much for HOA’s and mello-roos). I’m sure in the bubble a lot of people moved up from low-end housing into mid or upper tier housing, using the money from the sale of their bubbly low-end house.

    So to summarize my answer is: location location location.

    October 25, 2008 at 2:35 PM #293134
    nostradamus
    Participant

    I can’t really read the numbers on your chart but I can see the lines and the divergence then re-convergence of the three tiers. A lot of discussion has gone into this and there are many reasons for buying a home other than size. Here on piggs people go on an on about the school district, proximity to jobs, community, crime stats, and so on. Carmel Valley is a prime example: people pay a premium to live there because they see it as having superior schools and community (even though IMO they pay too much for HOA’s and mello-roos). I’m sure in the bubble a lot of people moved up from low-end housing into mid or upper tier housing, using the money from the sale of their bubbly low-end house.

    So to summarize my answer is: location location location.

    October 25, 2008 at 2:35 PM #293145
    nostradamus
    Participant

    I can’t really read the numbers on your chart but I can see the lines and the divergence then re-convergence of the three tiers. A lot of discussion has gone into this and there are many reasons for buying a home other than size. Here on piggs people go on an on about the school district, proximity to jobs, community, crime stats, and so on. Carmel Valley is a prime example: people pay a premium to live there because they see it as having superior schools and community (even though IMO they pay too much for HOA’s and mello-roos). I’m sure in the bubble a lot of people moved up from low-end housing into mid or upper tier housing, using the money from the sale of their bubbly low-end house.

    So to summarize my answer is: location location location.

    October 25, 2008 at 2:35 PM #293181
    nostradamus
    Participant

    I can’t really read the numbers on your chart but I can see the lines and the divergence then re-convergence of the three tiers. A lot of discussion has gone into this and there are many reasons for buying a home other than size. Here on piggs people go on an on about the school district, proximity to jobs, community, crime stats, and so on. Carmel Valley is a prime example: people pay a premium to live there because they see it as having superior schools and community (even though IMO they pay too much for HOA’s and mello-roos). I’m sure in the bubble a lot of people moved up from low-end housing into mid or upper tier housing, using the money from the sale of their bubbly low-end house.

    So to summarize my answer is: location location location.

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