Should the houses be worth twice what they were in 1996?

[(former)FormerSanDiegan]

[quote=AN]I like charts Rich posted in his Bubble Primer: http://piggington.com/shambing_away_from_cheapness_but_still_milling_about_in_the_gene much better. I think interest plays a huge role.[/quote]

I don;t know why we are debating what incomes have done since 1996.

The analysis by Rich indicates that in terms of home price to income ratio, we are about 20% higher than in 1996, BUT interest rates are such that monthly costs for owning have recently been lower than they have been in at least 30 Years in San Diego.

The author in the original link should have published his work in crayon.

[pemeliza]

1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.

[pemeliza]

1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.

[pemeliza]

1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.

[pemeliza]

1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.

[pemeliza]

1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.

[briansd1]

[quote=pemeliza]1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.[/quote]

That’s pretty much how I see things also.

[briansd1]

[quote=pemeliza]1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.[/quote]

That’s pretty much how I see things also.

[briansd1]

[quote=pemeliza]1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.[/quote]

That’s pretty much how I see things also.

[briansd1]

[quote=pemeliza]1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.[/quote]

That’s pretty much how I see things also.

[briansd1]

[quote=pemeliza]1996 was pretty much the bottom of the last bust in California and 1996 prices are nominally basically the same as 1988 prices. So in 22 years yes houses should probably be double especially given that interest rates are roughly half of what they were in the late 80’s.

Also, At 3% inflation it takes about 23.5 years for a price to double. Prices in 1996 were an overshoot to the downside. Given the scope of this bubble I would not be surprised to prices overshoot to the downside at about 2001 nominal pricing for the best areas. I’m already seeing this type of pricing in good areas.[/quote]

That’s pretty much how I see things also.

[blahblahblah]

I don’t know about other profession, but in 2002, average fresh grad software engineer were making about $45k/yr. Today, fresh grad software engineer should expect between $53k-66k w/ the average/median around $60k. I don’t have info for 1996, but I know in 1987, it was around $27k

Very true, but 1996 was about the start of the big outsourcing wave to India. That has continued and grown as well as expanded into Eastern Europe. My guess is that this has significantly supressed wages for engineers in the US.

[blahblahblah]

I don’t know about other profession, but in 2002, average fresh grad software engineer were making about $45k/yr. Today, fresh grad software engineer should expect between $53k-66k w/ the average/median around $60k. I don’t have info for 1996, but I know in 1987, it was around $27k

Very true, but 1996 was about the start of the big outsourcing wave to India. That has continued and grown as well as expanded into Eastern Europe. My guess is that this has significantly supressed wages for engineers in the US.

[blahblahblah]

I don’t know about other profession, but in 2002, average fresh grad software engineer were making about $45k/yr. Today, fresh grad software engineer should expect between $53k-66k w/ the average/median around $60k. I don’t have info for 1996, but I know in 1987, it was around $27k

Very true, but 1996 was about the start of the big outsourcing wave to India. That has continued and grown as well as expanded into Eastern Europe. My guess is that this has significantly supressed wages for engineers in the US.

[blahblahblah]

I don’t know about other profession, but in 2002, average fresh grad software engineer were making about $45k/yr. Today, fresh grad software engineer should expect between $53k-66k w/ the average/median around $60k. I don’t have info for 1996, but I know in 1987, it was around $27k

Very true, but 1996 was about the start of the big outsourcing wave to India. That has continued and grown as well as expanded into Eastern Europe. My guess is that this has significantly supressed wages for engineers in the US.

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