The housing bubble is over!

[cr]

Diego Mamani-

I see your point and you present an interesting case but it’s conveniently lacking the single most important element of prices: incomes.

Late August 2001 (house price $407K)
Mid March 2008 (house price $700-725K)
172% appreciation in 7 years, roughly 24%/yr.

I’d have to look for exact data, but I’m pretty confident in saying incomes didn’t go up by 172%.

[blackbox]

wow, that’s 2 minutes I’ll never get bacK!

[blackbox]

wow, that’s 2 minutes I’ll never get bacK!

[blackbox]

wow, that’s 2 minutes I’ll never get bacK!

[blackbox]

wow, that’s 2 minutes I’ll never get bacK!

[blackbox]

wow, that’s 2 minutes I’ll never get bacK!

[Diego Mamani]

Sduuude, good question, but you’ve mischaracterized the essence of what I wrote. And I agree with you that that mischaracterization isn’t how the world works.

If the euro plummets, we need to ask two questions:
(1) Plummet against what? The dollar, oil/gold, or against both?; and more importantly
(2) Why does the euro plummet?

If the euro plummets both against the dollar and against gold/silver/oil because of irresponsible monetary policies in Europe, then that shouldn’t affect house prices here. House (not apartment) rents will continue to increase with inflation until SFRs’ price/rent ratio gets back to its historical mean.

I understand that the thread’s title may have hurt sensibilities… I’m a housing bear myself, and I told everybody I knew to sell in 2005. I have a couple of co-workers who ignored me and bought houses at the peak of the bubble, and now they look embarrased when the issue is brought up (I never bring it up myself but they probably think of their $150k in lost equitty every time they see me). All I’m trying to say is that by accelerating domestic inflation, the Fed is seeking to restore the housing price/income and price/rent ratio by debasing the value of the dollar, as opposed to waiting for the adjustment to come from price drops only.

How do we know the dollar is being devaluated? Measure it in terms of precious metals, gold, and stable currencies like the Euro. Nominal house prices still have room to fall, but I can see the end of the adjustment now that I realize how little our dollars are worth compared to only 7 years ago.

[Diego Mamani]

Sduuude, good question, but you’ve mischaracterized the essence of what I wrote. And I agree with you that that mischaracterization isn’t how the world works.

If the euro plummets, we need to ask two questions:
(1) Plummet against what? The dollar, oil/gold, or against both?; and more importantly
(2) Why does the euro plummet?

If the euro plummets both against the dollar and against gold/silver/oil because of irresponsible monetary policies in Europe, then that shouldn’t affect house prices here. House (not apartment) rents will continue to increase with inflation until SFRs’ price/rent ratio gets back to its historical mean.

I understand that the thread’s title may have hurt sensibilities… I’m a housing bear myself, and I told everybody I knew to sell in 2005. I have a couple of co-workers who ignored me and bought houses at the peak of the bubble, and now they look embarrased when the issue is brought up (I never bring it up myself but they probably think of their $150k in lost equitty every time they see me). All I’m trying to say is that by accelerating domestic inflation, the Fed is seeking to restore the housing price/income and price/rent ratio by debasing the value of the dollar, as opposed to waiting for the adjustment to come from price drops only.

How do we know the dollar is being devaluated? Measure it in terms of precious metals, gold, and stable currencies like the Euro. Nominal house prices still have room to fall, but I can see the end of the adjustment now that I realize how little our dollars are worth compared to only 7 years ago.

[Diego Mamani]

Sduuude, good question, but you’ve mischaracterized the essence of what I wrote. And I agree with you that that mischaracterization isn’t how the world works.

If the euro plummets, we need to ask two questions:
(1) Plummet against what? The dollar, oil/gold, or against both?; and more importantly
(2) Why does the euro plummet?

If the euro plummets both against the dollar and against gold/silver/oil because of irresponsible monetary policies in Europe, then that shouldn’t affect house prices here. House (not apartment) rents will continue to increase with inflation until SFRs’ price/rent ratio gets back to its historical mean.

I understand that the thread’s title may have hurt sensibilities… I’m a housing bear myself, and I told everybody I knew to sell in 2005. I have a couple of co-workers who ignored me and bought houses at the peak of the bubble, and now they look embarrased when the issue is brought up (I never bring it up myself but they probably think of their $150k in lost equitty every time they see me). All I’m trying to say is that by accelerating domestic inflation, the Fed is seeking to restore the housing price/income and price/rent ratio by debasing the value of the dollar, as opposed to waiting for the adjustment to come from price drops only.

How do we know the dollar is being devaluated? Measure it in terms of precious metals, gold, and stable currencies like the Euro. Nominal house prices still have room to fall, but I can see the end of the adjustment now that I realize how little our dollars are worth compared to only 7 years ago.

[Diego Mamani]

Sduuude, good question, but you’ve mischaracterized the essence of what I wrote. And I agree with you that that mischaracterization isn’t how the world works.

If the euro plummets, we need to ask two questions:
(1) Plummet against what? The dollar, oil/gold, or against both?; and more importantly
(2) Why does the euro plummet?

If the euro plummets both against the dollar and against gold/silver/oil because of irresponsible monetary policies in Europe, then that shouldn’t affect house prices here. House (not apartment) rents will continue to increase with inflation until SFRs’ price/rent ratio gets back to its historical mean.

I understand that the thread’s title may have hurt sensibilities… I’m a housing bear myself, and I told everybody I knew to sell in 2005. I have a couple of co-workers who ignored me and bought houses at the peak of the bubble, and now they look embarrased when the issue is brought up (I never bring it up myself but they probably think of their $150k in lost equitty every time they see me). All I’m trying to say is that by accelerating domestic inflation, the Fed is seeking to restore the housing price/income and price/rent ratio by debasing the value of the dollar, as opposed to waiting for the adjustment to come from price drops only.

How do we know the dollar is being devaluated? Measure it in terms of precious metals, gold, and stable currencies like the Euro. Nominal house prices still have room to fall, but I can see the end of the adjustment now that I realize how little our dollars are worth compared to only 7 years ago.

[Diego Mamani]

Sduuude, good question, but you’ve mischaracterized the essence of what I wrote. And I agree with you that that mischaracterization isn’t how the world works.

If the euro plummets, we need to ask two questions:
(1) Plummet against what? The dollar, oil/gold, or against both?; and more importantly
(2) Why does the euro plummet?

If the euro plummets both against the dollar and against gold/silver/oil because of irresponsible monetary policies in Europe, then that shouldn’t affect house prices here. House (not apartment) rents will continue to increase with inflation until SFRs’ price/rent ratio gets back to its historical mean.

I understand that the thread’s title may have hurt sensibilities… I’m a housing bear myself, and I told everybody I knew to sell in 2005. I have a couple of co-workers who ignored me and bought houses at the peak of the bubble, and now they look embarrased when the issue is brought up (I never bring it up myself but they probably think of their $150k in lost equitty every time they see me). All I’m trying to say is that by accelerating domestic inflation, the Fed is seeking to restore the housing price/income and price/rent ratio by debasing the value of the dollar, as opposed to waiting for the adjustment to come from price drops only.

How do we know the dollar is being devaluated? Measure it in terms of precious metals, gold, and stable currencies like the Euro. Nominal house prices still have room to fall, but I can see the end of the adjustment now that I realize how little our dollars are worth compared to only 7 years ago.

[HereWeGo]

Diego,

Valued in Euros, what’s happened to median income over the same time period?

[HereWeGo]

Diego,

Valued in Euros, what’s happened to median income over the same time period?

[HereWeGo]

Diego,

Valued in Euros, what’s happened to median income over the same time period?

[HereWeGo]

Diego,

Valued in Euros, what’s happened to median income over the same time period?

[Author]

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