Upper MId to Lower High End Market in NCC

[pemeliza]

I agree that 1988 pricing was probably 15% lower than the 1990 peak and that is supported by sales records.

“I figured 1988 was near the top, then figured another 15% or so for the actual top in 1989/1990, then figured it was reached again around 2000”

It almost sounds like you are suggesting that the nominal top of the prior 1990 peak would have also been the nominal top of the current cycle around 2000-2001 had it not been for the credit bubble which extended the cycle for an additional 7 years. Why should the top of this cycle (which should have ended in 2000-2001 as you suggest) have been nominally the same as the top of the prior cycle in 1990?

[CA renter]

[quote=pemeliza]I agree that 1988 pricing was probably 15% lower than the 1990 peak and that is supported by sales records.

“I figured 1988 was near the top, then figured another 15% or so for the actual top in 1989/1990, then figured it was reached again around 2000”

It almost sounds like you are suggesting that the nominal top of the prior 1990 peak would have also been the nominal top of the current cycle around 2000-2001 had it not been for the credit bubble which extended the cycle for an additional 7 years. Why should the top of this cycle (which should have ended in 2000-2001 as you suggest) have been nominally the same as the top of the prior cycle in 1990?[/quote]

Good question.

Wages for the masses have moved very little since the late 1980s.

http://oregonstate.edu/instruct/anth484/minwage.html

Here is some info from the mid-90s to 2004:

http://www.epi.org/publications/entry/issuebriefs_ib196/

The distribution of wealth during the 1983-2007 period:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

———–

In particular, the steady
increase in the housing price inflation rate since the early
2000s is closely associated with the steady increase in the
money supply during the same period. Overall, housing
price inflation appears to lead CPI inflation.

http://research.stlouisfed.org/publications/es/10/ES1006.pdf

————–

I don’t have much time now, but will get back to this with some more info about my theories on house price inflation, wage inflation/deflation, demographic shifts (from wealthy Baby Boomers entering the housing market en masse in the 1970s, to the formation of dual-income households, and how that’s affected prices and wages), income and wealth accumulation trends, and credit expansion…also, how credit expansion has pulled economic activity forward for many decades, and we now have to pay the price.

[CA renter]

[quote=pemeliza]I agree that 1988 pricing was probably 15% lower than the 1990 peak and that is supported by sales records.

“I figured 1988 was near the top, then figured another 15% or so for the actual top in 1989/1990, then figured it was reached again around 2000”

It almost sounds like you are suggesting that the nominal top of the prior 1990 peak would have also been the nominal top of the current cycle around 2000-2001 had it not been for the credit bubble which extended the cycle for an additional 7 years. Why should the top of this cycle (which should have ended in 2000-2001 as you suggest) have been nominally the same as the top of the prior cycle in 1990?[/quote]

Good question.

Wages for the masses have moved very little since the late 1980s.

http://oregonstate.edu/instruct/anth484/minwage.html

Here is some info from the mid-90s to 2004:

http://www.epi.org/publications/entry/issuebriefs_ib196/

The distribution of wealth during the 1983-2007 period:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

———–

In particular, the steady
increase in the housing price inflation rate since the early
2000s is closely associated with the steady increase in the
money supply during the same period. Overall, housing
price inflation appears to lead CPI inflation.

http://research.stlouisfed.org/publications/es/10/ES1006.pdf

————–

I don’t have much time now, but will get back to this with some more info about my theories on house price inflation, wage inflation/deflation, demographic shifts (from wealthy Baby Boomers entering the housing market en masse in the 1970s, to the formation of dual-income households, and how that’s affected prices and wages), income and wealth accumulation trends, and credit expansion…also, how credit expansion has pulled economic activity forward for many decades, and we now have to pay the price.

[CA renter]

[quote=pemeliza]I agree that 1988 pricing was probably 15% lower than the 1990 peak and that is supported by sales records.

“I figured 1988 was near the top, then figured another 15% or so for the actual top in 1989/1990, then figured it was reached again around 2000”

It almost sounds like you are suggesting that the nominal top of the prior 1990 peak would have also been the nominal top of the current cycle around 2000-2001 had it not been for the credit bubble which extended the cycle for an additional 7 years. Why should the top of this cycle (which should have ended in 2000-2001 as you suggest) have been nominally the same as the top of the prior cycle in 1990?[/quote]

Good question.

Wages for the masses have moved very little since the late 1980s.

http://oregonstate.edu/instruct/anth484/minwage.html

Here is some info from the mid-90s to 2004:

http://www.epi.org/publications/entry/issuebriefs_ib196/

The distribution of wealth during the 1983-2007 period:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

———–

In particular, the steady
increase in the housing price inflation rate since the early
2000s is closely associated with the steady increase in the
money supply during the same period. Overall, housing
price inflation appears to lead CPI inflation.

http://research.stlouisfed.org/publications/es/10/ES1006.pdf

————–

I don’t have much time now, but will get back to this with some more info about my theories on house price inflation, wage inflation/deflation, demographic shifts (from wealthy Baby Boomers entering the housing market en masse in the 1970s, to the formation of dual-income households, and how that’s affected prices and wages), income and wealth accumulation trends, and credit expansion…also, how credit expansion has pulled economic activity forward for many decades, and we now have to pay the price.

[CA renter]

[quote=pemeliza]I agree that 1988 pricing was probably 15% lower than the 1990 peak and that is supported by sales records.

“I figured 1988 was near the top, then figured another 15% or so for the actual top in 1989/1990, then figured it was reached again around 2000”

It almost sounds like you are suggesting that the nominal top of the prior 1990 peak would have also been the nominal top of the current cycle around 2000-2001 had it not been for the credit bubble which extended the cycle for an additional 7 years. Why should the top of this cycle (which should have ended in 2000-2001 as you suggest) have been nominally the same as the top of the prior cycle in 1990?[/quote]

Good question.

Wages for the masses have moved very little since the late 1980s.

http://oregonstate.edu/instruct/anth484/minwage.html

Here is some info from the mid-90s to 2004:

http://www.epi.org/publications/entry/issuebriefs_ib196/

The distribution of wealth during the 1983-2007 period:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

———–

In particular, the steady
increase in the housing price inflation rate since the early
2000s is closely associated with the steady increase in the
money supply during the same period. Overall, housing
price inflation appears to lead CPI inflation.

http://research.stlouisfed.org/publications/es/10/ES1006.pdf

————–

I don’t have much time now, but will get back to this with some more info about my theories on house price inflation, wage inflation/deflation, demographic shifts (from wealthy Baby Boomers entering the housing market en masse in the 1970s, to the formation of dual-income households, and how that’s affected prices and wages), income and wealth accumulation trends, and credit expansion…also, how credit expansion has pulled economic activity forward for many decades, and we now have to pay the price.

[CA renter]

[quote=pemeliza]I agree that 1988 pricing was probably 15% lower than the 1990 peak and that is supported by sales records.

“I figured 1988 was near the top, then figured another 15% or so for the actual top in 1989/1990, then figured it was reached again around 2000”

It almost sounds like you are suggesting that the nominal top of the prior 1990 peak would have also been the nominal top of the current cycle around 2000-2001 had it not been for the credit bubble which extended the cycle for an additional 7 years. Why should the top of this cycle (which should have ended in 2000-2001 as you suggest) have been nominally the same as the top of the prior cycle in 1990?[/quote]

Good question.

Wages for the masses have moved very little since the late 1980s.

http://oregonstate.edu/instruct/anth484/minwage.html

Here is some info from the mid-90s to 2004:

http://www.epi.org/publications/entry/issuebriefs_ib196/

The distribution of wealth during the 1983-2007 period:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

———–

In particular, the steady
increase in the housing price inflation rate since the early
2000s is closely associated with the steady increase in the
money supply during the same period. Overall, housing
price inflation appears to lead CPI inflation.

http://research.stlouisfed.org/publications/es/10/ES1006.pdf

————–

I don’t have much time now, but will get back to this with some more info about my theories on house price inflation, wage inflation/deflation, demographic shifts (from wealthy Baby Boomers entering the housing market en masse in the 1970s, to the formation of dual-income households, and how that’s affected prices and wages), income and wealth accumulation trends, and credit expansion…also, how credit expansion has pulled economic activity forward for many decades, and we now have to pay the price.

[pemeliza]

CAR, as you reflect on this I will give you a follow-up question.

Let us assume for the moment that history were different and the top of the market would have been reached during 2000-2001 and that the top would have been nominally equivalent to the top set in 1990. In other words let’s assume there was no credit bubble.

My question is where do you think prices would be today 10 years after the top set in 2000-2001?

The reason I ask is because you have suggested many times that 2000-2001 prices would be about the level you would pull the trigger at today and many others have suggested the same thing. By implication then it seems that you are saying that in the absence of the credit bubble that today’s prices should be nominally the same not only as 2000-2001 prices but also 1989-1990 prices.

In other words, real prices should have steeply declined over the past 20 years in the absence of the credit bubble.

As it stands, given that some cream-puff homes in SD county are currently selling for real prices (after adjusting for inflation) that are slightly lower than what they sold for in 1989-1990 it seems that with all of the government intervention and lowering of interest rates, all the government was able to accomplish was flat or slightly declining real prices over the last 20 years in arguably one of the most desirable cities to live in the country. This much we know as fact because we can see it in the sales records.

What is compelling to me, is that you seem to be saying that in the absence of government intervention and FED easy money policies that real inflation adjusted prices should have declined sharply over the past 20 years.

[pemeliza]

CAR, as you reflect on this I will give you a follow-up question.

Let us assume for the moment that history were different and the top of the market would have been reached during 2000-2001 and that the top would have been nominally equivalent to the top set in 1990. In other words let’s assume there was no credit bubble.

My question is where do you think prices would be today 10 years after the top set in 2000-2001?

The reason I ask is because you have suggested many times that 2000-2001 prices would be about the level you would pull the trigger at today and many others have suggested the same thing. By implication then it seems that you are saying that in the absence of the credit bubble that today’s prices should be nominally the same not only as 2000-2001 prices but also 1989-1990 prices.

In other words, real prices should have steeply declined over the past 20 years in the absence of the credit bubble.

As it stands, given that some cream-puff homes in SD county are currently selling for real prices (after adjusting for inflation) that are slightly lower than what they sold for in 1989-1990 it seems that with all of the government intervention and lowering of interest rates, all the government was able to accomplish was flat or slightly declining real prices over the last 20 years in arguably one of the most desirable cities to live in the country. This much we know as fact because we can see it in the sales records.

What is compelling to me, is that you seem to be saying that in the absence of government intervention and FED easy money policies that real inflation adjusted prices should have declined sharply over the past 20 years.

[pemeliza]

CAR, as you reflect on this I will give you a follow-up question.

Let us assume for the moment that history were different and the top of the market would have been reached during 2000-2001 and that the top would have been nominally equivalent to the top set in 1990. In other words let’s assume there was no credit bubble.

My question is where do you think prices would be today 10 years after the top set in 2000-2001?

The reason I ask is because you have suggested many times that 2000-2001 prices would be about the level you would pull the trigger at today and many others have suggested the same thing. By implication then it seems that you are saying that in the absence of the credit bubble that today’s prices should be nominally the same not only as 2000-2001 prices but also 1989-1990 prices.

In other words, real prices should have steeply declined over the past 20 years in the absence of the credit bubble.

As it stands, given that some cream-puff homes in SD county are currently selling for real prices (after adjusting for inflation) that are slightly lower than what they sold for in 1989-1990 it seems that with all of the government intervention and lowering of interest rates, all the government was able to accomplish was flat or slightly declining real prices over the last 20 years in arguably one of the most desirable cities to live in the country. This much we know as fact because we can see it in the sales records.

What is compelling to me, is that you seem to be saying that in the absence of government intervention and FED easy money policies that real inflation adjusted prices should have declined sharply over the past 20 years.

[pemeliza]

CAR, as you reflect on this I will give you a follow-up question.

Let us assume for the moment that history were different and the top of the market would have been reached during 2000-2001 and that the top would have been nominally equivalent to the top set in 1990. In other words let’s assume there was no credit bubble.

My question is where do you think prices would be today 10 years after the top set in 2000-2001?

The reason I ask is because you have suggested many times that 2000-2001 prices would be about the level you would pull the trigger at today and many others have suggested the same thing. By implication then it seems that you are saying that in the absence of the credit bubble that today’s prices should be nominally the same not only as 2000-2001 prices but also 1989-1990 prices.

In other words, real prices should have steeply declined over the past 20 years in the absence of the credit bubble.

As it stands, given that some cream-puff homes in SD county are currently selling for real prices (after adjusting for inflation) that are slightly lower than what they sold for in 1989-1990 it seems that with all of the government intervention and lowering of interest rates, all the government was able to accomplish was flat or slightly declining real prices over the last 20 years in arguably one of the most desirable cities to live in the country. This much we know as fact because we can see it in the sales records.

What is compelling to me, is that you seem to be saying that in the absence of government intervention and FED easy money policies that real inflation adjusted prices should have declined sharply over the past 20 years.

[pemeliza]

CAR, as you reflect on this I will give you a follow-up question.

Let us assume for the moment that history were different and the top of the market would have been reached during 2000-2001 and that the top would have been nominally equivalent to the top set in 1990. In other words let’s assume there was no credit bubble.

My question is where do you think prices would be today 10 years after the top set in 2000-2001?

The reason I ask is because you have suggested many times that 2000-2001 prices would be about the level you would pull the trigger at today and many others have suggested the same thing. By implication then it seems that you are saying that in the absence of the credit bubble that today’s prices should be nominally the same not only as 2000-2001 prices but also 1989-1990 prices.

In other words, real prices should have steeply declined over the past 20 years in the absence of the credit bubble.

As it stands, given that some cream-puff homes in SD county are currently selling for real prices (after adjusting for inflation) that are slightly lower than what they sold for in 1989-1990 it seems that with all of the government intervention and lowering of interest rates, all the government was able to accomplish was flat or slightly declining real prices over the last 20 years in arguably one of the most desirable cities to live in the country. This much we know as fact because we can see it in the sales records.

What is compelling to me, is that you seem to be saying that in the absence of government intervention and FED easy money policies that real inflation adjusted prices should have declined sharply over the past 20 years.

[CA renter]

Yes, that’s correct.

We have to consider what that inflation looks like, and which sectors it did or didn’t affect. If inflation comes from credit, there is an equal amount of debt + interest that has to be paid back in the future. If there is literal “money printing” with no debt offset, we have to consider the different areas that money would have gone to because it doesn’t necessarily have to be spent in a proportional way.

Housing is largely affected by credit, and it afford the greatest number of people to leverage the greatest amount of money possible. Because of this, a credit expansion can cause housing prices to rise without a commensurate increase in wages.

Also, inflation may have caused the prices of other basic goods to rise to such an extent that there is less money left over for housing.

If we look at the history of housing prices you’ll see that the some of the greatest price increases happened in the 70s. I think this is largely due to two things: a fairly sudden increase in dual-income households, along with the movement of the Baby Boomers into their peak home buying years.

Still want to continue this, but have to run and pick up the kids. Will be back. 🙂

[CA renter]

Yes, that’s correct.

We have to consider what that inflation looks like, and which sectors it did or didn’t affect. If inflation comes from credit, there is an equal amount of debt + interest that has to be paid back in the future. If there is literal “money printing” with no debt offset, we have to consider the different areas that money would have gone to because it doesn’t necessarily have to be spent in a proportional way.

Housing is largely affected by credit, and it afford the greatest number of people to leverage the greatest amount of money possible. Because of this, a credit expansion can cause housing prices to rise without a commensurate increase in wages.

Also, inflation may have caused the prices of other basic goods to rise to such an extent that there is less money left over for housing.

If we look at the history of housing prices you’ll see that the some of the greatest price increases happened in the 70s. I think this is largely due to two things: a fairly sudden increase in dual-income households, along with the movement of the Baby Boomers into their peak home buying years.

Still want to continue this, but have to run and pick up the kids. Will be back. 🙂

[CA renter]

Yes, that’s correct.

We have to consider what that inflation looks like, and which sectors it did or didn’t affect. If inflation comes from credit, there is an equal amount of debt + interest that has to be paid back in the future. If there is literal “money printing” with no debt offset, we have to consider the different areas that money would have gone to because it doesn’t necessarily have to be spent in a proportional way.

Housing is largely affected by credit, and it afford the greatest number of people to leverage the greatest amount of money possible. Because of this, a credit expansion can cause housing prices to rise without a commensurate increase in wages.

Also, inflation may have caused the prices of other basic goods to rise to such an extent that there is less money left over for housing.

If we look at the history of housing prices you’ll see that the some of the greatest price increases happened in the 70s. I think this is largely due to two things: a fairly sudden increase in dual-income households, along with the movement of the Baby Boomers into their peak home buying years.

Still want to continue this, but have to run and pick up the kids. Will be back. 🙂

[CA renter]

Yes, that’s correct.

We have to consider what that inflation looks like, and which sectors it did or didn’t affect. If inflation comes from credit, there is an equal amount of debt + interest that has to be paid back in the future. If there is literal “money printing” with no debt offset, we have to consider the different areas that money would have gone to because it doesn’t necessarily have to be spent in a proportional way.

Housing is largely affected by credit, and it afford the greatest number of people to leverage the greatest amount of money possible. Because of this, a credit expansion can cause housing prices to rise without a commensurate increase in wages.

Also, inflation may have caused the prices of other basic goods to rise to such an extent that there is less money left over for housing.

If we look at the history of housing prices you’ll see that the some of the greatest price increases happened in the 70s. I think this is largely due to two things: a fairly sudden increase in dual-income households, along with the movement of the Baby Boomers into their peak home buying years.

Still want to continue this, but have to run and pick up the kids. Will be back. 🙂

[Author]

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