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Thu Jul 29, 2021, 07:47 AM

Is Housing In A Bubble?

I just saw the price of a new listing in my neighborhood. Housing prices are skyrocketing.
But this article suggests there is a genuine housing shortage. A two month supply of available houses, instead of the usual six months. And lending standards are staying firm. It's a little different from last time.

https://www.cnn.com/2021/07/27/economy/housing-bubble-fears-overblown/index.html

6 replies, 739 views

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Arrow 6 replies Author Time Post
Reply Is Housing In A Bubble? (Original post)
Tomconroy Jul 29 OP
TreasonousBastard Jul 29 #1
70sEraVet Jul 29 #2
Laura PourMeADrink Jul 29 #3
Laura PourMeADrink Jul 29 #4
Warpy Jul 29 #5
Tomconroy Jul 29 #6

Response to Tomconroy (Original post)

Thu Jul 29, 2021, 07:54 AM

1. In this area, it's mostly second homes, so who knows.

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Response to Tomconroy (Original post)

Thu Jul 29, 2021, 09:59 AM

2. I'm surprised the article never mentioned inflated lumber prices

as a factor in driving up home prices and in causing a drop in numbers of new homes being built. No builder wants to add $30,000 to the cost of building a home, that they might not be able to recoup if the lumber prices drop back before the house goes on the market!

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Response to 70sEraVet (Reply #2)

Thu Jul 29, 2021, 01:57 PM

3. Yes agree! but declined since then right?

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Response to Tomconroy (Original post)

Thu Jul 29, 2021, 01:59 PM

4. Think prices will decline but it's really just impossible to imagine

They will decline back to pre-covid. Sellers have gotten a taste of making much more money than their houses are worth. It will take slow turnover to convince them.

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Response to Tomconroy (Original post)

Thu Jul 29, 2021, 02:43 PM

5. Hedge funds and other investment companies are snapping them up

I get cards at least once a week from friendly "persons" who want to pay top dollar for my house, cash, sight unseen. This is creating a bubble in housing prices. It's also a losing strategy since demographics are about to kick housing demand in the teeth as Boomers continue to die off and underpaid and overindebted Millennials and Gen Z are unable to enter the market.

So yes, there is a bubble and it will end about as well as the last one did.

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Response to Tomconroy (Original post)

Thu Jul 29, 2021, 02:51 PM

6. For what it's worth, Goldman Sachs thinks prices will

Go up for a few years and then level off. But higher prices are here to stay.


https://www.marcus.com/us/en/resources/heard-at-gs/housing-market

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