Home prices skyrocketed last year. Two regions saw the biggest increases

[Chomsky]

Home prices skyrocketed last year. Two regions saw the biggest increases

Home prices rose 18.8% in 2021, according to the S&P CoreLogic Case-Shiller US National Home Price Index, the biggest increase in 34 years of data.

www.cnn.com

All regions saw price gains last year, but increases were strongest in the South and the Southeast, each of which were up over 25%.
Phoenix, Tampa and Miami reported the highest annual gains among the 20 cities in the index in December. Phoenix led the way for the 31st consecutive month with prices 32.5% higher than the year before. It was followed by Tampa with a 29.4% increase, and Miami, with a 27.3% increase.

--

Wow, oh wow, oh wow, oh wow!

The Case-Shiller report came out this morning, and I'm a bit speechless - here.

25% price increase in two major regions? Phoenix, Tampa, Miami, & 28 other major cities, have 30% gains? 30%? In one year? On top of huge increases, the year before?

--

Alright. That's a lot of exclamation & question marks above. But, they may be deserved.

Please tell me,

"Were not looking at a bubble"

I think I need to hear that . . .

 

[Metric Mouse]

Home prices skyrocketed last year. Two regions saw the biggest increases

Home prices rose 18.8% in 2021, according to the S&P CoreLogic Case-Shiller US National Home Price Index, the biggest increase in 34 years of data.

www.cnn.com

--

Wow, oh wow, oh wow, oh wow!

The Case-Shiller report came out this morning, and I'm a bit speechless - here.

25% price increase in two major regions? Phoenix, Tampa, Miami, & 28 other major cities, have 30% gains? 30%? In one year? On top of huge increases, the year before?

--

Alright. That's a lot of exclamation & question marks above. But, they may be deserved.

Please tell me,

"Were not looking at a bubble"

I think I need to hear that . . .

We're not in a bubble, not overall.

Price rises will slow, but they are not going to collapse.

 

[Crovax]

It's going to pop harder than before and I suspect this time it will trigger a huge political shift

 

[reflechissez]

We're not in a bubble, not overall.

Price rises will slow, but they are not going to collapse.

What drew you to this conclusion?

 

[reflechissez]

It's going to pop harder than before and I suspect this time it will trigger a huge political shift

Why?

 

[Slartibartfast]

Home prices skyrocketed last year. Two regions saw the biggest increases

Home prices rose 18.8% in 2021, according to the S&P CoreLogic Case-Shiller US National Home Price Index, the biggest increase in 34 years of data.

www.cnn.com

--

Wow, oh wow, oh wow, oh wow!

The Case-Shiller report came out this morning, and I'm a bit speechless - here.

25% price increase in two major regions? Phoenix, Tampa, Miami, & 28 other major cities, have 30% gains? 30%? In one year? On top of huge increases, the year before?

--

Alright. That's a lot of exclamation & question marks above. But, they may be deserved.

Please tell me,

"Were not looking at a bubble"

I think I need to hear that . . .

I did a lot of studying of this last year while I was looking for a new house (which I got under the local market rate due to a paperwork issue, but that's another story for another day).

I would say up until October of 2021, most of it was driven by migratory patterns of well paid white collar works who wanted to work from home. After Oct, its turning into FOMO and speculation. My dates are not exact of course, but this is based more on my observation.

Three things are going on right now though -
1. Interest rates have gone up but it does not appear to be lowering demand, but this increase JUST happened, so it may take some time to see that decreased demand in the stats
2. Rental costs are way up
2a. Rental costs being up might be what's driving people towards houses, at least according to the pundits
3. Its hard to get the parts needed to build a house

I fear we might see a homelessness crisis soon as rents and mortgages are outpacing people's ability to afford them, now that the flood of work from home people is starting to subside. So my best guess is that the bubble is just now starting for form.

 

[Crovax]

Why?

A large part of new home ownership is speculation a long with the COVID foreclosures still yet to hit. Not to mention we have slammed the interest rates to the ground so there is no wiggle room to help any crash recover. Along with stangnat wages and high inflation. We're going to have a situation where no one under 40 can afford a house and that's a powder keg politically speaking.

 

[reflechissez]

I did a lot of studying of this last year while I was looking for a new house (which I got under the local market rate due to a paperwork issue, but that's another story for another day).

I would say up until October of 20, most of it was driven by migratory patterns of well paid white collar works who wanted to work from home. After Oct, its turning into FOMO and speculation. My dates are not exact of course, but this is based more on my observation.

Three things are going on right now though -
1. Interest rates have gone up but it does not appear to be lowering demand, but this increase JUST happened, so it may take some time to see that decreased demand in the stats
2. Rental costs are way up
2a. Rental costs being up might be what's driving people towards houses, at least according to the pundits
3. Its hard to get the parts needed to build a house

I fear we might see a homelessness crisis soon as rents and mortgages are outpacing people's ability to afford them, now that the flood of work from home people is starting to subside. So my best guess is that the bubble is just now starting for form.

If enough people can't afford them, the properties will be vacant. The prices have to decline.

 

[reflechissez]

A large part of new home ownership is speculation a long with the COVID foreclosures still yet to hit. Not to mention we have slammed the interest rates to the ground so there is no wiggle room to help any crash recover. Along with stangnat wages and high inflation. We're going to have a situation where no one under 40 can afford a house and that's a powder keg politically speaking.

You're going to have to show your work on this one. And wages are not stagnant.

 

[CaughtInThe]

People all around me are selling and making a killing.

 

[Slartibartfast]

A large part of new home ownership is speculation a long with the COVID foreclosures still yet to hit. Not to mention we have slammed the interest rates to the ground so there is no wiggle room to help any crash recover. Along with stangnat wages and high inflation. We're going to have a situation where no one under 40 can afford a house and that's a powder keg politically speaking.

Millennials and Gen Z have been complaining about this (in bold) for about a decade now. There is a lot of entrenched negative sentiment about our current system already.

The rest of your post is not something I see as an accurate assessment of the situation at all.

 

[reflechissez]

People all around me are selling and making a killing.

But they still have to live somewhere.

 

[Slartibartfast]

People all around me are selling and making a killing.

Yes and no, the problem is that if you sell, then you just have to buy another really expensive house, its causing people to hesitate on whether selling is a good idea or not.

 

[Chomsky]

We're not in a bubble, not overall.

Price rises will slow, but they are not going to collapse.

That's my hope.

However the Fed has no choice but to aggressively raise rates to combat inflation, and that will hit mortgage rates hard; they've already increased substantively.

Then, there the Putin aggression resulting in political & economic instability. Gas & Oil prices are already flying!

 

[Crovax]

You're going to have to show your work on this one. And wages are not stagnant.

For most U.S. workers, real wages have barely budged in decades

Adjusted for inflation, today's average hourly wage has about as much purchasing power as it did in 1978. Most wage increases have gone to the highest earners.

www.pewresearch.org

 

[CaughtInThe]

But they still have to live somewhere.

Yes

 

[KevinKohler]

Very simple. People working high paying tech jobs are working remotely.

If you're working remotely, you no longer need to commute to the office. If that's true, why live in the locality, where houses and rents are sky high? Move someplace where home values are way lower, but are still nice areas to live.

It's gonna suck for those folks once their employers realize folks in India will do the same job for 25k per year.

 

[Cardinal]

But they still have to live somewhere.

Okay, so I have a stupid question about this. I'm a brand new homeowner so these things aren't so obvious to me. Let's say you've got a home and want to live in a comparable-valued neighborhood. Or maybe you want to upscale a bit. Point is, you're making a move which is relatively not too radical.

So you sell your home at your extraordinary profit, and you buy somebody else's home at their extraordinary profit. Isn't it a wash at that point? It seems to me that if you're already a home owner, your access to the housing market is about what it normally would have been. The people who are screwed are those who want to be first time home owners.

 

[CaughtInThe]

Yes and no, the problem is that if you sell, then you just have to buy another really expensive house, its causing people to hesitate on whether selling is a good idea or not.

The people that are sitting around me are moving 2 and 3 towns over. Where the prices aren't as bad and you get more house.

 

[Chomsky]

It's going to pop harder than before and I suspect this time it will trigger a huge political shift

Is a 'pop' fait accompli? 'No'.

Possible? 'Yes'. (IMHO)

 

[Gimmesometruth]

Home prices skyrocketed last year. Two regions saw the biggest increases

Home prices rose 18.8% in 2021, according to the S&P CoreLogic Case-Shiller US National Home Price Index, the biggest increase in 34 years of data.

www.cnn.com

--

Wow, oh wow, oh wow, oh wow!

The Case-Shiller report came out this morning, and I'm a bit speechless - here.

25% price increase in two major regions? Phoenix, Tampa, Miami, & 28 other major cities, have 30% gains? 30%? In one year? On top of huge increases, the year before?

--

Alright. That's a lot of exclamation & question marks above. But, they may be deserved.

Please tell me,

"Were not looking at a bubble"

I think I need to hear that . . .

A lot what is driving this is investor purchases....BUT they are not flipping, they are holding and renting out the properties. The counter to that is the HUGE levels of new rental property being constructed in the downtown Phx area....it is crazy. Some has been slow due to supply issues, but I have never seen so many apartment construction projects, Central ave has had so many empty lots built up and lots of old single level lots bulldozed with new multi level.

 

[Metric Mouse]

What drew you to this conclusion?

Price rise in homes is related to supply, demand and construction cost. Supply is very tight and construction costs continue to rise. This is not based on speculation and cheap credit like in the early naughties.

 

[Ginger Ale]

I did a lot of studying of this last year while I was looking for a new house (which I got under the local market rate due to a paperwork issue, but that's another story for another day).

I would say up until October of 20, most of it was driven by migratory patterns of well paid white collar works who wanted to work from home. After Oct, its turning into FOMO and speculation. My dates are not exact of course, but this is based more on my observation.

Three things are going on right now though -
1. Interest rates have gone up but it does not appear to be lowering demand, but this increase JUST happened, so it may take some time to see that decreased demand in the stats
2. Rental costs are way up
2a. Rental costs being up might be what's driving people towards houses, at least according to the pundits
3. Its hard to get the parts needed to build a house

I fear we might see a homelessness crisis soon as rents and mortgages are outpacing people's ability to afford them, now that the flood of work from home people is starting to subside. So my best guess is that the bubble is just now starting for form.

That's what's happening in my city, one of the mentioned. Fire fighters, teachers are all being priced out for tech. Phoenix is bringing in a lot of big tech companies now, and the service industry is really going to suffer in coming years. I doubt we will bust, what they say is we may slow down the growth, but it's here to stay. That's almost it's own big problem, we have a ton of people who won't be able to afford living here.

We might have to up the service wage to 20 to 25 an hour so that people can afford to live where they work, like L.A. did.

My house gained a value of 150,000 in two years. It's a lot and supply is low, and the new permits for track housing hasn't gone up to meet need like other states with high demand.

 

[Crovax]

Millennials and Gen Z have been complaining about this (in bold) for about a decade now. There is a lot of entrenched negative sentiment about our current system already.

The rest of your post is not something I see as an accurate assessment of the situation at all.

What I do know is that you have homes that are designed for the lower class >1200 Sq ft being sold at a price that only people in the top 5% of earners can afford. If that is the correct market state then we are even more ****ed than we thought.

 

[reflechissez]

For most U.S. workers, real wages have barely budged in decades

Adjusted for inflation, today's average hourly wage has about as much purchasing power as it did in 1978. Most wage increases have gone to the highest earners.

www.pewresearch.org

If you're going to use real wages, you have to subtract inflation from everything else as well.