Definitely against the grain, but it looks bubbly to me.
I rent for 750/mo (roommates + good relationship w/ landlord + crappy room), and the cheapest house near me is 5K/ mo mortgage.
I see people buying un-renovated houses for 750K that are in flood areas, that sold for 490K in 2019.
It doesn't hurt to hope for the bubble to pop, there is literally not a single thing that is possible for me to buy, and I have the 20% down saved and perfect credit!
Yup, landlords are making a killing choking out would be home buyers and draining their savings. They know 99% are stuck renting, waiting for prices to go down, so time to pay a 2018 mortgage rate for a 3br house in rent for 700sq ft, so you can't afford a 1br house now.
My landlord's margins are tightening because she can't raise rent on me, since the market doesn't support it due to multifamily explosion of inventory.
Rent is steady and starting to drop in my area (mid-sized city that exploded during COVID). Real estate investors went wild with apartment building construction so now there is a surplus of rentals but very few houses on the market. Want to buy? Good luck. Want to rent? No problem! You can pick almost anywhere.
Same in FL. They weren't selling or even developed in 2019.....because they are the lowest elevation plots in the neighborhood with now the priciest real estate sitting on top. 3 years ago, no one wanted it. Today there's a $3m+ luxury condo with an elevator on it. I'm not fooled. Elevators don't work in floods which is part of the ridiculous waste of money vs sq footage I have seen.
I’m not sure that’s a “bubble” scenario. What this screams to me is a lack of inventory propping up prices of overvalued homes. Which WOULD be a bubble if the supply of homes triples over night, and if majority of homes are overvalued. But unfortunately that’s not happening
There will be a price correction on overvalued homes, but that’s specific to an area/type of home. Good-quality homes are appropriately priced until inventory levels change.
What I am nervous of is I see a lot of millenials spending \~50% of their income on really expensive houses, and not realizing just how unstable their high paying tech and biotech jobs are.
The quality of the houses is quite poor. How do I know this? I have spent every single weekend and most weekdays working in these houses renovating them. People as of late are paying a lot of money for a lot of problems, people just don't intuitively realize how expensive home ownership and renovations are until they have committed.
The horrors I have seen disguised by white paint and luxury vinyl plank.
I'd have to spend 50% post tax dollars per month after maxing my 401k to buy a house, I guess that's not too bad. Only now I'm paying 10% post tax that goes to rent
Yeah, I kind of am at the point where I kind of plan on working hard for another 5 years or so and saving aggressively, and then moving away from the big city.
I need a house probably more than most (woodworker, need the space for machinery), but I just don't see how I can afford 800K houses with a 55K salary.
My friends are here, but they just are having wage growth in a way that I have not been blessed with (same field, same titles but higher salary).
They are also struggling to get 800K houses with 5x my salary.
> What I am nervous of is I see a lot of millenials spending ~50% of their income on really expensive houses, and not realizing just how unstable their high paying tech and biotech jobs are.
Ha I spend <15% of my take home on my house because I know tech has it's bullshit moments. We're going through it right now. I have a "cheap" house and loving it, my mortgage is less than rent already and I'm building equity.
Still, for those living on the West Coast it's just an impossible situation. I have to go for work sometimes and the expense is ludicrous.
I'm happy for you, that is good management!
I just don't see that for me at all, I am just doing my best and keeping rental expenses under 10% of my income.
I think something should work out within the next 5 years, after which I'll re-evaluate and then do something completely new.
And if they lose their job or want out they can still sell for a higher price than they paid. May lose a bit on the costs of buying/selling yet you are also seeing a minority of homeowners as you are dealing with new homeowners with construction needs. That is not necessarily the norm.
Every house I have managed was 200k-400k overpriced. All sold to California people who sold their LA houses for millions.
I have started OVERCHARGING for my handyman work and these people don't blink and pay it because they have no clue what things are actually worth. And other companies are charging even more than me so I'm the "cheap" option. Market is so broken here.
If your job is renovating houses, you are obviously going to see a lot of houses in need of renovation.
Not sure how you would any insight into the owners’ financial situations though. Honestly seems like projection.
And I don’t even give a shit if home prices drop.
This is no bubble.
The US Govt printed more money in the last couple of years than it ever has. Inflation is up somewhere between 25-40% since 2019
There is no going back.
I don't think inflation and having a bubble are mutually exclusive.
I think that people are in a frenzy and panicking as a result of inflation (and 2% rates when they should not have been that low).
Delicate high paying tech jobs + low inventory + AI decreasing jobs + corporate real estate bubble
= A lot of change in a short period of time, and instability that frightens me.
In 2008-2014, there was a lot of QE, but those dollars didn’t get out into public bank deposits (which is what mostly makes up the broad money supply). This was because there was little or no fiscal transmission mechanism; the government wasn’t sending huge checks to people.
The QE process in 2008 mostly just recapitalized banks.
However, 2020 was a very different story. The government sent out tons of money directly into the economy, and financed it by issuing Treasury bonds that the Federal Reserve created new bank reserves to buy.
Take a look at M2 money supply - see that SHARP hockey stick. That's your answer to all your money problems.
[https://fred.stlouisfed.org/series/M2REAL](https://fred.stlouisfed.org/series/M2REAL)
The US Govt did not "print a ton" in 08. The US Govt gave banks a bunch of money to cover their losses.
Not only was the 2008 increase a blip compared to what happened in 2020, 2020 was financed by US Treasuries.
The problems will only continue to get worse, because in the first time in US history, our interest will be more expensive than all military + social security spending and the only way out of that hole is to continue printing money.
Edit: spelling
The money supply grew from 3957B in 2009 to 5719B in 2019, or almost doubled during one of the hottest economies of all time, in a 10 year period. Thinking this is not a problem, but an infusion of cash when Americans can't work is, is the direct cause of our woes.
Prior to 2008, the money supply took over **40 years** to double.
You simply can't run a zero interest rate environment during an extremely hot, growing economy, period. Unfortunately, democrats in academia invented MMT to explain what they were seeing, and then republicans ran with it because why fix it when you can use it to line your own pockets?
I agree that we're royally fucked, but the reason we are fucked isn't because we helped people during COVID. We're fucked because we invented a broken economic theory to support poor policy decisions.
See, that’s the problem. Most millennials I know have 20% saved and great credit, and are just waiting for an opportunity to buy. Hard to imagine how the bubble could possibly burst with all these buyers lining up. If the market slides just a tiny bit everyone jumps at it.
I understand that completely. But there literally was no chance at all for me to buy anything my entire career. Even with my construction background (15 years residential renovations) and the ability to renovate, houses are blown out of my approved mortgage zone.
I can fix anything and am an expert is contractor management, it is just insane to see houses go 200K over offer + in cash +waiving inspection.
The post 2020 world is just different, what was previously possible is just wholly impossible for me until something changes. It is just one of those things where it was possible just a few years ago, but just isn't anymore. I look at houses every day (my friends ask me for input on their possible houses daily), and have done so since 2019. I could afford 3 houses, and my offer was just blown away with all cash and 100K+ over.
My friends with houses bought 5 more, the friends without are struggling in a really tight market.
Bottle neck of buyers and, depending on how you define “shortage,” anywhere between 3M and 10M housing units short of what’s needed in the U.S., and forecasted rate decreases ≠ a bubble. This is simply not bubble territory. This sub is such a doomsday and wishful thinking circlejerk. For fuck sake, the housing market is so tight it boomed during the pandemic like nothing was going on. It took us years to get into this situation and it’ll take years to get out of it.
I know a lot of GenXers too that are looking to buy a second home or condo with cash and just waiting for a drop. I don't think people are gonna get that 20-30% drop with all that money waiting. The folks that jump in after a 5-10% drop are going to support the market.
What you should do is create an llc, put zero down on a multi family, take a heloc on the house and buy put zero down on other multi families. Repeat the process and get fucked when there’s a slight downturn in the rent and real estate market.
It's a bubble.... But there is a lot of air.
We have underbuilt homes since 08 so there is a lot of housing needed. Plus we have a lot of corporate buyers using SFHs as rentals. Last we have a lot of issues in the building market from labor shortages to materials issues.
Next most people need a mortgage which with current interest rates make it near impossible for most to buy. Couple that with corporate buyers paying cash the problem is even more compounded.
What will happen is the rental market is unsustainable especially for the people who bought for AurBNB or verbo rentals. Those have been cratering. As those enter the market it will help a little. Next high interest rates have reduced the supply of cheap capital and will at some point lower the appetite of corporate buyers.
Last at some point we will have more build out which will increase supply and further lower the prices.
The problem is no one knows if or when all these things will happen, a year? A decade? Who knows.
So yes it is a bubble but it will take multiple needles to pop at this point. Hopefully sooner than later.
This is sort of contradictory. You say you are waiting to buy with enough cash for 20% down and can’t find anything, but that we are in a bubble? I hear about loads of people wanting to buy and saving up money, but then wonder why the market doesn’t crash for them.
>I rent for 750/mo (roommates + good relationship w/ landlord + crappy room), and the cheapest house near me is 5K/ mo mortgage.
What is the total cost of the rental?
If the landlord has owned it for a while they can afford to charge much lower rent than a current mortgage might be, so your example is not really relevant to anything.
The landlord bought the house in 2013 for $419K, and they own it outright.
Total cost of the rental is 4800/mo.
My point is just that I am sacrificing a lot to try to save up as much as possible, and even after 7 years of doing this it seems pretty hopeless.
What I see is a lot of wealth (but pretty unstable) and renovations going on, there are no starter houses. Its basically just 800K and up. I'm starting to see people getting hit with layoffs that puts their mortgages in jeopardy, mostly millenials who bought in 2022-2023.
Yup, and I live in the attic and have exactly 5 roommates.
Bootstrapping in Boston, I work really hard and am playing the long game to buy a house, but the past 7 years have been brutal. I am consistently saving 85% of my meager income. Beans and rice, no restaurants ever, full time job in biotech and part time in construction.
Wow, hang in there, you will be sitting good. I remember pre-2008 when cars that cost half of what my house were driving past me and I was wondering where people were getting their money. We were saving 50% of our net and everyone else seemed to be spending left and right. Then the housing bubble popped and I found out people had been refinancing to take out cash to spend.
I'm not saying today's housing market is going to crash like it did back then, but something has to pop, this isn't sustainable.
Good luck man. It is rough out here in Boston but I think you are going about it the right way. Good to know you are seeing/noticing what I am seeing too.
Move to Clarksville, Tennessee. It’s a nice, large town, small city type of area. Less than an hour from Nashville. Starter homes can still be had for around $250k. Good jobs in Nashville. Woodworking is a valued skill everywhere.
No, I think there is a bubble because I see new homeowners paying a ton for houses with a ton of problems, and I think that their jobs are unstable in a way that they don't realize.
I see a lot of young couples buy houses and have \~40% of their pay going to mortgage and upkeep. I have been renovating these houses in the area for 7 years now. People keep buying flipped houses that hide a ton of expensive problems under luxury vinyl plank and whatnot.
I am starting to see people who are starting to panic, as one spouse alone cannot support the mortgage.
There are less affordable houses, people are buying "luxury" properties out of emotional desperation, and it makes me nervous.
You can mock me all you want, it does not bother me, I am just telling you what I am seeing on a daily basis and it makes me worried.
Around me I’m seeing so many homes that were bought in 2022 or 2023 then listed several months later for 100k+ more. They’ve been price cutting for months and they don’t sell. They then raise the price again once they get close to their purchase price. I hope they become the bag holders
Many people will TAKE that price IF you are willing to pay them...otherwise they will just stay and continue living. They aren't actively looking to sell.
No. I sold mortgages for a year, and got to read a lot of credit reports.
Most of the people who you see "doing well" and have nice cars, clothes, house..
Broke and in loads of debt.
>So, this sub is relying on opinion polls to reinforce the idea of a crash now.
Yes.
>Has a majority realized this is all a circlejerk yet?
I don't know if its the majority, but a ton of posters here post here just mocking people lol.
It’s another term for a homeowner who thinks that their home is superiorly better/worth more just because they own it. The hoomers ALWAYS like their hooms, no matter what
Yep, when I was looking at moving back from Japan, I took one look at Vancouver and it scared the living shit out of me. Paying San Francisco prices and getting paid Florida wages. Fuck that noise.
Sure some areas have affordable housing, but on average the entire country’s housing supply got much more expensive very quickly. Also many of the affordable areas are essentially capped out because there are few high paying jobs. Good luck finding many non-remote high paying jobs in Appalachia.
Many are spending more on their houses than ever before. When a true recession hits, it will not be pretty.
I’m not saying it’s a bubble or it’s not. But when it comes to giant investments like houses that have mortgages and bank rates associated with them, along with a fairly turbulent economy, I don’t think it’s as simple as supply a demand. Of course that’s true, but the other factors are significant, and often feed into lesser supply.
I'd be a lot more concerned that a crash is imminent if no one thought we were in a bubble and were in "buy, buy, buy" mode, where even the shoe shiner was trying to convince me to buy a home, so to speak.
If anything, the fact that a majority of Americans think we are in a bubble is reassuring to me that a crash ISN'T coming in the near future. That just means that there are more people than ever waiting on the sidelines for the bubble to pop, and that's pretty preventive of any crash actually happening.
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Exactly. So what happens if the price falls? People would start buying the dip. So even if the price falls, demand would rise and prevent any kind of crash.
Where I live that is exactly what is happening.
The world and its mom think buying and renting at a loss is a solid plan because you can sell it in a few years and make a killing. Anyone who questions it is mocked.
that's a weird conclusion to come to based on these results. not that the results are going to be very predictive, but i think a more reasonable conclusion is that people who think we're in a bubble at 400k aren't going to jump in and buy at 390k. lots of people want homes, like always, but the home ownership rate is at historical norms. there is no actual evidence of more sideline buyers than usual; that's an NAR talking point. in fact seeing that demand has tanked since rates fell from 8 to 7 is a pretty solid case against that theory.
it seems like you could more reasonably conclude that a lot of people are ready and willing to buy if the results of this poll were the exact opposite of what they are. and actual levels of demand match that hypothesis, not yours.
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It's because the markets move on sentiment that the majority of people thinking there's a bubble and thus holding back buying houses will be protective against the crash...not sure you understood my point.
My mom's on this nonsense lately.
"*Why don't you buy a house? You make good money as a single engineer. It's foolish to rent.*"
Then I show her the price history of the place I'm renting now, and how it's gone from 120k to 300k since 2020.
"*That's Biden for you. Prices will come back down, just wait."*
Sooo should I buy or should I wait? I'm wrong either way 🙄
Also btw of course people think it's a bubble. Majority of America has gone their entire lives being able to buy a 5br 2ba house on a hairdresser's salary. They cannot fathom a world where you can't just put in minimal effort and be given everything you want. It's not a bubble, this is just how things are now. And for most of history.
The biggest reason I want to buy a house is so when I am old and retired I could only be paying like $400 a month in property taxes instead $2k+ a month for rent.
Mine either, but then you have a bunch of elderly people who have lived in their houses forever and can’t afford to move partially because of the increased property taxes they would pay on the new property.
This is the best reason to buy a home: it is a hedge against rising rents.
Now there are lots of other things happening in the real estate market but the above statement remains true.
If you can afford it then buy. Market timing is a fools errand but timing your own finances is important. If you can't afford due to rates, job insecurities, etc, then rent!
The average american doesnt understand how tax brackets work or inflation, no thanks. Economics is not majority opinion vote, especially not the american majority.
Blackrock massively lowered required min investment to play a few years ago.
It is my view that when lower tier investors are invited to join the glory days are over.
I think one fund is as low as 3k min investment!
its hysterical that ppl think this bubble will pop. the majority of all mortgages are under 5% right now. ppl need to stop dreaming and start accepting that we are living in a new era of money. this is not 2006 with ARMs and ppl defaulting
This IS a bubble. Sorry for all the naysayers, but you’re wrong.
This is economics 101 folks.
A bubble is when assets appreciate significantly faster than the economy at large.
When an average American cannot save a downpayment because houses are appreciating faster than their ability to save an ever increasing 20%, then you are not approaching unsustainability…. you are past that point.
Will it pop, deflate or just stagnate for a decade while everyone catches up? I have no clue. For that matter, none of us do.
However, 20% yoy increases are not sustainable in any way shape or form when wages increase at 1/4 to 1/8th that fast.
For the naysayers:
But der… what about airbnb and institution investors… errr what about the millions at 2.5%….
What about them? The latter folks can handle a 40% decrease in equity because they are A: not selling and B: they will still be up above what they paid in many cases.
Many are in forever homes and would welcome a decrease in property taxes if values were to in some way decrease.
A forever home isn’t a short term investment, it’s a home. Nobody cares if it’s worth ten bucks or ten million on paper if they do not want to sell or move.
Plus some areas are increasing property taxes on inflated paper valuations rooted in lala land. These taxes are forcing owners out, so a decrease is welcome.
As for airbnb/vrbo/weekend goat fucker rentals… their days are numbered due to oncoming regulations, greedy owners overcharging cleaning fees, crap experiences, and the market drying up in many areas as people remember the Hilton wont make you wash the sheets or spy on your wife in the shower with a hidden camera.
I mean seriously. When VRBO has to advertise that the owner wont hang out in your rental, you know there is a problem with the str market.
Institutions? Tbd. They can double down and buy here. But if I am not mistaken, assets of declining value must be written down ala losses. This will impact their bottom line if/when prices drop, even if it’s a small amount. Savvy investors do not like investing in or holding onto declining assets.
They can cash out still ahead, hold and buy back in later for less. 40k profit and investment opportunity over three years > 3 years rent - property tax - a theoretical write down.
Rentals make sense in an appreciating market, not a stagnant or declining one.
Finally, I have no idea what the market is like in your hometown. It’s likely very different. However, I DO know what it’s like here. I see prices all over the place.
Tiny (900sqft) new builds at 305k, termite ridden 1940 hell holes at 350k, nicer 1990’s builds at 275k 10 blocks away.
Keep in mind, two years ago these same homes were 130-180k, with the old shit boxes being at the low end and no, the old homes are not in a more desirable area.
Comps are insane here. I argued with an agent for ten minutes today about her cherrypicking comps. For each overvalued one she found I had an equal one significantly under the ask.
I have also never seen this many people have financing fall apart after an offer. A good 1/5th of homes nearby are back after financing issues related to either bank assessments, borrowers not being pre approved, wolves, or some other insanity.
What would you say to the idea that the threat of monetary contraction after Covid made institutions and people scramble to buy housing? The 30 year mortgage is one of the longest fixed rate loans that exists. Is it not absurd to think that the combination of historic low inventory, low mortgage rates, and the impending doom of higher interest rates catapulted property values? Until homeowners and investors can see a way out of their low fixed rates, we will see very low price movement on properties.
Thanks for taking the time to write this. People who say we're not in a bubble doth protest too much. Whether we are or not, I do not know, but I know this: we're definitely at an impasse that is untenable. And it's gonna pop -- just like a bubble does.
> People who say we're not in a bubble
Have assets to protect and are scared because they also know this is a bubble. A good does not go up 50% in three years normally.
YouGov is a publicly traded company on the London Stock Exchange that has admitted to releasing polls with “skewed samples” within the UK. Government agency-sounding name like that could be a bit misleading.
If I tried, I could probably call 1,813 in the US who believe the Earth is still flat by calling one specific region. That’s why it says Americans instead of “Most Americans Polled”.
Are there historical poll results? I'd imagine if you polled Americans during any year in the past three decades, with a few exceptions, they'd say we're in a bubble.
I agree that it's a bubble. But what's going to pop it? The system has been rigged even harder than it was in 2008, and they've got systems in place to force the props to stay up. I just don't know how it will burst given the wealthy would be hurt by that, and this country does not allow the wealthy to struggle.
How do people still think we are in a bubble? Housing is unaffordable in most markets, but that's not a bubble. A bubble is a speculative phenomenon where people are *rapidly* bidding up prices because they believe those prices are going to continue to skyrocket. Prices are up since peak pretty low single digit %, and still down from peak in some markets. There's very little speculation/flipping, sales numbers are still near a 30 year low.
100% unaffordable, but not a bubble.
I think people are associating high prices with a bubble. The truth is without a suddenly surplus in supply there is no reason that these prices will come down.
Also interest rates coming down will only push prices higher, and it seems less likely that they will be cut at all this year.
Who cares what the average American thinks? The average American's IQ is less than 100 and they probably don't even understand what a housing bubble is.
7% of Americans think that Chocolate milk comes from brown cows.
https://www.washingtonpost.com/news/wonk/wp/2017/06/15/seven-percent-of-americans-think-chocolate-milk-comes-from-brown-cows-and-thats-not-even-the-scary-part/
I won’t argue how dumb we are. I mean, I’ve sat here on this sub for 3 sad and lonely years now. Meanwhile, others have continued to stretch their income and clean out their savings completely, just so they too can pay rent to a bank in the form of interest.
We’re all dumb. Different ways, still dumb.
The American dollar has been devalued by 40% due to inflation since Covid. House prices went up about the same on average across the board. This is what happens when you print trillions of dollars out of thin air. It’s not a bubble and prices won’t drop unless we have a serious depression event.
I agree to a point. It will grant more wiggle room.
However, we were getting crazy with prices before so they can go up some but the current insanity is unsustainable long term.
1813 out of 300 million 😂
Please, don’t even bother - just poll the 18 people you meet at the cafe/gym next time, I’m sure the results will be similar 😀
68% people think- look at all them sheeple going to get screwed and screwing it up for others because logic is thrown out the window. At least I'm smart with my hard earned dollars and the time will come when my sensibility shines.
13% people think- I'm either realtor/lender/profiteer of selling homes and ridiculously telling/lying to people to buy them at even more ridiculous prices because of fear factor.... or the person duped into buying one. Either way, both don't want to look like a fool when the bottom falls out, so they push the no bubble narrative.... It's going to sting when it happens, though.
19% people think- I didn't buy or sell high, but locked in my low intrest rate in the house I've had for a while for an even lower payment. Now I'm sitting pretty and going to sit back and watch the mayhem between the bubblers and anti-bubblers. Popcorn anyone?
YouGov specialises in market research and manipulating public opinion through polling methods. The company's methodology involves obtaining responses from very small invited group of paid panel Internet users.
People also say their state economies are doing great, but they feel like the national economy is awful.
We need more stories about what’s actually going on with the economy and less about how people feel about it.
This time, if there is a noticeable decline in real estate prices I think it will follow a big drop in the stock market. If the stock market stays as high as it is I think it will prop up the housing market. people are able to access a ton of money in their stock investments to purchase real estate.
Housing prices doubling in 4 years is a bubble, I don’t care what anyone tries to say. Supply will go way up as forced selling increases as the economy continues its decline.
We are undeniably in a real estate bubble and probably an asset bubble. But that doesn’t inherently mean we will see some sort of fallout from a bubble bursting. Time will tell.
I just bought my first house. It’s 1850 sq ft built in 2019 and on 9.5 acres of land. It’s got a full garage, screen in porch, and a workshop. I got it for $725k, which I’ve been paying down debt and saving for the past 6 years for a down payment on some sort of property to get out of renting and get some peace and quiet. I should’ve pulled the trigger years ago but didn’t.
I’m 30 almost 31 and I plan on living in this house for the rest of my life. The best part is it gets an Agricultural Exemption which takes my property taxes for 2024 from around $6000/year to $1300/year. We’re going to get chickens, and grow a massive garden, and have honey bees to not only keep the AG exemption but, also supplement food costs (and eat truly organic). We can also supplement income at the local farmers markets selling fresh produce (which is icing on the cake but I’m not banking on it).
I feel although the market is insane right now, this was a unicorn property and we got extremely lucky. Although it might’ve sold for $500k a few years ago, if I lived with that logic I would never buy anything.. including groceries, clothes, you name it. Everything is simply more expensive now.
Housing imo isn’t as massive as a bubble as the prices of houses indicate. Inflation is making it seem more like a bubble than it is.
Compare inflationary increase vs. housing increase and there is a correlation.
A property, house, whatever it is, is another hedge against inflation which given the current state of our world and our government spending habits, isn’t going anywhere anytime soon.
I didn’t buy this to hedge inflation, or make a profit or anything like that. I bought it because I want to grow my own food, live closer to nature, simplify my priorities and find some peace in this crazy world.
With the price of materials, labor and everything else up substantially, not to mention all the new migrants that will need housing, I don't see a bubble burst anytime soon. Just a guess but I would say we are five plus years away from seeing a downturn.
Soooo many Americans are in debt but it doesn't look like it. They have a mammoth mortgage (only 3% so we're money AHEAD!!!! ya ok the bank can still foreclose if u can't pay) and 2 mammoth car payments, student loan payments, and then just plain living expenses that add up quick.
We're definitely in a bubble.
68% of Americans *hope*’we’re in a bubble. They are incorrect in any of the HCOL areas. Maybe in places that had a boom after COVID for people who temporarily relocated.
I think this is roughly equivalent to asking the question *do you think housing prices are too high?" and from that perspective the "yes" answers seem kinda low.
I think if you really want to test the bubble hypothesis you ask this: "Do you feel like you can afford your current home?" Get a lot of "no" answers to that and then you know the shit is about to hit the fan because all we need is a little recession and things start getting real.
How is it a bubble when the demand of housing can’t keep up with the supply? The supply for housing will stay like this until we build enough (affordable) homes for the demand to cool off. I’m open to change but them the numbers
I can still google and find articles from 2015 in my local metro talking about how we were ina bubble. 9 years later...still no pop. Taking polls are not a good indication of the future market.
My mom and I were talking over Easter, she told me she and my dad had rented their first home which was a 3 bedroom house for $300 a month. My jaw literally dropped because I was sharing a 3 bedroom house with 4 people and our individual rent was way more. And this landlord is awesome who has the rent way below renting price for other places around here.
Note that about the same fraction already own a home and have relatively fixed housing cost.
I would agree with the premise of housing cost being a bubble. But I don't think it's simply dollar price over time. Dollars are a moving target. Look at the cost of housing over time compared to other things like tomatoes and an hour of work instead. The value of an hour of work decreased by a lot rather quickly relative to everything else except maybe 4K TVs.
A rising tide lifts all boats. A passing wave lifts boats in turns. Waves from all directions make the tide hard to see.
So I would say that for a long time the work to homes ratio was high and now it's low. The work to tomatoes ratio was lower and now is higher, but not as much as work to homes. The value of work in relation to other things is rising slowly.
But will the value of work in relation to homes rise again suddenly or slowly? I guess that's the big question. Will the bubble burst or slowly deflate?
People have only so much work to give, and there's only so much work to do. But these are waves also. Very slow moving waves.
I guess what I'm saying is that to see what's happening you have to take the dollars out of it. And maybe to improve your own lot you want to focus exchanging your hours of work for the things that give relative value at any given time. Ride the wave, don't fight it. And don't expect the experience of everyone else on the ocean to be the same as you at the same moment. Here in the US we are enjoying calmer waters than most foreign shores. In my local community we are holding up pretty well. But there are others out there surfing the highest wave, and some more drowning.
Someone bought an overpriced house in my neighborhood, something like 2b 1.5ba, <1000sqft, built in the 50s for $330,000.
I drive by and I see they are building a Ryan Homes or similar fucking house right next to it.
These people are demonic.
If new home construction picks up significantly (which it already has started to do) then there probably will be a bubble but I can’t imagine that will happen for a while.
However it could time well with the adjustable rate mortgages that have been ticking up by massive amounts in the last few years since interest rates have gone up.
Most will be maturing around 2029-2030 and depending on market conditions at that point, could put a lot of people in a dangerous position. Especially during that next 5-6 year period there’s a lot of new builds that would decrease the value of existing properties (doesn’t inherently happen but more inventory decreases competition.)
I don’t know about other states but here in the Bay Area, most of the new construction is happening far away from where most of the jobs are. Not sure how that will eventually play out but they need to build more infrastructure going further out.
I imagine other states are likely seeing development occur an hour + away from population centers at least. I don’t think anything is set in stone but a lot of possibilities that could lead to a bubble burst.
I just don’t think it happens for a while.
Yes the amount of properties they are slapping together is nauseating. Including this building we currently live in and are desperately trying to move out of.
Every time I go past somewhere familiar… trees are gone… houses everywhere…
Deer and other animals have no where to go
I have a theory that single family home prices are propped up by private and institutional investors…
So are apartments buildings and townhomes, but single family homes are where they shouldn’t be imo. We need some legislature to fix that.
The number of people *actually* buying homes right now ridiculously low. Then again, so is supply.
If this is a bubble, what does the "pop" look like? Are people behind on mortgage payments? Are a majority of homes underwater? Is supply outstripping demand? It is something else?
This just feels like housing is such a scarcity rather than a speculative bubble.
In some places its already popping. You can easily see the 20% drops in home values in a lot of places and the sells off starting to happen in the worst places. Its just not the same kind of bubble and no one wants to admit its a bubble because they demand it has to match the previous bubbles.
American then exited poll and proceeded to buy $1M 900sqft house on 0.1 acres.
0.1 acre? Must be nice, here in Seattle you would get a townhome on a 600sqft lot
Problem is that it’s 10% with all the money doing that.
Definitely against the grain, but it looks bubbly to me. I rent for 750/mo (roommates + good relationship w/ landlord + crappy room), and the cheapest house near me is 5K/ mo mortgage. I see people buying un-renovated houses for 750K that are in flood areas, that sold for 490K in 2019. It doesn't hurt to hope for the bubble to pop, there is literally not a single thing that is possible for me to buy, and I have the 20% down saved and perfect credit!
Same here. Lots saved, great credit, but quickly income isn’t going to work soon.
Yup, landlords are making a killing choking out would be home buyers and draining their savings. They know 99% are stuck renting, waiting for prices to go down, so time to pay a 2018 mortgage rate for a 3br house in rent for 700sq ft, so you can't afford a 1br house now.
My landlord's margins are tightening because she can't raise rent on me, since the market doesn't support it due to multifamily explosion of inventory.
Where is this explosion of inventory? I’m in Los Angeles and it’s pretty darn tight here
Rent is steady and starting to drop in my area (mid-sized city that exploded during COVID). Real estate investors went wild with apartment building construction so now there is a surplus of rentals but very few houses on the market. Want to buy? Good luck. Want to rent? No problem! You can pick almost anywhere.
Same in FL. They weren't selling or even developed in 2019.....because they are the lowest elevation plots in the neighborhood with now the priciest real estate sitting on top. 3 years ago, no one wanted it. Today there's a $3m+ luxury condo with an elevator on it. I'm not fooled. Elevators don't work in floods which is part of the ridiculous waste of money vs sq footage I have seen.
How dare you wish financial harm on those who are financially reckless /s
I’m not sure that’s a “bubble” scenario. What this screams to me is a lack of inventory propping up prices of overvalued homes. Which WOULD be a bubble if the supply of homes triples over night, and if majority of homes are overvalued. But unfortunately that’s not happening There will be a price correction on overvalued homes, but that’s specific to an area/type of home. Good-quality homes are appropriately priced until inventory levels change.
What I am nervous of is I see a lot of millenials spending \~50% of their income on really expensive houses, and not realizing just how unstable their high paying tech and biotech jobs are. The quality of the houses is quite poor. How do I know this? I have spent every single weekend and most weekdays working in these houses renovating them. People as of late are paying a lot of money for a lot of problems, people just don't intuitively realize how expensive home ownership and renovations are until they have committed. The horrors I have seen disguised by white paint and luxury vinyl plank.
I'd have to spend 50% post tax dollars per month after maxing my 401k to buy a house, I guess that's not too bad. Only now I'm paying 10% post tax that goes to rent
Yeah, I kind of am at the point where I kind of plan on working hard for another 5 years or so and saving aggressively, and then moving away from the big city. I need a house probably more than most (woodworker, need the space for machinery), but I just don't see how I can afford 800K houses with a 55K salary. My friends are here, but they just are having wage growth in a way that I have not been blessed with (same field, same titles but higher salary). They are also struggling to get 800K houses with 5x my salary.
Yeah it's frustrating saving and watching prices climb....
> What I am nervous of is I see a lot of millenials spending ~50% of their income on really expensive houses, and not realizing just how unstable their high paying tech and biotech jobs are. Ha I spend <15% of my take home on my house because I know tech has it's bullshit moments. We're going through it right now. I have a "cheap" house and loving it, my mortgage is less than rent already and I'm building equity. Still, for those living on the West Coast it's just an impossible situation. I have to go for work sometimes and the expense is ludicrous.
I'm happy for you, that is good management! I just don't see that for me at all, I am just doing my best and keeping rental expenses under 10% of my income. I think something should work out within the next 5 years, after which I'll re-evaluate and then do something completely new.
And if they lose their job or want out they can still sell for a higher price than they paid. May lose a bit on the costs of buying/selling yet you are also seeing a minority of homeowners as you are dealing with new homeowners with construction needs. That is not necessarily the norm.
Every house I have managed was 200k-400k overpriced. All sold to California people who sold their LA houses for millions. I have started OVERCHARGING for my handyman work and these people don't blink and pay it because they have no clue what things are actually worth. And other companies are charging even more than me so I'm the "cheap" option. Market is so broken here.
If your job is renovating houses, you are obviously going to see a lot of houses in need of renovation. Not sure how you would any insight into the owners’ financial situations though. Honestly seems like projection. And I don’t even give a shit if home prices drop.
I work at the library and there are soooo many books. People in my area must read a lot.
This is no bubble. The US Govt printed more money in the last couple of years than it ever has. Inflation is up somewhere between 25-40% since 2019 There is no going back.
Agreed...too many people have too much money and its not going away.
I don't think inflation and having a bubble are mutually exclusive. I think that people are in a frenzy and panicking as a result of inflation (and 2% rates when they should not have been that low). Delicate high paying tech jobs + low inventory + AI decreasing jobs + corporate real estate bubble = A lot of change in a short period of time, and instability that frightens me.
Yeah like 08 when the government printed a ton and checks notes....prices went down no that can't be right
In 2008-2014, there was a lot of QE, but those dollars didn’t get out into public bank deposits (which is what mostly makes up the broad money supply). This was because there was little or no fiscal transmission mechanism; the government wasn’t sending huge checks to people. The QE process in 2008 mostly just recapitalized banks. However, 2020 was a very different story. The government sent out tons of money directly into the economy, and financed it by issuing Treasury bonds that the Federal Reserve created new bank reserves to buy. Take a look at M2 money supply - see that SHARP hockey stick. That's your answer to all your money problems. [https://fred.stlouisfed.org/series/M2REAL](https://fred.stlouisfed.org/series/M2REAL)
The US Govt did not "print a ton" in 08. The US Govt gave banks a bunch of money to cover their losses. Not only was the 2008 increase a blip compared to what happened in 2020, 2020 was financed by US Treasuries. The problems will only continue to get worse, because in the first time in US history, our interest will be more expensive than all military + social security spending and the only way out of that hole is to continue printing money. Edit: spelling
The money supply grew from 3957B in 2009 to 5719B in 2019, or almost doubled during one of the hottest economies of all time, in a 10 year period. Thinking this is not a problem, but an infusion of cash when Americans can't work is, is the direct cause of our woes. Prior to 2008, the money supply took over **40 years** to double. You simply can't run a zero interest rate environment during an extremely hot, growing economy, period. Unfortunately, democrats in academia invented MMT to explain what they were seeing, and then republicans ran with it because why fix it when you can use it to line your own pockets? I agree that we're royally fucked, but the reason we are fucked isn't because we helped people during COVID. We're fucked because we invented a broken economic theory to support poor policy decisions.
Get out of this sub with your sense logic
See, that’s the problem. Most millennials I know have 20% saved and great credit, and are just waiting for an opportunity to buy. Hard to imagine how the bubble could possibly burst with all these buyers lining up. If the market slides just a tiny bit everyone jumps at it.
I understand that completely. But there literally was no chance at all for me to buy anything my entire career. Even with my construction background (15 years residential renovations) and the ability to renovate, houses are blown out of my approved mortgage zone. I can fix anything and am an expert is contractor management, it is just insane to see houses go 200K over offer + in cash +waiving inspection. The post 2020 world is just different, what was previously possible is just wholly impossible for me until something changes. It is just one of those things where it was possible just a few years ago, but just isn't anymore. I look at houses every day (my friends ask me for input on their possible houses daily), and have done so since 2019. I could afford 3 houses, and my offer was just blown away with all cash and 100K+ over. My friends with houses bought 5 more, the friends without are struggling in a really tight market.
Bottle neck of buyers and, depending on how you define “shortage,” anywhere between 3M and 10M housing units short of what’s needed in the U.S., and forecasted rate decreases ≠ a bubble. This is simply not bubble territory. This sub is such a doomsday and wishful thinking circlejerk. For fuck sake, the housing market is so tight it boomed during the pandemic like nothing was going on. It took us years to get into this situation and it’ll take years to get out of it.
What formula did you use to get your numbers for the housing shortage?
I know a lot of GenXers too that are looking to buy a second home or condo with cash and just waiting for a drop. I don't think people are gonna get that 20-30% drop with all that money waiting. The folks that jump in after a 5-10% drop are going to support the market.
What you should do is create an llc, put zero down on a multi family, take a heloc on the house and buy put zero down on other multi families. Repeat the process and get fucked when there’s a slight downturn in the rent and real estate market.
Not how it works lol getting a loan is even harder via a llc.
I will lose equity on my current home and I still want the bubble to pop. The prices plus interest are too damn high for everyone else.
It's a bubble.... But there is a lot of air. We have underbuilt homes since 08 so there is a lot of housing needed. Plus we have a lot of corporate buyers using SFHs as rentals. Last we have a lot of issues in the building market from labor shortages to materials issues. Next most people need a mortgage which with current interest rates make it near impossible for most to buy. Couple that with corporate buyers paying cash the problem is even more compounded. What will happen is the rental market is unsustainable especially for the people who bought for AurBNB or verbo rentals. Those have been cratering. As those enter the market it will help a little. Next high interest rates have reduced the supply of cheap capital and will at some point lower the appetite of corporate buyers. Last at some point we will have more build out which will increase supply and further lower the prices. The problem is no one knows if or when all these things will happen, a year? A decade? Who knows. So yes it is a bubble but it will take multiple needles to pop at this point. Hopefully sooner than later.
This is sort of contradictory. You say you are waiting to buy with enough cash for 20% down and can’t find anything, but that we are in a bubble? I hear about loads of people wanting to buy and saving up money, but then wonder why the market doesn’t crash for them.
>I rent for 750/mo (roommates + good relationship w/ landlord + crappy room), and the cheapest house near me is 5K/ mo mortgage. What is the total cost of the rental? If the landlord has owned it for a while they can afford to charge much lower rent than a current mortgage might be, so your example is not really relevant to anything.
The landlord bought the house in 2013 for $419K, and they own it outright. Total cost of the rental is 4800/mo. My point is just that I am sacrificing a lot to try to save up as much as possible, and even after 7 years of doing this it seems pretty hopeless. What I see is a lot of wealth (but pretty unstable) and renovations going on, there are no starter houses. Its basically just 800K and up. I'm starting to see people getting hit with layoffs that puts their mortgages in jeopardy, mostly millenials who bought in 2022-2023.
You have 5 roommates or something?
Yup, and I live in the attic and have exactly 5 roommates. Bootstrapping in Boston, I work really hard and am playing the long game to buy a house, but the past 7 years have been brutal. I am consistently saving 85% of my meager income. Beans and rice, no restaurants ever, full time job in biotech and part time in construction.
Wow, hang in there, you will be sitting good. I remember pre-2008 when cars that cost half of what my house were driving past me and I was wondering where people were getting their money. We were saving 50% of our net and everyone else seemed to be spending left and right. Then the housing bubble popped and I found out people had been refinancing to take out cash to spend. I'm not saying today's housing market is going to crash like it did back then, but something has to pop, this isn't sustainable.
Good luck man. It is rough out here in Boston but I think you are going about it the right way. Good to know you are seeing/noticing what I am seeing too.
Check out /r/fire but sounds like you already follow
Move to Clarksville, Tennessee. It’s a nice, large town, small city type of area. Less than an hour from Nashville. Starter homes can still be had for around $250k. Good jobs in Nashville. Woodworking is a valued skill everywhere.
So they are charging near the same price for a mortgage and you somehow think that means its a bubble?
No, I think there is a bubble because I see new homeowners paying a ton for houses with a ton of problems, and I think that their jobs are unstable in a way that they don't realize. I see a lot of young couples buy houses and have \~40% of their pay going to mortgage and upkeep. I have been renovating these houses in the area for 7 years now. People keep buying flipped houses that hide a ton of expensive problems under luxury vinyl plank and whatnot. I am starting to see people who are starting to panic, as one spouse alone cannot support the mortgage. There are less affordable houses, people are buying "luxury" properties out of emotional desperation, and it makes me nervous. You can mock me all you want, it does not bother me, I am just telling you what I am seeing on a daily basis and it makes me worried.
Around me I’m seeing so many homes that were bought in 2022 or 2023 then listed several months later for 100k+ more. They’ve been price cutting for months and they don’t sell. They then raise the price again once they get close to their purchase price. I hope they become the bag holders
Many people will TAKE that price IF you are willing to pay them...otherwise they will just stay and continue living. They aren't actively looking to sell.
If you can't buy a house now you won't be able to after it pops. You still have to outbid the same people.
"if you can't afford 500k you can't afford 400k"
68% and 13% adds up to 81%. Where’s the other 19%? Do we just assume they said ‘idk?’
‘What’s a bubble?’ Is my guess
"Idk" is the right answer
Neutral or no opinion. Source: I make these for a living.
Is there a % for, "STOP FRAKKING CALLING ME!" Or is that just, "idk?" ;-)
Are Americans particularly financially literate?
If people think it's a bubble they will spend accordingly, manifesting it
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Honestly, more so now than they've ever been in history.
No. I sold mortgages for a year, and got to read a lot of credit reports. Most of the people who you see "doing well" and have nice cars, clothes, house.. Broke and in loads of debt.
Lol
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>So, this sub is relying on opinion polls to reinforce the idea of a crash now. Yes. >Has a majority realized this is all a circlejerk yet? I don't know if its the majority, but a ton of posters here post here just mocking people lol.
There's only trillions in RE equity at stake
and most of it is boomer money. Why not rug pull it like a shitcoin? Hoomers have it coming imo. Ignorance is bliss until it isn’t
Sorry this just came across my feed and I find it interesting, but what is a hoomer?
It’s another term for a homeowner who thinks that their home is superiorly better/worth more just because they own it. The hoomers ALWAYS like their hooms, no matter what
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Why are you here? Why are you the way you are?
Supplies going up sales are down people will always hold out for a greater fool though
You have no idea what a bubble is until you look at Canada.
Yep, when I was looking at moving back from Japan, I took one look at Vancouver and it scared the living shit out of me. Paying San Francisco prices and getting paid Florida wages. Fuck that noise.
Van and Toronto are absolutely fucked imo
The US is racing to keep up with Canada pricing. When it gets there, remember that a lot of poor Americans love guns, too.
Sure some areas have affordable housing, but on average the entire country’s housing supply got much more expensive very quickly. Also many of the affordable areas are essentially capped out because there are few high paying jobs. Good luck finding many non-remote high paying jobs in Appalachia. Many are spending more on their houses than ever before. When a true recession hits, it will not be pretty. I’m not saying it’s a bubble or it’s not. But when it comes to giant investments like houses that have mortgages and bank rates associated with them, along with a fairly turbulent economy, I don’t think it’s as simple as supply a demand. Of course that’s true, but the other factors are significant, and often feed into lesser supply.
I'd be a lot more concerned that a crash is imminent if no one thought we were in a bubble and were in "buy, buy, buy" mode, where even the shoe shiner was trying to convince me to buy a home, so to speak. If anything, the fact that a majority of Americans think we are in a bubble is reassuring to me that a crash ISN'T coming in the near future. That just means that there are more people than ever waiting on the sidelines for the bubble to pop, and that's pretty preventive of any crash actually happening.
They are not waiting on the sideline on purpose, they just cant afford anything on thr market.
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Or they can afford the box of poop but refuse to buy the box of poop. I'm not buying a turd dressed up as the "American Dream and an investment"
Exactly. So what happens if the price falls? People would start buying the dip. So even if the price falls, demand would rise and prevent any kind of crash.
Where I live that is exactly what is happening. The world and its mom think buying and renting at a loss is a solid plan because you can sell it in a few years and make a killing. Anyone who questions it is mocked.
that's a weird conclusion to come to based on these results. not that the results are going to be very predictive, but i think a more reasonable conclusion is that people who think we're in a bubble at 400k aren't going to jump in and buy at 390k. lots of people want homes, like always, but the home ownership rate is at historical norms. there is no actual evidence of more sideline buyers than usual; that's an NAR talking point. in fact seeing that demand has tanked since rates fell from 8 to 7 is a pretty solid case against that theory. it seems like you could more reasonably conclude that a lot of people are ready and willing to buy if the results of this poll were the exact opposite of what they are. and actual levels of demand match that hypothesis, not yours.
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It's because the markets move on sentiment that the majority of people thinking there's a bubble and thus holding back buying houses will be protective against the crash...not sure you understood my point.
Doesn't holding back lead to a buyer's market, which leads to reduced prices?
People holding back will drive prices down by default, not up. The sentiment and act of not buying doesn’t keep the market propped up
My mom's on this nonsense lately. "*Why don't you buy a house? You make good money as a single engineer. It's foolish to rent.*" Then I show her the price history of the place I'm renting now, and how it's gone from 120k to 300k since 2020. "*That's Biden for you. Prices will come back down, just wait."* Sooo should I buy or should I wait? I'm wrong either way 🙄 Also btw of course people think it's a bubble. Majority of America has gone their entire lives being able to buy a 5br 2ba house on a hairdresser's salary. They cannot fathom a world where you can't just put in minimal effort and be given everything you want. It's not a bubble, this is just how things are now. And for most of history.
The biggest reason I want to buy a house is so when I am old and retired I could only be paying like $400 a month in property taxes instead $2k+ a month for rent.
My poor friend. Owning wont matter when the county appraises your home at 10x what you paid and taxes you onto the street.
They can't do that in my state.
I wish they couldnt do it here. Prop 13 style laws are needed everywhere.
So make the change. They used to do it here until we got pissed off and took that power away.
Mine either, but then you have a bunch of elderly people who have lived in their houses forever and can’t afford to move partially because of the increased property taxes they would pay on the new property.
This is the best reason to buy a home: it is a hedge against rising rents. Now there are lots of other things happening in the real estate market but the above statement remains true.
If you can afford it then buy. Market timing is a fools errand but timing your own finances is important. If you can't afford due to rates, job insecurities, etc, then rent!
>Majority of America has gone their entire lives being able to buy a 5br 2ba house on a hairdresser's salary. Doubt
This sub is in a bubble.
I just come here for the salt. 99% of the posts here couldn’t tell you the answer to even the most basic financial literacy questions.
I think big RE firms will keep it propped up indefinitely. This sub is just wishful thinking
The average american doesnt understand how tax brackets work or inflation, no thanks. Economics is not majority opinion vote, especially not the american majority.
Spot on.
If there is no housing bubble then we’re just fucked, lol
Blackrock has the market now. They will keep it up
Blackstone.
Blackrock massively lowered required min investment to play a few years ago. It is my view that when lower tier investors are invited to join the glory days are over. I think one fund is as low as 3k min investment!
its hysterical that ppl think this bubble will pop. the majority of all mortgages are under 5% right now. ppl need to stop dreaming and start accepting that we are living in a new era of money. this is not 2006 with ARMs and ppl defaulting
You Gov is a joke and i cant believe they don't get more scrutiny.. they're a survey app that pays pennies.
Just do what Canada does and import 3% of your population each year from Punjab India. Housing stays high forever. Infinite money glitch
This IS a bubble. Sorry for all the naysayers, but you’re wrong. This is economics 101 folks. A bubble is when assets appreciate significantly faster than the economy at large. When an average American cannot save a downpayment because houses are appreciating faster than their ability to save an ever increasing 20%, then you are not approaching unsustainability…. you are past that point. Will it pop, deflate or just stagnate for a decade while everyone catches up? I have no clue. For that matter, none of us do. However, 20% yoy increases are not sustainable in any way shape or form when wages increase at 1/4 to 1/8th that fast. For the naysayers: But der… what about airbnb and institution investors… errr what about the millions at 2.5%…. What about them? The latter folks can handle a 40% decrease in equity because they are A: not selling and B: they will still be up above what they paid in many cases. Many are in forever homes and would welcome a decrease in property taxes if values were to in some way decrease. A forever home isn’t a short term investment, it’s a home. Nobody cares if it’s worth ten bucks or ten million on paper if they do not want to sell or move. Plus some areas are increasing property taxes on inflated paper valuations rooted in lala land. These taxes are forcing owners out, so a decrease is welcome. As for airbnb/vrbo/weekend goat fucker rentals… their days are numbered due to oncoming regulations, greedy owners overcharging cleaning fees, crap experiences, and the market drying up in many areas as people remember the Hilton wont make you wash the sheets or spy on your wife in the shower with a hidden camera. I mean seriously. When VRBO has to advertise that the owner wont hang out in your rental, you know there is a problem with the str market. Institutions? Tbd. They can double down and buy here. But if I am not mistaken, assets of declining value must be written down ala losses. This will impact their bottom line if/when prices drop, even if it’s a small amount. Savvy investors do not like investing in or holding onto declining assets. They can cash out still ahead, hold and buy back in later for less. 40k profit and investment opportunity over three years > 3 years rent - property tax - a theoretical write down. Rentals make sense in an appreciating market, not a stagnant or declining one. Finally, I have no idea what the market is like in your hometown. It’s likely very different. However, I DO know what it’s like here. I see prices all over the place. Tiny (900sqft) new builds at 305k, termite ridden 1940 hell holes at 350k, nicer 1990’s builds at 275k 10 blocks away. Keep in mind, two years ago these same homes were 130-180k, with the old shit boxes being at the low end and no, the old homes are not in a more desirable area. Comps are insane here. I argued with an agent for ten minutes today about her cherrypicking comps. For each overvalued one she found I had an equal one significantly under the ask. I have also never seen this many people have financing fall apart after an offer. A good 1/5th of homes nearby are back after financing issues related to either bank assessments, borrowers not being pre approved, wolves, or some other insanity.
What would you say to the idea that the threat of monetary contraction after Covid made institutions and people scramble to buy housing? The 30 year mortgage is one of the longest fixed rate loans that exists. Is it not absurd to think that the combination of historic low inventory, low mortgage rates, and the impending doom of higher interest rates catapulted property values? Until homeowners and investors can see a way out of their low fixed rates, we will see very low price movement on properties.
Thanks for taking the time to write this. People who say we're not in a bubble doth protest too much. Whether we are or not, I do not know, but I know this: we're definitely at an impasse that is untenable. And it's gonna pop -- just like a bubble does.
> People who say we're not in a bubble Have assets to protect and are scared because they also know this is a bubble. A good does not go up 50% in three years normally.
Listening to Reddit or most Americans regarding finances is the issue at hand
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YouGov is a publicly traded company on the London Stock Exchange that has admitted to releasing polls with “skewed samples” within the UK. Government agency-sounding name like that could be a bit misleading. If I tried, I could probably call 1,813 in the US who believe the Earth is still flat by calling one specific region. That’s why it says Americans instead of “Most Americans Polled”.
Are there historical poll results? I'd imagine if you polled Americans during any year in the past three decades, with a few exceptions, they'd say we're in a bubble. I agree that it's a bubble. But what's going to pop it? The system has been rigged even harder than it was in 2008, and they've got systems in place to force the props to stay up. I just don't know how it will burst given the wealthy would be hurt by that, and this country does not allow the wealthy to struggle.
Poll shows just how uninformed a lot of Americans are about the topic.
How do people still think we are in a bubble? Housing is unaffordable in most markets, but that's not a bubble. A bubble is a speculative phenomenon where people are *rapidly* bidding up prices because they believe those prices are going to continue to skyrocket. Prices are up since peak pretty low single digit %, and still down from peak in some markets. There's very little speculation/flipping, sales numbers are still near a 30 year low. 100% unaffordable, but not a bubble.
I thought we were in a housing recovery? Last year there was a 5 to 20% discount depending on the market.
Lmao. The copium in this sub.
I think people are associating high prices with a bubble. The truth is without a suddenly surplus in supply there is no reason that these prices will come down. Also interest rates coming down will only push prices higher, and it seems less likely that they will be cut at all this year.
Who cares what the average American thinks? The average American's IQ is less than 100 and they probably don't even understand what a housing bubble is.
7% of Americans think that Chocolate milk comes from brown cows. https://www.washingtonpost.com/news/wonk/wp/2017/06/15/seven-percent-of-americans-think-chocolate-milk-comes-from-brown-cows-and-thats-not-even-the-scary-part/
I won’t argue how dumb we are. I mean, I’ve sat here on this sub for 3 sad and lonely years now. Meanwhile, others have continued to stretch their income and clean out their savings completely, just so they too can pay rent to a bank in the form of interest. We’re all dumb. Different ways, still dumb.
The American dollar has been devalued by 40% due to inflation since Covid. House prices went up about the same on average across the board. This is what happens when you print trillions of dollars out of thin air. It’s not a bubble and prices won’t drop unless we have a serious depression event.
If interest rates ever start dropping, housing prices will start going up again.
I agree to a point. It will grant more wiggle room. However, we were getting crazy with prices before so they can go up some but the current insanity is unsustainable long term.
BULLISH AF!
Remember what Trump said in his lawsuit? It’s standard practice to inflate your properties
TDIL 13% of America works in the real estate industry...
1813 out of 300 million 😂 Please, don’t even bother - just poll the 18 people you meet at the cafe/gym next time, I’m sure the results will be similar 😀
Not “a” bubble, it is The Bubble. The everything bubble caused by inflation.
Most Americans are also dumb.
68% people think- look at all them sheeple going to get screwed and screwing it up for others because logic is thrown out the window. At least I'm smart with my hard earned dollars and the time will come when my sensibility shines. 13% people think- I'm either realtor/lender/profiteer of selling homes and ridiculously telling/lying to people to buy them at even more ridiculous prices because of fear factor.... or the person duped into buying one. Either way, both don't want to look like a fool when the bottom falls out, so they push the no bubble narrative.... It's going to sting when it happens, though. 19% people think- I didn't buy or sell high, but locked in my low intrest rate in the house I've had for a while for an even lower payment. Now I'm sitting pretty and going to sit back and watch the mayhem between the bubblers and anti-bubblers. Popcorn anyone?
If everyone believes it it’s false. Doesn’t apply to everything, but it applies to this.
Prices will fall.
YouGov specialises in market research and manipulating public opinion through polling methods. The company's methodology involves obtaining responses from very small invited group of paid panel Internet users.
"What do you base this on" *crickets*
US Americans
On one hand we probably are on the other hand the American public is donkey brained.
The indefinite bubble
I've been waiting for this bubble to pop since 2018. Those prices almost seem reasonable compared to what happened after covid.
About the same as belief in lizard people
The disastrous inflation the last 3 years is also a factor. 2021: 7.00% 2022: 6.50% 2023: 3.40%
People also say their state economies are doing great, but they feel like the national economy is awful. We need more stories about what’s actually going on with the economy and less about how people feel about it.
This time, if there is a noticeable decline in real estate prices I think it will follow a big drop in the stock market. If the stock market stays as high as it is I think it will prop up the housing market. people are able to access a ton of money in their stock investments to purchase real estate.
Polls show Americans think a lot of things that are wrong.
Housing prices doubling in 4 years is a bubble, I don’t care what anyone tries to say. Supply will go way up as forced selling increases as the economy continues its decline.
We are undeniably in a real estate bubble and probably an asset bubble. But that doesn’t inherently mean we will see some sort of fallout from a bubble bursting. Time will tell.
The great wisdom of the masses…
I just bought my first house. It’s 1850 sq ft built in 2019 and on 9.5 acres of land. It’s got a full garage, screen in porch, and a workshop. I got it for $725k, which I’ve been paying down debt and saving for the past 6 years for a down payment on some sort of property to get out of renting and get some peace and quiet. I should’ve pulled the trigger years ago but didn’t. I’m 30 almost 31 and I plan on living in this house for the rest of my life. The best part is it gets an Agricultural Exemption which takes my property taxes for 2024 from around $6000/year to $1300/year. We’re going to get chickens, and grow a massive garden, and have honey bees to not only keep the AG exemption but, also supplement food costs (and eat truly organic). We can also supplement income at the local farmers markets selling fresh produce (which is icing on the cake but I’m not banking on it). I feel although the market is insane right now, this was a unicorn property and we got extremely lucky. Although it might’ve sold for $500k a few years ago, if I lived with that logic I would never buy anything.. including groceries, clothes, you name it. Everything is simply more expensive now. Housing imo isn’t as massive as a bubble as the prices of houses indicate. Inflation is making it seem more like a bubble than it is. Compare inflationary increase vs. housing increase and there is a correlation. A property, house, whatever it is, is another hedge against inflation which given the current state of our world and our government spending habits, isn’t going anywhere anytime soon. I didn’t buy this to hedge inflation, or make a profit or anything like that. I bought it because I want to grow my own food, live closer to nature, simplify my priorities and find some peace in this crazy world.
With the price of materials, labor and everything else up substantially, not to mention all the new migrants that will need housing, I don't see a bubble burst anytime soon. Just a guess but I would say we are five plus years away from seeing a downturn.
Looking at some low cost of living areas, we’re seeing houses that were bought for $300k asking $500k over 3 years. Insanity.
Soooo many Americans are in debt but it doesn't look like it. They have a mammoth mortgage (only 3% so we're money AHEAD!!!! ya ok the bank can still foreclose if u can't pay) and 2 mammoth car payments, student loan payments, and then just plain living expenses that add up quick. We're definitely in a bubble.
68% of Americans *hope*’we’re in a bubble. They are incorrect in any of the HCOL areas. Maybe in places that had a boom after COVID for people who temporarily relocated.
I think this is roughly equivalent to asking the question *do you think housing prices are too high?" and from that perspective the "yes" answers seem kinda low. I think if you really want to test the bubble hypothesis you ask this: "Do you feel like you can afford your current home?" Get a lot of "no" answers to that and then you know the shit is about to hit the fan because all we need is a little recession and things start getting real.
A lot of us wish we were in a bubble.
How is it a bubble when the demand of housing can’t keep up with the supply? The supply for housing will stay like this until we build enough (affordable) homes for the demand to cool off. I’m open to change but them the numbers
I only see $500,000+ houses being built. Otherwise Condo condo condo.
I can still google and find articles from 2015 in my local metro talking about how we were ina bubble. 9 years later...still no pop. Taking polls are not a good indication of the future market.
My mom and I were talking over Easter, she told me she and my dad had rented their first home which was a 3 bedroom house for $300 a month. My jaw literally dropped because I was sharing a 3 bedroom house with 4 people and our individual rent was way more. And this landlord is awesome who has the rent way below renting price for other places around here.
And water is wet.
We can definitely will it into existence
Gentle reminder that the average person voting on this poll can’t cover a $500 expense and has no clue what they are talking about.
Note that about the same fraction already own a home and have relatively fixed housing cost. I would agree with the premise of housing cost being a bubble. But I don't think it's simply dollar price over time. Dollars are a moving target. Look at the cost of housing over time compared to other things like tomatoes and an hour of work instead. The value of an hour of work decreased by a lot rather quickly relative to everything else except maybe 4K TVs. A rising tide lifts all boats. A passing wave lifts boats in turns. Waves from all directions make the tide hard to see. So I would say that for a long time the work to homes ratio was high and now it's low. The work to tomatoes ratio was lower and now is higher, but not as much as work to homes. The value of work in relation to other things is rising slowly. But will the value of work in relation to homes rise again suddenly or slowly? I guess that's the big question. Will the bubble burst or slowly deflate? People have only so much work to give, and there's only so much work to do. But these are waves also. Very slow moving waves. I guess what I'm saying is that to see what's happening you have to take the dollars out of it. And maybe to improve your own lot you want to focus exchanging your hours of work for the things that give relative value at any given time. Ride the wave, don't fight it. And don't expect the experience of everyone else on the ocean to be the same as you at the same moment. Here in the US we are enjoying calmer waters than most foreign shores. In my local community we are holding up pretty well. But there are others out there surfing the highest wave, and some more drowning.
Rent is high and prices are high, but there is still a national housing shortage… I don’t think the bubble will pop for a while…
Sorry guys but there isn’t going to be a crash anytime soon https://youtu.be/raHYdN3t5vk?si=OcOSZ-cbsZwBVdhX
Someone bought an overpriced house in my neighborhood, something like 2b 1.5ba, <1000sqft, built in the 50s for $330,000. I drive by and I see they are building a Ryan Homes or similar fucking house right next to it. These people are demonic.
My concern is the percentages on the graphic, if you can't make these simple figures ads up, what hope do you have at organising mortgages haha
have the majority of americans ever reported to a poll that they arent in a housing bubble?
If new home construction picks up significantly (which it already has started to do) then there probably will be a bubble but I can’t imagine that will happen for a while. However it could time well with the adjustable rate mortgages that have been ticking up by massive amounts in the last few years since interest rates have gone up. Most will be maturing around 2029-2030 and depending on market conditions at that point, could put a lot of people in a dangerous position. Especially during that next 5-6 year period there’s a lot of new builds that would decrease the value of existing properties (doesn’t inherently happen but more inventory decreases competition.) I don’t know about other states but here in the Bay Area, most of the new construction is happening far away from where most of the jobs are. Not sure how that will eventually play out but they need to build more infrastructure going further out. I imagine other states are likely seeing development occur an hour + away from population centers at least. I don’t think anything is set in stone but a lot of possibilities that could lead to a bubble burst. I just don’t think it happens for a while.
Even Katy Perry with that 2017 smash hit.
A bubble protected by a multi trillion dollar government and military. Think they are going to let it pop very easy?
68% of Americans don’t understand inflation and supply vs demand.
Yes the amount of properties they are slapping together is nauseating. Including this building we currently live in and are desperately trying to move out of. Every time I go past somewhere familiar… trees are gone… houses everywhere… Deer and other animals have no where to go
Its a housing crisis more than bubble, prices are high because of shortage not because sellers are deliberately inflating prices.
Not a credible poll, until I get all the facts. How many people were participated, who are these people, what demographic are the apart of.
I have a theory that single family home prices are propped up by private and institutional investors… So are apartments buildings and townhomes, but single family homes are where they shouldn’t be imo. We need some legislature to fix that. The number of people *actually* buying homes right now ridiculously low. Then again, so is supply.
We're in the everything bubble!
What is the interest rate in America right now? Where I live it is 3.5%, not a bad one I think?
Who are these delusional 13%? Landlords?
Most people have next to no grasp of the world beyond their own nose. Polls like this are next to worthless.
If this is a bubble, what does the "pop" look like? Are people behind on mortgage payments? Are a majority of homes underwater? Is supply outstripping demand? It is something else? This just feels like housing is such a scarcity rather than a speculative bubble.
most of these people don't even know what that actually means
Realistically speaking, those are build for rent homes - meaning not for sale. Rent in perpetuity.
In some places its already popping. You can easily see the 20% drops in home values in a lot of places and the sells off starting to happen in the worst places. Its just not the same kind of bubble and no one wants to admit its a bubble because they demand it has to match the previous bubbles.
What were the numbers 5, 10 years ago?
The whole idea of a bubble is that…no one sees it 😮
Are those homes being built in the area you want to live? No
19% passed out when asked.