Renowned housing analyst who predicted the 2008 home price crash weighs in on the current market

TheOilWizard said:
Property taxes in my area have increased exponentially in line with the home values. I understand that it's not a 1-to-1 connection (and that's an important distinction you made), but I do believe it's an influencing factor. Home insurance premiums as well.

The dramatic and sudden increase in home values has not helped me or those I know at all. I do appreciate your glass-half-full view, at least.
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That maybe the case but that is likely a function of your local government using appreciation to stuff its coffers but as has been said, the budget is what it is, and it is met by balancing real estate values with mill rates. It should START with the budget needed to do all things the town needs to do and END with what mill rate based on the current tax base meets that budget.
 
TheOilWizard said:
Sure, but all of that was turned upside down during this latest run. Any planning you did prior to 2020 is irrelevant. Again, I'm very hesitant to call anyone out in that situation as making a bad career choice.
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Throughout history, housing has always had its runs and corresponding declines.
My brother purchased his first house when interest rates were 15 1/2%. I purchased my first house when interest rate was 10 1/4%.
Even at that time, there was no inventory on the market and even our real estate agent who had kids our age said she felt sorry for us. She can’t understand how anybody can afford to buy a house that was in around 1989 or 1990.

No guarantees in life, and it’s an individuals demeanor to make things happen not politician. The people living in the present, have no clue how the people in the past lived and the people in the present live a heck of a lot better with far more luxuries than those of the past. The present doesn’t know how to do without. I am just discussing here and enjoy conversation.
Sadly, if they think it’s rough now wait one decade today will look like a piece of cake

By the way, why would anybody expect the world to be normal after just a few years of the entire world economy being shut down due to Covid. I personally was against the shutdown as others were. We are who we vote for and majority rules, though they make poor choices
 
alarmguy said:
Throughout history, housing has always had its runs and corresponding declines.
My brother purchased his first house when interest rates were 15 1/2%. I purchased my first house when interest rate was 10 1/4%.
Even at that time, there was no inventory on the market and even our real estate agent who had kids our age said she felt sorry for us. She can’t understand how anybody can afford to buy a house that was in around 1989 or 1990.

No guarantees in life, and it’s an individuals demeanor to make things happen not politician. The people living in the present, have no clue how the people in the past lived and the people in the present live a heck of a lot better with far more luxuries than those of the past. The present doesn’t know how to do without. I am just discussing here and enjoy conversation.
Sadly, if they think it’s rough now wait one decade today will look like a piece of cake

By the way, why would anybody expect the world to be normal after just a few years of the entire world economy being shut down due to Covid. I personally was against the shutdown as others were. We are who we vote for.
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Respectfully, you're quoting my posts and removing relevant information to the point I was making. I'm not sure if this is intentional or not, but let's please look at my quote in context. To rephrase: These are medical professionals. People who have to make career decisions YEARS in advance (due to education, training, etc.) before ever seeing a salary. Not necessarily unique by any means and can be applied to many career paths.

The point I was making, was that it was impossible to predict what would have happened before it did. These are high paying jobs regardless, so to say they made "poor decisions" was, in my opinion, out of place.
 
jeepman3071 said:
As a millennial I agree there is a lot of whining, but there are definitely some things the older generation doesn't understand about how life is different for us compared to back then.

I remember two of my retired neighbors telling me I was "foolish" for not getting a job right out of college with a pension. Meanwhile the same jobs they retired from earning a pension with their full six figure salary were both hiring and those benefits were no longer included.

I disagree with the post above stating millennials will be able to retire earlier, it simply isn't the case unless you do pretty much the opposite of the societal norms these days. Retirement benefits are MUCH worse at many employers now than they ever have been. I'm fortunate to work at a university now with good benefits, but it is not the norm. All of my previous employers the healthcare and retirement were pretty sad, but inline with most corporate benefits these days. I'm very fortunate, but I have also never taken on a car loan, and was able to work full-time all through college to graduate with no student debt while also owning a business. Those are not the norm for most people these days. I have a few student employees who are also commuting and working full-time like I was during college, and even for them there is no way they will be in the financial shape I was in when I graduated. I'm not saying "oh life is so hard now" but times have changed. It is no longer financially possible to work a run of the mill part-time job, pay for school as you go, and also live in an apartment by yourself like my parents did. You wouldn't even qualify now.
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It is different.
There haven't been any major world wars to cull the herd temporarily wiping significant amounts of industrial capacity off the global map.
Knowledge is somewhat free so in many professions competition is global rather than local.
Increased capital mobility has made it easier to tap into the global labor pool.
The cost of post-secondary education has exceeded the earning capacity of many degrees. Policy makers for decades focused on the demand side (i.e. cheap student loans) rather than supply.
Companies realized the unsustainability of traditional pension plans.

Some of these changes started in the 1990s and not a lot has changed.
 
TheOilWizard said:
Property taxes in my area have increased exponentially in line with the home values. I understand that it's not a 1-to-1 connection (and that's an important distinction you made), but I do believe it's an influencing factor. Home insurance premiums as well.

The dramatic and sudden increase in home values has not helped me or those I know at all. I do appreciate your glass-half-full view, at least.
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Your property taxes will continue to increase even if house prices in your area decrease. It just costs more for firefighters, police services, office staff, department vehicles, etc. Where does that additional money come from? Property taxes.

And because it would cost more to rebuild or repair your house (construction wages and materials cost more) and because there have been more storms, floods, and fires, your home owner's insurance will continue to increase too. Insurance companies are quite content to pay the bills and pass along the costs.
 
ecotourist said:
Your property taxes will continue to increase even if house prices in your area decrease. It just costs more for firefighters, police services, office staff, department vehicles, etc. Where does that additional money come from? Property taxes.

And because it would cost more to rebuild or repair your house (construction wages and materials cost more) and because there have been more storms, floods, and fires, your home owner's insurance will continue to increase too. Insurance companies are quite content to pay the bills and pass along the costs.
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Yep, completely understand and agree. However, I do believe it's typical for your tax bill to jump with higher property valuations because I've seen it happen again, and again, and again. At minimum it's an influencing factor because the taxable "pool" is higher. Also, sometimes there is a difference between how things work on paper and in practice.
 
I own one housing unit. The fact that its value on paper is twice what I paid 10 years ago doesn’t give it more utility. In economic terms that growth was unproductive. It’s still one housing unit. The next guy will pay double for exactly one housing unit. He will also pay a lot more in taxes since tax increases on your primary residence in SC are capped at 3% per year until you sell.

It’s no different than when used car prices doubled during the pandemic. It seems everyone could easily understand how stupid that was but fail to see it with housing.

The financialisation of the family home is counter productive.
 
Lots of people 35 and younger have given up hope of home ownership and the American Dream…… especially if the average home they want to buy is 10-12X their salary.

I mentioned previously in another housing thread that my dad supported a family of 6 on an airline A&P mechanic salary.
Bought a new 3/2/2 house ($33K) in 1970 and back then it was only 3-4X his salary.
Stay at home wife to raise 4 kids and discipline in the home.

^^^^
That’s impossible today with only 1 paycheck.

—————————-

I helped all my kids buy houses before the age of 27 and glad I did before housing went crazy after Covid.
 
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goingplacesanddoingstuff said:
I have more success than most boomers and still the line is “quit whining and get a job.” I have a job, investments, etc.

The problem is that the system is degrading faster than successful young people can keep up. Their lifestyles are in severe retrograde, even as they continue adding to their success. We’re running on a treadmill that is increasing in speed.
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I agree with everything you said.
 
Dave Hess said:
Lots of people 35 and younger have given up hope of home ownership and the American Dream…… especially if the home they want to buy is 10-12X their salary.

I mentioned previously in another housing thread that my dad supported a family of 6 on an airline A&P mechanic salary.
Bought a new 3/2/2 house ($33K) in 1970 and back then it was only 3-4X his salary.
Stay at home wife to raise 4 kids and discipline in the home.

^^^^
That’s impossible today with only 1 paycheck.

—————————-

I helped all my kids buy houses before the age of 27 and glad I did before housing went crazy after Covid.
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Some folks are giddy over the current housing market because it gives them a sense of status or superiority over others. "I own a house and you can't afford one!" I wonder how many of these folks have kids, grandkids, etc.

As a long time home owner, I'm very worried about home ownership slipping out of reach for the average family. Like one of my teachers used to say, "the world doesn't revolve around you..."
 
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What I see here is that some of those of us who are boomers are crowing about how hard we worked and shrived to afford our current fortunate position while the younger generations just need to work harder and they can also prosper.
It ain't like that. All of us who have done well also benefited from various breaks along the way.
The world is much harder now for the younger folks to prosper in.
Those of us who were fortunate enough to have matured into a world of cheap houses and good paying jobs with real pensions should be more grateful for what we have and less critical of those now coming into middle age.
 
fdcg27 said:
What I see here is that some of those of us who are boomers are crowing about how hard we worked and shrived to afford our current fortunate position while the younger generations just need to work harder and they can also prosper.
It ain't like that. All of us who have done well also benefited from various breaks along the way.
The world is much harder now for the younger folks to prosper in.
Those of us who were fortunate enough to have matured into a world of cheap houses and good paying jobs with real pensions should be more grateful for what we have and less critical of those now coming into middle age.
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This. Agreed.
 
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