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Current housing surge vs. last decade's housing surge
Posted on 7/20/14 at 11:19 pm
Posted on 7/20/14 at 11:19 pm
I read this article a couple of days ago in the Seattle Times. LINK
Some key highlights...
I don't follow this stuff very closely and don't know a lot about it, but I've been debating whether to buy or rent in the near future.
My main question is this...
What makes this housing surge different than the one last decade? What has been done to avoid another collapse, if anything?
Some key highlights...
quote:
Home prices in many parts of King and Snohomish counties are returning to the peak levels they hit seven years ago before their historic plunge.
This could be the year the housing market finally regains those heights if frothy sales continue:
• In the first six months of the year, the median sale price of single-family homes in King County was $430,000, about 5?percent shy of the peak set in 2007.
• Half of the county’s 30 submarkets have either surpassed their previous price peaks or climbed to within 5 percent of them, according to a Seattle Times analysis of home-sales statistics from the Northwest Multiple Listing Service (MLS).
I don't follow this stuff very closely and don't know a lot about it, but I've been debating whether to buy or rent in the near future.
My main question is this...
What makes this housing surge different than the one last decade? What has been done to avoid another collapse, if anything?
7
Posted on 7/21/14 at 5:25 am to TDawg1313
Credit is much tighter. There are also quite a few millennials living at home that will start families in the near future I suspect.
Posted on 7/21/14 at 6:40 am to TDawg1313
Personally, I think we are in another bubble. Thankfully my market isn't really phased by the good or the bad too much. We don't get the crazy swings in value (good or bad).
If I were in a market where prices were approaching 2007 levels, I'd be looking REAL hard at why the prices are what they are. Cheap money has led to another building/investing craze.
Just a quick search shows that the median household income is around $65,000 in Seattle. So do you think a median single family home price of $430,000 is sustainable? Do you think there is much room for values to keep climbing in the near future? I don't.
ETA: Sales volume in Seattle is currently below 2009 levels. I'd say the adjustment is about to happen sooner rather than later in that market.
If I were in a market where prices were approaching 2007 levels, I'd be looking REAL hard at why the prices are what they are. Cheap money has led to another building/investing craze.
Just a quick search shows that the median household income is around $65,000 in Seattle. So do you think a median single family home price of $430,000 is sustainable? Do you think there is much room for values to keep climbing in the near future? I don't.
ETA: Sales volume in Seattle is currently below 2009 levels. I'd say the adjustment is about to happen sooner rather than later in that market.
This post was edited on 7/21/14 at 6:49 am
Posted on 7/21/14 at 7:02 am to TDawg1313
The credit is much harder to come by and at least in my area, its a supply issue. Supply is very low and good houses don't stay on the market more than a week or 2
Posted on 7/21/14 at 7:08 am to TDawg1313
Houses are in stronger hands from a financial health stand point. Buyers in the last 5 years have put more down than buyers in early 2000s.
Posted on 7/21/14 at 8:14 am to TDawg1313
quote:
What makes this housing surge different than the one last decade? What has been done to avoid another collapse, if anything?
This boom is happening in different places for different reasons.
Credit is much harder to come by.
Posted on 7/21/14 at 9:16 am to TDawg1313
IMO prices reaching all time highs isn't necessarily alarming, as housing prices have steadily increased (generally) over the last century. The prices during the housing bubble were artificially high due to absurd lending practices (encouraged by the gov't) and corrupt banking (also encouraged by the gov't).
Although prices may be creeping up again with the low interest rate environment, if you look at a graph of historical housing prices, they are much more aligned today with the historical uptrend. It's not nearly as "bubblish" as it was 6 years ago.
Although prices may be creeping up again with the low interest rate environment, if you look at a graph of historical housing prices, they are much more aligned today with the historical uptrend. It's not nearly as "bubblish" as it was 6 years ago.
Posted on 7/21/14 at 6:57 pm to TDawg1313
Housing starts are currently less than half of what they were at the peak. Multi family construction is moving the needle now, tougher lending standards pushing people away from single family units
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