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0 pointsleereeves2y ago0 comments

So am I. The median home price rose from 221k in Q4 2011 to 442k in Q4 2022.

That's doubling in 11 years, thus rising 6.5% per year on average over the long term.

https://fred.stlouisfed.org/series/MSPUS

Over the same time period, the value of existing homes, as measured by the Case-Shiller U.S. National Home Price Index (which measures the price of repeat same home sales) more than doubled.

https://fred.stlouisfed.org/series/csushpinsa

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s1artibartfast2y ago· 2 in thread

I still don't know what point you are trying to make or refute.

If you asking why I think it is completely unrealistic to expect a 50% decline on a short timeline, there are tons of reasons. You have to ask why housing prices doubled, and ask how easy or likely those underlying conditions are to reverse.

1) First, US GDP/capita went up by 60% in those 11 years.[1]

2) Similarly, US inflation in those 11 years was 40% [2]

3) US urban population increased by 25 million in those 11 years [3]

4) Construction costs/sqft are up about 90% in those 11 years [4]

5) More generally, Most Americans have 30 year fixed rate mortgages. This means they can and will avoid selling at a loss, so prices are sticky.

These are all factors without "quick fixes". Slow change can happen, but the fundamentals are sticky. If my house burnt down, it would cost $1M in materials and labor to replace.

https://fred.stlouisfed.org/series/A939RC0Q052SBEA

https://www.usinflationcalculator.com/

https://www.statista.com/statistics/985183/size-urban-rural-...

https://www.mortenson.com/cost-index

yterdy2y ago

>You have to ask why housing prices doubled, and ask how easy or likely those underlying conditions are to reverse.

Massive monetary expansion via QE and low interest rates. Resolved by raising interest rates and taxes on wealth holders (and particularly those holding unused or underutilized real estate) to deflate the asset bubble.

https://fred.stlouisfed.org/series/M2SL

s1artibartfast2y ago

Strongly disagree. That is an additional factor, but doesnt change most of the factors I mentioned. It doesnt change population or urbanization. It doesnt change the cost of labor or materials.

Underutilized RE is a red herring.

As long as construction costs remain high, supply remains low, and there are enough buyers that afford the price, you wont see changes.

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