Real estate prices

Howdy

Real estate, what do you think about it?

Is housing underpriced or overprised? Are we facing a new real estate bubble?
What say you?

 

The vast majority of the population cannot afford them and rising values lead to higher assessments leading to much higher real estate taxes.

 

If.... President Trump meets my expectations of becoming President #3 to deal with flaws in USA central banking policy........ we could be in for a boom in real estate but not necessarily in cities and towns.


Could a real estate boom plus better Fed policy pay off USA national debt?

Here is an article explaining how Lincoln and Kennedy tackled flaws in USA central banking policy.

https://www.michaeljournal.org/articles/politics/item/abraham-lincoln-and-john-f-kennedy

 

I think we are in a bubble. My house increased in value more than $5K in just the last 30 days, and Zillow predicts it will gain another $17K in value by the end of the year. If I were advising my kids, I would tell them not to buy now. I would tell them to wait. Inevitably, there will be a drop. During the economic slowdown in the mid 2000s, my house lost about $60K in value. That would have been the time to buy a house.

On the other hand, if you want to retire and move from a high-cost state to a low-cost state, this is definitely the time to do just that.

Seth

 

I agree that living on a acreage is the way to go. I have 20 acres in South Florida. However, I don't think it is an obtainable goal for most. Most of the developable acreages are being snatched up by developers. The EPA makes it extremely difficult to build on anything close to water in rural areas. Beyond the cost of the land and house construction costs, the permits and associated costs were over 250K. The EPA can tie you up for years. If you think you can just buy and build you are in for a shock. The EPA considers anything that at any time holds 4 inches of water as a navigable water way.

As for housing costs. The lower end home is going through the roof and competition for what is there is fierce. The reasons for this are many. First of all, construction costs are nearing $200 a square foot to build. With the high costs of lots in most areas, it is hard to build a starter home for under 300K. Second, the influx of immigrants are a major factor in this bracket. They are buying and renting millions of lower priced existing homes.

The prices of homes in the moderate and above ranges seems fairly stable. If they are overpriced or underpriced depends on your situation. If you are selling they are underpriced, if you are buying they are overpriced. In some areas taxes and association fees are deadly. If you build or buy in a growing subdivision without sufficient schools, be prepared to get raped. When they start building schools the costs are ridiculous.

 

Wow, someone hit the "they are low" option. S/he must be a realtor or a bankster.

 

That was me......
and what I meant was that they are relatively low in comparison to what they will probably be within
ten to fifteen years.......

President Obama, (frankly essentially all Presidents and Prime Ministers and the majority of world leaders since 1973 or 1974) ...
did what they could to keep the average citizen in a state of Pessimism.... vs Optimism.

One of the reasons that they did this for was valid......
they were trying to save us from going into a binge of OverConsumptionism......
So... they deliberately made it look like the national debts of both Canada and the USA
were spiralling out of control...... which gave politicians an excuse to tell the average citizens that
this and that necessary program could not be afforded at this time.

Did P. M. Pierre Elliott Trudeau save the world environment?

Here is a graph showing how P. M. Justin Trudeau's policy change of 1974 affected the
national debt of Canada:


https://www.michaeljournal.org/articles/social-credit/item/the-public-debt-problem?/plenty34.htm

 

What Prime Minister Pierre E. Trudeau did in 1974 was highly relevant to events in the USA......
if the brilliant monetary policy experiment initiated by P. M. Mackenzie King had been continued......
it would have been impossible for the Federal Reserve and Congress and USA political leaders to
accomplish the following situation in the USA:

https://www.michaeljournal.org/articles/social-credit/item/the-public-debt-problem?/plenty34.htm





Now that you see this you will better understand what I meant by the opening post in this other discussion:




Did going bankrupt in '91 prepare Mr. Trump for the Presidency?

https://en.wikipedia.org/wiki/Donald_Trump

Ask yourself this question..... could USA political leaders arrange for the USA national debt to spiral out of control........ giving political leaders in both major parties a seemingly valid excuse for their relative incompetence.......

if the following brilliant central banking policy had been continued to be applied a few hundred miles north?

I am thinking NO!



My 2006, 2008, 2016 and 2004 campaign writings as ART.



Quoted in my 2008 campaign:
http://www.michaeljournal.org/appenB.htm

 

You mean hyperinflation?
If farms would skyrocket, then flats in the city would plummet, I suppose.
Some people complain about a real estate bubble in Canada, btw., Toronto in particular.

 

It depends upon the state. Prices are absurd in much of California and NYC, primarily due to rich liberal Democrats banning new construction by regulations and costs to protect their precious property values. To rich white liberal Democrats, the greatest civil and human right is their property value of their real estate.

In Conservative areas, such as parts of Texas, a person can buy or rent a 1600 sq. ft 3-2-2 "starter/first house on a quarter acre lot for less than half of what they could buy or rent a 900 sq foot apartment in NYC or San Francisco.

 

Real estate has been overpriced my whole life.

One hell of a struggle & sacrifice and application of discipline it was to buy that first house on $5.25 an hour -- but after you take profits on the first house the second one is a little easier.

Most people give up a lot getting in position to buy and buying the first house.

Most people can't have it all, now.

 

This is total nonsense - counter to our whole system of economics.

Prices are high where people are willing to pay to live.

If nobody wants to live in some piece of Texas, then the prices will be low. They may be even lower somewhere in Wyoming or in the Dakota "bad lands".

If everybody wants to live in CA or NYC, then prices will be high.

I agree that problems arise when people want to live somewhere, but it's not because of some plot - it's simple economics.

 

Let's remember that we had 2008 already, and it's still incredibly expensive to live in certain places where everyone wants to live.

I'm sure there are places where the prices are high enough that they may fall some - thus one could call that a bubble. There are always minor adjustments.

But, that's not the overall picture.

 

Demand is high for a plot of grass to stand on and a roof overhead except where there's a high crime rate, drug infestation, and no jobs

 

I'm not sure what your point is here.

If someone wants to know how much people want to live in some neighborhood, all they have to do is fire up Zillow.com or whatever.

 

I know this may sound counterintuitive and ludicrous to many, but geographically speaking most of the U.S. has very little job opportunity.
That's why most of the people don't live in "most parts" of the country obviously. Majority of the population tends to be very concentrated into specific areas.

There are two types of areas with low house prices: those with plenty of open land, and those that used to have a large population but then decades ago the local jobs dried up and people left leaving behind plenty of old houses.

There's plenty of land out West with no water supply out in the middle of nowhere that's very very cheap. You also have parts of Alaska that get very cold in the Winter, where the cold lasts almost half the year.

Did you know over half the population in Canada lives further South in latitude than Seattle? Plenty of vast empty land, and for good reason, it's rocky barren tundra.

 

That's right. Expensive or even too expensive doesn't mean overpriced, necessarily.
The real estate might eventually decline in value, but it could be a wait of many many years. It doesn't make sense to try to time the market unless something big is happening and you're only adjusting your buying time by a couple of years.

On the other hand, it's easy to get ripped off and buy something that's overpriced. Especially for those with the inclination to immediately buy one of the first houses they see when they start looking.
Most of the homes listed for sale are the less desirable ones that are harder sells. That's why they're for sale in the first place. If it was a good home and a bargain, why do you think the current owner would be so eager to sell?
It could for example be a large expensive home with some fundamental design flaw.

 

The population of the US has exploded over the last 30 years of so. There are over a 100 million more people living here now than did in the 70's. These new people need homes, ergo more demand means higher prices. I don't have anything to back this up but I would bet that EPA regulations add at least 20K to the price of a new home. Shortages of concrete and lumber have pushed new construction costs up too.

However, the biggest factor in building a new home at this time is lot prices. As an earlier poster pointed out many places won't allow new construction due to lack of water. Other areas have very restrictive zoning. Lot prices in many cities have gone up 500% in the last 10 years.

Homes may be expensive but I wouldn't say they are over priced. Most home builders work on a 5% profit margin.

 

Although there will be occasional dips, the prices will continue to grow.

 

Yeah, especially if there is hyperinflation and a loaf of bred costs $200.

 

Well, here in Seattle it is true that the cost of living is going up, and is probably doing so in part due to the rise in the cost of housing.

However, I don't see evidence of hyperinflation on the horizon.

What's happening here is that there is strong growth in jobs that pay good salary. We're getting a significant influx of young, educated professionals who are being well paid. Today, the #1 occupation is software development.

 

You are right. These two things go hand and hand. If you bring in a bunch of well educated, well paid professionals, they are going to spend that money. That will include buying homes. Not only will they buy the new and higher end homes. They will buy the older homes and fix them up. I have seen this in several cities I have lived in and visited. Yuppies will take over older neighborhoods and dump insane amounts of money in the homes. When this occurs it pushes the prices of lower priced homes upward, pricing many people out of the market. Seattle has some of the highest priced real estate in the US. It is to the point that unless you acquired your home years ago, the majority of people can not afford to live there.

 

We need to encourage home ownership

even if it means differentiating a home property

from an income property.

 

I agree, there is no better investment. Some times you need to be innovative. I have one son who bought a home then had a couple of buddies move in and pay rent. They make most of his payment and make owning a home a lot less painful.

 

I support home ownership for national and local social stability effects.