The Boomer-B-Gone Virus might speed that along.***

1) The driving force of the current market is NOT wild speculation. People are buying homes to live in and paying cash or a low loan to value mortgage meaning they have large equity in their homes. People don't walk away from large equity like they do mortgages with little to no equity.

2) Inventories of homes for sale are at 50 year lows. Supply and demand. Older home owners are not selling their homes and moving to condos or smaller homes as often as they have in the past.

3) The spread between home prices and rental rates is small in many markets meaning the difference between a mortgage payment and a rent payment is small. When rent prices fall well below mortgage payments, leasing a home becomes much more attractive relative to owning.

4) Covid has provided the freedom to work from anywhere you can afford a home, which is causing people to move to the Sunbelt etc.

I don't pretend to know where things are heading, but this article does a good job of laying out the current scenario vs the bubble of 2008.

https://fortune.com/2022/04/14/us-housing-market-real-estate-crash-prediction-metric/

This is not the 2008 housing bubble all over again—but a little-known metric can tell us when the next crash is coming

Unlike the dynamics governing the last ramp-up, the driving force today isn't wild speculation

Halena

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Re: Good article on housing market compared to 2008.

Jul 8, 2022, 2:54 AM

Admittedly there are a lot of things that are covered in this article that have shown up in other pieces or threads here. Namely millennials now entering the housing market after a bit of delay following GFC, low housing supply due to more cautious builders after GFC, boomer generation staying in houses longer so not selling, material costs (notably lumber) rising, people moving from VHCL to HCL or MCL areas, fewer people putting homes on the market during the pandemic, etc. that are causing the prices to go higher. Like many things during the pandemic the fundamentals (if you will) were already there, but the pandemic catalyzed them. The article does a good job of putting all of this information in one place (lots of good references from the article on all of these points).
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Estate Agents Crosby | Kuavo

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Also think Bill McBride makes a good point of tracking inventory (not demand) as it is a bit more predictable. It seem inventory is starting to rise, which may mean things start to change in the future. They are speculating a year out, but who knows. This quote stuck out to me:

Still, rising inventory is one of several signs that we may have reached peak ludicrousness. The share of homes that have to reduce their price to sell is finally ticking up after a historic plunge, according to the real-estate research firm Altos Research. Housing starts are back to their highest levels since before the Great Recession, even with lumber prices in the stratosphere. Although there aren’t a lot of homes on the market, there are a lot of new homes on the way—buyers just need to be a little patient.

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Good article on housing market compared to 2008.

I read something similar a while back that said something

I don't think low interest rates caused people to "take on

We're about 20 year from there being a ton of houses for

Perhaythe ocean ms could decrease home inventories post Boomers?***

Perhaps oceans could decrease home inventories post Boomers?***

Re: Good article on housing market compared to 2008.

what is VHCL to HCL or MCL***

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