The Federal Reserve is watching housing prices increase and is claiming that there is a risk of a 2009-esque housing bubble. I am not so sure.
The prices of homes were skyrocketing in 2008. Everyone was in a panic to buy a house, flip it, and get rich. This isn’t that. I think that, unlike 2008, prices of everything are rising, and that is because the value of the US dollar is falling. That is, the US government has printed its way into this mess.
We are not on the verge of a housing bubble popping. We are on the verge of a collapse of the US dollar. In 2008, your home lost half of its value. In 2022, you are at risk of having your bank accounts lose half of their value.
SiG · April 9, 2022 at 10:08 am
The other argument for it being a housing bubble is the rumors that large investment companies (the name I’ve heard the most is Blackrock) are buying up houses at well above market value. My initial reaction to that was that they want material goods – especially land – because “they’re not making any more” and real estate will hold its value. Any material good is likely to be good to hold if the dollar is collapsing. There isn’t a currency in the world that’s based on any commodity – or wasn’t until Russia made allegations that they’ll back the ruble with gold.
I know you get this, but a lot of people don’t seem to: prices aren’t going up in the supply vs. demand sense (although there’s some of that from the “supply chain” crisis). The value of the food or gasoline or whatever is relatively stable. The dollar is collapsing in value. As Milton Friedman said, “inflation is always and everywhere a monetary phenomenon.”
Jonathan · April 9, 2022 at 11:03 am
I disagree, while I don’t think real estate is as frantic as it was in 2008 (particularly in urban Florida), the market is still unsustainable and there will be a significant correction. Rhe market is slowing and prices are starting to drop at the high end (high being relative to local prices, not national). Additionally, like with cars many people are really shopping based on monthly payment. As rates rise from 2.5 or 3 % to 5+%, buyers can afford noticeably less, so over time prices will drop. Of course, for a while many will hold out for former prices but eventually they’ll adjust.
A house here that was listed for 8 months just sold for $70k less than the original list price. Another one that we looked at and passed on finally sold after a year for more than $40k less than asking.
United States Of South Africa · April 9, 2022 at 2:42 pm
Sabotage disguised as incompetence in Jo Jo Brandon and the rest of Leviathangov as Hussein will succeed in burning it all down during his turd term.
The replacements have to live somewhere and BlackRock will make sure there is plenty of housing.
dave in pa. · April 9, 2022 at 3:36 pm
the dollar has being dropping for years. learned that from my grandfather.
he kept his gold coins, fuck FDR. his words. and yes, they buying up houses and land where ever they can. land is always worth something.
paper money, stocks not so much. a lot of people like gold and silver.
I have a little silver, but you can not eat it. or run your car/truck with it.
food always has value. next is shelter and then meds.
guns keep their value as a rule as well. the week link in that is ammo.
without that, all you have is a fancy club or rock.
a long time ago, when I started working, a pair of levi jeans was 7 bucks. top of the line timberland work boots like 12. and they where both made here. I have a savage model 24 I bought over 40 some years ago, still shoots as well today as it did the day I got it.
the thing is good or well made tools and the like will last you a lot longer than the dollar will. spend your dollars wisely before they become worthless the way these clowns are going.
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