Is Housing In A Bubble?

[Tomconroy]

I just saw the price of a new listing in my neighborhood. Housing prices are skyrocketing.
But this article suggests there is a genuine housing shortage. A two month supply of available houses, instead of the usual six months. And lending standards are staying firm. It's a little different from last time.

https://www.cnn.com/2021/07/27/economy/housing-bubble-fears-overblown/index.html

[TreasonousBastard]

1. In this area, it's mostly second homes, so who knows.

[70sEraVet]

2. I'm surprised the article never mentioned inflated lumber prices

as a factor in driving up home prices and in causing a drop in numbers of new homes being built. No builder wants to add $30,000 to the cost of building a home, that they might not be able to recoup if the lumber prices drop back before the house goes on the market!

[Laura PourMeADrink]

3. Yes agree! but declined since then right?

[Laura PourMeADrink]

4. Think prices will decline but it's really just impossible to imagine

They will decline back to pre-covid. Sellers have gotten a taste of making much more money than their houses are worth. It will take slow turnover to convince them.

[Warpy]

5. Hedge funds and other investment companies are snapping them up

I get cards at least once a week from friendly "persons" who want to pay top dollar for my house, cash, sight unseen. This is creating a bubble in housing prices. It's also a losing strategy since demographics are about to kick housing demand in the teeth as Boomers continue to die off and underpaid and overindebted Millennials and Gen Z are unable to enter the market.

So yes, there is a bubble and it will end about as well as the last one did.

[Tomconroy]

6. For what it's worth, Goldman Sachs thinks prices will

Go up for a few years and then level off. But higher prices are here to stay.


https://www.marcus.com/us/en/resources/heard-at-gs/housing-market