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Monday, September 26, 2016

"Home Prices Are Out Of Hand Again"

U.S. home prices appear to be getting out of hand again as the gap between home price growth and household real income growth is close to where it was just before the housing collapse.

It’s also notable, and worrying, that the housing market is back in a “flipping frenzy” with non-bank actors climbing aboard to fund the speculation.

Since 1999 year-end through 2015 home prices have risen 76% while household mean real income has grown less than 2%; the millennium-to-date gap between the two growth rates peaked at 84% during 2005-2006 and has risen back to 74% as of 2015 year-end. Gap at year-end 2007 was 75%.

This millennium through 2015 has seen average new and existing home sale prices rise 84% and 55%, respectively, despite the lack of income growth.

Existing and new home sales average prices peaked at $280.2k in June 2015 and $384k in Oct. 2014, respectively; both peaks exceeded levels seen during housing boom.

Over the same period outstanding home mortgage debt has risen 14%, though it’s notable that with the end of easy mortgage credit it has fallen 11% from its June 2008 peak.

Concurrent with this 11% fall, the homeownership rate (63.8% at 2015 year-end) has slid back to levels last seen in the mid-1960s.



Anonymous said...

The prices haven't caught up around here yet but they are going to soon.

Anonymous said...

The Fed has done a great job of inflating asset prices.
Everything cost more thanks to the Fed.
That is their stated goal.

Anonymous said...

In Salisbury????????

Anonymous said...

What is NEVER talked about is: New home prices have risen tremendously because of ALL the added government mandates over the years. This has caused resales to go up in price even though they don't have all the new mandated requirements. water, sewer, well, septic, electric, plumbing, carpentry, fire sprinklers, lawn sprinklers,paint,added fees, and probably a lot of other items have all added thousands and thousands to costs !!!

Anonymous said...

12:40 you are clueless. Without jobs or people with decent incomes, you can try and charge what you want, but there will be no buyer, leaving you to sit on that POS gem that you have owned for 30+ years and haven't put a cent into.

It is amazing the crap people are already trying to sell around here.
PLUS, you have absolutely no idea how many homes around here are in foreclosure or pre-forclosure status.

There are 100's that banks own and have not even put on the market yet.

Sorry but I could not ignore the depth of your stupidity.

Anonymous said...

You are correct on all counts.

However, if the banks drop their inventory onto the market it will cause price DEFLATION, right? Too much supply will cause prices to collapse.

Don't buy now. Wait longer and pay less.

Anonymous said...

I can't see where house prices are up in Salisbury.
Am I missing something??