[sambull]

We won't ever see a 2008 style price drop again. My house was going for $399K before I bought it in 2011 for $199K @ <4%.

Unfortunately we got lucky, the big players in REO weren't ready to 'close' that many packages last time. My first devops role was at a company that was working with big players to make sure next time this exact scenario presented itself the big guys will be able to deploy their cash to gobble these things up.

[josefresco]

> We won't ever see a 2008 style price drop again

That's what they told me when I bought my $250K condo in the early 2000's. Then in 2008 it was magically worth only $125K after being appraised a year earlier for 350K.

Never forget: "The market can remain irrational longer than you can remain solvent"

[VeninVidiaVicii]

I’ll go you one further — it seems like every time some prescient comment about the economy gets extremely upvoted, the economy does the literal opposite thing.

[itsoktocry]

>Then in 2008 it was magically worth only $125K after being appraised a year earlier for 350K.

And what's it worth today? What is the average annual price appreciation since you bought it?

Watching "home value" month-to-month is pointless.

[xboxnolifes]

And all of the advise i got for the last almost decade has been to wait for prices to drop.

[tossandthrow]

Risk tends to build up and be released in different ways every time.

It is right that it is not likely a credit crisis that will be the trigger next time.

But it could be hyperinflation - which would de-facto crash the housing market.

Right now the PE value for the housing market is really high, and it is not likely to continue up forever.

[LastTrain]

Go find a graph of housing prices 1963 to current, you will see that the events leading up to and including 2008 did nothing to help or hinder housing affordability in the long run. We are due a 2008 style correction but that will not make housing affordable either. The real problem is that household income stopped outpacing home prices in the 1970s.

[Workaccount2]

The core actual problem is that there are good places to live, and finite land in those places.

The next step up "problem" is that the income curve has flattened greatly in the last 75 years. So there are many more high earners mixed in that they are carrying "regular home" prices up with them.

In 1967 lower/middle/upper class ratio was 36%/54%/10%

In 2019 lower/middle/upper class ratio was 25%/41%/34%

The middle class is shrinking because people are getting richer, not poorer. That's the part you never hear people say. Probably because they don't even know it and just assume everyone is broke.

I can only imagine now, after the pandemic money shower (not stimulus checks), that this effect is even greater. Hell upper class might actually be at parity with middle class now.

[1]https://i.postimg.cc/NjKLYpjF/ulc2on31apqc1.jpg

[wahern]

> The real problem is that household income stopped outpacing home prices in the 1970s.

On a price per square foot basis, home prices have been remarkably stable since 1960s. The share of income spent on housing has also remained remarkably stable. Though prices have ballooned, interest drops considerably, so monthly payments as share of income haven't changed that much.

The way things have gotten worse for people isn't so obvious. For one thing, people have many more choices to spend their money on, such as computers and college. That's created additional pressure on people without the cost of housing itself changing as much as people think, but its a problem someone from 1960 might roll their eyes at. (Hedonistic adaptation?) Then of course there's various income and geographical bifurcations. For example, you can choose to live someplace cheap, but then you're opting out of the highly dynamic and potentially highly lucrative portions of the economy. That's an opportunity cost, but not a literal cost if you're comparing to 1960s lifestyles.

[ty6853]

The materials are very cheap.

Last year I built a house for ~30k shell, about ~60k with utilities and everything inside of it. My own labor.

Of course, there are only a handful of counties that will let you do that without licenses, or a building plan, or inspections at times that preclude holding a job. Because there is always some self-righteous actor, screaming at the rooftop that their neighbor is going to kill the whole neighborhood in a fire, no matter that housing has been virtually completely unregulated for owner/builders in my county for 2 decades and none of the hysteria people warned of came to fruition.

The plus is all these people screaming for expensive regulations are absolutely scared shitless of my area, and do not live here. Which is nirvana.