the staff of the Ridgewood blog
Ridgewood NJ, talk to almost any housing expert and they will likely say the housing market is not in a bubble. This is despite home prices soaring to historical highs across the country.
In February, prices surged 12% year-over-year, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index, which is the highest increase since February 2006—right before the housing market crashed, sending home values into a free fall.
Federal Reserve Chairman Jerome Powell told reporters that while the sharp rise in housing prices is not an “unalloyed good,” the Fed hasn’t picked up signs of financial instability or growing risks.
Powell, however, voiced concerns with how many potential first-time buyers could miss their chance to make a crucial investment after a crisis that drastically inflated wealth inequality.
The intensity of the market boom has prompted countless comparisons to the mid-2000s’ housing bonanza. In many ways, this market resembles the state of play in 2005 and 2006, which was the peak of a previous bubble that burst, to disastrous effect.
But “experts” claim “it’s different this time ” and ” and the same experts who were blindsided by the 2008 collapse offer a few key differences that they say separate today’s market from the one of about 15 years ago. For one, the current market is supported by a “far more robust lending system” compared to the loose underwriting process that became the 2008 market’s downfall. Another key difference is that since 2008, the housing market hasn’t had enough inventory, even before 2020’s record drop.
ROFLMAO.
It’s different this time.
New Paradigm.
I never complained when I paid market price for my land, then built my first home a few years later in 1983. The FIXED rate mortages were 18%. So I opted for a 13.75% 30 year VARIABLE. When rates ‘came down’ a few years later, I thought I nailed it with a 9.75% fixed for 15 years, which was paid off before it matured.
So do the math using the old prices and interest rates and a 30 year pay out vs todays prices at less than 3% fixed rate for 30 years and there isn’t much total difference.
To all of the crybabies saying ‘it was cheaper then’… SO were the salaries. Just compare with public worker salaries.. if a cop made 13k then…its 130k now ++++. So your salary is 10x what we made and the property is 10x what we paid but the interest rate is LESS. So your getting a better deal.. (I only used police salaries for comparison since its a public record)
So quit whining about ‘affordable’ housing and get off your ass and save money instead of pissing it away on $1200 phones, vacations, and fancy cars.
Last time there were “0% down” mortgages and banks advertising that you should take the equity out of your home.
Now they treat mortgage customers as if we are scammers.
There’s a case of settled science online, where millenials have undeniable proof that they are priced-out of the housing market. Pointing out factual evidence to them gets you the equivalent of an online massacre. I see it in the spending habits of my kids, their friends, and the younger crowd that I work with. The whole Avocado Toast analogy was an accurate description of how they blow through their money on daily consumables, such as Starbucks, uber, electronics, marijuana, cars, movies, lunches, etc. They are flat broke the day before payday. Saving is an alien concept to them. They truly believe socialism and things like universal basic income is the way to go, and all the world’s problems can be resolved if we simply tax the billionaires.
Mortgage banker underwriting standards are relatively unchanged. Back to the volume underwriting model as the ABS market is demanding the inventory.
Watch out realtors! 5% is going away soon