Is America in another housing bubble?

[still_one]

America’s bifurcated housing market is a microcosm of uneven economic growth since the Great Recession. Signs of stress are visible in both low and high-end markets as dwindling inventory and premium prices forced many potential homeowners to become “involuntary renters.”

In an article titled “Housing Affordability Issues: Cyclical or Structural?”, Atlanta Fed researcher expressed the following concerns:

A decline in housing affordability may be considered a leading indicator of potential stress in the market that could lead to a market correction. Simply put, as housing affordability diminishes, households begin to experience greater stress in covering their housing costs. In such a scenario, the demand for housing declines, inventory levels increase, and home prices trend downward.

From this perspective, relative affordability would act as a gauge on the extent of a housing bubble. With home affordability already at a multi-year low, the following factors will further support the thesis that the U.S. is in the midst of a housing bubble in 2017:

Supply glut in high-end housing, as well as in high-end multifamily housing.
85% of 189,000 multifamily rental units completed in 2016 were in the luxury category.
378,000 new apartment units are expected to come online in 2017 across the U.S., and “banks are retreating from making apartment loans in traditionally strong markets.”
Foreign all-cash buyers have elevated high-end home prices beyond local economies' price ranges.
Spread between premium and trade-up homes constrained medium-tier housing supply.
Shifting labor trends likely dampen demand and exert downward pricing pressure.

http://www.rawstory.com/2017/03/is-america-in-another-housing-bubble/

[JayhawkSD]

1. Value of my house is now higher than in 2007

For reasons that don't matter, I've had my house in San Diego appraised several times over the years. I refinanced only twice, in 2005 and again in 2016, both times for lower rate with no cash taken out. For what it's worth, we have about 70% equity at this point. Anyway...

The appraised value of our home is about 15% higher now than it was at the peak of the 2007 housing bubble. Houses in our central city HOA, 1700-2000 sqft semi detached townhomes, are selling for $500,000+ and more than half are cash deals. Of the last five that sold, four remained unoccupied for five months or more while they were gutted and reconstructed.

Bubble? Don't know, but certainly much more money is being spent now than was being spent then.

[SHRED]

3. I concur with you about San Diego County

Our 3 bedroom 2.5 bath townhome here in Encinitas was built in 1977. We bought it in the late 1990's for under $200K. It shot up to the $600K range before the 2008 crash. Now it's in the mid to high $700K range.

[SHRED]

2. We have areas here in San Diego County...

...that are being developed.
Big areas and housing prices are sky high.

I mentioned to my spouse last year that it looks like 2006-8 all over again.