The Housing Bubble

No state excluded. That’s how inflated asking prices are.

HA isn’t kidding.

Back in the good old days, buying a house meant your mortgage payment was lower than rent. After all, why take on the risk, if there isn’t some kind of payback?

Now, you pay a premium vs. renting. For the privlege of putting in a garden and being able to decorate any way you want to.

Want to know what’s nice about apartment living? We had lots of snow this winter, and I don’t even own a snow shovel.

For the privlege of putting in a garden and being able to decorate any way you want to.

Renting didn’t stop me from just this week attaching a TV and a homemade bike rack with 4″ lag screws to walls I don’t own.

Renting is always better. Always.

“4 inch lag screws”

Good God, man……….you might lose your deposit!

you might lose your deposit!

In your FACE, landlady!

Comment by sleepless_near_seattle
2014-04-02 08:33:35
Renting didn’t stop me from just this week attaching a TV and a homemade bike rack with 4″ lag screws to walls I don’t own.

No inspections or permissions granted?

I get a visit quarterly from the PM inspection man, iPad in hand, walking through the house for which I’m paying 2x a mortgage payment, taking pictures, pointing out things and ticking off boxes on his rental inspection software?

Pisses me off.

No inspections or permissions granted?

I haven’t seen my landlady in 9 months. She knows what she has with us (given the other applicants she turned away) and doesn’t rock the boat. Then again, it’s just her; she’s not affiliated with a larger PM firm.

I’ll add, however, that while I may be taking a somewhat mocking tone here, we respect her and her property. We treat it like our own.

We do too, and fix the small things ourselves, etc. but it doesn’t matter. When we leave, I’ll never rent a place with a PM again; owners (sane, hopefully) are easier to deal with without an intermediary.

Just confirming that we don’t take her for granted, as it might have sounded in earlier post. It’s been nice. My previous place (small complex) had a PM but even then they’d only come around for scheduled maintenance on all units once or twice a year unless something specific needed to be addressed in individual units. No checklist.

Moar please.

Moar stories about your “relationship” with the ex-wife.

“Only ones who wanted to get laid more than once or twice a year.”

http://picpaste.com/ATT000192.jpg

I was warned of this before marriage. I laughed. Turns out it’s funny cuz it’s true!

Comment by rms
2014-04-02 11:40:23

http://picpaste.com/ATT000192.jpg

Too freakin’ funny!!!

So you moonlight as a shrink now?

Do you allow your patients to consume groceries while lying on your couch?

could u transfer me a cheeto?

Why you dissing on frankie, LolaLOL? He’s one of the only regular posters from the UK posting here, and he’s from Northern England, not some poofter from London.

They may class the house as a Holiday home in which case she may receive up to a 50% discount on the council tax.

Holiday homes and second homes

In England, holiday homes or second homes will be liable for council tax. However, councils can offer a second homes’ discount of 50% or less, or even no discount at all, because no one lives there on a permanent basis. This depends on the policy of the local authority where your holiday home or second home is located. If it is in Wales or Scotland the discount may vary. In England, there are some special cases where local authorities have no discretion and the second home discount must be set at 50%. These are where:

the second home is owned by someone who cannot live there because they have to live elsewhere in England, Wales or Scotland because of their job or their partner’s job
the second home is a pitch with a caravan on it or a mooring occupied by a boat.

I guess I’ll need to disagree - when my lease is up and need to choose a rental in the same neighborhood the rent will be up. I have to rent from the currently available stock - a research chart won’t make the rent of available houses any less for me.

Whether you disagree or not has no bearing on the reality. The reality is, rental rates are falling and renting is half the cost of buying at current grossly inflated asking prices of resale housing.

In reality if I choose to rent again in 2 months, I’ll be paying 20-25% more for rent than what I’m paying now. The reality is how much money will be coming out of my pocket each month. Perhaps I’m looking at it wrong, but in terms of cash flow and my personal budget, rent will be as much or more than a mortgage payment. I do agree that houses are overpriced, but so is rent.

… and 50% less than the cost of buying it.

Whats the problem?

The reality is how much money will be coming out of my pocket each month ??

Are you new here Brandon ?? I don’t recall seeing your user name before…If so, just ignore HA…He/She is a endless loop tape….Same crap every day…Nothing useable…Don’t engage with him/her even if supported by facts…

Says home depot boy.

From the census statistics rents in Boise peaked in 2008 and are dropping much faster than the national average. So what makes your neighborhood special?

Blue Sky - do you have a link to the census data? My neighborhood is popular with families due to the schools plus there is very little in the way of affordable new construction. Like I told HA, I have to pay rents based on the reality of available rentals/rents - not charts, trends, or census data.

ScDave - long time lurker but used to be active 7-8 years ago during the bubble.

Brandon, I didn’t save the links but I just googled Boise rent trends and several links poped up.

Some places I’ve rented, it was the landlord that was “special”, not the house!

Sounds like they’ve got an excess, empty inventory problem in Boise.

No - but only because I cancelled.

I have no insurance now. My rates would have increased from $140 monthly to $340 monthly. All that for a doubling in deductibles.

Like my sister-in-law, I have started an HSA. Her rates also skyrocketed.

Both of us will save money by taking the tax hit.

My co-worker and her husband are now paying $400/month for theirs. As I said in a post maybe a week ago, they are trying to sell one of their cars to pay for it.

Goon’s monthly also jumped, according to Goon.

I don’t know if Ben’s did…I remember him being none too pleased about ObamaCare.

That should read $400/month MORE for coverage.

You know, it’s too bad that the insurance industry and the Republicans didn’t allow a public option for a little more competition. It may have at least kept your costs the same.

That should read $400/month MORE for coverage.

Republicans should announce that if they retake the Senate, they will pass a bill retroactively repealing the penalty. I would love to see Obama veto that bill.

It’s a wonderful feeling to play Hero while others have to pay the cost, isn’t it Oxide?

You know, it’s too bad that the insurance industry and the Republicans didn’t allow a public option for a little more competition. It may have at least kept your costs the same.

You know it is too bad that Democrats blocked selling insurance across state lines it might have lead to more competition. Democrats undercut their own program by blocking that Republican proposal.

Of course it’s a great thing when you’ve got no chance of acquiring it on your own. This is the fundamental of Debt-Donkeyism.

http://online.wsj.com/news/articles/SB10001424052970203550604574360923109310680

Goon’s increase was discussed here when he first wrote about it. He doesn’t know that the ACA caused his rates to increase. The cost of insurance has been increasing rapidly for decades.

Also, I have a feeling that there’s no there there when it comes to selling insurance across state lines. There are already plenty of insurance companies that operate in multiple states. How would it even work? With my insurance I have a book of doctors who accept the insurance. If someone bought insurance from an insurance company in another state, would they get a book listing doctors in another state?

Goon’s increase was discussed here when he first wrote about it. He doesn’t know that the ACA caused his rates to increase. The cost of insurance has been increasing rapidly for decades

But Obama promised a $2500 reduction in premiums.

http://www.youtube.com/watch?v=_o65vMUk5so

http://news.yahoo.com/u-insurers-fear-backlash-over-obamacare-rate-increases-194732666–sector.html

Mike wrote: Also, I have a feeling that there’s no there there when it comes to selling insurance across state lines. There are already plenty of insurance companies that operate in multiple states. How would it even work? With my insurance I have a book of doctors who accept the insurance. If someone bought insurance from an insurance company in another state, would they get a book listing doctors in another state?

Regulation of most insurance matters happens at the state level. Like a state might require that you can’t go and call something health insurance unless there is some limit on out of pocket costs per year.

Selling insurance across state lines just means that the federal government would forbid state A from requiring that policies sold by company Z meet the health insurance laws of State A rather than the health insurance laws of the state that company Z is located in. It isn’t code for anything. Remember when all the credit card companies moved to (I think) South Dakota because they got rid of their usury laws and allowed the CC companies to charge 28% interest? Apply that race to the bottom mentality to health insurance and that is what selling health insurance across state lines means.

Oh, and the states have good reason to regulate insurance in their jurisdiction. They don’t want people who can’t pay their bills because of totally inadequate health insurance to bankrupt their hospitals. Or take up space in their prisons because they can’t afford mental health treatment.

have no insurance now. My rates would have increased from $140 monthly

My super large group, employer provided insurance costs $1500 a month. Pray tell what exactly did your old insurance cover? Did you ever collect a claim on it?

Granted, mine is a family plan. But really, $140 a month? An annual check up costs far more than that.

Thanks for the explanation, Polly. Based on what you wrote, the term “selling insurance across state lines” doesn’t really describe the proposal. I get my car insurance from a company located in another state, but it’s still subject to the laws of my state.

It’s easy, lazy and deceptive to blame the problem on the ACA”…

No, it isn’t. It’s easy, lazy and deceptive to try to divert attention.

Buying a house is a voluntary action. There are few victims.

ObamaCare isn’t. There are tens of millions of victims.

Another incentive not to work hard in Obamacare:

http://obamacare.net/irs-will-retroactively-bill-obamacare-income-rises/

ObamaCare isn’t. There are tens of millions of victims.

Can you document that, other than anecdotally. For every someone you know whose rates “skyrocketed” I can show someone for who it didn’t.

Don’t get me wrong. I’m not a fan of Obamacare, it didn’t do anything to reform our Byzantine Health Care system and American health care is still rapaciously expensive. Just saying that a lot of people are using it as an excuse to distract from other problems. Every problem is being blamed on Obamacare. Which is BS.

But I actually would be OK if it was repealed, not only because it sucks, but because that would shove us back to the unsustainable system we had before, which can only crash and burn. Hopefully the next time we’ll get it right.

“But I actually would be OK if it was repealed, not only because it sucks, but because that would shove us back to the unsustainable system we had before, which can only crash and burn. Hopefully the next time we’ll get it right.”

^this

the worse, the better

Then continue the thought.

Why are realtors advising people to pay quadruple construction costs(lot, labor, materials, profit) of $55/sq ft for a 20+year old used house?

If you think it through, does it or should it really matter to a realtor what the price is

It does. People don’t buy when prices fall, as they fear catching a falling knife. Realtors will never admit that prices are too high, never. Houses always don’t sell for other concocted reasons.

“If you think it through, does it or should it really matter to a realtor what the price is…”

My realtor friend says no. When prices drop noticeably, she says they do get extrememly busy (I had this conversation with her back in 2010). The commission might drop, but they’re making more sales. She works in the Bay Area so maybe it’s a poor example, but she also covers areas that took quite a tumble.

Oxide, your Gods, the Demos, have too much riding on this to repeal it. They also have secret deals with the RINOs (which is the leadership of the R part - McSame, Boehner, et al). McSame couldn’t care less if O-Scare is not repealed.

Your guess is as good as mine, In Colorado. And perhaps better than the “official numbers”.

I believe nothing that comes out of this administration. I trust Obama even less than I trusted Bush, and that’s saying something!

Philosophically, ObamaCare is a total failure.

Anything that requires people to participate or face fines generally is.

“Anything that requires people to participate or face fines generally is.”
Like wearing seatbelts?

Like wearing seatbelts ??

+1 +1…

Would you support go to church or face fines? Once government gets to mandate behavior then what will be mandated depends on the political winds and that is very dangerous.

“Like wearing seatbelts?”

How many states require all motorcycle operators to wear helmets? Which is more dangerous: Riding in a car with no seatbelt or riding a motorcycle with no helmet?

If you think it is completely unrelated there have been numerous studies that demonstrate that people with religious beliefs have better medical outcomes which would reduce medical costs. Yes, we have a constitution that would presently forbid forcing people to attend religious services but we increasing ignore the language of the constitution and allow justices to say it does not mean what it meant when it was written, it is a living document and can evolve so that can work both ways. Here are just some of the studies:

http://www.godandscience.org/apologetics/religionhealth.html

Strangely enough thats been tried before, one of the reasons people emigrated to America.

The Act of Uniformity 1558 (1 Eliz 1 c 2) was an Act of the Parliament of England. It was actually passed in 1559.[3] It set the order of prayer to be used in the English Book of Common Prayer. All persons had to go to church once a week or be fined 12 pence (equivalent to just over £11 in 2007 [4]), a considerable sum for the poor. By this Act Elizabeth I made it a legal obligation to go to church every Sunday. The Act of Uniformity reinforced the Book of Common Prayer.

http://en.wikipedia.org/wiki/Act_of_Uniformity_1558

Excerpt from link that is about to post, which shows that government could argue that attending religious services served the secular purpose of reducing medical costs:

Hummer R, Rogers R, Nam C, Ellison CG, 1999. Religious involvement and U.S. adult mortality. Demography 36: 273-285.

This study examined the effect of religious attendance on mortality. People who never attended religious activities exhibited 1.87 times the risk of death compared with people who attend more than once a week, which results in a seven-year difference in life expectancy at age 20 between those who never attend and those who attend more than once a week. People who did not attend church or religious services were more likely to be unhealthy and, consequently, to die. However, religious attendance also increased social ties and behavioral factors to decrease the risks of death.

Strangely enough thats been tried before, one of the reasons people emigrated to America.

Yes, just like climate goes in cycles political thought goes I cycles. To paraphrase Reagan, a government big enough to give you everything you want is big enough to take everything away from you, and history shows that it is more likely to do the latter than the former.

More Medicare fraud links:

http://oig.hhs.gov/fraud/enforcement/criminal/index.asp

We need to mandate meat eating to save on health costs, remember Hitler was a vegetarian:

http://atlanta.cbslocal.com/2014/04/01/study-vegetarians-less-healthy-lower-quality-of-life-than-meat-eaters/

In the first 6 months?

Cause I’m sure tens of millions of uninsured just figured they’d get around to it eventually. It’s more like a new restaurant, if you don’t get the customers within the first 6 months, you’ll be closing soon.

It did not meet 25% of the need because most of the people that have enrolled had existing insurance. It appears that we are talking about only a few million that now have insurance that did not and it has disrupted the whole healthcare system. Epic fail, just like the rest of the Obama presidency.
O= One
b= big
a= azz
m= Mistake
a= America

http://www.forbes.com/sites/theapothecary/2014/03/31/rand-only-one-third-of-obamacare-exchange-sign-ups-were-from-the-previously-uninsured/

I realize that, Dan.

But I’m cutting them some slack…and even under that slackened scenario, it’s a failure.

People don’t wait until the last minute to sign up for something like really like.

If they really like something, they get in line immediately - like they do with cheap airline tickets or tickets to a playoff game.

Waiting in line on the last day before fines are in effect is not exactly what I call a high demand product.

Or, like most US Americans, they put off paying the bill until the due date of the bill.

Paid my apartment rent on Monday. The gal in the office said their busiest day for rent payments is on the 3rd of the month (the last day before penalties start kicking in).

Or, like most US Americans, they put off paying the bill until the due date of the bill.

Actually, they have not paid the “bill” that will be a separate problem. I don’t think you compare the two since if people want something, they would have been eager to sign-up in before January so they could have had healthcare. The fact that they just signed up prior to the deadline for fines shows that they were dissatisfied with the options but wanted to avoid the fines.

If they really like something, they get in line immediately ??

Well sure they do WHEN ITS FREE !! Thats why they line up at the emergency room…ITS FREE !!

Well sure they do WHEN ITS FREE !! Thats why they line up at the emergency room…ITS FREE !!

And that’s why the Democrats are in trouble, if you want the Free sh*t army to vote for you, you have to design the program to either appear free or at least give someone back far more than they pay into the program. That is why social security and medicare soared in popularity after they were enacted. The Ponzi scheme financing of those programs did give many generations a windfall. This turkey just reveals how inefficient government is in delivering the goods. Epic fail, as a program and even from a partisan political view. It will drag the Democrats down until they show the sense they showed in the late 1980’s and shoot the unpopular entitlement program.

From Wikipedia:

Medicare Catastrophic Coverage Act of 1988, Public Law. 100-360 (July 1, 1988). The 1988 Catastrophic Act focused on providing protection against catastrophic medical expenses under Medicare. Specifically, the Act expanded the Medicare program to provide protection against catastrophic medical expenses and for the first time, provided coverage under the Medicare program for prescription drugs. To pay for these benefit expansions, a new supplemental premium tax on all persons eligible for Medicare was enacted. After massive protests by seniors, the law was essentially repealed the next year.

This turkey just reveals how inefficient government is in delivering the goods.

Governments deliver the goods in single payer countries way better than the American system.

Medicare delivers the goods cheaper than the private system.

It’s math..

non-partisan data from the Congressional Budget Office (CBO) and the Center for Medicare and Medicaid Services (CMS) demonstrate definitively that private insurance is increasingly less efficient than Medicare. The data show that Congress should examine and address the role that private insurance is playing in driving up overall health care costs.

According to CMS, for common benefits, Medicare spending rose by an average of 4.3 percent each year between 1997 and 2009, while private insurance premiums grew at a rate of 6.5 percent per year. (See Table 13)
According to a calculation by the National Academy for Social Insurance, if spending on Medicare rose at the same rate as private insurance premiums during that period, Medicare would have cost an additional $114 billion (or 31.7 percent). http://healthaffairs dot org

It did not meet 25% of the need because most of the people that have enrolled had existing insurance.

Then most of the people knew the ACA coverage was better than they had before.

The fact that they just signed up prior to the deadline for fines shows that they were dissatisfied with the options but wanted to avoid the fines.

The fact that they hit the 7 million after a horrible roll out and millions of dollars Koch negative ads shows ACA had initial acceptance even greater than expected.

Three posts that say nothing. People would have signed up in January if it was a good program. The only reason Medicare has held down increases is that it has cost shifted care to the private programs. Medicare is filled with fraud and abuse and it is well documented.

http://www.medicarenewsgroup.com/news/medicare-faqs/individual-faq?faqId=6a130489-e387-476d-a358-c77cfba68367

People would have signed up in January if it was a good program.

Do people sign up for life insurance the day they are born? They would if it was a good program, and they are sure to need it someday.

Geeze. Insurance is not like buying groceries. You don’t need it… until you need it. Young kids are going to put it off until the last minute.

Geeze. Insurance is not like buying groceries. You don’t need it… until you need it. Young kids are going to put it off until the last minute.

Then, Obama was pretty stupid to design a plan counting on the young to be 38% of the enrollees and sign-up early enough to offset the costs of the mostly unhealthy 62% that were going to sign-up the first chance they could get? Keep drinking the Kool-Aid Oxide, the failure of this thing will only become more apparent with age and the political damage to the Democrats more severe, the party’s collective IQ has dropped considerably since the late 80s when they knew enough to cut their losses.

Oxide, you are doing the work of the PTB, One of the reasons the Republican leadership was so mad at Cruz is that they did not want Obamacare to be derailed. They see Obamacare as a way to gain back control of the government without having to represent the middle class which is the other way to obtain power. I do not want them to gain power as the lesser of two evils. They should do what is right for the country not allow Obamacare to damage the country but they are happy to see it be damaged and then ride the election wave.

And yet with both posts, you didn’t address your own comment. If it were a good program, kids would sign up right away. No, they will wait to sign up when they have to, because they don’t need it yet. And the kids are signing up after, what, a six month delay? That’s nothing in government time.

Oh man. In my early 20s I only bought health insurance because my parents said it’s a good idea. But I did not buy insurance at age 24 and 25. Then I started working for the feral government after that and had health insurance.

I never really needed it back then.

You’re the only one who cares about such things.

Really then explain this action by the U of Illinois.

http://obamacare.net/sex-changes-university-illinois-obamacare/

A lot of the properties in the South Bay of L.A. - to me, are in the same situation. Former dumps up againt the PV peninsula hills. Benzene all over. You don’t drink the water from any fountain between LAX and the Palos Verdes Peninsula. And many houses are in the $600s. The ones costing in the $millions on the hill cost that much for a reason.

As for right next to the ocean I do not know, but Exxon has refineries close by the ocean in El Segundo too.

today’s kids dont have a freakin clue… ??

Well, I get what you are saying but their age and their hormones play a big part in that…Once they get a little older, and they are tired of the craziness they will engage the internet…

“businesses just need to understand they need to pay more of their revenue in wages and reduce their profit expectations”

Are you smoking crack for breakfast today Danny boy?

Do you think “businesses” give a sh*t about the teenager in Denver who got snuffed by an illegal alien 3 time DUI offender?

Or the 14 year old girl stabbed to death by her older sister’s illegal alien boyfriend who was drunk and high on coke and hearing voices?

Most of the HBB audience have probably taken a semester of economics, and as far as “business” is concerned, incidents like these are just externalities.

When you are out for one of your walks, here is a list of Denver crack dealer sites, you can stop off at McDonalds and have an illegal spit in your meal due to your ICE baseball cap:

http://crackstreet.com/maps.html

Or the mundane financial losses suffered by Regular Joe’s, when they get run into by drunk illegals with no car insurance?

The first thing I’m going to do if I suffer a major loss due to an illegal, is hire someone to find out who he was working for, and sue the crap out of them. We wouldn’t need fences, drones, or any of this other crap if they started throwing the people who hire illegals in jail, or sue their azzes.

We wouldn’t need fences, drones, or any of this other crap if they started throwing the people who hire illegals in jail, or sue their azzes

I agree and that is why that solution is not tried because it would work.

that can program the robots to do those jobs ??

Ah pardon me but I do not have any interest in being served my beer by a robot at Hooter’s…. : >)

they need to pay more of their revenue in wages and reduce their profit expectations.

WTH is this commie talk?

I am willing to allow really hot women to get a guest worker visa to serve chicken wings at Hooters. However, they get deported when they get fat.

I am willing to allow really hot women to get a guest worker visa to serve chicken wings at Hooters. However, they get deported when they get fat.

Wow. You talk “tough” and talk like you know women, but you don’t have one. You don’t have the b@lls to move to a country where being sexist is “cool”.

They’d chew you up and spit u out like a chicken bone and you’d cry home to your momma. Really, all you do is talk.

Social security and medicare taxes are only levied on wages, not investment income.

I know. I was referring to the original post not when we started to talk about capital gains. However, I believe Obamacare does apply to some capital gains.

I believe Obamacare does apply to some capital gains.

Where? How much compared to the historical rate?

Bill, your personal situation doesn’t apply to this analysis.

Do you have Children CCC ??

We have no children. Just a dog!

Well, In that case, with the move and all, I think you made the right choice to rent…What kind of dog BTW…We have 2 GSH’s

Excellent call. We itemize, so this is a factor that should be incorporated into our Excel model.

I’ve been looking for 3 months. Bring some examples or analysis to the table and I’ll admit I missed a better opportunity.

Bring some examples or analysis to the table ??

He can’t…Its all bad gas…

Then double your your cost and buy it. Whining about it gets you nowhere here.

Instead of encouraging aggregate demand with more jobs here, the central bank/planners instead want to push debt as the source of economic growth

True and Great Britain has been the template for that. Their economy is even more in debt than our economy and they have a bigger housing bubble. The Anglo Saxon world has loved debt even more than continental Europe. Or as my Norman ancestors would say those Saxon dogs.

The Anglo Saxon world has loved debt even more than continental Europe.

Reagan and Thatcher’s SupplySideTrickleDown dream. We’ve done it for 34 years. This is not “theory”.

The rich got richer as was their plan scribbled down on a napkin, but it didn’t trickle down.

Comment by Neuromance
2014-04-02 09:22:11

And wages are declining: see p.5 numbered, p.13 actual of this link: http://www.census.gov/prod/2013pubs/p60-245.pdf

————–

Absolutely correct, and as Rio has noted, it’s been the plan all along.

I live amongst this supposed top 0.01% near Microsoft HQ, and while they may have high IQs, common sense and good driving skills often seem to be absent!

Selection bias. Why? Because you don’t know so stop cherry picking.

A 30 year old house is worth less than a 10 year old house.

So it’s been going on a long time. Another interesting fact is that family size has been getting smaller over the past 40 years. Back in 1973 there were a lot of families with four or more kids. That’s quite rare now.

If you really want to see what is happening in San Diego county generally, here is the place to look:

http://www.zillow.com/local-info/CA-San-Diego-County-home-value/r_2841/

You can see lots of data going back 10 years, broken down not just countywide, but also by city.

Broad trends?

1. Prices going up, but at a decreasing rate, even a few examples of year on-year declines.
2. Generally haven’t hit peak values again (but I’m guessing certain cities HAVE).
3. Fewer and fewer foreclosures are occurring.
4. The average number of homes selling each year is WAY down from the 2004-2006 timeframe. HOWEVER, I think comparing any data to 2004-2006 is problematic if you are trying to see if things are “normal” now, since that timeframe was clearly abnormal. In 2004-2006, the percentage of homes sold each year ranged from 6% to 8.5%. From 2007-present, the range of number of homes sold each year was 4.9% to 6%. Much more stable.

Should we expect to get back to 2004-2006 numbers? Candidly, I don’t know. My suspicion is that 4.9-6% of homes trading hands each year is below the longer-term “norm” (ISTR “normal” being closer to 7%), but I don’t have hard data to back up that suspicion.

And a controversial comment that I heard from R Shiller, that I needed to do a double-take on was that “home prices have been falling relative to incomes” over a long period of time. This was a comment he made during a discussion about manipulation of CPI and the effect on his LONG term data analysis–he also noted that the Census was finding that despite family size decreasing, we are consuming more housing (what we have been talking about here).

Again, this is not to say that home prices are in line with incomes today (or even over the past decade), but as a LONG term trend, incomes have been going up faster than home prices–which has supported the long-term trend to larger houses despite families being smaller.

Again, housing is consumption. Why are people buying larger homes? Because they can.

“Who knows.”

You don’t. Now back to it. A 20 year old is worth far less than a 2 year old house.

On a price per square foot basis, the homes are trading at a nearly identical price.

The age distribution for the houses in each case are likely to be very similar, unless you are claiming that this year’s batch are only holding prices better because they are newer.

However, that would be wrongheaded, since we have shown above that bigger homes tend to be newer homes, so the real argument would be that this years batch are actually an older cohort on average (thus the smaller sizes on average), which would really confound you, since it would indicate that price per square foot (age adjusted) is going up faster than inflation.

http://www.zillow.com/local-info/CA-Poway-home-value/r_20044/

And since Zillow does compare like sales in determining direction of home prices (factoring age, etc.), they would take into consideration the age of the home inherently in their analysis.

This graph that shows their estimate that home values are up 16% year on year would indicate that the likelihood is that there are more older, smaller homes on the market this year than last.

Since it was the newer homes that ran into problems (people who overpaid), and since there is less distress this year than last, fewer newer homes being resold this year also tracks with that data.

So, it seems like the answer to your question is:

1. More condos on the market; and
2. More older homes on the market.

Nonsense. A Zillow “home value” isn’t a parameter. Besides… Zillow excludes defaults and foreclosures but that kind of hogwash is what we expect from you.

Now back to an actual parameter, Price.

Poway, CA Housing Prices Collapse 29% YoY On Rising Inventory

http://www.movoto.com/poway-ca/market-trends/