Why are home prices so high despite...... • Record low homeownership not seen since the early 90's at 63.7% • Income and median household price disparity is greater now than in was in the housing crash • Per the case shiller index, the 20 city average is only 11-12% away from the July 2006 high What am I not seeing here? It seems as if home prices are inflated due to short term low supply. Why have builders not caught up? What will happen when they do? Are we investors the cause of a mini bubble this time?

Look at your points from the other side: This means there's a ton of prospective home buyers available, driving up demand. Studies show that most millennials want to own homes eventually and they are only just now getting to a place in their lives where they are able to. Research shows that income increases at the high end of the income spectrum can increase prices for lower end homes. http://www.nber.org/papers/w12331. This makes intuitive sense as people/institutions with high incomes are buying property for investment. Comparing to previous highs isn't terribly relevant, in my opinion. Where the current market peaks out is not determined by where the previous peak occurred.

One thing different than 10 years ago - people have much more savings and liquid assets. They are looking to put the money works for them. And now, since the stock's market is not very reliable ( or i would say it reach out his current maximum potential) than real estate as a type of assets is very attractive. And do not forget that the money are still cheap (low interesting rate)...

Followed Discussions Followed Categories Followed People Followed Locations

Real Estate News & Current Events

Market News & Data

Market Trends & Data

Buying & Selling Real Estate

Out of State Investing

Real Estate News & Current Events

Real Estate Technology

Investor Mindset

General Info

BiggerPockets Exclusive PRO Area

PRO

General Real Estate Investing

BPCON

New Member Introductions

Questions About BiggerPockets & Official Site Announcements

Off Topic

Starting Out

Real Estate Success Stories

Real Estate Horror Stories

Real Estate Strategies

House Hacking

BRRRR - Buy, Rehab, Rent, Refinance, Repeat

Commercial Real Estate Investing

Mobile Home Park Investing

Innovative Strategies

Multi-Family and Apartment Investing

Land & New Construction

Wholesaling

Rehabbing & House Flipping

Short-Term & Vacation Rental Discussions presented by

Tax Liens & Mortgage Notes

Medium-Term Rentals

Buying & Selling Small Businesses

Outdoor Hospitality

Landlording & Rental Properties

General Landlording & Rental Properties

Managing Your Property

Marketing Your Property

Tenant Screening

First-Time Home Buyer

Real Estate Professionals

Mortgage Brokers & Lenders

Contractors

Real Estate Agent

Financial, Tax, & Legal

Personal Finance

Creative Real Estate Financing

Private Lending & Conventional Mortgage Advice

Insurance

Tax, SDIRAs & Cost Segregation presented by

Foreclosures

1031 Exchanges presented by

Goals, Business Plans & Entities

Legal & Legislation

Real Estate Classifieds

Classifieds

Real Estate Events & Meetups

Reviews & Feedback

Ask About A Real Estate Company

Real Estate Deal Analysis & Advice

Guru, Book, & Course Reviews

Syndications & Passive Real Estate Investing

Updated about 9 years ago on 12/10/2015. Most recent reply

34
Posts: 13
Votes

Krystian SosinskiPoster

Real Estate Agent
Phoenix, AZ

Real Estate News & Current Events

Why are home prices so high?

Krystian SosinskiPoster

Real Estate Agent
Phoenix, AZ

Posted December 08, 2015 09:34

Why are home prices so high despite......

Record low homeownership not seen since the early 90's at 63.7%
Income and median household price disparity is greater now than in was in the housing crash
Per the case shiller index, the 20 city average is only 11-12% away from the July 2006 high

What am I not seeing here? It seems as if home prices are inflated due to short term low supply. Why have builders not caught up? What will happen when they do? Are we investors the cause of a mini bubble this time?

0 Votes

2 Replies

Jump to Last Reply

Sort By:

Oldest

Loading replies...

Your Profile Views

Curious to see who's interested in your profile? Unlock your views with Pro

Connect with others

7 day free trial. Cancel anytime.

PRO

Upgrade to Pro

Market Finder - key investor metrics for all US markets

Deal Finder - investor-focused filters and notifications for new properties

Calculators - Unlimited access to 9+ property analysis calculators

Find an Agent

Find & Match With an Investment Friendly Real Estate Agent

Enter your market to get started

Rent Estimator

Address or ZIP

loading related articles...