i haven't read the whole thread, but it's important to distinguish that the Big Short was really about the subprime mortgage meltdown, which are securities that were inflated and based on real estate mortgages, rather than the house prices themselves. Simply, it was about the bad loans (and the packaging thereof) than about the fact that housing prices were high.
But yeah, high housing prices certainly were a major part of the movie.
Anecdotally, I know a ton of people in my area who got the biggest mortgage possible to buy a house out of fomo. Maybe during an economic recovery with low interest rates, that makes sense, but I think we are all downplaying the amount of people who won't be able to afford their mortgages the second the unexpected happens (job loss, recession, etc).
I don't believe in the doom and gloom stuff, but I also think a lot of recent home buyers are going to be underwater on their mortgages at rates higher than we expect currently.
The difference between now and 2008 is this price run is a supply problem, not a demand problem. Due to a lack of building and still tight mortgage standards, we are 3 million units short. With rising rates, I think we get a typical (not like 2008) cycle-volumes slow while price stagnate. Payments as a percentage of income are still 20-30% percentile relative to a 60-70 year history. Not to beat a drum, but restrictive zoning in high job growth cities is the real problem with today's housing market.
Much different lending conditions in this current market. No bank is loaning a $30,000/year retail store assistant manager the funds to purchase a $500K house like they did in 2008.
I get that you like his movie Jamin and that you really, really want housing prices in Seattle to crash. Sadly, that just isn't going to happen unless the entire economy goes south and wipes out a bunch of jobs in the process. Chances are that your job would also be endangered under such circumstances and some guy in Bangalore will be buying a small house when he gets a raise and your responsibilities in an emergency layoff/corporate reorganization.
They did because Obama FORCED them to under threat of steep financial penalties. This country has had some messed up leaders and he takes the cake.
Might want to look at Wikipedia and a calendar, sport!
Hello, Jamin. How are you recovering from your severe case of Covid? I guess things are looking up, for you to be planning a trip to London. Did you try the garlic remedy?
If you really want to spook yourself about the market as a whole I highly recommend reading The Lords of Easy Money by Chris Leonard. Takes you through a timeline of the Fed’s actions in the wake of 2008 and up until about May 2020. It ends with the insanity the Fed jumped into to avoid a major catastrophe from a Covid market meltdown & lets you come to your own conclusion of what those actions are going to cause in the coming years... Very dense & a lot of technical financial terms but still enjoyable
If you really want to spook yourself about the market as a whole I highly recommend reading The Lords of Easy Money by Chris Leonard. Takes you through a timeline of the Fed’s actions in the wake of 2008 and up until about May 2020. It ends with the insanity the Fed jumped into to avoid a major catastrophe from a Covid market meltdown & lets you come to your own conclusion of what those actions are going to cause in the coming years... Very dense & a lot of technical financial terms but still enjoyable
They are coming out with a book next year called Easy Money
Here's one from March 2022: "Single-family home prices in Florida are up 17.7% as of October 2021"
Tampa's rate was highest in the state at 29.4% in 2021. Overall, it was 18.8% according to this article, the highest growth in decades. So, it's growing fast but you're greatly, greatly exaggerating. And if the economy were not itself growing very rapidly (jobs rose 390,000 in May, something like the 13 straight month at that level or higher) and jobs plentiful (unemployment nationwide is 3.6%, only a tenth above the lowest rates in 50 years+), and people flooding into the state of Florida--driving up demand--you would have a much better argument. The Great Recession was preceded by a speculative bubble tied closely to trading in collateralized debt obligations and there was no rapid economic growth and job growth to back it all up. This time is different--which is not to say that there isn't some craziness.
They did because Obama FORCED them to under threat of steep financial penalties. This country has had some messed up leaders and he takes the cake.
Might want to look at Wikipedia and a calendar, sport!
Obama took office after the Great Recession was well under way and the whole housing market--and financial institutions in general--had collapsed or frozen.
My Mortgage Bankers Speech from Nov 13th 2006 is now in one video clip. I gave this presentation at the the Western Regional Mortgage Bankers Conference in ...
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