Comments on: Sunday Night Stats – 5 Year Hold http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/ Seattle's Leading Resource for Real Estate Information Fri, 19 Mar 2010 05:20:19 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: ARDELL http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328369 ARDELL Tue, 11 Nov 2008 00:26:24 +0000 http://raincityguide.com/?p=3334#comment-328369 Sandy, Here's the trend on that in 2008 dollars from Pew" http://pewsocialtrends.org/pubs/?chartid=531 Sandy,

Here’s the trend on that in 2008 dollars from Pew”

http://pewsocialtrends.org/pubs/?chartid=531

]]> By: Sandy K http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328365 Sandy K Tue, 11 Nov 2008 00:07:09 +0000 http://raincityguide.com/?p=3334#comment-328365 Kary said, "I don’t know where inflation is headed. I’m just trying to point out that if we are heading into inflation, that’s not necessarily a bad thing for people who own houses." That's true and all, the problem is what tends to come at the end of periods of inflation, and what some are arguing is happening right now, which is the opposite of inflation. "This too shall pass" as they say. Ardell brings up an interesting note which is the discrepancy between household vs. worker income. Individual worker incomes are flat compared to a generation ago, though household incomes have gone up. That is largely due to more households being two income households. It's my understanding that the trend of two worker households is starting to reverse. Lots of women my age got their education, started careers, then Mommy-tracked and never came back into the workforce, unlike their baby boomer parents. Kary said, “I don’t know where inflation is headed. I’m just trying to point out that if we are heading into inflation, that’s not necessarily a bad thing for people who own houses.”

That’s true and all, the problem is what tends to come at the end of periods of inflation, and what some are arguing is happening right now, which is the opposite of inflation.

“This too shall pass” as they say.

Ardell brings up an interesting note which is the discrepancy between household vs. worker income. Individual worker incomes are flat compared to a generation ago, though household incomes have gone up. That is largely due to more households being two income households. It’s my understanding that the trend of two worker households is starting to reverse. Lots of women my age got their education, started careers, then Mommy-tracked and never came back into the workforce, unlike their baby boomer parents.

]]> By: ARDELL http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328350 ARDELL Mon, 10 Nov 2008 20:21:36 +0000 http://raincityguide.com/?p=3334#comment-328350 I posted the YOY price change chart and the big crash in home values was in the sixties followed by a period of equally dramatic increase. I posted the YOY price change chart and the big crash in home values was in the sixties followed by a period of equally dramatic increase.

]]> By: ARDELL http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328349 ARDELL Mon, 10 Nov 2008 20:19:48 +0000 http://raincityguide.com/?p=3334#comment-328349 "Maybe rising wages with inflation balance out the affordability?" Only if you use "household" income vs. individual worker income. “Maybe rising wages with inflation balance out the affordability?”

Only if you use “household” income vs. individual worker income.

]]> By: Kary L. Krismer http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328344 Kary L. Krismer Mon, 10 Nov 2008 19:38:27 +0000 http://raincityguide.com/?p=3334#comment-328344 Re 23, probably, but with a lag factor of some sort. I don't want to give the impression that inflation won't hurt homeowners, because there will be at least some temporary pain as prices rise and income stays the same. It's just that over the long run, homeowners (or just people in debt) would be somewhat better off as a result of some of the effects of inflation. Also, I would add that many parts of the country did have falling prices when interest rates rose at the end of the 70s, early 80s. That just demonstrates how interest rates are only one factor that affect prices. Re 23, probably, but with a lag factor of some sort. I don’t want to give the impression that inflation won’t hurt homeowners, because there will be at least some temporary pain as prices rise and income stays the same. It’s just that over the long run, homeowners (or just people in debt) would be somewhat better off as a result of some of the effects of inflation.

Also, I would add that many parts of the country did have falling prices when interest rates rose at the end of the 70s, early 80s. That just demonstrates how interest rates are only one factor that affect prices.

]]> By: Cautious Buyer http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328343 Cautious Buyer Mon, 10 Nov 2008 19:32:22 +0000 http://raincityguide.com/?p=3334#comment-328343 RE #20 I was just thinking about that. Affordability would dictate lower prices for higher rates, but inflation is associated with higher rates and rising prices. I guess the historical data in the post indicates rising prices and rates with inflation. Maybe rising wages with inflation balance out the affordability? RE #20

I was just thinking about that. Affordability would dictate lower prices for higher rates, but inflation is associated with higher rates and rising prices.

I guess the historical data in the post indicates rising prices and rates with inflation. Maybe rising wages with inflation balance out the affordability?

]]> By: ARDELL http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328342 ARDELL Mon, 10 Nov 2008 18:58:49 +0000 http://raincityguide.com/?p=3334#comment-328342 If you click on the source link at the bottom of the post you can do a pdf of % increase YOY. I'll post it. If you click on the source link at the bottom of the post you can do a pdf of % increase YOY. I’ll post it.

]]> By: Kary L. Krismer http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328341 Kary L. Krismer Mon, 10 Nov 2008 18:53:20 +0000 http://raincityguide.com/?p=3334#comment-328341 FWIW (again I'm not much of a macro guy), I've always wondered whether "stagflation" was a creation of the Fed back during Carter/Ford. The inflation they were fighting might not have been real, but instead just the impact of OPEC on prices. By fighting the imaginary inflation they sent us into recession. To understand that you need to accept the premise that the price of one commodity (oil) going up, and working it's way through to the price of other assets, is not inflation. But that's another way those years don't compare. The Fed is behaving considerably different this time around. FWIW (again I’m not much of a macro guy), I’ve always wondered whether “stagflation” was a creation of the Fed back during Carter/Ford. The inflation they were fighting might not have been real, but instead just the impact of OPEC on prices. By fighting the imaginary inflation they sent us into recession. To understand that you need to accept the premise that the price of one commodity (oil) going up, and working it’s way through to the price of other assets, is not inflation.

But that’s another way those years don’t compare. The Fed is behaving considerably different this time around.

]]> By: ARDELL http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328340 ARDELL Mon, 10 Nov 2008 18:51:16 +0000 http://raincityguide.com/?p=3334#comment-328340 "If rates did go way up soon, it would have to drive down prices." Confused, why would double digit increases in rate drive up prices per your previous statement but drive them down now? I remember raise freezes in the mid eighties and small banks being swallowed up by big banks. Specifically in 1984 - 1986. “If rates did go way up soon, it would have to drive down prices.”

Confused, why would double digit increases in rate drive up prices per your previous statement but drive them down now?

I remember raise freezes in the mid eighties and small banks being swallowed up by big banks. Specifically in 1984 – 1986.

]]> By: cautious buyer http://raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/#comment-328339 cautious buyer Mon, 10 Nov 2008 18:46:07 +0000 http://raincityguide.com/?p=3334#comment-328339 Thanks for answering Kary. I agree that high inflation in the near future could have the effect of bailing out underwater homeowners and anyone else with significant fixed rate debt, preventing defaults for the banks. Some investor somewhere would lose out from being paid back in worthless 2018 dollars. People with cash based savings and little debt would lose, but the stock market should go up with inflation. And it's all besides the point of whether 1973-88 appreciation can be compared to 2003-2008 given the more inflationary environment in the 70s and 80s (according to the gov's numbers). Thanks for answering Kary. I agree that high inflation in the near future could have the effect of bailing out underwater homeowners and anyone else with significant fixed rate debt, preventing defaults for the banks.
Some investor somewhere would lose out from being paid back in worthless 2018 dollars. People with cash based savings and little debt would lose, but the stock market should go up with inflation.

And it’s all besides the point of whether 1973-88 appreciation can be compared to 2003-2008 given the more inflationary environment in the 70s and 80s (according to the gov’s numbers).

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