What’s Left of the American Dream Withers at Record Pace

[marmar]

What’s Left of the American Dream Withers at Record Pace
by Wolf Richter • July 29, 2015


The current housing boom has Dallas solidly in its grip. As in many cities around the US, prices are soaring, buyers are going nuts, sellers run the show, realtors are laughing all the way to the bank, and the media are having a field day. Nationwide, the median price of existing homes, at $236,400, as the National Association of Realtors sees it, is now 2.7% higher than it was even in July 2006, the insane peak of the crazy housing bubble that blew up with such spectacular results.

Housing Bubble 2 has bloomed into full magnificence: In many cities, the median price today is far higher, not just a little higher, than it was during the prior housing bubble, and excitement is once again palpable. Buy now, or miss out forever! A buying panic has set in.

.....(snip).....

That’s true for many cities, including San Francisco. The “Boom Town,” as it’s now called, is where the housing market has gone completely out of whack, with a median condo price at $1.13 million and the median house price at $1.35 million. This entails some consequences [read… The San Francisco “Housing Crisis” Gets Ugly].

The fact that Housing Bubble 2 is now even more magnificent than the prior housing bubble, even while real incomes have stagnated or declined for all but the top earners, is another sign that the Fed, in its infinite wisdom, has succeeded elegantly in pumping up nearly all asset prices to achieve its “wealth effect.” And it continues to do so, come heck or high water. It has in this ingenious manner “healed” the housing market.

But despite the current “buying panic,” the soaring prices, and all the hoopla round them, there is a fly in the ointment: overall homeownership is plunging.

The homeownership rate dropped to 63.4% in the second quarter, not seasonally adjusted, according to a new report by the Census Bureau, down 1.3 percentage points from a year ago. The lowest since 1967! ..............(more)

http://wolfstreet.com/2015/07/29/home-buying-panic-record-prices-crashing-homeownership-rate-low-rental-vacancy/

[Warpy]

1. It's gotten ridiculous.

There is no runaway inflation in this city, yet I've gotten the first card in the mail since 2006 or so exhorting me to sell my house to "we buy houses, any condition." I'm tempted since this place is falling down around my ears and I'd be happier in a place with a lot less yard.

Leaving a quick buck artist holding the bag is appealing.

When the bust happened here, there was a sudden glut of yuppie barns that had never been lived in, snapped up by rich people from California. One guy bought a whole cul-de-sac. There was no inflation then and there is none now. Hope springs eternal in the mercenary heart, I guess.