{"id":34175,"date":"2018-05-11T08:28:53","date_gmt":"2018-05-11T13:28:53","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34175"},"modified":"2018-05-11T08:28:53","modified_gmt":"2018-05-11T13:28:53","slug":"the-3-stage-housing-bubble-collapse","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34175","title":{"rendered":"The 3 Stage Housing Bubble Collapse"},"content":{"rendered":"
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The 3 Stage Housing Bubble Collapse<\/a><\/h3>\n<\/header>\n
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Most Americans don\u2019t know, but the housing market is heading toward another epic bubble.\u00a0 However, the bubble forming today is much different than the subprime housing meltdown in 2007.\u00a0 Back in 2007, there was an oversupply of homes, whereas today there is a shortage.\u00a0 With more buyers than sellers bidding up prices, the U.S. median home price value hit a new record high of $338,000 at the end of 2017.<\/p>\n

Unfortunately, wages have not kept up with rising home values.\u00a0 For ex<\/strong>ample, the average hourly earnings have only increased 21% since 2009.\u00a0 However, the U.S. median home price $330,000 in Q1 2018 is 53% higher<\/strong>:<\/p>\n

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Now, to make up for the shortage of homes in the high-demand cities across the country, the new-home building boom is once again on the rise.\u00a0 The U.S. housing starts in March are up to 1.3 million from the low of 478,000 at the bottom of the 2009 recession.\u00a0 Now, even though current housing starts are more than double what they were at the lows in 2009, they are nearly 50% less than the peak of 2.3 million in 2006.<\/p>\n

However, there is a much different dynamic today as the cost to build a new home is much higher than it was in 2006.\u00a0 At the peak in 2006, the U.S. median new home price was $262,000 versus the $337,000 in Q1 2018<\/strong>.\u00a0 Moreover, the U.S. median new home price is 60% higher than the low in 2009:<\/p>\n

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Even though the average wages of an American increased 21% since 2009, the median new home price is 60% higher.\u00a0 Part of the reason for the higher new home price is the increased demand but it\u2019s also due to higher costs.\u00a0 For example, the lumber price shut up 170% since the beginning of 2016.<\/strong>\u00a0 When the U.S. median new home price reached a high of $262,000 in 2006, the price of lumber was $330.\u00a0 Today, the lumber price isn\u2019t quite double, but at $592, it\u2019s pretty darn close:<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The 3 Stage Housing Bubble Collapse Most Americans don\u2019t know, but the housing market is heading toward another epic bubble.\u00a0 However, the bubble forming today is much different than the subprime housing meltdown in 2007.\u00a0 Back in 2007, there was an oversupply of homes, whereas today there is a shortage.\u00a0 With more buyers than sellers […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[150,406,2340,12073],"class_list":["post-34175","post","type-post","status-publish","format-standard","hentry","category-economics","tag-collapse","tag-housing-bubble","tag-housing-market","tag-srsrocco-report"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34175"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34175\/revisions"}],"predecessor-version":[{"id":34176,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34175\/revisions\/34176"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}