I checked the value of my home on Zillow today.
It's nuts.
After 13 years the estimated price is up 6.5% per annum.
On the other hand, the house I previously owned and sold is up only 0.8% per annum over the same period.
Two entirely different houses, two entirely different locations, two completely different histories. What seems like a bubble living in my current house wouldn't seem like one living in my old one.
The best way I've found to think about this is to ask, How much of a house will my income buy? For bubble purposes nationally, even though housing is a regional and local matter, use median household income and median sales price.
Here's the chart of that data as currently available.
In 2020 the Median Sales Price of Houses Sold for the United States (MSPUS) averaged a new high of almost $337k. We don't yet have the median household income figure for 2020, but it's likely to be bad news, skewing the graph lower again as less income buys a smaller share of increasingly expensive housing.
As you can plainly see, the trend for the percentage of a house purchased by an income has been all downhill since the end of Reagan Bull in 2000. The percentage really fell a lot during the housing bubble which peaked in 2005-06, helping precipitate GFC1. Incomes fell a lot after the Great Financial Crisis because people lost their jobs by the millions and never got them back and so less income purchased less house. Housing prices bottomed in 2012 and then rebounded slowly. Incomes did not, however, and what you made just kept buying less in the low range of 19%.
That all sucked. Obama really sucked. Sucked historically bad. Record-setting bad.
You'll notice things really improved in 2019, however. That's because median household income shot up $5k to over $68k (Trump tax cuts), and the median sales price of a house actually fell $5k to $320k. Your higher income bought more of a slightly cheaper house, not as much as the good old days, but more.
Unfortunately in 2020 median sales price shot up almost $17k while millions upon millions lost their jobs. The feds enacted foreclosure forbearance so that 2.3 million homes whose owners lost their jobs never came onto the market. But desperate people who wanted out of cities snarfed up inventory. Demand far exceeded supply, so prices went up.
But even at 21.5% in 2019 housing was nowhere near affordable like it was from 1987-2001. It was a nice, hopeful moment, while it lasted.
I'm guessing it's going to be quite a while, though, before we ever see even that again.
