I owned my own home in Seattle until 1997. I then rented and continued to rent until I left in 2011. The interesting thing is that we paid VERY low rent while people paid sky high mortgages as prices went up.
One of the homes we rented was just two blocks away from Paul Allen on Mercer Island. I nice tri-level on a beautiful lot (on what is called the “scar” because they bulldozed all the trees when it was built several decades ago). $1400 a month.
Eventually we paid $1650 for a five bedroom on a 1/4 acre professionally landscaped yard a few miles east of Renton in the highlands. The house was valued in Zillo for 330k when we first moved in and when we left that one in 2009 it had peaked at around $525k, but the collapse brought it down to less than $300k.
The price of that home is now $1.3 million.
We’re in another bubble and it’s going to hurt more than the last one.
Someone brought this up around five years ago for Phoenix/Tucson. Maybe around three years after the 2008 bubble burst....some middle-folks were showing up and buying several houses at a time, which the local markets were still 40-to-50 percent below what the market of housing was in 2007. It didn’t make a lot of sense, but if you had cash in your hand and just wanted to wait this out....then maybe it made sense.
Well....these were Chinese parties, and they had cash which they didn’t want to bring back into China or admit that they had. In some ways, it was money laundering. No one said the number of houses in this gimmick but I got the impression that at least twenty houses a month were being structured like this and rented out later.
In the rural regions (like Mississippi or Arkansas)....I don’t think there is a bubble existing. But I’d agree...in San Francisco, Seattle, and various metropolitan locations....it’s probably true.
One of the best stories I ever heard was a co-worker who walked into the Orlando market in 1990, and bought a property on some canal area...3-car garage, big pool in the back, and the price was in the 180k range. When he left in 2003....adding a dock and a big upgraded patio area...it was almost 900k that they paid. But it dropped like a rock after 2008.