It's funny that the Fed is still dreaming about having low inflation while the number one expense most people will have experiences rampant inflation.

It's impossible to control skyrocketing house prices in booming tech areas with anything other than a massive amount of new housing developments.

Even if everything you can buy suddenly got 10% cheaper, the houses in those areas would immediately increase back to the old level because the prices is driven by a high demand relative to supply.

Makes sense. To me it just seems they act as if inflation was low but in reality they are creating huge asset inflation with the low interest policy.

Housing is not experiencing rampant inflation when you look at the nation as a whole. We have one currency so the Fed has to try to strike a balance that works for everyone.

That's an interesting thought, does the government have cpi-like numbers for different localities, or just the one number?

Rents are included in cpi, but home prices aren't. Now, of course they are correlated, but that's certainly one of the arguments against using cpi.

edit: answered my own question, the bureau of labor statistics has more numbers than you can shake a stick at.

I want to remark that its not inflation, its just regular demand shock to the market. Specially housing takes time to match the supply to demand.

Inflation is generalized increased of nominal costs, not particular to an asset, nor in 'real terms' which is what is happening here.

Isn't it very localized?

Based on this it's nationwide: https://fred.stlouisfed.org/series/CSUSHPINSA

That says it’s about back to where it was 10 years ago. Mind you there was a fairly big run up to the peak of the bubble but most people here aren’t complaining about prices having risen again to 2007 levels.

Can confirm. I both recently sold my home, and used to be a licensed real estate appraiser before switching to Software Dev.

Our house in the not-super-desirable area of NE Portland was worth ~$265k when we looked at the data in late February/March of this year (strong data supporting that number). When we finally put it on the market in the beginning of May, it sold in 1 day, with multiple offers, for a sales price of $312k.

Yes, that's a $47k increase in value in just over 2 months. When spring hit, real estate prices went bonkers in Portland this year. Also, we bought the house for $160k ~five years ago.

We bought a small one-bedroom condo in downtown PDX for my brother to live in ~3 years ago b/c it seemed like a better investment than random stocks/ETFs. He lived there for a year, and we rented it part-time for another four months.

Purchase price was $145k. Sale price (after only 16 months) was $190k.

We used to proceeds from that sale to buy a two-bedroom house for my parents move into for their retirement. Paid $250k last October; recent sales in the neighborhood suggest it's worth $310-325k now.

So yeah, agreed re: bonkers Portland housing price inflation.

Not inflation, demand shock.

Inflation is generalized increase in prices. Im sure beers and miso-fries have barely changed prices if at all.

My house is alrfull day worth almost 100k more only 6 months later. It’s crazy. Beaverton and Hillsboro are really seeing pricing skyrocket.

Im sure portland is getting a lot, but 300% market price increase in real estate in 2 years sounds like a lot.