  The recent report of near-ambient conditions superconductivity in a
nitrogen-doped lutetium hydride has inspired a large number of experimental
studies with contradictory results. We model from first principles the physical
properties of the possible parent structures of the reported superconductor,
LuH$_2$ and LuH$_3$. We show that only the phonon band structure of LuH$_3$ can
explain the reported Raman spectra due to the presence of hydrogens at the
interstitial octahedral sites. However, this structure is stabilized by
anharmonicity only above 6 GPa. We find that the intriguing color change with
pressure in the reported superconductor is consistent with the optical
properties of LuH$_2$, which are determined by the presence of an undamped
interband plasmon. The plasmon blue-shifts with pressure and modifies the color
of the sample without requiring any structural phase transition. Our findings
suggest that the main component in the experiments is LuH$_2$ with some extra
hydrogen atoms at octahedral sites. None of LuH$_2$ and LuH$_3$ superconduct at
high temperatures.
