Housing Bubble ~ Real Estate Bubble ?
#1
Posted 31 March 2004 - 01:58 AM
#2
Posted 31 March 2004 - 07:51 AM
What bubble There is no bubble,prices are not going to go down.My house doubled in price in four years.Bubble is refered to something which has no foundation.Actually real state is the most solid investment now.
#3
Posted 31 March 2004 - 07:53 AM
#4
Posted 31 March 2004 - 08:31 AM
Well don't sound sad about it! Rejoice!
But be careful - history tells us that there's always a 'down' after a long period of (seemingly exponential) growth in the housing/real estate sector. I see many parallels right now, to 1989, when we had a terrible housing crash (at least here in Canada) and following recession that we didn't get out of 'till 1992 - and then we didn't start seeing the effects of the turnaround until 1995.
In some cases, people who purchased right before the drop, didn't see their homes attain the value they paid for them until almost 10 years later. They say but low, sell high - right now it's pretty damn 'high'... not the time to buy (IMO).
#5
Posted 31 March 2004 - 12:20 PM
Buying a house in US is good business, but if I have to pay my house in lets say 30 years.....its roughly 4 time the original price.
I'm stupid and I would rather buy somewhere else on the globe.
#6
Posted 31 March 2004 - 08:06 PM
#7
Posted 31 March 2004 - 10:40 PM
thats because the historical penjulum will swing back to its previouse state once again and then again. and again.. we never learn.. lol... ok this was the longest post in a while.. phew...
#8
Posted 01 April 2004 - 04:41 PM
#9
Posted 01 April 2004 - 05:37 PM
Maybe true other states but not here in Boston.Boston has actually housing shortage even for renting due to many universities around here and prices keep going up here.If anything they will level off but not go down.I hope you are right though I would not mind buying a house for investment and collect rent and relocate to Armenia.Shhhhhhhhhhh. my little dream...
#10
Posted 02 April 2004 - 02:39 AM
The Housing Bubble in New England
By Dean Baker[1]
January 5, 2004
In the last eight and a half years, the country has experienced an unprecedented run-up in home prices. Over this time, the rise in home sale prices has been more than 40 percentage points higher than the overall rate of inflation. Typically home prices have risen approximately in step with the overall rate of inflation. Neither the great boom of the sixties, nor the demographic surge created by the baby boomers forming their own households in the seventies and eighties, led to any substantial increase in home prices, adjusting for overall inflation.
The New England region has been at the center of this run-up in home prices, experiencing an increase in home sale prices that exceeded the overall rate of inflation by more than 70 percentage points over this period. The run-up in home prices in New England over this period was more rapid than in any other region of the nation. The table below shows the increase in home prices (adjusted for the overall rate of inflation) in the United States as a whole, the New England region, the Pacific Coast region (which had the second largest run-up in prices), and each of the six New England States.
Table 1
Inflation Adjusted Increase in Home Prices 1995-2003
United States
34.7%
New England
59.6%
Pacific States
49.4%
Connecticut
36.4%
Maine
44.9%
Massachusetts
73.5%
New Hampshire
67.8%
Rhode Island
53.3%
Vermont
26.1%
Source: Office of Federal Housing Enterprise Oversight and Bureau of Labor Statistics.[2]
While the most obvious explanation for this increase in home prices is that it is due to a real estate bubble that paralleled the stock bubble – as happened in Japan -- some analysts have attributed this run-up in home prices to fundamental factors affecting the supply and demand for housing. This list of factors includes:
1) an increasing population due to immigration,
2) limited supplies of urban land,
3) environmental restrictions on building,
4) growing incomes of homebuyers.
The problem with these explanations is that none of them are new to this period – if these factors explain the current run-up in home prices, then they should have also led to rising real home prices in prior decades, when many of the factors (e.g. rising incomes) would have played a larger role in pushing up home prices.
At a more basic level, if these fundamentals were to explain a run-up in home prices, then they should also be driving up rental prices. If higher home prices are due to an insufficient supply of housing, then the effects in the sale and rental market should be comparable. While rents did originally outpace overall inflation in the period from 1995-2002, they did not rise anywhere near as much as home prices, increasing approximately 10 percentage points more than the overall rate of inflation. More recently, rental inflation has slowed. In the last year and a half rents nationwide have risen slightly less than the overall rate of inflation. In some bubble markets, such as San Francisco and Seattle, rents are actually falling. This pattern is completely inconsistent with a run-up in home prices that is driven by fundamental factors, rather than by a speculative bubble.
If the run-up in home prices in New England and elsewhere is attributable to a speculative bubble, then it will inevitably burst. Like the stock market crash, a collapse of the housing bubble is likely to be a serious blow to the economy. It will virtually ensure a second dip to the recession. It is also likely to be devastating to the personal finances of millions of families, whose home is their largest financial asset.
Unfortunately, few families realize that much of the wealth in their homes could disappear in a collapse of the housing bubble. As was the case with the stock bubble, the vast majority of economic analysts have failed to recognize the housing bubble. Families have been encouraged to treat housing as a secure investment that can only appreciate in value. This view from experts has led homeowners to borrow in record amounts – the ratio of equity to value is at a post-war low among homeowners, in spite of the record appreciation in home prices.[3]
If home prices move back toward their pre-bubble levels, many families will find that their mortgages equal or exceed the market value of their home, leaving them with no equity. For aging baby boomers who are nearing retirement, many of whom have recently lost much of their savings in the stock market crash, such a blow may destroy any hopes of a financially secure retirement.
While some of the increase in home prices is likely to be real – just as some “new economy” stocks have survived the crash, it is likely that the regions experiencing the largest run-up in home prices will see the largest fall during the crash. For this reason the New England region is especially vulnerable to a downturn in the housing market.
Table 2 shows the real increase in home sale prices over the last five years in the major metropolitan areas in the New England region. The last row shows the real increase in rent in the Boston metropolitan area, the only metropolitan area in the region for which the Bureau of Labor Statistics publishes a rent index. As can be seen, the real increase in home prices vastly exceeds the increase in rents in Boston in every city on the list. As is the case nationally, the rate of increase in rental prices has slowed dramatically in the Boston area. Over the last year, rent in the Boston area has increased by 3.6 percent, compared to increases of more than 7 percent in the prior two years. This pattern of slowing rental inflation is consistent with the run-up in home prices being explained by a speculative bubble instead of underlying factors in the regional housing market.
Table 2
Inflation Adjusted Increase in Home Prices 1998-2003
Barnstable-Yarmouth, MA
79.2%
Boston, MA-NH
55.0%
Bridgeport, CT
40.9%
Brockton, MA
63.3%
Burlington, VT
26.3%
Danbury
34.3%
Fitchburg-Leominster, MA
55.3%
Hartford, CT
25.1%
Lawrence, MA-NH
53.4%
Lowell, MA-NH
54.2%
Manchester, NH
54.9%
Nashua, NH
61.8%
New Haven-Meriden, CT
33.3%
New London-Norwich, CT-RI
36.4%
Portland, ME
41.1%
Portsmouth-Rochester, NH-ME
50.2%
Providence-Fall River Warwick, RI-MA
52.0%
Stamford-Norwalk
42.8%
Waterbury, CT
24.5%
Worcester, MA-CT
51.1%
Boston – Rent Index
12.0%
Source: Office of Federal Housing Enterprise Oversight and Bureau of Labor Statistics.[4]
The public should be calling on presidential candidates to address the issue of the housing bubble. The failure to recognize the stock market bubble was the major cause of the current recession and the resulting job losses. While it may be too late to prevent a sharp decline in house prices, the next president should be prepared to offer a program of economic stimulus to counter-act the recessionary effects of the bursting of the housing bubble.
--------------------------------------------------------------------------------
http://www.cepr.net/...sing_Bubble.htm
#11
Posted 02 April 2004 - 11:17 AM
#12
Posted 03 April 2004 - 01:18 AM
#13
Posted 24 May 2005 - 10:12 AM
#14
Posted 24 May 2005 - 10:16 AM
I'm putting my house up in the market
#16
Posted 24 May 2005 - 11:04 AM
Sasunb JAn yes menakmi ban gitem or mardiq tsiyr @ tsiyrin en aprum
mijin TAn arjeq@ iysor $420,000 ~$500 LA - 1 kam 2 Hogi ashxatogh unetsogh tun @ shat djvarutyab e vjarum iys tan hamar
xosum eyi barekamis het ov Washingon MUtual collaction department e ashxatum - asum er or verjin 6 amsva mej mardiq ov chem karogh vjarel avelatsel en 25% yev avel de hiam du indz asa te iys arjeqner@ esopes mnalu en te voch
#17
Posted 24 May 2005 - 11:07 AM
I'm putting my house up in the market
putting your house up in the market will not solv your problem
if you dont get a new house in next 6 months you will pay %32 tax so most of whom i know who has sold a house - getting ready to get a new one since no Armenia will pay A TAX en el %32
#18
Posted 24 May 2005 - 01:33 PM
#19
Posted 24 May 2005 - 01:50 PM
Amy jan, you got into real estate? Awesome! If you play your cards right it can be a very profitable business, but you must put yourself out there and socialize until you are blue in the face. I thought of doing that at some point, my ex used to do that for a living. He would hit a few closing at once and get a hefty $10,000 and I got to spend some of it. Congrats.
#20
Posted 24 May 2005 - 02:01 PM
I was thinking of getting into the business, but I met a guy who's a realtor instead So he gets to do all the fun, and guess who helps him spend it?
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