i dont see a bubble at all. The housing market is too important to the US and it will be defended at all costs. Thats why if you follow the rules in America, you can make a fortune.
really? most economists do. how will america defend that? everyone rushing out and buying bricks or something? please list said rules to make a furtune...other than going to beauty school.
exactly correct.. they will just keep printing more FIAT dollars and give more money away to keep housing afloat..
If Barrons is bearish on homebuilders, then they are a "BUY". I have never seen one magazine so consistently wrong in my life.
By the way, you can currently buy real estate in Berlin and Tokyo at or near 15 year lows. Tokyo apt prices have only turned up in the last year or so. In Berlin you can buy a reasonable 2 bed apartment within 30 mins of the centre for about 30-40k Euros. More regional areas of Japan and to some extent Germany are even cheaper. The majority of buyers in these markets pay a big chunk in cash, mortgages are conservative, and speculation in real estate is virtually unheard of - all the gamblers went broke in the 90s. Rental yields are attractive and prices per square foot compare favourably with other locations. You would have to be insane to invest in real estate in the US, UK, Caribbean, Australia etc at 400k for garbage when you can get prime real estate in 2 of the biggest and most advanced economies in the world for a much lower price. Sell up your inventory in Fla/Ca and plonk down a decent chunk of change in German real estate, and you are practically guaranteed to clear at least a million dollars over the next decade.
I read an article about that recently. Japan's population barely increased (like 3%) over the last 15 years, whereas our (U.S.A.) population increased by 40% in the same period. We keep having babies, so we keep needing new houses. The two real estate markets aren't comparable that way. Ya'll are picking on Hair Dresser and Hair has some good points. If the real estate market really starts to collapse to where it creates a negative wealth effect, Bernanke (or however you spell it), will likely step in and drop rates to the point where prices will stabilize. The Fed wants the "balloon" to deflate slowly, and not only do they have their hand on the valve, they have their hand on the pump as well. Interesting thing is that if our Fiat currency and overworked printing presses did cause strong inflation, owning things (gold, real estate, cars, whatever) will be the only way to preserve your wealth. Remember that during the Hyper inflation in Germany, the mortgage holders would chase bankers down the street putting money in their pockets to pay them off with worthless cash. Since I'm sitting on real estate with fixed notes, I would love, love, LOVE, it if cash quickly became worth a small fraction of what its worth today. The cash flow from my holdings would go to the moon. Oh, and for the gold bugs, gold would become more valuable to approximately the same degree as real estate, but it wouldn't be leveraged as well and it wouldn't kick off any cashflow thereafter. SM