Housing Bubble Archives

Real Estate Investors Can Profit in a Down Market

February 14, 2012 by Marco Santarelli

One of the most exciting things about being a real estate investor is knowing what markets will produce the greatest long-term returns – especially while in the middle of a challenging housing market.

In a down market, savvy real estate investors are eager to find out how they can best leverage their resources. And expert forecasts are some of the best tools they can use to back up their strategies. A good example comes from real estate consulting firm John Burns Real Estate (JBRE), which has recently predicted that homeownership will fall from 70.0 percent to 62.1 percent by 2015 due to a weak economy, weak consumer confidence, limited mortgage availability, higher rates of foreclosures and short sales, and other factors.

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The Housing Bust is Over

January 16, 2012 by Marco Santarelli

“The bursting of the global housing bubble is only halfway through,” The Economist magazine wrote recently.

I disagree…

Here in the U.S. at least, the housing bubble is completely over.

It drives me nuts when I hear commentators say, “We're halfway through,” and, “We have more pain to come.”

The fact is, right now, houses in America are the best value they've been in many generations. It's not hard to understand…

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Who Can You Trust?

May 5, 2010 by Marco Santarelli

Our "favorite housing economist" Dr. Bob Shiller thinks the market (especially housing) is already overheated. "We are in a very unusual circumstance," says Shiller, "because of the massive bailouts, the homebuyer tax credits, the Fed's purchase of mortgage-backed securities – and these things are coming to an end. I don't trust the trend we have."

"So the question is, are we at risk for even more price increases, and another bubble? I think we are at risk, but I'm not predicting it," says Shiller. "I think it's more likely we don't do so well from here," Moneynews reported Shiller telling The Motley Fool.

So is that "a yes, a no, I know, or a maybe?"

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Housing Numbers Err on the Bright Side

August 5, 2009 by Marco Santarelli

Is it time to buy a house or investment property?

It Depends…

If you need a place to live and want to own a house, why not? Prices in some areas are fairly reasonable. But if you're speculating, our guess is that you'll get a better deal if you wait.

Why? House prices may be firming in some areas – that's what the Case-Shiller numbers seem to show. But nationwide, they are probably headed down for quite a while longer.

Here are four reasons why:

First, as you know, this is a depression. It will probably be long. And deep. You wouldn't know it from looking at the stock market or reading the news. The Dow went up another 114 points yesterday. Oil rose to $71. And the dollar – anticipating inflation – fell to $1.44 per euro.

But that's what bounces are supposed to look like. They look good enough so that people mistake them for the real thing… and get suckered into more losses.

This is a depression. Depressions drag down asset prices. Typically, prices become much more reasonable. And then they reach UNREASONABLE levels. House prices have become reasonable. Now they will become unreasonably cheap…

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