The Phaserl


What Happens After the Housing Bubble Reflates?

from The Daily Bell:

The Housing Bubble Is Back … Cullen Roche is worried that the trajectory of housing prices might deviate from what practical assumptions would predict ” Real estate returns are not rocket science. Because they’re such a huge portion of the consumer balance sheet they tend to be tied very closely to wage growth. Wage growth, by definition, is very closely tied to the rate of inflation. That explains why the long-term historical return of real estate is roughly in-line with the rate of inflation. But this survey from Zillow shows that real estate ‘investors’ are probably still too optimistic.” − Forbes

Dominant Social Theme: Housing prices are coming back, thanks goodness.

Free-Market Analysis: This Forbes analysis is actually a fairly sophisticated analysis on how realtors decide whether houses are a good buy or not. The article concludes that houses may be cheap to buy given current conditions. And this, apparently, may begin to drive a housing bubble once more.

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