It’s Official, America has a Housing Bubble
America’s housing bubble is official. The Federal Reserve is issuing warnings about a housing bubble.
Read MoreIn individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
America’s housing bubble is official. The Federal Reserve is issuing warnings about a housing bubble.
Read MoreA dangerous housing bubble could be responsible for Rocket Mortgage’s (NYSE: RKT) stock growth. In 2020, Rocket Companies (NYSE: RKT) began
Read MoreBoth the United States and Canada are in the midst of serious real estate bubbles. Disturbingly, the Canadian bubble is
Read MoreWhat that really means is that the property values of mostly white, upper middle class people are more important than meeting a basic need of working families. It is perfectly okay for waiters to sleep in their cars and the poor to live under bridges as long as the high values of Amazon.com and Microsoft executives’ homes are maintained. Jeff Bezos does not have to worry about anybody constructing an apartment house on his block.
Read MoreOne reason why housing is not on the U.S. national agenda is that for most Americans, there is no housing shortage. A quick look at Zillow indicates that prices are actually falling in many markets, including regions in Colorado that are a little over a hundred miles from the red-hot Denver market.
Read MoreSo no, America, we are not in Great Real Estate Bubble Round II; instead, we are in a completely unstable real estate market. My prediction is that housing prices are headed for a major collapse within the next year followed by decades of stagnation. America’s real estate market will end up like Japan’s: plagued by overpriced zombie assets, expensive properties that nobody can afford to buy.
Read MoreThe American people are not taking part in the recovery. Almost all the new wealth being generated is going to Wall Street and not Main Street. Goldman Sachs’ revenue increased by $2.38 billion over the past year, while the demand for new housing is 25% lower than it was 10 years ago, according to the National Association of Realtors’ chief economist, Lawrence Yun.
Read MoreOne has to wonder if home ownership has now become so expensive that it has become a drag on the economy. Unfortunately, Zillow’s number crunching indicates that could be the case.
Read MoreA more likely scenario is that the collapse of the bubbles in areas like Denver and the Bay Area will drag down real estate prices nationwide and further depress the market. A real estate market collapse is likely, but it will not be a bubble; instead, it will be deflation as housing costs fall because of lower demand. The factor most likely to trigger that event would be an increase in mortgage interest rates.
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