Wednesday, May 25, 2005

The bubble will burst soon

Behold the bubble is about to pop. The bubble will pop (price declines) within the next 12 months.

1) People are stretching to their limits to buy (look at how many IOs and ARMS)
2) Lending practices will tighten given Fed's reccomendations
3) Greenspan just used the term 'bubble'
4) The foriegn buying of loans is slowing
5) More public awareness of the housing bubble situation. See the increasing number of articles referencing the bubble (use a Google or Lexis Nexis news search)


  1. I say 4-6 month. Most meltdowns occur in October. So I think all it will burst in October 2005.

  2. I hope they are ready to pop so I can finally get a house.

    With the prices so ridiculously high, I can't afford one unless its with one of those interest-only loans with no down payment, which I think is the most dumb thing you can do, since you are not a "homeowner", you are basically paying rent, not to your landlord but to your bank/lender. And to add insult to injury, you spend more on a mortgage since you have to pay for closing costs, maintenance, insurance and other associated costs.

  3. When Greenspan retires next year...

  4. Greenpsan shares a big part of the blame for the bubble. He should be terminated.

  5. Well, Greenspan used the words "irrational exuberance" years before stocks popped. Calling tops is pretty difficult. I've been watching and wondering just how much longer it can go on. My answer as of right now is: a while longer. Heh.


  6. You are right that calling tops is 'pretty diffucult'. I think the factors are in place now for stagnation in housing prices followed by price declines.

  7. Have a RE agent contact in Bay Area who says it's popping right now... Houses that used to get 20-30 offers are only getting 2-3. Some overpriced properties are staying up for sale over 30 days.

    The bad news for renters is that when folks start dumping their properties, the rent market will get unbelievably hot.

    No one will want to buy a house when property starts dropping, and landlords will be able to get premium $$$ like they did back during the .com bubble.

    So, if you're not in a house (like me), you're basically screwed either way.

  8. is there one market where dom and inventory are decreasing ?
    nada not in USA or anywhere in world now