Bubble, Bubble . . .

We make no claim to being a housing maven, but having been in the eminent domain biz for the past four decades or so, one can’t help but pick up — shall we say? — a certain sensitivity to real estate stuff (which surely includes housing¬† prices). So we are gratified to see that our recent musings about the increases in housing prices having begun to flirt with a new bubble, are now being confirmed by people with a better claim to mavenhood, like Fortune magazine and CNN.Money for instance. See Nim-Hai Tseng, Signs of New Housing Bubble in Several Areas, May 17, 2013, http://finance.fortune.cnn.com/2013/05/17/housing-bubble/?iid=Lead¬†— for the article, click here. Our gratification has to do with seeing a confirmation of our thinking, not an unreasonable rise in housing prices which is bad, bad, bad.

Of course, now we have unprecedentedly low interest rates, and a pent up demand generated by the sharp decline in housing construction brought about by the 2008 Great Recession. But however true these things may be, there is a limit to how much ordinary people can spend on housing, and those who flirt with that limit are asking for trouble.

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