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.